TEST BANK for Essentials of Marketing, A Marketing Strategy_Planning Approach. 17th Edition ISBN10:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

34)

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

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

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

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

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

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

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

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

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

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

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A marketing audit evaluates the whole marketing program. ⊚ ⊚

45) data.

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

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

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

48)

Control helps marketing managers learn how

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

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

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

51)

Which of the following is true regarding marketing control?

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

52)

With respect to marketing control,

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

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

54)

The basic objective of implementation is to do things

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

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

56)

Which of the following statements about customer complaints is false?

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

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

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

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

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

60)

Which of the following statements about implementation is false?

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

61)

Effective implementation of a marketing plan

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

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

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

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64)

The 80/20 rule suggests that

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

65)

The 80/20 rule says that

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

66)

According to the 80/20 rule,

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

67)

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

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

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

69)

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

70)

Sales analysis is a

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

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

72)

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

73)

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

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74)

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

75)

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

76)

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

77)

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

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

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78)

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

79)

Sales analysis

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

80)

Which of the following is true regarding sales analysis?

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

81)

A ________ looks for exceptions or variations from planned performance.

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

82)

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

83)

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

84)

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

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

85)

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

86)

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

87)

The main purpose of a performance analysis is to

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

88)

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

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

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

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

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

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

93)

Performance analysis

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

94)

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

95)

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

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

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

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

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

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

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

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

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

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

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

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

105)

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

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

106)

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

107)

The iceberg principle suggests that

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

108)

Which of the following statements best explains the iceberg principle?

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

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

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

111)

Which of the following statements best describes the iceberg principle?

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

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

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

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

115)

General summaries of overall marketing cost data

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

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

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

117)

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

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

119)

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

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120)

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

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

122)

The full-cost approach to marketing cost analysis

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

123)

A contribution-margin income statement shows

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

124)

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

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

125)

Which of the following is true regarding marketing cost analysis?

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

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

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

127)

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

128)

The contribution-margin approach to marketing cost analysis

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

129)

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

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130)

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

131)

Which of the following observations is true?

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

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

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

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

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

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

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

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

137)

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

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

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

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

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

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

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

142)

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

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

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

144)

Marketing metrics are

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

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

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

146)

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

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

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

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

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

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

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

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

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

154)

A marketing auditor for a firm will most likely

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

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

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

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

157)

A marketing audit is a(n)

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

158)

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

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159)

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

160)

Which of the following statements about marketing audits is true?

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

161)

Which of the following statements about marketing audits is false?

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

162)

A marketing audit

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

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

164)

A marketing audit is necessary because

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2)

true false

Cross-functional links rarely affect strategy planning. ⊚ ⊚

true false

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

true false

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

true false

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

true false

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

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⊚ ⊚

true false

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

true false

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

9)

true false

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

true false

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

true false

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

12)

true false

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

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⊚ ⊚

13)

true false

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

true false

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

true false

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

16)

true false

Funded marketing plans have no budget constraints. ⊚ ⊚

true false

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

true false

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

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⊚ ⊚

true false

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

true false

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

true false

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

22)

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

23)

true false

true false

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

true false

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

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

true false

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

true false

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

28)

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

29)

true false

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

38) plan.

true false

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

true false

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

true false

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

41)

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

48)

true false

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

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

true false

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

true false

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

true false

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

53)

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

62)

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

77)

true false

Mass customization serves individual needs. ⊚ ⊚

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

88)

true false

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

true false

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

true false

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

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91)

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

92)

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

93)

true false

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

95)

true false

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

94)

true false

true false

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

true false

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

true false

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

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

true false

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

100)

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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⊚ ⊚

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

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

118)

Cross-functional challenges are greatest

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

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

120)

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

121)

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

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

123)

Which of the following is true regarding capital?

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

124)

Which of the following observations is true?

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

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

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

126)

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

127)

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

128)

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

129)

Working capital may be used to pay for

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

130)

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

131)

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

132)

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

133)

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

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

134)

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

135)

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

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

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137)

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

138)

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

139)

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

140)

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

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

141)

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

142)

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

143)

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

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

144)

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

145)

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

146)

Generating capital by means of debt financing

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

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

148)

Which of the following statements about borrowing money is false?

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

149)

Which of the following observations concerning debt financing is false?

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

150)

Which of the following statements about borrowing money is false?

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

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

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

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

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

154)

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

155)

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

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156)

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

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

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

158)

Indirect distribution

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

159)

Indirect distribution typically requires less capital than direct distribution because

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

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

161)

When a new marketing plan is more successful than expected,

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

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

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

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

164)

Which of the following statements is true regarding excess capacity?

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

165)

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

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

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

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

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168)

If a firm has excess production capacity, it

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

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

170) for

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

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

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

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

172)

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

173)

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

174)

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

175)

A virtual corporation

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

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

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

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

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

180)

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

181)

Production flexibility should help a supplier support its business customers with

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

182)

Firms that use mass customization

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

183)

With the mass-customization approach, a firm

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

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

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

186)

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

187)

Which of the following statements about mass customization is true?

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

188)

Which of the following statements about mass customization is true?

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

189)

Which of the following statements about mass customization is true?

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

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

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

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

193)

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

194)

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

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

195)

Marketing cost analysis

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

196)

A major purpose of marketing cost analysis is to

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

197)

Marketing cost analysis starts with the assumption that

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

198)

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

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

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

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

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

201)

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

202)

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

203)

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

204)

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

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

205)

As compared to natural accounts, functional accounts

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

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

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

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

208)

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

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

209)

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

210)

The first step in marketing cost analysis is to

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

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211)

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

212)

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

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

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

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

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

215)

A good marketing manager knows that

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

216)

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

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

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

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

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

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

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

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

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

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

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

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

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

226)

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

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

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

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

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

230)

Which of the following is true of an ERP system?

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

231)

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

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232)

Which of the following statements concerning human resources is false?

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

233)

Regarding human resources, a good marketing manager knows that

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2)

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

3)

true false

true false

Making goods or performing services is called marketing. ⊚ ⊚

true false

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

true false

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

6)

true false

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

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

true false

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

true false

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

10)

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

11)

true false

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

13)

true false

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

12)

true false

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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⊚ ⊚

20)

Marketing only applies to profit organizations. ⊚ ⊚

21)

true false

Marketing only applies to for-profit organizations. ⊚ ⊚

22)

true false

true false

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

true false

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

24)

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

25)

true false

true false

Marketing should begin with the production process. ⊚ ⊚

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

true false

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

true false

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

true false

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

30)

true false

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

true false

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

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

true false

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

34)

true false

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

true false

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

true false

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

true false

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

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

true false

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

40)

true false

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

true false

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

true false

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

true false

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

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

true false

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

46)

true false

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

true false

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

true false

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

true false

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

50)

true false

Intermediaries specialize in trade and production.

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⊚ ⊚

true false

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

true false

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

true false

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

true false

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

true false

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

56)

true false

Not all societies need an economic system.

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⊚ ⊚

true false

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

true false

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

true false

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

true false

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

true false

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

true false

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

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⊚ ⊚

true false

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

64)

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

65)

true false

Most Western economies are completely market-directed. ⊚ ⊚

67)

true false

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

66)

true false

true false

The American economy is entirely market-directed. ⊚ ⊚

true false

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

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

true false

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

71) era.

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

96)

true false

Adoption of the marketing concept is today universal. ⊚ ⊚

true false

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

true false

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

99)

true false

Customer value is another term for customer satisfaction.

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⊚ ⊚

100)

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

101)

true false

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

102)

true false

true false

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

true false

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

104)

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

105)

true false

true false

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

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

true false

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

true false

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

true false

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

110)

true false

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

true false

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

112)

true false

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

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⊚ ⊚

true false

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

114)

true false

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

true false

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

116)

true false

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

true false

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

true false

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

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

true false

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

121)

true false

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

true false

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

true false

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

true false

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

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

true false

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

true false

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

128)

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

129)

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

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

130)

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

131)

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

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

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

134)

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

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

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

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

137)

Which of the following statements about marketing is false?

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

138)

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

139)

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

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

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

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

143)

Marketing can be viewed as

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

144)

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

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

145)

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

146)

Marketing

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

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147)

Which of the following is true of marketing?

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

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

149)

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

150)

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

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

151)

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

152)

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

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

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

154)

Which of the following is an accurate statement about marketing?

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

155)

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

156)

Which of the following statements is true about marketing?

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

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157)

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

158)

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

itself." E) facilitate a single transaction.

159)

Effective marketing should begin with

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

160)

Marketing should

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

161)

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

162)

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

163)

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

164)

Marketing is of no relevance in a ________ economy.

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

165)

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

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

167)

Which of the following statements about marketing is false?

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

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168)

Which of the following statements about marketing is false?

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

169)

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

170)

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

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

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

172)

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

173)

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

174)

Which of the following is true of macro-marketing?

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

175)

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

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

177)

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

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

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

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

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

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

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

182)

In advanced economies,

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

183)

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

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

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

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

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

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

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

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

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

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

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

192)

Discrepancies of assortment happen when

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

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

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

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

195)

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

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

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

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

199)

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

200)

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

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201)

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

202)

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

203)

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

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

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

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

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

208)

The standardization and grading function of marketing involves

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

209)

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

210)

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

211)

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

212)

The universal functions of marketing

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

213)

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

214)

The universal functions of marketing are

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

215)

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

216)

Which of the following is not true about intermediaries?

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

217)

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

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

219)

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

selling.

220)

Which of the following types of firms are collaborators?

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

221)

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

222)

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

223)

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

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

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224)

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

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

226)

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

227)

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

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228)

Concerning the universal functions of marketing, it is true that

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

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

230)

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

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

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

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

233)

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

234)

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

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235)

In a command economy,

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

236)

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

237)

In a market-directed economy,

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

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

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

239)

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

240)

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

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

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

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242)

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

243)

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

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

244)

Which of the following statements about economic systems is true?

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

245)

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

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

246)

Consumers in a market-directed economy

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

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

248)

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

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249)

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

250)

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

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

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

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

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

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

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

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

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

256)

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

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

257)

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

258)

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

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

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

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

262)

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

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

263) era.

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

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

264)

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

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

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

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

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

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

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

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

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

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

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

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

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

275)

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

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

276)

During the sales era, A) families traded or sold their surplus output to local distributors. B) characteristic management thinking was, "If we can make it, it will sell." C) all marketing activities were brought under the control of one department. D) increased competition made firms focus on winning customers. E) marketing people did both short-run and long-run marketing planning.

277) Asa Meyer was just named FireFly Products sales manager, with responsibilities for all marketing planning. FireFly's president tells him that his job is to "outsell the competition." FireFly is operating in the ________ era. A) market-oriented B) production C) sales D) marketing company E) marketing department

278)

As a firm moves from the sales era to the marketing department era, it is likely to A) have marketing people who develop long-range plans—sometimes five or more years

ahead. B) begin to integrate all the firm's marketing activities. C) place less emphasis on earning a profit and more emphasis on what customers will buy. D) adopt a narrower view of marketing. E) be more concerned with its ability to produce enough to meet demand.

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279) Myra Martinez was just named Treasure Island, Inc.'s marketing manager—with responsibilities for short-run policy planning of the firm's advertising, sales, marketing research, purchasing, and distribution efforts. Treasure Island is operating in the ________ era. A) market-oriented B) production C) marketing department D) marketing company E) sales

280) The main difference between the "marketing department era" and the "marketing company era" is A) more emphasis on selling and advertising in the marketing department era. B) whether the president of the firm has a background in marketing. C) more emphasis on short-run planning in the marketing company era. D) whether the whole company is customer-oriented. E) There is no difference.

281) When marketing people do long-range planning and the whole company is guided by the "marketing concept," the company has entered the ________ era. A) production B) customer satisfaction C) marketing company D) consumerism E) marketing department

282) A company where the marketing people do both short-run and long-range planning is operating in the ________ era.

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A) marketing company B) sales C) simple trade D) marketing department E) production

283)

Which of the following would be relevant in the marketing company era? A) bringing all marketing activities together under the control of one department B) planning for five or more years ahead C) reselling goods to consumers and intermediaries D) focusing on production

284) The president of a financial services company says that her new marketing manager has changed things a lot—making long-range plans about where the firm should focus its effort, and coordinating the decisions about what services to offer and how they should be promoted and priced. It seems that this company is just moving into the ________ era. A) marketing company B) sales C) production D) marketing department E) simple trade

285) SouthFace Corporation just named Chloe Perry to a marketing management position. One of the reasons she accepted a position with this company was its reputation for market-oriented long-range planning. SouthFace Corp. is probably operating in the ________ era.

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A) planning B) marketing company C) marketing research D) marketing department E) None of these answers is correct.

286)

Which of the following is true of the five stages in marketing evolution? A) In the marketing department era, firms do both short-run and long-run planning. B) The first era to evolve was the sales era. C) In the marketing company era, firms do short-run planning only. D) Most firms operate in the production era. E) None of these answers is correct.

287) The owner of The Rascal’s Bar & Grill does long-range planning, and the whole company is guided by the marketing concept. Rascal’s appears to be operating in the ________ era. A) production B) customer satisfaction C) marketing company D) consumerism E) marketing department

288)

Which of the following statements about the five stages in marketing evolution is true? A) Few firms have graduated to the marketing company era. B) The sales era continued until at least 1950 for most firms. C) In the marketing department era, firms began to do long-run planning. D) The production era was the first era to evolve.

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289) with

The marketing concept is a strategic way of approaching business that contrasts sharply

A) the marketing orientation. B) the production orientation. C) the profit orientation. D) macro-marketing. E) the triple bottom line.

290)

Compared with other approaches to business, the marketing concept is distinct in that it A) focuses on profits. B) produces new products and services. C) creates a broad assortment of products. D) produces quality products. E) focuses on satisfying customers' needs.

291) The triple bottom line is a measure of a firm's success based on multiple criteria, commonly referred to as A) product, price, and promotion. B) people, planet, and profit. C) partnership, planning, and positioning. D) segmentation, targeting, and positioning. E) brands, buyers, and bucks.

292) When a firm considers a triple bottom line as a measure of long-term success, this means that it measures outcomes in which of the following areas?

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A) economic success, social impact, and political change B) firm profitability, customer satisfaction, and behavioral change C) economic success, social impact, and environmental impact D) company effort, customer satisfaction, and relative market share E) customer satisfaction, environmental impact, and production efficiency

293) An organization practicing ________ aims all its efforts at satisfying its customers—at a profit. A) the sales concept B) a production orientation C) in the marketing department era D) profit maximization economics E) the marketing concept

294) All of the following are the basic ideas included in the definition of the marketing concept EXCEPT A) customer satisfaction. B) total company effort. C) profit, or another measure of long-term success, as an objective. D) making whatever products are easy to produce and then trying to sell them. E) giving customers what they need.

295)

A production-oriented firm typically A) views customer credit as a customer service. B) sets inventory requirements with customer needs in mind. C) tries to sell the products it can make easily. D) focuses advertising on need-satisfying product benefits. E) operates as an integrated unit.

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296) Managers who think of customers existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society have a ________ orientation. A) marketing B) production C) selling D) dynamic E) customer

297)

A manager with a production orientation would A) think of customers as existing to buy the firm's output. B) take production decisions guided by customers' needs. C) find out what product customers want to buy, and then produce that product. D) have production managers handle all marketing activities. E) get the production department to work closely with other departments.

298)

Which of the following is MOST likely to be found in a production-oriented firm? A) agreements among departments about how to improve customer satisfaction B) making products that are easy to produce C) producing goods that exactly meet the customer's needs D) a focus on profit rather than sales

299)

Which of the following is LEAST likely to be found in a production-oriented firm? A) disagreements among departments about how to improve the company's product B) making products that are easy to produce C) producing goods that exactly meet the customer's needs D) a mass marketing approach

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300) At MetroTech, salespeople blame the production people for making inferior products, and the production people complain that the salespeople are just not getting enough orders. MetroTech seems to have a ________ orientation. A) bottom line B) production C) customer D) sales E) marketing

301) MetroTech Corporation has been experiencing declining profits. The accounting department blames the MetroTech marketing staff for "out of control" sales costs. The salespeople blame the warehouse for being slow to fill orders. And the warehouse manager says that the production department can't meet its schedule. MetroTech seems to have A) implemented the marketing concept. B) a customer orientation. C) a marketing orientation. D) a sales orientation. E) a production orientation.

302) Accepting the "marketing concept" means that a firm should have a ________ orientation. A) marketing B) research C) production D) sales E) planning

303)

A firm with a marketing orientation

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A) has little need for salespeople. B) sells what it can make easily. C) tries to determine customers' needs before developing its product. D) focuses advertising on product features.

304)

The three basic ideas in the "marketing concept" are A) customer satisfaction, resource efficiency, and sales maximization. B) customer satisfaction, total company effort, and sales growth. C) resource efficiency, sales growth, and profit maximization. D) customer satisfaction, marketing manager as chief executive, and profit. E) customer satisfaction, total company effort, and profit.

305)

Which of the following is one of the three basic ideas in the "marketing concept"? A) resource efficiency B) a total company effort C) to obtain economies of scale D) to maximize sales E) the president having a marketing background

306)

Which of the following is one of the three basic ideas in the "marketing concept"? A) resource efficiency B) economies of scale C) profit as an objective D) to maximize sales E) training

307)

Which of the following is one of the three basic ideas in the "marketing concept"?

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A) resource efficiency B) customer satisfaction C) to obtain economies of scale D) to maximize sales E) the president having a marketing background

308)

An important step in applying the marketing concept is

A) changing the firm's organizational structure. B) changing the firm's management methods and procedures. C) appointing someone with a marketing management background to be the firm's president. D) hiring a marketing consultant. E) making a commitment to customer satisfaction.

309)

The marketing concept says that a business firm should aim all its efforts at A) doing more advertising and selling than competitors. B) selling what the company produces efficiently. C) satisfying customers regardless of profitability. D) making a profit selling to satisfied customers. E) producing products at the lowest cost.

310)

The "marketing concept" says that a business firm should A) aim all its efforts at meeting society's needs, regardless of profitability. B) aim all its efforts at satisfying its customers—at a profit. C) sell those products it can make at the lowest cost. D) place a heavy emphasis on developing new products. E) treat advertising and selling as its priority.

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311)

A producer with a marketing orientation is MOST likely to A) distribute the product according to customer needs. B) distribute the product in as many retail outlets as possible. C) provide overnight express shipping at an extra cost. D) use e-commerce as a key element in distribution. E) distribute directly from the producer to the consumer.

312)

Complete acceptance of the "marketing concept" would require

A) making sure that all departments focus their efforts on satisfying customer needs. B) having all production, finance, accounting, and personnel managers report directly to the marketing manager. C) placing less emphasis on profit as the objective of the firm. D) trying to satisfy the needs of each and every customer.

313)

"Production orientation" refers to the attitudes of A) sales managers. B) accountants. C) financial managers. D) production managers. E) anyone who doesn't practice the marketing concept.

314)

In a firm operating as a total system to implement the marketing concept, A) the whole company is customer-oriented. B) there are no departments. C) product planning is under the control of the production or engineering departments. D) the marketing manager directs and controls all company activities. E) None of these answers is correct.

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315)

The total system view of the marketing concept builds on the idea that A) sales should be the firm's high-level objective. B) a company should not have specialized departments. C) each department in an organization should do what it does best. D) all departments—not just marketing—should be guided by customer needs. E) None of these answers is correct.

316)

In a firm that has a total company effort in implementing the marketing concept, A) there are "fences" around individual departments. B) not all departments impact customer satisfaction. C) the firm lacks a central focus. D) departments—even very specialized ones—are guided by what customers want. E) the firm is more production-oriented than marketing-oriented.

317) The numeric data that is used by marketing managers to evaluate performance against a set target or goal is referred to as A) market information. B) production statistics. C) the triple bottom line. D) marketing metrics. E) standardization and grading.

318)

Which of the following reasons best describes why a firm would use marketing metrics?

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A) to understand customer satisfaction B) to determine how well a marketing strategy is performing C) to ascertain the effectiveness of different departments within the firm D) to set marketing targets and goals E) to decide what products are easiest to produce

319) The owner of a food truck implemented a new location strategy so that she would be better positioned near a crowded office park during the lunch hour. How should she evaluate her new location strategy? A) She should use marketing metrics to compare performance between the old location and the new location. B) She should use customer satisfaction surveys to evaluate performance between the two locations. C) She need only compare the revenue numbers between the new and old locations. D) She should analyze the effectiveness of the universal functions of marketing. E) She should compare the triple bottom line of both locations.

320)

Which of the following is a basic idea of the marketing concept? A) A production orientation must guide the whole system. B) An organization should build "fences" around its own departments. C) Survival and success require a profit. D) A firm should "give customers what it produces best." E) A firm is obliged to have a positive effect on society.

321)

Adoption of the marketing concept

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A) is easy for most firms. B) occurred first in the service industry. C) has been universal. D) has been slow for producers of industrial commodities. E) happened last among consumer product companies.

322) Whiz Bang Cinema is a restaurant. Whiz Bang’s owners worry about the environment, using paper products made from recycled paper and recycling everything possible. Whiz Bang also gives its employees every Sunday off to be with family, and the restaurant sponsors many local sports teams. It does this while also making sure it is profitable. Whiz Banks seems to operate with a A) sustainable focus. B) production orientation. C) triple bottom line. D) strong profit motive. E) marketing department approach.

323)

The marketing concept can be applied by A) a nurses' association. B) cosmetics manufacturers. C) nonprofit hospitals. D) national parks. E) All these answers are correct.

324)

The marketing concept can be applied by

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A) nonprofit hospitals. B) symphony orchestras. C) private universities. D) manufacturers of consumer products. E) All these answers are correct.

325)

Which of the following is the best example of the marketing concept in action?

A) A product manager tells her sales force, "The inventory in the warehouse must be sold if we are to make a profit, so redouble your sales efforts." B) A manufacturer of industrial chemicals adapts its formulas and goes after the big consumer cleaning market. C) A cleaning supplies firm learns that many consumers are having trouble hiring maids, so it develops a plan to offer customers complete house cleaning services. D) An Internet retailer finds that shoppers are abandoning their shopping carts before checking out, so it promotes its $10 discount on each customer's first purchase. E) A student group wants to hold an awards banquet, so it buys Krispy Kreme donuts and sells them to friends who want to help the club achieve its objectives.

326)

A public utility that has adopted the marketing concept would be most likely to

A) set up a special service to help consumers reduce expensive peak-hours energy consumption. B) lower prices until almost all consumers felt that prices were fair. C) advertise its "public service role" to improve its image with the public. D) use email to send customers a personal apology when blackouts occur. E) None of these answers is correct.

327)

A local symphony group that has adopted the marketing concept would be most likely to

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A) lower ticket prices until all its concerts sell out. B) advertise so consumers know about the quality of the musicians who play in its concerts. C) find out what kind of music local residents want to hear. D) use only its best musicians to handle solo performances.

328)

Which of the following illustrates the marketing concept in action?

A) Three pediatricians set up a group practice, so that at least one is always available for emergencies. B) Bank ATMs that dispense cash are placed in fast-food restaurants. C) The Nevada auto registration office mails license tags to people, to reduce inconvenient waiting in line. D) A veterinarian has office hours in the evening to see pets whose owners must work during the day. E) All these answers are correct.

329)

Which of the following illustrates the marketing concept in action?

A) A young lawyer gives free legal advice to poor people. B) A local police department organizes a "community crime watch" program in a neighborhood that has had many burglaries. C) Several lawyers set up a group practice—so that the costs of the office and equipment can be shared. D) None of these illustrate the marketing concept in action.

330)

A local theater group that has adopted the marketing concept would be MOST likely to

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A) promote the sale of subscriptions, so that patrons can buy tickets at a reduced price for several plays at one time. B) use publicity to announce upcoming plays. C) do a survey to find out what new shows patrons would like to see. D) sell tickets via the Internet.

331) FlyFar Airlines uses marketing research to determine customer needs and assess how well the company meets them. This suggests that FlyFar managers exhibit A) a marketing orientation. B) social responsibility. C) separation of information. D) the innovation concept. E) a production orientation.

332) Which of the following practices would suggest that Acme Tools practices a marketing orientation? A) It sets inventory levels with customer requirements and costs in mind. B) It sells products that it can easily make for its customers. C) It focuses its advertising efforts on product features and how products are made. D) It views customer service as an activity required to reduce consumer complaints. E) It ends its relationship with customers when a sale is made.

333)

A firm with a marketing orientation is MOST likely to A) view advertising as an unnecessary expense. B) recognize that effective advertising is the key to sales. C) advertise how a product meets customers' needs. D) focus its advertising on product features. E) eliminate advertising as a strategy.

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334) Which of the following is not likely to be found in a company with a marketing orientation? A) The company sells whatever it can make. B) The company sees customer credit as a service. C) The company designs its packaging as a selling tool. D) The company uses marketing research to see if it is satisfying its customers. E) The company focuses on locating new opportunities.

335) Which of the following is not an example of a marketing orientation, as opposed to a production orientation? A) The role of the company's marketing research is to determine customer needs and how well the company is satisfying them. B) The relationship with the customer is based on customer satisfaction before and after a sale, leading to a profitable long-run relationship. C) The firm's focus is on reducing its costs. D) The role of the company's customer service is to satisfy customers after the sale, so they'll come back again. E) Company costs that do not add value to customers should be eliminated.

336) Which of the following is not an example of a production orientation, as opposed to a marketing orientation? A) The company sells what it can make easily. B) Advertising focuses on the benefits of the product to customers. C) The relationship with the customer ends with the sale of the product to the customer. D) The purpose of customer service is to reduce customer complaints. E) Advertising focuses on the features of the product.

337)

In a firm with a production orientation,

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A) customer needs determine company plans. B) relationships with customers extend beyond a single sale. C) costs that do not give value to customers are eliminated. D) marketing research, if used at all, is for determining customers' reactions. E) advertising is focused at the need-satisfying benefits of goods and services.

338) ________ refers to the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. A) Operating cost B) Profit margin C) Customer value D) Net value E) Satisfaction

339)

Which of the following statements about customer value is true?

A) Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. B) The greater the competition, the less important customer value is. C) The sure way to achieve high customer value is to offer a lower price. D) It is the manager's view of customer value that matters, not the customer's. E) None of these statements is true.

340)

Which of the following statements about customer value is true?

A) It can't be applied in competitive situations. B) It considers price but no other elements of the marketing mix. C) It applies to goods but not services. D) Its emphasis on what the customer sees as the positive things about a marketing mix means that the negatives are likely to be ignored. E) None of these statements is true.

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341) Customer value typically would not be impacted by a marketing manager's decisions concerning A) product. B) place. C) promotion. D) price. E) Any of these might impact customer value.

342)

Which of the following best ascertains customer value? A) customer monetary costs plus firm profits B) customer benefits minus customer costs C) customer costs plus customer benefits D) customer effort to receive a benefit minus the time delay to receive the benefit E) firm benefits minus customer costs

343)

In evaluating customer value, which of the following is MOST important? A) the customer’s view of costs and benefits B) the price of the market offering C) a firm’s understanding of customer costs and benefits D) high profit margins E) the market offering with the least cost to customers

344)

A functional benefit that a customer may receive from a market offering would

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A) offer top-quality aesthetics. B) save the customer time. C) lower the customer’s anxiety. D) give the customer hope. E) provide a sense of belonging.

345)

Which of the following is the best example of a life-changing customer benefit?

A) A coffee shop redesigns its drive-through window service to cut back on customer wait times. B) An office supply store institutes a loyalty card program in which customers can use earned points for discounts on future purchases. C) A restaurant redecorates to make its space more comfortable. D) A grocery store decides to lower the prices on all produce. E) A gym institutes a buddy program in which a staff member checks in weekly with new enrollees to offer encouragement and advice.

346) Which of the following is not an example of a customer cost that plays a role in a customer’s view of value? A) the interest rate B) potential rewards C) associated fees D) wait time to receive a benefit E) effort required to receive a benefit

347)

Which of the following statements about price and customer value is accurate?

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A) Customer value is only achieved from a low price. B) Customer value is uninfluenced by price. C) A low price trumps all other customer benefits. D) A high price is acceptable when it obtains desired benefits. E) A customer will never accept a higher price market offering.

348)

Which of the following statements about customer value is true?

A) Building relationships with customers means providing customer value before, but not after the purchase of a product or service. B) Retaining current customers is usually less costly than taking customers away from a competitor. C) A firm's advertising department cannot be expected to develop ads to convince a customer to buy from the firm more than once. D) People in the organization who are not in the sales or customer service areas should never be called upon to help resolve a customer's problem. E) None of these statements is true.

349) In order to build relationships with customer value, firms must do all of the following EXCEPT A) ensure that everyone in a firm works together to provide customer value before and after each purchase. B) brief their advertising people to develop ads that try to convince a customer to buy once. C) attract customers in the first place—and keep them satisfied after they buy. D) try to adopt the marketing concept. E) try to eliminate costs that do not give value to customers.

350)

Customer value

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A) is greater if costs exceed benefits. B) becomes less important as competition increases. C) is the same thing as low price. D) affects a customer's relationship with a firm before and after a sale. E) None of these answers is correct.

351) The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits is called customer A) bias. B) cost. C) price. D) value. E) loyalty.

352)

Which of the following is not true about a firm practicing the marketing concept? A) Everyone in the organization focuses on satisfying customers. B) Offering superior customer value attracts customers. C) Satisfying customers leads to customers defecting to the competition. D) Firms build profitable customer relationships. E) All of these are true.

353)

Nonprofit organizations

A) do not have a profit objective, so the marketing concept does not apply. B) can benefit by adopting the marketing concept. C) are fundamentally different than business firms—so they should embrace a production orientation rather than a marketing orientation. D) do not need to be concerned with marketing activities. E) None of these answers is correct.

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354)

Which of the following is true of business firms and nonprofit organizations?

A) Unlike a business firm, a nonprofit organization needs resources and support to survive and achieve its objectives. B) Unlike a business firm, a nonprofit organization must take in as much money as it spends or it won't survive. C) A nonprofit organization does not measure "profit" in the same way as a business firm does. D) Nonprofit organizations face competition for customers; business firms do not. E) Unlike a business firm, a nonprofit organization gets support directly from those who receive the benefits.

355)

In nonprofit organizations, the marketing concept A) is not relevant. B) has different measures of success. C) is usually easy to adopt because of how nonprofits organize for marketing. D) can be implemented without considering customer needs. E) operates with a production orientation.

356) Given the nature of their work, which of the following should have a marketing orientation? A) Girl Scouts of America B) Dallas–Fort Worth Symphony C) American Cancer Society D) University of Wisconsin E) All of these organizations should have a marketing orientation.

357)

Which of the following organizations should apply the marketing concept?

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A) National Park Service B) National Federation of the Blind C) Christian Children's Fund D) United States Postal Service E) All of these organizations should apply the marketing concept.

358)

Which of the following describes the micro–macro dilemma? A) What is good for some producers and consumers may not be good for society as a

whole. B) Marketing people are unsure about individual activities versus social processes. C) In a multiproduct company, which product is to be emphasized over another is unclear. D) Most people don't want much freedom of choice in buying products. E) Intermediaries facilitate exchange, but they add to the cost of goods.

359)

According to the concept of social responsibility, a firm has a duty to A) communicate regularly with the public. B) satisfy consumer needs at any cost. C) place profit above all other considerations. D) place customer satisfaction above all other considerations. E) work in a way that is always good for society as a whole.

360)

Which of the following is not a challenge related to social responsibility?

A) There is little agreement on who gets to determine what is "good" for society. B) Actions that may seem good for society may be costly to a firm. C) Some consumers make purchases based on the perceived societal benefits of a product or service. D) It is impossible to know what impact a firm's actions will have on future generations. E) Acting to satisfy one group of stakeholders may anger another group of stakeholders.

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361)

The term "micro–macro dilemma" means that

A) most people are both producers and consumers. B) marketing people cannot agree on whether marketing should be viewed as activities or as a social process. C) macro-marketing is just a small part of a larger micro-marketing system. D) the micro view of marketing is concerned with the flow of goods and services from producers to consumers—while the macro view is not. E) what is "good" for some producers and consumers may not be good for society as a whole.

362) Trying to balance the interests of people who want to consume alcoholic drinks and the dangers of drunk driving is an example of A) the role of a central market. B) subsistence marketing. C) political action. D) the macro–micro dilemma. E) the exchange process in marketing.

363) The fact that many Americans want the convenience of driving gas-guzzling trucks and sport utility vehicles that also contribute disproportionately to pollution and global warming is an example of A) the micro–macro dilemma. B) discrepancies in customer value. C) marketing ethics. D) the responsibilities of the marketer. E) the marketing concept.

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A) customer value. B) economies of scale. C) the storing function. D) innovation. E) the micro–macro dilemma.

365)

Which of the following is an example of the micro–macro dilemma?

A) Disposable packages are convenient but contribute to environmental problems. B) Children like to ride bicycles, but accidents are common. C) Sulfites help to keep restaurant salads looking fresh, but some people have a dangerous allergic reaction to sulfites. D) Jet skis can be fun but can also be dangerous to the driver and others. E) All of these are examples of the micro–macro dilemma.

366)

Which of the following is the BEST example of the micro–macro dilemma? A) Many consumers buy imported cars, even though they say they like American cars

better. B) High performance cars are fun to drive but may be dangerous to others. C) Imported cars may cost buyers more to buy now but may have better resale value later. D) A fuel-efficient car may cost more to buy but less to operate. E) The economy may be growing, but many people still are not able to buy a new car.

367)

Which of the following is the BEST example of the micro–macro dilemma?

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A) Pepsi Blue sales went up, but total sales of all soft drinks went down. B) A small group of loyal consumers really like RC Cola best, but most consumers don't like it at all. C) The deposit on returnable soft drink bottles is about equal to the cost of the bottle. D) Paper cups for soft drinks are convenient, but they often end up as litter along the highway. E) Snapple beverages are more popular in Texas than in the rest of the United States.

368)

Which of the following is an example of the micro–macro dilemma?

A) A homeowner purchases a ladder but falls off it because he didn't set up the ladder according to the safety instructions posted on it. B) A person gets a speeding ticket because she was talking on her cell phone while driving and didn't notice a speed limit sign. C) A person drives without fastening his seat belt even though a warning light and chime remind him to "buckle up." D) A person is injured while using a power lawn mower because of a small stone that is hurled from the discharge chute. E) A restaurant owner uses plastic containers to keep "take-out" food warm for customers, but the containers cannot be reused or recycled.

369)

Which of the following is not an example of the micro–macro dilemma?

A) Many people like beer and wine, but drunk driving is a big social problem. B) Some people like to eat a lot but later feel guilty about eating too much. C) A "good" lawn mower can be produced cheaply, but its price must be higher if its design must be safe for "ignorant" users. D) A smoker may enjoy a cigar, but the smell can make other people sick. E) Downhill snow skiing is fun, but it is really quite dangerous.

370) ________ refers to a firm's obligation to improve its positive effects on society and reduce its negative effects.

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A) The nonprofit orientation B) The micro–macro dilemma C) Marketing ethics D) Legal obligations E) Social responsibility

371)

Which of the following statements is true regarding social responsibility in marketing?

A) Being socially responsible usually leads to a negative response from customers. B) Being socially responsible can conflict with a firm's profit objective. C) Companies tend to avoid developing written codes of ethics because standards for professional behavior are ambiguous by nature. D) Firms tend to advance their own short-term interests at the expense of customers.

372) A marketing manager made a speech in which he described his organization as having "really embraced the marketing concept over ten years ago." A critic in the audience argued that the manager didn't understand the "socially conscious" view of the marketing concept. Given the critic's argument, the marketing manager may work for A) a fruit processor. B) the public library. C) a firm that recycles aluminum cans. D) a soap producer. E) a motorcycle producer.

373)

Moral standards that guide marketing decisions and actions are called A) civil laws. B) macro dilemmas. C) micro dilemmas. D) marketing ethics. E) laws.

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374)

Which of the following is true concerning marketing ethics? A) Individuals develop moral standards based on their own values. B) Opinions about what is right or wrong vary from one society to another. C) The prevailing practice of most businesspeople is to be fair and honest. D) Marketing ethics has its critics. E) All of these answers are true.

375) In the American Marketing Association's Statement of Ethics, which ethical value stresses a firm's attempts to balance the needs of its buyers with the interests of sellers? A) honesty B) fairness C) responsibility D) citizenship E) openness

376) In the American Marketing Association's Statement of Ethics, which ethical value stresses a firm's attempts to recognize the basic human dignity of its customers? A) citizenship B) respect C) honesty D) openness E) responsibility

377) Which of the following criticisms focuses most directly on a macro view of marketing, rather than on a micro view?

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A) Products often wear our right after the warranty expires. B) Much TV advertising is annoying. C) Marketing exploits the poor and the uneducated. D) Prices for very similar products vary a lot from store to store. E) Door-to-door salespeople are trained to be pushy.

378) Firms develop ________ to promote fair and honest dealings with all stakeholders inside and outside of the organization. A) marketing plans B) marketing departments C) codes of ethics D) intermediaries E) a marketing orientation

379) Which of the following is a common criticism of marketing in the United States and other developed societies? A) Marketing motivates people toward “things” instead of social needs. B) Marketing only focuses on the necessities. C) Marketing exploits those with resources to spend. D) Marketing promotes the “safety” of products, which increases prices. E) Marketing makes it more difficult for people to buy things that they want instead of need.

380)

In the marketing context, a “better world” includes all of the following EXCEPT

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A) sellers make a profit without having to consider sustainability. B) buyers’ consumption choices allow them to experience a better quality of life. C) marketing strategy decisions address some of the world’s most challenging problems. D) sellers and buyers make decisions that have less adverse impacts on others. E) buyers and sellers make better and healthier decisions.

381)

Marketing that seeks to make the world a better place, A) can still be profitable. B) is just a ploy to get people to buy stuff they don’t need. C) is a charitable endeavor. D) does not address the world’s real problems. E) is totally ineffective.

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Answer Key Test name: Chap 01_17e 1) FALSE Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 2) FALSE Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 3) FALSE Making goods or performing services is called production. Marketing is a much bigger process, involving the flow of need-satisfying goods and services from producer to consumer. 4) FALSE Estimating what price consumers are willing to pay for a product and assessing whether the firm can make a profit selling at that price is an example of a marketing activity. 5) TRUE Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 6) TRUE Marketing plays an essential role in providing consumers with needsatisfying goods and services and, more generally, in creating customer satisfaction. 7) TRUE Version 1

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Customer satisfaction is the extent to which a firm fulfills a consumer's needs, desires, and expectations. 8) FALSE Marketing helps make sure that the right goods and services are produced and find their way to customers. 9) TRUE In advanced economies, marketing costs about 50 cents of every consumer dollar. 10) FALSE In advanced economies, marketing costs about 50 cents of every consumer dollar. 11) TRUE Marketing encourages innovation, which is the development and spread of new ideas, goods, and services. 12) FALSE Marketing encourages innovation, which is the development and spread of new ideas, goods, and services. 13) TRUE We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 14) FALSE We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 15) FALSE Version 1

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We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 16) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 17) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 18) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives. 19) FALSE Marketing applies to both profit and nonprofit organizations. 20) FALSE Marketing applies to both profit and nonprofit organizations. 21) FALSE Marketing applies to both profit and nonprofit organizations. 22) FALSE Marketing applies to both profit and nonprofit organizations. 23) TRUE

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Marketing, rather than production, should begin with determining what goods and services are to be developed to satisfy customer needs. 24) FALSE Marketing, rather than production, should determine what goods and services are to be developed. 25) FALSE Marketing should begin with potential customer needs and not with the production process. 26) TRUE Marketing involves a flow of need-satisfying offerings from a producer to a customer, which implies that there is an exchange of the offering for something else, such as the customer's money. 27) TRUE In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 28) FALSE A marketing exchange is often part of an ongoing relationship, not just a single transaction. 29) FALSE The marketing flow of need-satisfying goods and services is not just for a single transaction but rather is part of building a long-lasting relationship that benefits both the firm and the customer. 30) TRUE The emphasis with macro-marketing is on how the whole marketing system works, which includes looking at how marketing affects society and vice versa. Version 1

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31) FALSE Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 32) FALSE Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 33) TRUE The emphasis with macro-marketing is not on the activities of individual organizations. Instead, the emphasis is on how the whole marketing system works. 34) FALSE The emphasis with macro-marketing is not on the activities of individual organizations. Instead, the emphasis is on how the whole marketing system works. 35) TRUE Macro-marketing is concerned with the flow of need-satisfying goods and services from producers to consumers. 36) TRUE The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. 37) TRUE

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Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. 38) FALSE Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways such as space, time, information and values, and ownership. 39) TRUE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 40) FALSE Most firms specialize in producing and selling large amounts of a narrow assortment of goods and services, which allows them to take advantage of mass production with its economies of scale. 41) FALSE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 42) TRUE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 43) FALSE In an advanced economy, a narrow assortment of goods and services can be produced with mass production and its economies of scale. 44) TRUE This statement requires an understanding of the material in Exhibit 1–1. 45) TRUE

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The purpose of a macro-marketing system is to overcome the discrepancies and separations using the universal functions of marketing. 46) TRUE The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 47) FALSE The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 48) FALSE The universal functions of marketing must be performed in all macromarketing systems and may differ among nations and economic systems. 49) TRUE Producers and consumers sometimes handle some of the marketing functions. However, exchanges are often easier or less expensive when a marketing specialist performs some of the marketing functions. 50) FALSE Intermediaries specialize in trade rather than production. 51) TRUE Intermediaries can help to make the whole macro-marketing system more efficient and effective by the savings of time, effort, and expense that would be involved without them. 52) FALSE

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Although intermediaries charge for services they provide, this charge is usually offset by the savings of time, effort, and expense that would be involved without them, thus making the whole macro-marketing system more efficient and effective. 53) FALSE Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 54) FALSE Exchanges are often easier or less expensive when a marketing specialist performs some of the marketing functions. 55) TRUE All the marketing functions must be performed by someone, either by shifting or sharing; but no function can be completely eliminated. 56) FALSE All societies must provide for the needs of their members and hence every society needs some sort of economic system. 57) TRUE An economic system is the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society. 58) FALSE Every society needs some sort of economic system that must develop some method to decide what and how much is to be produced and distributed by whom, when, to whom, and why. 59) TRUE Countries with command economies often had little variety, so consumers had few choices. Version 1

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60) FALSE In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 61) FALSE In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 62) TRUE In a market-directed economy, prices in the marketplace are a rough measure of how society values particular goods and services. 63) TRUE In contrast with command economies, consumers in a market-directed economy choose from a range of options that may meet their needs. 64) FALSE Consumers in a market-directed economy enjoy great freedom of choice, but it is not complete freedom of choice. They are still required to buy goods and services that must be provided for the good of society. 65) FALSE New consumer needs that can be served profitably—not just the needs of the majority—will probably be met by some profit-minded businesses. But profit, survival, and growth are not guaranteed. 66) FALSE The American economy and most other Western economies are mainly market-directed, but not completely. 67) FALSE

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The American economy and most other Western economies are mainly market-directed, but not completely. 68) FALSE The American economy and most other Western economies are mainly market-directed, but not completely. 69) TRUE The simple trade era was a time when families traded or sold their "surplus" output to local distributors. These specialists resold the goods to other consumers or other distributors. This was the early role of marketing. 70) TRUE The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. 71) TRUE From the Industrial Revolution until the 1920s, most companies were in the production era. 72) FALSE The sales era is a time when a company emphasizes selling because of increased competition. It is in the marketing department era that all marketing activities are brought under the control of one department to improve short-run policy planning and to try to inte-grate the firm’s activities. 73) FALSE

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Marketing departments are not formed until someone is needed to tie together the efforts of research, purchasing, production, shipping, and sales. This does not occur until firms have already gone through both the production era and the sales era. 74) TRUE The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 75) FALSE The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept. 76) TRUE The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept. 77) TRUE The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. 78) FALSE The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 79) FALSE The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 80) TRUE

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The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 81) TRUE A production orientation means making whatever products are easy to produce and then trying to sell them and thinking of customers as existing to buy the firm's output rather than of firms as existing to serve customers. 82) FALSE A production orientation means making easy-to-produce products and then trying to sell them. Consumers of these products exist to buy the firm's output, rather than the firm existing to serve customers. 83) TRUE A marketing-oriented firm tries to offer customers what they need, and a production-oriented firm makes whatever products are easy to produce and then trying to sell them. 84) FALSE Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success) and not just sales—as an objective. 85) TRUE Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—and not just sales—as an objective. 86) FALSE

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Three basic ideas are included in the definition of the marketing concept: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success) and not just sales—as an objective. 87) FALSE Three basic ideas are included in the definition of the marketing concept: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—and not just sales—as an objective. 88) FALSE In the marketing concept, profit and/or other measures of long-term success can and should be the objective. 89) FALSE Adoption of the marketing concept is not universal. The marketing concept provides a guiding focus that all departments adopt. 90) FALSE Departments may still exist because specialization often makes sense, while the marketing concept provides a guiding focus that all departments adopt. 91) TRUE Marketing metrics refer to the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 92) FALSE Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long-term success. 93) TRUE Version 1

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Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long-term success. 94) FALSE Adoption of the marketing concept is not universal because producers of industrial commodities like steel, coal, and chemicals have tended to remain production oriented. 95) TRUE When an industry gets competitive, consumers have choices and flock to those that deliver customer satisfaction. This provides an incentive for more firms to practice the marketing concept. 96) FALSE Adoption of the marketing concept is not universal. 97) FALSE A manager who adopts the marketing concept sees customer satisfaction as the path to profits. 98) TRUE Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. 99) FALSE Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. Satisfaction occurs when you give the customers what they need. 100) TRUE A good or service that doesn't meet a customer's needs results in low customer value, even if the price is very low.

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101) FALSE Some people think that higher customer value comes from a low price. A high price may be more than acceptable when it obtains the desired benefits. 102) FALSE Some people think that higher customer value comes from a low price. A high price may be more than acceptable when it obtains the desired benefits. 103) TRUE A manager's objective and thorough analysis (opinion) of the benefits of the firm's offering may not accurately reflect the customer's impressions. It is the customer's view that matters. 104) FALSE A manager's objective and thorough analysis (opinion) of the benefits of the firm's offering may not accurately reflect the customer's impressions. It is the customer's view that matters. 105) TRUE A firm that offers superior customer value is likely to win the competition and keep customers. 106) TRUE Firms that embrace the marketing concept seek ways to build a profitable long-term relationship with each customer. 107) TRUE Trying to get new customers by taking them away from a competitor is usually more costly than retaining current customer relationships by really satisfying their needs. 108) TRUE Version 1

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Building lasting relationships with customers requires that everyone in a firm work together to provide customer value before and after each purchase. 109) FALSE The long-term relationship with the customer is threatened unless everyone works together to make things right for the customer. 110) TRUE The marketing concept is as important for nonprofit organizations as it is for business firms. 111) FALSE The marketing concept is as important for nonprofit organizations as it is for business firms. In fact, marketing applies to all sorts of public and private nonprofit organizations. 112) TRUE Support for nonprofit organizations often does not come directly from those who receive the benefits the organization produces. 113) TRUE As with a business, a nonprofit organization must take in as much money as it spends or it won't survive. 114) TRUE A nonprofit organization does not measure "profit" in the same way as a firm. 115) TRUE The micro–macro dilemma means what is "good" for some firms and consumers may not be good for society as a whole. 116) TRUE Version 1

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The micro–macro dilemma means what is "good" for some firms and consumers may not be good for society as a whole. 117) TRUE The micro–macro dilemma occurs when a firm focuses its efforts on satisfying some consumers to achieve its objectives, which may result in negative effects on society. 118) FALSE A firm's obligation to improve its positive effects on society and reduce its negative effects is called social responsibility. 119) FALSE A firm's obligation to improve its positive effects on society and reduce its negative effects is called social responsibility. 120) TRUE A manager cannot be truly consumer-oriented and at the same time intentionally unethical. 121) TRUE Marketing ethics are the moral standards that guide marketing decisions and actions. 122) TRUE Marketing ethics are the moral standards that guide marketing decisions and actions. 123) TRUE Each individual develops moral standards based on his or her own values, which helps explain why opinions about what is right or wrong often vary from one person to another, from one society to another, and among different groups within a society, and why it is sometimes difficult to say whose opinions are "correct." Version 1

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124) FALSE A manager should be criticized for making an unethical marketing decision, because managers have a duty to be fully informed before making decisions. 125) TRUE As stated in Exhibit 1–7, the American Marketing Association's code of ethics sets specific ethical standards for many aspects of marketing. 126) TRUE As stated in Exhibit 1–7, the American Marketing Association's code of ethics sets specific ethical standards for many aspects of marketing. 127) A Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 128) D Building a facility to manufacture furniture is part of production, not marketing. In contrast with production, marketing helps make sure that the right goods and services are produced and that they find their way to consumers. 129) C Marketing should begin with potential customer needs. Marketing should try to anticipate needs and then determine what goods and services are to be developed to meet those needs. 130) C Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 131) B Production is actually making goods or performing services. Version 1

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132) C Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 133) E Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 134) B Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 135) B Customer satisfaction is the extent to which a firm fulfills a customer's needs, desires, and expectations. 136) E In advanced economies, marketing costs about 50 cents of every consumer dollar. For some goods and services, the percentage is much higher. 137) C In advanced economies, marketing costs about 50 cents of every consumer dollar. For some goods and services, the percentage is much higher. 138) A Marketing affects almost every aspect of your daily life. 139) C

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Marketing affects almost every aspect of daily life, is important to your job, affects innovation and consumers’ standard of living and also plays a big part in economic growth and development. Production involves actually making the goods that people need. 140) D Marketing encourages research and innovation, the development and spread of new ideas, goods and services. 141) D The development and spread of new ideas, goods, and services for the marketplace is called innovation. 142) B Marketing should handle storing, advertising, designing the packaging, setting the price of the product, etc. Making goods or performing services is called production. 143) A Marketing is a set of activities done by an individual organization to satisfy its customers. 144) D Marketing from a micro view is a set of activities performed by organizations, and from a macro view it is a social process. 145) C Marketing from a micro view is a set of activities performed by organizations, and from a macro view it is a social process. 146) A

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Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 147) E Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 148) D Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 149) D Marketing from a micro view is a set of activities performed by organizations. 150) D Marketing should begin with potential customer needs and not with the production process. 151) C Marketing should begin with potential customer needs and not with the production process. 152) C

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Marketing from a micro view is a set of activities performed by organizations. The American Red Cross is an organization that performs activities such as seeking more blood donors. The other alternatives deal with macro-marketing issues. 153) E Marketing from a micro view is a set of activities performed by organizations. The other alternatives deal with macro-marketing issues. 154) A Marketing applies to both profit and nonprofit organizations. 155) C Marketing applies to both profit and nonprofit organizations. 156) A Marketing applies to both profit and nonprofit organizations. 157) E The aim of marketing is to identify customers' needs and provide needsatisfying products, whether the product is a physical good, a service, or even an idea. 158) D The aim of marketing is to identify customers' needs and meet those needs so well that the product almost "sells itself." 159) B Marketing should begin with potential customer needs and not with the production process. 160) B

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Marketing should determine what goods and services are to be developed, including decisions about product design and packaging; prices or fees; transporting and storing policies; advertising and sales policies; and, after the sale, installation, customer service, warranty, and perhaps even disposal and recycling policies. 161) C Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 162) D Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 163) E Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 164) C In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 165) A In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 166) A In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 167) A Version 1

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In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 168) E A marketing exchange is often part of an ongoing relationship, not just a single transaction. 169) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 170) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 171) D Macro-marketing examines how the whole marketing system works. It does not pertain to the individual marketing plans and challenges of individual organizations. 172) A The emphasis with macro-marketing is not on the activities of individual organizations; instead, the emphasis is on how the whole marketing system works. 173) C

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Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 174) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. 175) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers. 176) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 177) C The emphasis with macro-marketing is not on the activities of individual organizations; instead, the emphasis is on how the whole marketing system works. 178) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 179) E

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The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 180) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 181) A The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 182) B Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. 183) E Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. As Exhibit 1–1 shows, exchange be-tween producers and consumers is hampered by spatial separation; separation in time; separation of information; separation in values; and separation of ownership. 184) E Exchange between producers and consumers is hampered by spatial separation, separation in time, separation of information and values, and separation of ownership. 185) C

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The transporting function involves the movement of goods from one place to another, and the storing function involves holding goods until customers need them. These functions help to overcome the spatial separation caused by the tendency of producers to locate where it is economical to produce, while consumers are located in many scattered places. 186) D Purchasing cheese from five different manufacturers overcomes discrepancies of assortment; purchasing from around the world overcomes spatial separation; and customers being able to satisfy their needs at different prices overcomes separation of values. 187) D In spatial separation, producers tend to locate where it is economical to produce while consumers are located in many scattered places. 188) A In separation of information, producers do not know who needs what, where, when, and at what price; and consumers do not know what is available from whom, where, when, and at what price. 189) C In separation in values, producers value goods and services in terms of costs and competitive prices while consumers value them in terms of satisfying needs and their ability to pay. 190) A Discrepancies of quantity occur when producers prefer to produce and sell in large quantities and consumers prefer to buy and consume in small quantities. 191) A Version 1

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Discrepancies of assortment occurs when producers specialize in producing a narrow assortment of goods and services, but consumers need a broad assortment. 192) D Discrepancies of assortment occur when producers specialize in producing a narrow assortment of goods and services, but consumers need a broad assortment. 193) B Separation of ownership occurs when producers hold title to goods and services that they themselves do not want to consume while consumers want goods and services that they do not own. 194) C Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 195) B Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 196) B From the macro-marketing perspective, the marketing function that overcomes the spatial separation between a manufacturer and overseas consumers is transporting. Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand. 197) C The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. Version 1

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198) A While producers handle some of the marketing functions themselves, exchanges are often easier or less expensive when a marketing specialist, or intermediary, performs some of the marketing functions. 199) C The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 200) A The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 201) A The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 202) A The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 203) B The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 204) E

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The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. Most of these functions were performed by Ben. 205) D The selling function involves promoting the product, use of personal selling, advertising, customer service, and other direct and mass selling methods. 206) B The selling function involves promoting the product, use of personal selling, advertising, customer service, and other direct and mass selling methods. 207) B Market information function involves the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm's own neighborhood or in a market overseas. 208) D The standardization and grading function involves sorting products according to size and quality. 209) C The standardization and grading function involves sorting products according to size and quality. 210) C The standardization and grading function involves sorting products according to size and quality. 211) C

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The buying function means looking for and evaluating goods and services. 212) C Producers, consumers, and marketing specialists perform the universal functions of marketing. 213) E Producers, consumers, and marketing specialists perform the universal functions of marketing. Intermediaries and collaborators are marketing specialists. 214) C The universal functions of marketing must be performed in all macromarketing systems and may differ among nations and economic systems. The two kinds of economic systems are command economies and market-directed economies. 215) D An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process. 216) B An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process by saving some of the time, effort, and expense that would be involved without them. 217) B An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process for a large number of customers. 218) E Version 1

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Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 219) E Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 220) E Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 221) E Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 222) D Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 223) B Marketing intermediaries and collaborators are often able to perform the marketing functions better and at a lower cost than producers or consumers can, which makes the whole macro-marketing system more efficient and effective. 224) D

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Internet-based intermediaries like Amazon.com and eBay.com help cut the costs of many marketing functions. 225) B Responsibility for performing the marketing functions can be shifted and shared in a variety of ways. 226) B From a micro viewpoint, not every firm must perform all of the functions; however, responsibility for performing the marketing functions can be shifted and shared in a variety of ways. 227) A From a macro-marketing viewpoint, all of the marketing functions must be per-formed by someone—an individual producer or consumer, an intermediary, a market-ing collaborator, or, in some cases, even a nation’s government. No function can be completely eliminated. 228) A From a macro-marketing viewpoint, all of the marketing functions must be performed by someone—an individual producer or consumer, an intermediary, a marketing collaborator, or, even a nation’s government. No function can be completely eliminated. 229) E Economic system is the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society. 230) C The role of a macro-marketing system is to effectively match supply and demand and at the same time accomplish society's objectives. 231) A Version 1

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In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 232) E In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 233) D In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. The economy often has little variety, so consumers have few choices. 234) E In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 235) A In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. These decisions are usually part of an overall economic plan directed by the government. 236) D While all societies have economic systems, how an economic system operates depends largely on the nature of the society's political institutions. 237) E

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In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 238) C In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 239) C In a market-directed economy, consumers decide what is to be produced and by whom—through their dollar "votes." 240) A In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 241) B Prices in the marketplace are a rough measure of how society values particular goods and services. 242) B Prices in the marketplace are a rough measure of how society values particular goods and services. 243) E All these statements are true regarding the role of price in a marketdirected economy. 244) A Consumers in a market-directed economy are free to choose from a range of options that may meet their needs.

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245) D In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. Government officials decide what and how much is to be produced and distributed in a command economy. 246) B The citizens in a market-directed economy are taxed for goods or services provided for the good of society such as national defense, public schools, police and fire protection, roads, and public health services. 247) E In a market-directed economy, prices are determined in the marketplace. Setting prices is not likely to be a role of government. 248) D In a market-directed economy, consumers decide what is to be produced and by whom—through their dollar "votes." 249) A Consumers in a market-directed choose from a range of options that may meet their needs. They are not forced to buy any goods or services, except those judged as good for society—such as national defense, police and fire protection, roads, public schools, etc. 250) B The American economy and most other Western economies are mainly market-directed, but not completely. 251) A

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The rise of digital and social media gives customers more power in the market. If a customer feels that they have been wronged by a company, their review on a website or in a social media post may be read by hundreds or thousands of people. 252) A Prospective customers often search the web to learn about companies before buying. They can easily find positive or negative information on the Internet, which gives companies an extra incentive to play by the socially accepted rules of the game. 253) A The American and most other Western economies are mainly marketdirected—but not completely. Society assigns supervision of the system to the government, which sets and enforces the “rules of the game.” 254) D In many Western economies, public interest groups and consumers provide an additional check on a market-directed economy. For example, the Center for Science in the Public Interest (CSPI) is a consumer watchdog group that pressures food companies to make healthier products. 255) E Consumers can report their satisfaction or dissatisfaction with companies by posting reviews on websites. Potential customers can easily find positive and negative information on the Internet, giving firms an extra incentive to play by the socially accepted "rules of the game." 256) C

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Producers are free to do whatever they wish, provided that they stay within the rules set by government and receive enough dollar "votes" from consumers. But profit, survival, and growth are not guaranteed. 257) C In a command economy, prices are set by government planners, not supply and demand. 258) A As reflected in Exhibit 1–2, checks on the market-directed macromarketing system include: (1) customers voting with their dollars based on prices charged; (2) customers voicing satisfaction and dissatisfaction; (3) public interest groups sharing information; and (4) the government setting the “rules of the game.” 259) A As bartering became more difficult, societies moved into the simple trade era, a time when families traded or sold their surplus output to local distributors. These specialists resold the goods to other consumers or other distributors. 260) E The five stages in marketing evolution are: (1) the simple trade era, (2) the production era, (3) the sales era, (4) the marketing department era, and (5) the marketing company era. 261) A The five stages in marketing evolution are: (1) the simple trade era, (2) the production era, (3) the sales era, (4) the marketing department era, and (5) the marketing company era. 262) D

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The simple trade era is a time when families traded or sold their "surplus" output to local distributors. 263) B From the Industrial Revolution until the 1920s, most companies were in the production era, since companies focused on production of a few specific products. 264) C The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 265) E "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 266) C "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 267) E The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. "If we can make it, it will sell" is management thinking characteristic of the production era. 268) B The sales era is a time when a company emphasizes selling because of increased competition. 269) A

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The sales era is a time when a company emphasizes selling because of increased competition. 270) B Advanced production capabilities led to a sales era, in which a company emphasizes selling to win customers because of increased competition. 271) E The sales era is a time when a company emphasizes selling because of increased competition. 272) D The sales era is a time when a company emphasizes selling because of increased competition. 273) B The sales era is a time when a company emphasizes selling because of increased competition. 274) C The sales era is a time when a company emphasizes selling because of increased competition. 275) C By about 1930, in the sales era, most companies in the industrialized Western nations had more production capability than ever before. 276) D Advanced production capabilities led to a sales era, in which a company emphasizes selling to win customers because of increased competition. 277) C The sales era is a time when a company emphasizes selling because of increased competition. Version 1

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278) B The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 279) C The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 280) D In marketing company era, the whole company effort is guided by the marketing concept that aims all its efforts at satisfying its customers. 281) C The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 282) A The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 283) B The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead. 284) A

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The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and decide where to put the company's effort. 285) B The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead. 286) E In the five stages in marketing evolution, the marketing department era makes short-run planning only; the first era to evolve was the simple trade era; the marketing company era makes both short-run and long-run planning; and the production era is a time when a company focuses on a few specific products—perhaps because few of these products are available in the market. 287) C The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 288) B For most firms in advanced economies, the sales era continued until at least 1950. 289) B The marketing concept means that an organization aims all its efforts at satisfying its customers based on their needs. This contrasts with the production orientation, in which managers make and sell whatever products are easy to produce.

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290) E The marketing concept is distinct from other approaches to business in that it views organizations as existing to serve customers and the needs of society. Firms that apply the marketing concept direct all their efforts at satisfying customers. 291) B Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 292) C Some organizations explicitly consider a triple bottom line, which measures an organization's economic, social, and environmental outcomes as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 293) E The marketing concept means that an organization aims all its efforts at satisfying its customers—but at a profit. 294) D The marketing concept means that an organization aims all its efforts at satisfying its customers—but at a profit. Making whatever products are easy to produce and then trying to sell them is a production orientation. 295) C Making whatever products which are easy to produce and then trying to sell them is a production orientation. 296) B

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Production orientation occurs when managers think of customers existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society. 297) A Production orientation occurs when managers think of customers as existing to buy the firm's output rather than of firms existing to serve customers. 298) B Making whatever products are easy to produce and then trying to sell them is found in a production-oriented firm. 299) C Production orientation occurs when managers think of customers as existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society. 300) B A production orientation means making whatever products that are easy to produce and then trying to sell them; and thinking of customers as existing to buy the firm's output rather than of firms existing to serve customers. 301) E A production orientation means making whatever products that are easy to produce and then trying to sell them; and thinking of customers as existing to buy the firm's output rather than of firms existing to serve customers. 302) A A marketing orientation means trying to carry out the marketing concept. Version 1

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303) C A marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 304) E Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 305) B Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 306) C Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 307) B Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 308) E Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit—not just sales—as an objective. 309) D The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. Version 1

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310) B The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. 311) A A marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 312) A In a firm that follows marketing concept, every department may directly or indirectly impact customer satisfaction. 313) E Making whatever products are easy to produce and then trying to sell them is a production orientation. "Production orientation" refers to anyone who doesn't acknowledge customer needs. 314) A The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 315) D The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 316) D The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 317) D Version 1

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Marketing metrics refers to the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 318) B Marketing metrics allow marketing managers to calculate how well a strategy is performing. They are often used to evaluate performance against targets or goals that are already set. 319) A The food truck owner can use marketing metrics to compare the performance at her new and old locations. 320) C Profit is the difference between a firm's revenue and its total costs and acts as the balancing point that helps the firm determine what needs it will try to satisfy with its total effort. 321) D Some industries with limited competition, including electric utilities, cable television providers, and industrial commodities producers, have also been slow to adopt the marketing concept. 322) C Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 323) E Any organization that follows the three basic ideas of marketing concept is said to have adopted the marketing concept. 324) E

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Any organization that follows the three basic ideas of marketing concept is said to have adopted the marketing concept. 325) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 326) A The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 327) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 328) E The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 329) B The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 330) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. Doing a survey is the best choice because it involves trying to determine needs. 331) A Marketing-oriented firms try to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 332) A

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Marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 333) C As stated in Exhibit 1–4, a marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 334) A As stated in Exhibit 1–4, a company makes what it can sell in a marketing-oriented firm, trying to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 335) C As stated in Exhibit 1–4, in a marketing orientation, a firm's focus is on locating new opportunities and not on reducing its costs. 336) B As stated in Exhibit 1–4, in a production orientation, advertising focuses on the features of the product and not on the benefits of the product to customers. 337) D As stated in Exhibit 1–4, marketing research used in a production orientation determines the customer reaction. 338) C Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. 339) A Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. Version 1

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340) E Customer value reflects both benefits and costs (positives and negatives) and is applicable to both goods and services. It considers all elements of the marketing mix, not just price, and competition does matter. 341) E Customer value considers all elements of the marketing mix. 342) B As seen in Exhibit 1–5, customer value equals customer benefits minus customer costs. Customer value is the difference between what a customer sees from a market offering and the costs of obtaining those benefits. 343) A It is the customer’s view of costs and benefits that is important. Customer value depends on the customer’s perception. 344) B As reflected in Exhibit 1–5, a functional benefit of a market offering could save the customer time or effort. 345) E According to Exhibit 1–5, life-changing benefits include those that give hope, offer motivation, or provide a sense of affiliation or belonging. Having a gym staff member check in on new enrollees may provide all these benefits to gym customers. 346) B Examples of different types of costs, as seen in Exhibit 1–5, include monetary costs (money, interest rates, fees) and inconvenience (time delay and effort required to receive a benefit). Rewards are an example of an emotional benefit. Version 1

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347) D A high price may be more than acceptable when it obtains the desired benefits. A good or service that doesn’t meet a customer’s needs results in low customer value, even if the price is very low. 348) B Trying to get new customers by taking them away from a competitor is usually more costly than retaining current customers by really satisfying their needs. 349) B The firm's advertising might encourage a customer to buy once, but if the firm doesn't deliver on the benefits promised in its ads, the customer is likely to go elsewhere the next time the need arises. 350) D Building and maintaining relationships with customers require that everyone in a firm work together to provide customer value before and after each purchase. 351) D Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. For example, any readily available glue that performs the job effectively at the least cost will have high customer value to a scrapbook hobbyist. 352) C

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Exhibit 1–6 summarizes these ideas. In a firm that has adopted the marketing concept, everyone focuses on customer satisfaction. They look for ways to offer superior customer value. That helps attract customers in the first place—and keeps them satisfied after they buy. So when they are ready to make repeat purchases, the firm is able to keep them as customers. Sales may increase further because satisfied customers are likely to buy other products offered by the firm. In this way, the firm builds profitable relationships with its customers. 353) B The marketing concept is as important for nonprofit organizations as it is for business firms. 354) C A nonprofit organization does not measure "profit" in the same way as a firm. 355) B All nonprofit organizations seek to achieve different objectives and need different measures of success. 356) E Marketing applies to all sorts of public and private nonprofit organizations ranging from government agencies, health care organizations, educational institutions, and religious groups to charities, political parties, and fine arts organizations. 357) E Marketing applies to all sorts of public and private nonprofit organizations ranging from government agencies, health care organizations, educational institutions, and religious groups to charities, political parties, and fine arts organizations.

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358) A The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 359) E Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects, both for present and future generations. 360) C While making marketing decisions based on social responsibility can add costs to a firm, it can also increase profits. Some consumers purchase products based on the perceived benefits of those products to society and the natural environment. 361) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 362) D The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 363) A The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 364) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 365) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. Version 1

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366) B The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 367) D The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 368) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 369) B The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 370) E Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects. 371) B Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects. There are times when being socially responsible can increase not only a firm's profits, but also its costs. 372) E Some consumers want products that may not be safe or good for society in the long run. Companies that produce such products follow the marketing concept to satisfy customer needs but fail to be socially responsible. A good example is a motorcycle manufacturer. 373) D

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Marketing ethics are the moral standards that guide marketing decisions and actions. 374) E Marketing ethics are the moral standards that guide marketing decisions and actions. Each individual develops moral standards based on his or her own values, which explains why opinions about what is right or wrong often vary from one society to another. Marketing ethics also help most businesspeople practice fair and honest business. 375) B As stated in Exhibit 1–7, fairness helps to balance justly the needs of the buyer with the interests of the seller. 376) B As stated in Exhibit 1–7, respect stresses acknowledgement of the basic human dignity of all stakeholders. 377) C The criticism that marketing exploits the poor and the uneducated is a macro-marketing issue, not a micro-marketing issue. 378) C To be certain that standards for marketing ethics are as clear as possible, many organizations develop their own written codes of ethics, which state the ethical standards that everyone in the firm should follow in dealing with customers and other people. 379) A As reflected in the sample criticisms of marketing in Exhibit 1–8, some criticize marketing for making people too materialistic and for motivating people toward “things” instead of social needs. 380) A Version 1

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A better world is one where: (1) buyers and sellers make better decisions, are healthier, and through their consumption choices (or decision not to consume) experience a better quality of life; (2) buyers and sellers make decisions that have less adverse impacts on others; and (3) marketing strategy decisions address some of the world’s most challenging problems—including hunger, poverty, and climate change. 381) A Most companies are stepping up their efforts to use marketing to create a better world. Such efforts are not necessarily charitable endeavors, and are often profitable.

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CHAPTER 2 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Planning, implementation, and control are basic jobs of all managers. ⊚ ⊚

2)

true false

Controlling the marketing plan is the first step of the marketing management process. ⊚ ⊚

true false

3) The three basic jobs in the marketing management process are planning, implementation, and control. ⊚ ⊚

true false

4) The marketing management process consists of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. ⊚ ⊚

5)

true false

Strategic planning is a top management job that includes planning only for marketing. ⊚ ⊚

true false

6) Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. ⊚ ⊚

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7) Strategic (management) planning is a managerial process of developing and maintaining a match between the resources of the production department and its product opportunities. ⊚ ⊚

true false

8) Finding attractive opportunities and developing profitable marketing strategies are tasks included in the marketing manager's marketing strategy planning job. ⊚ ⊚

true false

9) Marketing strategy planning is the process of deciding how best to sell the products the firm produces. ⊚ ⊚

10)

true false

A marketing strategy specifies a target market and a related marketing mix. ⊚ ⊚

true false

11) A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. ⊚ ⊚

true false

12) A marketing strategy is composed of two interrelated parts—planning and implementation. ⊚ ⊚

13)

true false

The two parts of a marketing strategy are an attractive opportunity and a target market.

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⊚ ⊚

14)

true false

A target market consists of a group of consumers who are usually quite different. ⊚ ⊚

true false

15) A marketing mix consists of the uncontrollable variables that a company puts together to satisfy a target market. ⊚ ⊚

16)

true false

Target marketing aims a marketing mix at some specific target customers. ⊚ ⊚

true false

17) Mass marketing means focusing on some specific customers, as opposed to assuming that everyone is the same and will want whatever the firm offers. ⊚ ⊚

18)

The mass marketing approach is more production-oriented than marketing-oriented. ⊚ ⊚

19)

true false

true false

The terms mass marketing and mass marketers mean the same thing. ⊚ ⊚

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20)

"Mass marketers" like Target usually try to aim at clearly defined target markets. ⊚ ⊚

21)

The problem with target marketing is that it limits the firm to small market segments. ⊚ ⊚

22)

true false

true false

Potential customers are all alike. ⊚ ⊚

true false

23) The basic reason to focus on some specific target customers instead of all possible customers is so that managers can develop a marketing mix that satisfies those customers' specific needs better than they are satisfied by some other firm. ⊚ ⊚

24)

The "Four Ps" are Product, Promotion, Price, and Personnel. ⊚ ⊚

25)

true false

The "Four Ps" of the marketing mix are Product, Position, Promotion, and Price. ⊚ ⊚

26)

true false

true false

The "Four Ps" of the marketing mix are People, Products, Price, and Promotion. ⊚ ⊚

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27) Product, Place, Promotion, and Price are the four major variables (decision areas) in a firm's marketing mix. ⊚ ⊚

true false

28) The customer is a part of the marketing mix and should be the target of all marketing efforts. ⊚ ⊚

true false

29) Although the customer should be the target of all marketing efforts, customers are not part of a marketing mix. ⊚ ⊚

30)

true false

The customer should not be considered part of a "marketing mix." ⊚ ⊚

true false

31) The Product area is concerned with developing the right physical good, service, or blend of both for the target market. ⊚ ⊚

true false

32) According to the text, a firm that sells a service rather than a physical good does not have a product. ⊚ ⊚

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33) The Product area of the marketing mix may involve a service and/or a physical good, which satisfies some customers' needs. ⊚ ⊚

true false

34) The Place decisions are concerned with getting the right product to the target market at the right time. ⊚ ⊚

true false

35) Any series of firms (or individuals) from producer to final user or consumer is a channel of distribution. ⊚ ⊚

true false

36) A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. ⊚ ⊚

37)

A channel of distribution must include an intermediary. ⊚ ⊚

38)

true false

true false

A channel of distribution must include several kinds of intermediaries and collaborators. ⊚ ⊚

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39) Personal selling, mass selling, and sales promotion are all included in the Promotion area of the marketing mix. ⊚ ⊚

40)

true false

Promotion is composed of personal selling, advertising, publicity, and sales promotion. ⊚ ⊚

true false

41) Personal selling involves direct personal communication to get the sale, but personal attention is seldom required after the sale. ⊚ ⊚

true false

42) Customer service is needed when a customer wants the seller to resolve a problem with a purchase. ⊚ ⊚

true false

43) Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. ⊚ ⊚

true false

44) Sales promotion can involve point-of-purchase materials, store signs, contests, catalogs, and circulars. ⊚ ⊚

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45) Sales promotion refers to those promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. ⊚ ⊚

46)

true false

Personal selling and advertising are both forms of sales promotion. ⊚ ⊚

true false

47) The "Four Ps" are used by marketing managers to deliver customer value to a target market. ⊚ ⊚

48)

Promotion is the most important of the "Four Ps." ⊚ ⊚

49)

true false

In general, no single element of the "Four Ps" is more important than the others. ⊚ ⊚

51)

true false

Price is the most important of the "Four Ps." ⊚ ⊚

50)

true false

true false

The marketing mix should be set before the best target market is selected. ⊚ ⊚

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52) As in the Toddler University case, the needs of a target market virtually determine the nature of an appropriate marketing mix. ⊚ ⊚

53)

true false

Marketing plan and marketing strategy mean the same thing. ⊚ ⊚

true false

54) A marketing strategy and all the time-related details for carrying out the strategy is a "marketing plan." ⊚ ⊚

true false

55) A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. ⊚ ⊚

56)

true false

Implementation means putting the marketing plan into operation. ⊚ ⊚

true false

57) Short-run decisions that stay within the overall guidelines set during strategy planning are called implementation decisions. ⊚ ⊚

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58) plan.

Marketing strategy planning should specify all the operational decisions to implement the ⊚ ⊚

true false

59) Companies such as the Campbell Soup Company can only implement one marketing strategy at a time. ⊚ ⊚

true false

60) Marketing analytics is used to evaluate marketing performance in order to maximize efficiency and effectiveness. ⊚ ⊚

61)

true false

Most companies implement only one marketing strategy at a time. ⊚ ⊚

true false

62) A marketing program blends all of the firm's marketing plans into one "big" plan and is the responsibility of the whole company. ⊚ ⊚

63)

A marketing program blends all of a firm's marketing plans into one "big" plan. ⊚ ⊚

64)

true false

true false

A marketing program may consist of several marketing plans.

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⊚ ⊚

65)

true false

A successful marketing program benefits the firm by increasing customer equity. ⊚ ⊚

true false

66) Customer lifetime value (CLV) represents the total profits a single customer contributes to a firm over the length of the relationship. ⊚ ⊚

true false

67) One way to increase customer equity is to find cost-effective ways to serve current customers so they buy more. ⊚ ⊚

true false

68) One way to increase customer equity is to find cost-effective ways to add new customers for the firm's products. ⊚ ⊚

true false

69) The best way to increase customer equity is to find cost-effective ways to increase earnings from current customers while bringing profitable new customers into the fold. ⊚ ⊚

true false

70) The customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's short-term profits—just for the next quarter or year.

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⊚ ⊚

true false

71) Enhancing customer value by increasing their purchases is a potential source of new revenue. ⊚ ⊚

true false

72) The retention rate is the amount it costs to attract a new customer compared to the amount it costs to retain customers. ⊚ ⊚

true false

73) If a local deli had 2,000 customers in its first year in business and 200 of those customers returned the following year, its retention rate is 80 percent. ⊚ ⊚

74)

true false

Acquisition cost is the expense that is required to acquire each new customer. ⊚ ⊚

true false

75) If a firm spent $5,000 in advertising to obtain 50 new customers, its acquisition cost would be $100 per customer. ⊚ ⊚

true false

76) The single most important factor in screening possible marketing opportunities is the long-run trends facing the company.

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⊚ ⊚

true false

77) Attractive opportunities for a particular firm are those that the firm has some chance of doing something about—given its resources and objectives. ⊚ ⊚

true false

78) A breakthrough opportunity is an opportunity that helps innovators develop long-term, hard-to-copy marketing strategies that will be very profitable. ⊚ ⊚

true false

79) Breakthrough opportunities are those that help innovators develop hard-to-copy marketing strategies that will be profitable for a long time. ⊚ ⊚

true false

80) A firm with a "competitive advantage" has a marketing mix that the target market sees as better than a competitor's mix. ⊚ ⊚

true false

81) Finding competitive advantages is important because they are needed for survival in increasingly competitive markets. ⊚ ⊚

true false

82) It is useful to think of the marketing strategy planning process as a narrowing-down process.

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⊚ ⊚

true false

83) The marketing strategy planning process starts with a narrow look at a market and becomes broader the closer the firm comes to developing a marketing mix. ⊚ ⊚

84)

true false

There are usually more different strategy possibilities than a firm can pursue. ⊚ ⊚

true false

85) Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. ⊚ ⊚

true false

86) A S.W.O.T. analysis is one way to zero in on a marketing strategy that is well-suited to the firm. ⊚ ⊚

true false

87) A S.W.O.T. analysis identifies the "special weapons or tactics" used by the competitor in a product market that has the most profitable marketing mix. ⊚ ⊚

true false

88) S.W.O.T. analysis is based on the idea that one of the best ways to develop a strategy is to identify and copy the marketing "strategies, weapons, outlook, and tactics" of the firm's most effective competitor.

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⊚ ⊚

true false

89) A good S.W.O.T. analysis helps a manager focus on a strategy that takes advantages of the firm's opportunities and strengths while avoiding its weaknesses and threats to its success. ⊚ ⊚

true false

90) The letters in "S.W.O.T." analysis are an abbreviation for the first letters of the words "strengths, weaknesses, opportunities, and threats." ⊚ ⊚

true false

91) The letters in "S.W.O.T." analysis are an abbreviation for the first letters of the words "special weapons or tactics." ⊚ ⊚

true false

92) Segmentation is the process a manager goes through to decide which subgroups of customers to select. ⊚ ⊚

true false

93) Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. ⊚ ⊚

94)

true false

Differentiation means that the firm's marketing mix is similar to its competitors' mixes.

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⊚ ⊚

true false

95) Differentiation often requires a firm to fine-tune its marketing mix to meet the specific needs of its target market(s). ⊚ ⊚

96)

Differentiation emphasizes uniqueness rather than similarity. ⊚ ⊚

97)

true false

true false

Differentiation emphasizes similarity rather than uniqueness. ⊚ ⊚

true false

98) The external market environment doesn't play a role in the marketing strategy planning process because it exists outside of the company. ⊚ ⊚

true false

99) It is useful to think of the marketing strategy planning process as a process that begins with a narrow focus but then broadens to embrace unlimited opportunities and options. ⊚ ⊚

true false

100) The first two letters in "S.W.O.T." analysis help managers examine customers, competition, and the external marketing environment. ⊚ ⊚

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101) The last two letters in "S.W.O.T." refer to "opportunities" and "threats" related to factors outside the company, including customers, competition, and the external marketing environment. ⊚ ⊚

true false

102) Marketing opportunities involving present products and present markets are called "market penetration" opportunities. ⊚ ⊚

true false

103) Market penetration means trying to increase sales of a firm's present products in its present markets—probably through a more aggressive marketing mix. ⊚ ⊚

true false

104) A firm that tries to increase sales by selling new products in new markets is pursuing "market development" opportunities. ⊚ ⊚

true false

105) A market development opportunity would involve a firm offering new or improved products to its present markets. ⊚ ⊚

true false

106) When a firm tries to increase sales by offering new or improved products to its present markets, this is called "product development." ⊚ ⊚

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107) Nike moved beyond shoes and sportswear to offer its athletic target market a running watch with a customized Nike app. This is an example of a market development strategy. ⊚ ⊚

true false

108) The ArrowPoint Company has just modified and enlarged its product line to meet the changing needs of its current customers. This is an example of "market development." ⊚ ⊚

true false

109) When Cadillac added a new sports utility vehicle called Escalade to the "luxury-oriented" selection at its existing dealers, it was seeking "market development" opportunities. ⊚ ⊚

true false

110) If Burger King added tacos to the "burger-oriented" menu in its existing restaurants, it would be seeking "market development" opportunities. ⊚ ⊚

true false

111) Marketing opportunities that involve moving into totally different lines of business are "diversification" opportunities. ⊚ ⊚

true false

112) The least risky—but most challenging—marketing opportunities are diversification opportunities. ⊚ ⊚

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113)

Often, attractive opportunities are fairly close to markets the firm already knows. ⊚ ⊚

true false

114) When it comes to choosing among different types of opportunities, most firms tend to be production-oriented and usually think first of diversification. ⊚ ⊚

true false

115) Of the four types of opportunities firms can pursue, diversification is the easiest to evaluate and involves the least risk. ⊚ ⊚

true false

116) Advances in e-commerce, transportation, and communications have had little impact on creating international opportunities. ⊚ ⊚

true false

117) If customers in other countries are interested in the products a firm offers, or could offer, serving them may improve economies of scale. ⊚ ⊚

true false

118) Unfavorable trends in the domestic market environment may make the international marketing environment very attractive. ⊚ ⊚

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119) International opportunities should be considered in the strategy planning process, but they don't always survive as the most attractive ones that are turned into strategies. ⊚ ⊚

true false

120) Marketing managers usually find that opportunities in international markets are less profitable than in domestic markets. ⊚ ⊚

true false

121) When a firm's domestic market is prosperous, marketing managers are less likely to pursue opportunities in international markets. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 122) The three basic tasks of all managers, according to the text, are A) planning, staffing, and evaluating. B) marketing, production, and finance. C) execution, feedback, and control. D) hiring, training, and compensating. E) planning, implementation, and control.

123)

Controlling is vital to the marketing management process because

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A) marketing managers need to control their subordinates. B) controlling examines a firm's strengths, weaknesses, opportunities, and threats. C) gathering feedback on a plan's results may lead to beneficial adjustments or entirely new plans. D) controlling involves identifying a target market. E) controlling is part of the marketing mix.

124)

Which of the following duties would NOT be performed by a firm's marketing managers? A) planning activities B) directing the implementation of plans C) controlling plans D) overseeing the firm's financial statements E) developing marketing mixes for target markets

125)

Which of the following is one of three basic marketing management jobs? A) directing the implementation of plans B) controlling the plans in actual operation C) planning marketing activities D) All these answers are correct.

126)

The marketing management process is the process of A) planning marketing activities. B) implementing marketing plans. C) controlling marketing plans. D) All these answers are correct.

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A) marketing mix decisions B) strategic (management) planning C) advertising and promotional activities D) marketing management process E) effective marketing strategy

128)

What sets the tone and direction for the whole company? A) expansion plan B) manager’s qualification C) marketing plan D) management process E) sales and promotion

129)

Marketing strategies A) are not whole-company plans. B) ensure that every opportunity is good for every company. C) do not specify target markets and related marketing mixes. D) ensure sales and profit for the company. E) provide a limited picture of what a firm will do in some market.

130) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called A) management by objective. B) marketing programming. C) marketing strategy planning. D) strategic (management) planning. E) market planning.

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131) ________ is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. A) Strategic (management) planning B) Target marketing C) Mass marketing D) Resource allocation E) Marketing control

132)

"Marketing strategy planning" means A) finding attractive opportunities and developing profitable marketing strategies. B) finding attractive opportunities and selecting a target market. C) selecting an attractive target market. D) selecting an attractive marketing mix. E) selecting a target market and developing a marketing strategy.

133)

Marketing strategies A) enable marketing managers to be satisfied just planning present activities. B) ensure that every opportunity is good for every company. C) do not specify target markets and related marketing mixes. D) provide a limited picture of what a firm will do in some market. E) are not whole-company plans.

134)

A marketing strategy A) specifies a target market and a related marketing mix. B) provides a focused but narrow picture of what a firm will do in some market. C) is a market-oriented, whole-company plan. D) includes two interrelated parts: product mix and product development. E) includes the marketing mix, but does not specify customers.

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135)

A marketing strategy specifies A) a target market and a related marketing mix. B) all the company's resources. C) a target market. D) a target market and the company's objectives. E) a marketing mix.

136)

A marketing strategy specifies A) a marketing mix. B) a target market and a related marketing mix. C) a target market. D) the resources needed to implement a marketing mix.

137)

A target market and a related marketing mix make up a A) marketing plan. B) marketing strategy. C) marketing program. D) marketing analysis. E) marketing proposal.

138) Which of the following refers to a fairly homogeneous (similar) group of customers to whom a company wishes to appeal? A) related market B) target market C) typical market D) mix market E) trial market

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139) Herbal Essences tries to sell its hair shampoos and conditioners to young women in their late teens and early 20s. These women represent Herbal Essences' primary A) marketing strategy. B) "Four Ps." C) target market. D) marketing mix. E) channel of distribution.

140) What term refers to the controllable variables the company puts together to satisfy a target group? A) target marketing B) marketing strategy C) direct marketing D) mass marketing E) marketing mix

141)

In contrast to mass marketing, target marketing A) assumes all customers have the same needs. B) assumes everyone is a potential customer. C) focuses only on small market segments. D) tailors a marketing mix to fit some specific group of customers. E) makes it more likely that a firm will face direct competition.

142)

Which of the following statements about target marketing is NOT correct?

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A) Target marketing is not mass marketing. B) Mass marketers like Kraft and Walmart may conduct target marketing. C) Target marketing is not limited to small market segments. D) Target marketing assumes that everyone is different and specifies some particular target customers. E) Target marketing is associated with the typical production-oriented approach that aims at everyone with the same marketing mix.

143)

The difference between target marketing and mass marketing is that target marketing

A) means focusing on a small market. B) focuses on short-run objectives, while mass marketing focuses on long-run objectives. C) focuses on specific customers, while mass marketing aims at an entire market. D) does not rely on e-commerce, but mass marketing does. E) aims at increased sales, while mass marketing focuses on increased profits.

144)

In contrast to mass marketing, target marketing A) ignores the need for the firm to obtain a competitive advantage. B) ignores markets that are large and spread out. C) is limited to small market segments. D) assumes that all customers are basically the same. E) None of these answers is correct.

145)

Target marketing A) is a production-oriented approach to marketing. B) is essentially the same as mass marketing. C) considers everyone a potential customer. D) assumes that everyone is the same. E) specifies some particular group of customers.

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146) ________ assume(s) that everyone is the same and consider(s) everyone to be a potential customer. A) Mass marketers B) Target marketing C) Mass marketing D) Target marketers E) Objective marketing

147)

Which type of marketing aims to sell to everyone? A) controlled marketing B) target marketing C) oriented marketing D) direct marketing E) mass marketing

148)

Marketing managers should view potential customers as A) all alike. B) all having the same needs. C) always wanting to meet needs in the same way. D) grouped into segments of similar consumers. E) being of different types, but all having the same characteristics.

149)

Good marketing strategy planners know that

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A) firms like Nabisco and Walmart are too large to aim at clearly defined target markets. B) target marketing does not limit one to small market segments. C) mass marketing is often very desirable and effective. D) the terms "mass marketing" and "mass marketer" mean basically the same thing. E) target markets cannot be large and spread out.

150)

In contrast to mass marketing, target marketing A) is limited to small market segments. B) assumes that all customers are basically the same. C) ignores markets that are large and spread out. D) assumes that what they give is what customers want. E) focuses on fairly homogeneous market segments.

151)

Which of the following statements about target marketing is NOT correct?

A) Target marketing is not mass marketing. B) Mass marketers cannot do target marketing. C) Target marketing can mean big markets and profits. D) Marketing-oriented managers practice "target marketing." E) Target marketing aims at a marketing mix that is tailored to fit specific target customers.

152)

The marketing mix

A) includes four variables: People, Place, Promotion, and Price. B) includes the target market. C) helps to organize the marketing strategy decision areas. D) includes four variables: advertising, personal selling, customer service, and sales promotion. E) does not focus on target customers.

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153)

The "Four Ps" of a marketing mix are A) Production, Personnel, Price, and Physical Distribution. B) Promotion, Production, Price, and People. C) Potential Customers, Product, Price, and Personal Selling. D) Product, Price, Promotion, and Profit. E) Product, Place, Promotion, and Price.

154)

A marketing mix consists of A) Policies, Procedures, Plans, and Personnel. B) the customer and the "Four Ps." C) all variables, controllable and uncontrollable. D) Product, Price, Promotion, and Place.

155)

A firm's "marketing mix" decision areas do NOT include A) Promotion. B) People. C) Price. D) Product. E) Place.

156)

A firm's marketing mix decision areas do NOT include A) Price. B) Promotion. C) Product. D) Place. E) Profit.

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157)

Which of the following is NOT one of the four variables in a marketing mix? A) Price B) Product C) Promotion D) Payment E) Place

158)

Which of the following is true?

A) The Product "P" in the marketing mix stands only for physical goods. B) The Product "P" in the marketing mix stands for both physical goods and services. C) The Product "P" in the marketing mix stands only for tangible merchandise. D) The Product "P" in the marketing mix stands only for physical merchandise. E) The Product "P" in the marketing mix stands strictly for physical goods and tangible merchandise.

159)

What is important to remember when developing the “right” product? A) The product must be competitive in the market. B) The product must bring in good profit. C) The product must be unique to the market. D) The product must be easily available in the market. E) The product must satisfy the customers’ needs.

160)

"Product" is concerned with

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A) branding. B) packaging and warranty. C) physical goods. D) services. E) all of these might be involved with Product.

161)

"Product" is concerned with A) branding and warranties. B) physical goods and/or services. C) packaging. D) developing the right new product for a market. E) All of these might be involved with "Product."

162)

"Product" is concerned with A) services. B) developing products that will satisfy some customers' needs. C) designing, packaging, and branding new products. D) physical goods. E) All of these might be involved with "Product."

163)

"Product" is NOT concerned with A) quality level. B) branding. C) wholesale price. D) packaging. E) warranty.

164)

Which of the following is NOT a Product-area decision?

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A) quality level B) market exposure C) instructions D) packaging E) branding

165)

Which of the following is considered a product? A) tax advice from a financial consultant B) a computer C) a haircut D) a chair E) All of these are considered products.

166) Henry Ford told prospective customers of his Model T car, "You can have any color as long as it is black." Which aspect of the marketing mix was he stressing? A) Promotion B) Product C) Place D) Price E) People

167) The packaging design for a new flavor of Ben and Jerry's ice cream is an aspect of which component of the marketing mix? A) Place B) Price C) Product D) Promotion E) People

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168) Suzuki's 3-year/36,000-mile new car warranty is part of which marketing mix decision area? A) Price B) Target Market C) Place D) Product E) Promotion

169) Dell, Inc. wants to offer customers televisions in addition to computers. This is a change in its ________ strategy. A) Pricing B) Promotion C) Personnel D) Product E) Placement

170) Big Fizz Co., a manufacturer of cola-flavored drinks, wants to add packaged fruit juices to its existing product line. Big Fizz needs to make some decisions regarding packaging and branding of the fruit juices. These decisions would fall under which variable of the marketing mix? A) Product B) Place C) Promotion D) Price E) Personal Selling

171) When one considers the strategy decisions organized by the "Four Ps," branding is related to packaging as

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A) branding is to pricing. B) production is to marketing. C) store location is to sales force selection. D) personal selling is to mass selling. E) pricing is to promotion.

172) A firm's decisions regarding channel type, market exposure, and kinds of intermediaries would fall under the marketing mix variable of A) Product. B) Place. C) Promotion. D) Price. E) People.

173) The ________ area of the marketing mix is concerned with decisions about getting the "right" product to the target market when and where it's wanted. A) Product B) People C) Promotion D) Price E) Place

174)

"Place" is concerned with A) intermediaries. B) transporting. C) channel members. D) storing. E) All of these might be involved with Place.

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175)

"Place" is concerned with A) getting the product to its intended market. B) intermediaries located between producers and consumers. C) where, when, and by whom goods are offered for sale. D) when and where products are wanted. E) All of these might be involved with Place.

176)

"Place" is NOT concerned with A) storing. B) intermediaries. C) transporting. D) channels of distribution. E) sales reps.

177)

"Place" is NOT concerned with A) who handles storing and transporting. B) when and where products are wanted. C) kinds of intermediaries needed to reach customers. D) telling the target market what products are available and where. E) channels of distribution.

178) Hewlett-Packard sells personal computers through specialty computer stores, electronics superstores, and its own Internet site. The marketing mix variable that is being considered here is

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A) Price. B) Promotion. C) Personnel. D) Product. E) Place.

179) Scott Paper uses many intermediaries to reach its target markets; Citibank uses none. Which of the marketing mix variables is being considered here? A) Penetration B) Product C) Promotion D) Place E) Price

180) Any series of firms or individuals that participate in the flow of products from producer to final user or consumer is known as A) customer service. B) a packaging line. C) a production line. D) a channel of distribution. E) mass marketing.

181)

A channel of distribution A) usually has three members—a manufacturer, a distributor, and a retailer. B) is any series of firms (or individuals) from producer to final user or consumer. C) should be as short as possible. D) is not involved if a firm sells directly from its own website to final customers.

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182) Herbal Essences tries to get shelf space in Target and Walmart because young women frequently shop there for hair care products. This is an example of which of the "Four Ps"? A) Price B) Product C) Promotion D) Place E) People

183) A detailed plan for handling transportation and storage of a new product that is now being distributed to wholesalers nationwide is an aspect of which part of the "Four Ps"? A) Place B) Product C) Promotion D) Price

184) An office supplies producer sells a variety of office supplies to final consumers and businesses using its own mail order catalog. Here, A) there is no channel of distribution. B) there is no opportunity to apply target marketing. C) no promotion is involved. D) a production orientation is just as effective as a marketing orientation. E) None of these of these answers is correct.

185) The ________ area of the marketing mix includes decisions related to telling the target market or others in the channel of distribution about the "right" product.

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A) Product B) Place C) Promotion D) Price E) Communication

186)

"Promotion" may include A) personal selling to channel members. B) point-of-purchase materials. C) mail-order selling. D) advertising on the Internet. E) All of these may be included in Promotion.

187)

"Promotion" includes A) advertising. B) personal selling. C) sales promotion. D) publicity. E) All of these may be included in Promotion.

188)

Marketing strategy decisions concerning Promotion include decisions about A) packaging and branding. B) the kinds of intermediaries to use. C) training for salespeople. D) transporting and storing. E) discounts and allowances.

189)

"Promotion" is NOT concerned with

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A) creating billboard ads. B) designing new products. C) publicity. D) television commercials. E) personal selling.

190) Personal selling lets the salesperson adapt the firm's marketing mix to a specific customer. This is an aspect of which marketing mix variable? A) Price B) Place C) Promotion D) Product

191)

________ is direct spoken communication between sellers and potential customers. A) Personal selling B) Sales promotion C) Advertising D) Publicity E) Mass selling

192)

From the perspective of the "Four Ps," personal selling is to advertising as A) mass selling is to branding. B) Place is to Product. C) sales promotion is to pricing. D) warranties are to channel type. E) geographic terms are to price allowances.

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193) ________ refers to personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. A) Advertising B) Sales promotion C) Publicity D) Personal selling E) Customer service

194)

Advertising is

A) the designing and distribution of novelties, point-of-purchase materials, store signs, contests, catalogs, and circulars. B) direct communication between sellers and potential customers. C) any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. D) the main form of publicity. E) All of these are included in Advertising.

195) A popular television show, The Unexpected, achieved skyrocketing ratings after moralist Tom Bowman attempted to have it removed from the air. This is an example of mass selling through A) advertising. B) publicity. C) unethical means. D) personal selling. E) media hype.

196)

Sales promotion

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A) lets the salesperson adapt the firm's marketing mix to each potential customer. B) is the main form of advertising. C) can assist the personal selling and mass selling people. D) is free. E) consists of both advertising and personal selling.

197)

Catalogs, point-of-purchase materials, and free samples are all examples of A) publicity. B) personal selling. C) sales promotion. D) advertising. E) marketing.

198)

Coupons, samples, and point-of-purchase materials are examples of A) advertising. B) publicity. C) specialty services. D) personal selling. E) sales promotion.

199) When Herbal Essences offers "dollar-off coupons" to adult women to try to get them to try its shampoos and conditioners, it is an example of A) publicity. B) sales promotion. C) product development. D) market penetration. E) distribution.

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200) Ford Motor Co. "loaned" new Fiestas to social trendsetters who drove the cars as part of their Meals on Wheels responsibilities. When Ford asked them to write about their driving experiences on Facebook and Twitter, it was emphasizing which aspect of the "Four Ps"? A) Product B) Place C) Price D) Promotion E) People

201) The owner of the new Sharp Scissors hair salon gave coupons to potential customers walking by her store to stimulate interest and offer a trial of her new hair salon. The coupons are an example of A) advertising. B) publicity. C) sales promotion. D) a channel of distribution. E) media.

202) To help cosmetic company RedRain Inc. launch a new line of lipstick, tickets that can be redeemed for prizes are enclosed in some of the lipstick packages. This activity is best classified as A) advertising. B) publicity. C) sales promotion. D) personal selling. E) mass marketing.

203) The company 3M sent samples of Breathe Right Nasal Strips to NFL trainers. This was an example of a ________ strategy.

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A) price B) promotion C) personnel D) product E) place

204)

"Price" A) is affected by the kind of competition in the target market. B) includes markups and discounts, but not allowances and freight charges. C) is not affected by customer reactions. D) is the most important part of a marketing mix.

205)

While setting the price of a product, what must managers consider? A) cost of the whole marketing mix B) buying capacity of the customers C) profit it should bring the company D) transportation cost E) personnel cost to the company

206)

The Price area of the marketing mix

A) requires consideration of the cost of the marketing mix and the competition facing the firm when setting prices. B) does not involve estimating consumer reaction to possible prices. C) refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. D) does not include the consideration of geographic terms in price setting. E) None of these answers is correct.

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207)

When developing a marketing mix, a marketing manager should remember that A) "Promotion" includes only personal selling and publicity. B) a channel of distribution includes at least one intermediary. C) "Price" includes markups, discounts, allowances, and geographic terms. D) "Product" includes physical goods but not services. E) customers’ needs are all the same.

208) When Ford Motor Co. introduced its Escape hybrid SUV, it offered a $1,000 rebate as an incentive to attract new buyers. This was an example of which aspect of the marketing mix? A) Price B) Promotion C) Place D) Product E) People

209) In which of the following ways would a marketing manager seek to deliver customer value to a target market? A) increased product features B) lower price C) more convenient buying options D) effective communication about product value E) All these answers are correct.

210)

The most important variable in a firm's marketing mix is

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A) Product. B) Price. C) Promotion. D) Place. E) None of these answers is correct, since all contribute to one whole.

211)

An appropriate marketing mix should be determined primarily by A) what has worked for the company in the past. B) the needs of a target market. C) the budget available to spend. D) the past experiences of the marketing manager. E) what product the firm can produce with economies of scale.

212)

Ideally, a good marketing mix should A) be very similar to the marketing mix typically used by key competitors. B) be determined by which marketing mix costs the least. C) not include much advertising, because it's expensive and usually isn't very effective. D) flow logically from all the relevant dimensions of a target market. E) bring big profits to the company.

213)

The text's Toddler University example shows that

A) parents are not price sensitive when it comes to assuring that their kids will get a good college education. B) the needs of a target market determine the nature of the appropriate marketing mix. C) a small producer can't compete effectively against large competitors. D) in the long run, a firm cannot make a profit without its own production facilities. E) All of these answers are correct.

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214)

The text's Toddler University example shows that A) no mass market exists for general-purpose baby shoes. B) the needs of a target market determine the nature of the appropriate marketing mix. C) a small producer can't compete effectively against large competitors. D) no target market exists for high-quality baby shoes. E) All these answers are correct.

215)

In the text's Toddler University (TU) example,TU's marketing plan included A) a detailed description of the marketing mix to be offered. B) a description of the resources required to carry out the plan. C) expected results of the plan. D) control procedures. E) All these answers are correct.

216)

The main difference between a "marketing strategy" and a "marketing plan" is that A) time-related details are included in a marketing plan. B) a marketing plan includes several marketing strategies. C) a marketing strategy provides more detail. D) a marketing strategy omits pricing plans. E) a marketing plan does not include a target market.

217) Which of the following refers to a written statement of a marketing strategy and the timerelated details for carrying out the strategy? A) marketing mix B) marketing program C) marketing plan D) marketing design E) marketing direction

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218)

A marketing plan is A) a marketing program. B) a marketing strategy. C) a marketing strategy plus the time-related details for carrying it out. D) a target market and a related marketing mix. E) a plan that contains the necessary operational decisions.

219)

A marketing plan A) is just another term for "marketing strategy." B) consists of several "marketing programs." C) includes the time-related details for carrying out a marketing strategy. D) is a strategy without all the operational decisions. E) ignores implementation and control details.

220)

A marketing plan should include A) some control procedures. B) what company resources will be needed, and at what rate. C) what marketing mix is to be offered to whom, and for how long. D) what sales and profit results are expected. E) All of these are included in a marketing plan.

221)

Which of the following is part of a complete marketing plan? A) competitors' marketing strategies B) what company resources (costs) are required and at what rate C) how different marketing mixes (for different target markets) relate to each other D) All of these are parts of a complete marketing plan.

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222)

Which of the following would probably NOT be in a proposed marketing plan? A) a list of what company resources (costs) would be required B) a statement of how frequently the design of the website will be changed C) expected sales and profit results D) a description of the target market and marketing mix

223)

Which of the following is included in a marketing plan? A) the control procedures to be used B) the costs involved C) the results expected D) what marketing mix is to be offered E) All of these should be included in a marketing plan.

224)

________ refers to putting marketing plans into operation. A) Delivery B) Implementation C) Operational planning D) Strategy planning E) Control

225)

Short-run decisions to help implement strategies are best known as A) actionable items. B) strategic decisions. C) marketing plans. D) operational decisions. E) dependencies.

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226)

Managers should make operational decisions

A) within the guidelines set down during strategy planning. B) with great care, as these decisions are the same as strategic decisions. C) for the long-run, to help formulate strategic plans. D) while keeping in mind that these decisions should always lead to changes in the basic strategy. E) on a month-to-month basis, never daily or weekly.

227)

Which of the following statements about operational decisions is FALSE? A) They help to carry out a marketing strategy. B) They are short-run decisions. C) They are part of the implementation process. D) They usually require ongoing changes in the basic strategy to be effective.

228) Which of the following statements is a strategy decision, rather than an operational decision? A) "We will change the colors of our selection of shirts at the end of the season." B) "We will cut prices as needed to in order to protect our market share." C) "We will increase the number of training sessions for new sales associates from two to three." D) "We will hire a merchandising specialist this month to help remodel our older stores." E) "We will place a special ad in the Sunday newspaper promoting our upcoming sale."

229) Which of the following statements by a marketing manager refers to an operational decision, rather than to a strategy decision?

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A) "Our target customers view most existing luxury sedans as dull, and they want performance as well as luxury." B) "Newspaper ads will be more cost effective than 30-second radio ads, given the price increase for radio this month." C) "We hope to earn a 15 percent return on investment with our plan." D) All of these statements refer to operational decisions.

230)

Which of the following is an operational decision rather than a strategy decision? A) a decision to seek distribution only through the best retailers B) selection of a specific target market C) a decision to maintain a "one price" policy D) selection of a specific cable TV channel on which to advertise E) selection of a niche market

231)

Which of the following is an example of an operational decision? A) Focus promotion on the economy of the product. B) Make the product available in every possible retail outlet. C) Have a salesperson visit the manager of a new hardware store that will open next

week. D) Set a price that is no higher than competitors' prices. E) None of these is an example of an operational decision.

232) Which of the following would NOT require an operational decision for a leading hair color manufacturer? A) Solicit orders from any new, financially attractive, salons. B) Drop colors that are losing appeal. C) Create a fresh ad for each Sunday newspaper. D) Set a competitive price if a primary competitor offers a special discount. E) Promote the fair price and satisfactory quality of the product.

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233) Happy Feet shoe company's strategic policy states "Carry as limited a line of colors, styles, and sizes as will satisfy the target market." This policy best relates to which decision area of the marketing mix? A) People B) Place C) Promotion D) Price E) Product

234) One of the strategic policies of camera maker Zoom Cameras states: "We will communicate the key benefits and value of our cameras' unique zoom lenses and demonstrate how they meet customer needs." This policy best fits which marketing mix decision area? A) Product B) Place C) Promotion D) Price E) People

235) A retailer's operational decision to hire new salespeople would best relate to the marketing mix decision area of A) Product. B) Place. C) Promotion. D) Price. E) People.

236) When fast food restaurant Tommy's Tacos had poor sales in Central City, marketing managers closed one outlet on the east side of town and opened two new locations on the south side of town. These moves represent

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A) operational decisions in the Product decision area. B) strategy policies in the Place area. C) strategy policies in the Product area. D) operational decisions in the Place area. E) strategy policies in the Promotion area.

237) The practice of measuring, managing, and analyzing market performance to maximize efficiency and effectiveness is known as A) marketing analytics. B) marketing metrics. C) a marketing plan. D) publicity. E) differentiation.

238) What is the best way for a marketing manager to measure a firm’s marketing performance? A) compare the firm’s marketing plans B) perform marketing analytics C) develop a marketing plan D) create a single marketing strategy E) initiate a marketing plan

239)

A marketing program A) blends all of a firm's marketing plans into one big plan. B) is a description of a firm's marketing mix. C) is a detailed plan of how to implement a strategy. D) is a marketing strategy plus the time-related details. E) None of these answers is correct.

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240)

Which of the following blends all of a firm's marketing plans into one big plan? A) marketing program B) marketing mix C) marketing statement D) marketing overview E) marketing flow

241) ________ is the total profits a single customer contributes to a firm over the length of the relationship. A) Customer equity B) Profit C) Net worth D) Customer lifetime value E) A premium price

242) The profits a single customer contributes to a firm over the length of the relationship is called customer A) equity. B) lifetime value. C) service. D) satisfaction. E) feedback.

243) Estimating a customer's lifetime purchasing potential is important because it helps marketers to

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A) make a quick sale on a product. B) decide whether to place ads online or in magazines. C) recognize that mass marketing is the best way to reach customers. D) select the right channel of distribution. E) devise long-range plans and strategies for building customer relationships.

244) When a customer who buys two Apple iPhones, an Apple iMac computer, and Apple TV over a period of several years, Apple's marketing managers should be thinking about A) diversification. B) mass marketing. C) differentiation. D) customer lifetime value. E) customer feedback loops.

245)

Customer lifetime value

A) emphasizes a short-run approach to marketing management. B) is basically a historical measure of how profitable a firm has been in the past. C) applies to firms that target final consumers but not to firms that target business customers. D) will increase if a firm increases its market share with a particular strategy. E) considers the total profits a customer contributes to the firm over the length of the relationship.

246) When the manager of a Denny's Restaurant offers a customer a coupon for a free meal as compensation for slow service, the manager is focusing on

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A) differentiation. B) product development. C) short-term profits. D) a diversification strategy. E) customer lifetime value.

247) ________ is the expected earnings stream of a firm's current and prospective customers over some period of time. A) Profit B) Earnings C) Operating profit D) Customer equity E) Net value

248)

The difference between customer lifetime value and customer equity is that

A) customer equity takes a financial approach where customer lifetime value does not. B) customer lifetime value looks at specific target markets. C) customer equity takes into account a firm's current and future customers and the costs associated with each. D) customer equity reflects the total stream of purchases that a customer could contribute to a company over the length of the relationship. E) customer lifetime value focuses on purchases over the next year, while customer equity takes into account a longer time horizon.

249) Which of the following is NOT a reason the marketing program should build customer equity?

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A) Marketing strategies do not contribute to customer equity. B) Expected profits depend on customer equity. C) Firms expect financial returns. D) Profit growth comes from customers. E) Customers are the source of revenue.

250)

Which of the following is most likely to increase a firm's customer equity? A) The firm offers a more costly marketing mix that attracts more customers. B) The firm offers customer value that is at least as good as what competitors offer. C) The lifetime value of the firm's individual customers increases. D) The competition in the firm's market increases. E) The firm cuts costs by reducing promotion efforts.

251)

The customer equity concept

A) encourages a manager to consider both the costs and the revenue from a marketing strategy. B) recognizes that customers are satisfied at a cost. It is basically an estimate of a firm's future earnings. C) applies even to firms that pursue several different strategies. D) focuses on earnings as well as sales. E) All of these are part of the customer equity concept.

252)

Which of the following statements about customer equity is FALSE?

A) It focuses on the revenues and the costs of acquiring, retaining, and enhancing customers. B) If the parts of a firm's marketing program work well together, it should increase the firm's customer equity. C) Expected profits depend on customer equity. D) Customer equity benefits customers but not the company.

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253) The customer equity approach suggests three potential paths for growth. Which of the following is not one of these paths? A) shedding inactive customers B) acquiring new customers C) enhancing customer value by increasing customer purchases D) retaining current customers

254)

What are two marketing metrics used to estimate customer lifetime value? A) retention rate and acquisition cost B) revenue and profit C) price and quantity D) revenue and retention rate E) acquisition cost and customer satisfaction

255) All of the following marketing metrics are needed to estimate customer lifetime value except A) market share. B) average profit margin. C) retention rate. D) acquisition cost.

256)

How would a marketing manager determine a firm’s retention rate?

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A) by determining the percentage of existing customers that a firm keeps as compared to its total number of customers B) by figuring out the expense to the firm of attaining a new customer C) by considering the revenues and costs of retaining customers over the long term D) by analyzing the firm’s customer base as compared to the forecast in the firm’s marketing plan E) by determining the average profit margin for each of the firm’s customers per year

257) Which of the following pieces of information would be necessary to determine a firm’s retention rate? A) how many customers returned to a company’s website and bought something after an initial purchase B) the revenue and costs that are associated with every current and future customer that visits a firm’s retail location C) how much it costs to attract each new customer for each promotion activity D) the efforts of a company to enhance the benefits it provides for each existing customer E) the deviation between what a firm planned and its actual overall performance

258) Donna opened an exclusive clothing store, which had 2,000 customers in its first year. Of those 2,000 customers, 500 patronized Donna’s clothing store the following year. This reflects a 25 percent A) retention rate. B) acquisition cost. C) profit margin. D) lifetime value. E) customer equity.

259) If the local sandwich shop had 1,000 customers last year, and this year 250 of those same customers are still going to the sandwich shop for lunch, what is the shop’s retention rate?

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A) 10 percent B) 50 percent C) 20 percent D) 25 percent E) 75 percent

260)

Which of the following refers to the expense required to obtain a new customer? A) retention cost B) acquisition cost C) customer equity D) CLV E) market development

261) If a firm spends $5,000 per year on advertising and attracts 50 new customers, what is the acquisition cost for each customer? A) $100 per customer B) $50 per customer C) $500 per customer D) $10 per customer E) $20 per customer

262) An outdoor retailer spent $20,000 on Internet and print advertisements promoting its new line of sports and travel gear. From the promotion, it gained 500 new customers. This results in a(n) ______ of $40 per customer. A) acquisition cost B) retention rate C) profit margin D) lifetime value E) customer value

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263)

It is best to think of breakthrough opportunities as opportunities that A) appeal to the mass market. B) will quickly create a whole new industry of firms competing with similar marketing

mixes. C) help innovators develop hard-to-copy marketing mixes. D) increase sales. E) will take profits to the highest level.

264) ________ help(s) innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. A) Opportunity segments B) Competitive decisions C) Breakthrough opportunities D) Competitive marketing E) Operational decisions

265)

Which of the following best illustrates a breakthrough opportunity?

A) A recording company's new artist gets unexpected national publicity on YouTube, and almost every teenager wants to download it on Spotify. B) A drug company develops a patented pill that people can take once a year and safely avoid catching a cold. C) A bank puts its credit card machines in convenient drive-up locations so they will be more convenient for customers. D) A nurse realizes that the growing number of older people will increase the demand for nursing home services, so she quits her job and opens a quality nursing center for the elderly. E) A wireless phone company introduces a new service that offers more free weekend minutes than any other service in its market area.

266)

Which of the following would be likely to help you develop a breakthrough opportunity?

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A) a two-month advantage over competitors in introducing a new product B) an idea for a new website animation that will attract consumer attention C) accurate marketing research information about how much of a planned product the target market is likely to buy D) None of these would help you develop a breakthrough opportunity.

267)

Which of the following could be a breakthrough opportunity?

A) a unique technical invention that competitors could not legally copy B) a contract with the best intermediaries to reach your market, ensuring that they will handle your product and no competitors' offerings C) a head start in a market, so you can win target customers who will be loyal to your firm and its offering D) All of these could be breakthrough opportunities.

268) A pharmaceutical company spent a significant amount of money developing a new drug to combat high blood pressure. The drug did not cause any of the typical side effects usually associated with blood pressure medications. It was forecasted to be a "blockbuster" medication that would achieve over $1 billion in sales. It would also be difficult for other firms to duplicate, at least in the short run, because of patent protection and the substantial research and development costs required. The introduction of this new drug would best be described as A) diversification. B) market development. C) a breakthrough opportunity. D) "hit-or-miss" marketing. E) market penetration.

269) ________ means that a firm has a marketing mix that the target market sees as better than a competitor's mix.

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A) Competitive advantage B) Strategic policy C) Customer equity D) Comparative opportunity E) Market development

270)

Breakthrough opportunities are opportunities that A) help innovators develop hard-to-copy marketing strategies. B) may be turned into marketing strategies that will be profitable for a long time. C) help the firm develop a competitive advantage. D) help a firm satisfy customers better than some competitor. E) All of these apply to breakthrough opportunities.

271)

Breakthrough opportunities

A) are so rare that they should be pursued even when they do not match the firm's resources and objectives. B) seldom occur within or close to a firm's present markets. C) are especially important in our increasingly competitive markets. D) are those that a firm's competitors can copy quickly. E) are best achieved by trying to hold onto a firm's current market share.

272)

Which of the following statements regarding marketing strategies is FALSE?

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A) It is useful to think of the marketing strategy planning process as a narrowing-down process. B) These strategies must meet the needs of target customers, and a firm is likely to get a competitive advantage if it just meets needs in the same way as some other firm. C) Developing successful marketing strategies doesn't need to be a hit-or-miss proposition. D) These strategies require decisions about the specific customers the firm will target and the marketing mix the firm will develop to appeal to that target market. E) Most companies implement more than one marketing strategy and related marketing plan at the same time.

273)

Developing a set of specific qualitative and quantitative screening criteria

A) increases the different opportunities—and strategy possibilities—in the market. B) can make it difficult to zero in on the best target market and marketing mix. C) cannot help eliminate the potential of strategies that are not well suited for the firm. D) can help a manager define in which business and markets the firm wants to compete. E) highlights advantages of a strategy but does not make it clear why you should select that strategy.

274)

A S.W.O.T. analysis includes A) strengths. B) weaknesses. C) opportunities. D) threats. E) All of these are included in a S.W.O.T analysis.

275)

Which of the following statements about S.W.O.T. analysis is true?

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A) It is a useful aid for identifying relevant screening criteria and for zeroing in on a feasible strategy. B) S.W.O.T. is simply an abbreviation for the first letters of the words: strengths, weaknesses, opportunities, and threats. C) It identifies and lists the firm's strengths and weaknesses and its opportunities and threats. D) It helps managers focus on a strategy that takes advantage of the firm's strengths and opportunities while avoiding its weaknesses and threats to its success. E) All of these statements about S.W.O.T. analysis are true.

276)

A S.W.O.T. analysis

A) seeks to improve strategy planning by "Scanning for Warnings, Omens, and Tips" about competitors' plans. B) is not necessary if competitors have already entered the market. C) defends against potential competitive threats by planning specific "safeguards, weapons, or tactics." D) should help a manager develop a strategy that leads to a competitive advantage. E) limits the competitive edge of the company.

277)

A S.W.O.T. analysis can help a marketing manager

A) define in which business and markets the firm wants to compete. B) narrow down to a specific target market and marketing mix from the many alternatives available. C) see the pros and cons of different possible strategies. D) develop a competitive advantage. E) All of these can help a marketing manager who is using a S.W.O.T. analysis.

278)

A S.W.O.T. analysis

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A) focuses on what a firm plans to do to "Satisfy Wishes of a Target" customer. B) summarizes a firm's "strategy, wishes (of its customers), outlook, and tactics." C) helps defend against potential competitors by developing a set of competitive "safeguards, weapons, offensives, and tactics." D) identifies a firm's "strengths, weaknesses, opportunities, and threats." E) seeks to reduce the risk of competitive surprises by scanning the market for "signals, warnings, omens, and tips."

279) "A firm has adequate resources." With which element of the S.W.O.T analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats E) limitation

280) "A firm is in a fast-growing industry." With which element of the S.W.O.T. analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats

281) "A firm is vulnerable to recession." With which element of the S.W.O.T. analysis tool does this statement fit?

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A) strengths B) weaknesses C) opportunities D) threats E) limitation

282) "A firm is falling behind in research and development." With which element of the S.W.O.T. analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats

283) ________ means that the marketing mix is distinct from what is available from a competitor. A) Operational B) Visible C) Differentiation D) Competitive E) Diversification

284)

Differentiation of a firm's marketing mix

A) means the firm's marketing mix is hard to distinguish from a competitor. B) may provide the firm with a competitive advantage in the marketplace. C) makes it harder for consumers to notice if there is a consistent theme across all elements of the marketing mix. D) is usually not necessary in order for the firm to succeed.

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285) Differentiation refers to the ________ of the firm's marketing mix to meet the needs of the target market. A) similarity B) uniqueness C) unsuitability D) willingness E) adaptability

286)

Differentiation

A) helps a firm get a competitive advantage if it just meets needs in the same way as other firms. B) means that the marketing mix is similar to what is available from a competitor. C) often requires that the firm fine-tune all the elements of its marketing mix to the specific needs of a distinctive target market. D) is less obvious to target customers when there is a consistent theme integrated across the "Four Ps" decision areas. E) can only be based on one important element of the marketing mix.

287) The company iRobot got its start by developing high-tech robots for military uses, but itlater started making futuristic robots that clean and wax floors in homes everywhere. Which of the four types of opportunity does this illustrate? A) market penetration B) market development C) diversification D) opportunity cost E) golden opportunity

288) Of the four types of opportunities firms can pursue, market penetration often appeals to marketers because

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A) it requires the creation of new products. B) it involves selling current products in familiar markets. C) it involves selling current products in unfamiliar markets. D) it doesn't require a more effective use of the marketing mix. E) it is guaranteed to succeed.

289)

Which of the following firms is exploring a market development opportunity?

A) The Coleman camping gear company boosts sales of popular lanterns by setting up promotional displays at well-attended outdoor events. B) Campbell's targets health-conscious consumers with a new line of low-sodium soups. C) McDonald's opens two upscale hotels in Switzerland to serve families and business travelers. D) The E-Z-Go golf cart company begins selling golf carts for use in malls, factories, and airports. E) Mammoth Mountain Ski Resort offers horseback riding and a mountain bike park for summer visitors.

290) ________ means trying to increase sales of a firm's present products in its present markets. A) Differentiation B) Product development C) Market development D) Diversification E) Market penetration

291) When Colgate encourages its current customers to brush more often by taking their toothbrush and toothpaste to work with them, which market opportunity is Colgate pursuing?

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A) market development B) product development C) diversification D) market penetration

292) Lipton has increased sales by developing ads that encourage its current customers to drink Lipton tea instead of coffee at morning "coffee breaks." This effort focuses on A) diversification. B) market penetration. C) product development. D) mass marketing. E) market development.

293) Tropicana is trying to get its customers to drink orange juice more often with ads that say, "It's not just for breakfast anymore." What type of opportunity is the company pursuing? A) market penetration B) diversification C) market development D) product development E) mass marketing

294) Kraft Foods recently increased its advertising and couponing to its present cheese customers. It appears that Kraft is pursuing what kind of opportunity? A) market penetration B) product development C) market development D) mass marketing E) diversification

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295) If Frito-Lay (which has products in almost all the submarkets for snack foods) were to try to increase its share of one of its markets, it would be pursuing a ________ opportunity. A) diversification B) market penetration C) product development D) mass marketing E) market development

296) Coca-Cola runs an advertising campaign on morning radio shows encouraging current customers to "have a Coke in the morning" instead of their morning coffee. This is an example of A) market development. B) product development. C) diversification. D) market penetration. E) mass marketing.

297) Pop Soda Co. wants to increase sales of its existing carbonated drinks by making them more convenient, so it's making the drinks available at more stores in its present areas. This is an example of A) market penetration. B) differentiation. C) product development. D) diversification. E) market development.

298) When a customer goes online to register Adobe's Acrobat Reader, the Web page promotes other related products, including its popular Photoshop software. This is an example of

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A) product development. B) screening opportunities. C) mass marketing. D) differentiation. E) market penetration.

299)

________ means trying to increase sales by selling present products in new markets. A) Differentiation B) Market development C) Product development D) Diversification E) Market penetration

300) When a firm tries to increase sales by selling its present products in new markets, it is called A) product development. B) diversification. C) market penetration. D) mass marketing. E) market development.

301)

A company expanding globally is an example of A) market development. B) product development. C) diversification. D) market penetration. E) mass marketing.

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302) When AT&T advertises in The Wall Street Journal that smartphones using its technology can make calls from more than 200 countries in the world, which market opportunity is AT&T pursuing? A) market penetration B) product development C) diversification D) market development

303) The Wall Street Journal has been trying to attract new customers by promoting its newspaper for student use in business courses. This is an example of A) product development. B) diversification. C) market penetration. D) market development.

304) An Embassy Suites hotel offers an inexpensive "Family Luncheon Buffet" on Sundays to get customers for its restaurant that is filled by business travelers during weekdays. This effort to get new customers for the available facility is an example of A) a production orientation. B) product development. C) market development. D) diversification. E) market penetration.

305) Coca-Cola is taking advantage of an increased willingness of African leaders to engage in international trade by marketing its soft drinks in certain African nations. What type of opportunity is Coca-Cola pursuing?

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A) market development B) diversification C) product development D) market penetration E) product reorientation

306) Avon, which in the past relied on door-to-door personal selling, is trying to reach new customers by distributing mail-order catalogs, adding toll-free telephone ordering, and opening online retail sites. Avon is pursuing a ________ opportunity. A) market development B) market penetration C) target marketing D) product development E) mass marketing

307) A mail-order marketer of flower bulbs to gardening hobbyists decides to sell the bulbs in grocery stores, to reach nonhobbyists who might be interested in pretty flowers. This is an example of A) market development. B) diversification. C) market penetration. D) product development.

308) GreatGadgets, an Internet-based marketer of innovative gift items, decides to sell products in its own retail stores to reach consumers who don't like to buy without first seeing an item in person. This is an example of

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A) market development. B) diversification. C) market penetration. D) product development.

309) An Australian wine producer, facing declining sales at home, set up a new channel of distribution to sell wine in the United States. This seems to be an effort at A) market development. B) diversification. C) market penetration. D) product development.

310) E-Z-Go, a producer of golf carts, promotes its carts to other users by advertising them as an easy and quiet way for workers to get around malls, airports, and big factories. E-Z-Go is trying to increase its sales through A) market penetration. B) differentiation. C) product development. D) market development. E) diversification.

311) BeQuick, a fast-food restaurant, has always operated outlets in malls. With a new strategy that involves opening new outlets that sell the same menu but operate in airports, zoos, casinos, and military bases, BeQuick is pursuing what type of opportunity? A) product development B) market development C) differentiation D) market penetration E) diversification

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312) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a ________ opportunity. A) diversification B) market penetration C) product development D) mass marketing E) market development

313)

________ refers to offering new or improved products for present markets. A) Diversification B) Market development C) Differentiation D) Market penetration E) Product development

314) When a firm tries to increase sales by offering new or improved products to its present markets, it is called A) mass marketing. B) product development. C) market penetration. D) diversification. E) market development.

315) If Wendy's decides to test-market a hot dog in several stores to determine if it can make more profit from this menu item than from a "Wendy's single," which market opportunity is Wendy's pursuing?

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A) diversification B) market development C) market penetration D) product development

316) To compete more successfully with its many competitors offering packaged cookies, Famous Amos added its own line of "extra chunky" premium cookies. This seems to be an effort at A) combination. B) market penetration. C) market development. D) product development. E) diversification.

317) A producer of frozen pasta dinners finds that its current target customers select among its frozen pasta dinners, going to a pizza restaurant, or staying home and eating an Italian sub sandwich. So the company set up a chain of pizza restaurants that also serve Italian sub sandwiches. This seems to be an effort at A) market development. B) diversification. C) market penetration. D) product development.

318) Wendy's continues to test possible new toppings for hamburgers, including grilled mushrooms and provolone cheese. This suggests that Wendy's is pursuing

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A) marketing myopia. B) mass marketing. C) product development. D) market development. E) diversification.

319) Wendy's continues to come out with new offerings, like stuffed pitas. This suggests that Wendy's is pursuing A) marketing myopia. B) mass marketing. C) product development. D) market development. E) diversification.

320) Converse started selling its high-top canvas basketball shoes in colors such as hot pink, lime green, and purple, to accompany their traditional colors of black and white. Converse seems to be pursuing a ________ opportunity. A) market penetration B) market development C) product development D) diversification E) breakthrough

321) Heinz, in order to boost its sales, came up with ketchup in gross green and funky purple colors. It packaged the ketchup in EZ Squirt dispensers molded to fit little hands. This is an example of

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A) product development. B) market development. C) diversification. D) market penetration.

322) In developing trails for hiking and biking to bring its winter ski customers back in the summer, Mountain High Ski Resort is pursuing what type of opportunity? A) channel penetration B) diversification C) product development D) market development E) market penetration

323) Zippo is pursuing ________ opportunities with its Multi-Purpose Lighter that is designed to light candles, fireplaces, grills, and more. A) market penetration B) market development C) product development D) diversification E) channeling

324) Hewlett-Packard decided that too many other companies were attracting its customers by advertising their computer printers as "having all of the features of Hewlett-Packard's LaserJet." So Hewlett-Packard designed a new color printer with a completely new set of features that no competitors' equipment offered. Hewlett-Packard then introduced it to the same market with the hope that it could develop a larger and more profitable share. This was an effort at

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A) market development. B) diversification. C) market penetration. D) product development.

325) To improve its profits, Delta Tool Corp. has redesigned its entire line of rechargeable power drills—adding several new or improved features and three new models. Apparently, Delta Tool is pursuing a ________ opportunity. A) combiner B) market development C) product development D) diversification E) market penetration

326) Professional Dental Supply has been successfully selling dental instruments to dentists for the past twenty years and has developed strong customer relations. When looking for new marketing opportunities, Professional Dental Supply will most likely look first at A) market penetration. B) diversification. C) market development. D) product development. E) Professional Dental Supply will look at all opportunities equally.

327) ________ means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.

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A) Diversification B) Market development C) Product development D) Differentiation E) Market penetration

328) When a firm tries to increase its total sales by offering new products to new markets, it's pursuing A) diversification. B) product development. C) market development. D) market penetration. E) All these answers are correct.

329) When Sony Corp., an electronics producer, purchased the Pebble Beach golf course in California, it was pursuing what type of opportunity? A) diversification B) market development C) market penetration D) product development

330) Cheese manufacturer Ashe Mountain Corp. started a new chain of movie theaters called Ashe Mountain's Movie World. The theaters have been a major success and significantly increased the revenues of Ashe Mountain Corp. This is an example of A) diversification. B) market development. C) product penetration. D) differentiation. E) market penetration.

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331) A beer distributor concerned about increasing regulation of alcoholic beverages decides to start a new business distributing children's toys. This company seems to be pursuing A) market development. B) diversification. C) product development. D) market penetration.

332) Industrial Plastics Corporation has decided to manufacture and sell electric motors for fishing boats. The firm appears to be pursuing a ________ opportunity. A) combiner B) product development C) market development D) market penetration E) diversification

333) A producer of home burglar alarm devices decides to start manufacturing portable video cameras for use in industrial security situations. This is an example of A) market development. B) diversification. C) product development. D) market penetration.

334) If a cola producer bought out a mango juice producer in an attempt to appeal to healthconscious consumers who do not drink soft drinks, it would be pursuing a ________ opportunity.

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A) market development B) diversification C) market penetration D) product development

335)

The most risky and challenging opportunities usually involve A) market development. B) product development. C) diversification. D) market penetration. E) market modification.

336)

The most risky types of marketing opportunity to pursue usually involve A) market development. B) market penetration. C) diversification. D) product development. E) All of these are equally risky.

337) Because companies are likely to be most familiar with their own operations, ________ opportunities are usually the easiest to pursue. A) market penetration B) product development C) market development D) diversification E) All of these are equally easy.

338)

Which of the following statements about international opportunities in marketing is true?

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A) There is no need to consider international opportunities when the domestic market is prosperous. B) International trade is decreasing worldwide. C) A product with slow sales growth in a domestic market may experience faster growth in another country. D) Only large firms can engage in international marketing. E) All of these statements about international opportunities in marketing are true.

339) Which of the following is NOT among the reasons international opportunities should be considered by managers? A) The world is getting smaller. B) Serving international markets may improve economies of scale. C) Favorable trends at home and unfavorable trends in other countries make international marketing particularly attractive. D) Around the world, potential customers have needs and money to spend. E) It helps to develop a competitive advantage at home and abroad.

340)

Going global has become easier than ever for marketers, due to A) language differences between nations. B) cultural differences among ethnic groups around the world. C) advances in e-commerce, transportation, and communication. D) political and social unrest in various parts of the world. E) a worldwide economic recession.

341)

Which of the following represents a risk of operating in a foreign market?

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A) learning foreign regulations and culture B) finding better trends in variables C) getting an early start in a new market D) enjoying competitive advantage at home and abroad E) increasing ability to reach international customers

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Answer Key Test name: Chap 02_17e 1) TRUE In the marketing management process, planning, implementation, and control are basic jobs of all marketing managers. 2) FALSE Controlling marketing plans is the final step of the marketing management process. It involves measuring results and evaluating progress of plans after they have been devised and implemented. 3) TRUE The marketing management process is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 4) TRUE The marketing management process is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 5) FALSE Strategic planning includes planning not only for marketing but also for production, finance, human resources, and other areas. 6) TRUE Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. It includes planning not only for marketing but also for production, finance, human resources, and other areas.

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7) FALSE Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 8) TRUE The marketing manager's marketing strategy planning job involves finding attractive opportunities and developing profitable marketing strategies. 9) FALSE Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. 10) TRUE A marketing strategy specifies a target market and a related marketing mix. It is a broad view of what a firm will do in some market. 11) TRUE The two interrelated parts that make up a marketing strategy are (1) target market, and (2) marketing mix. 12) FALSE A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. 13) FALSE A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. 14) FALSE A target market consists of a fairly homogeneous group of customers. 15) FALSE Version 1

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A marketing mix is the set of controllable variables that a company puts together to satisfy a target group. 16) TRUE Target marketing aims a marketing mix at some specific target customers. 17) FALSE Mass marketing vaguely aims at everyone with the same marketing mix. It assumes that everyone is the same—and it considers everyone a potential customer. 18) TRUE Mass marketing is the typical production-oriented approach that vaguely aims at everyone with the same marketing mix. 19) FALSE Mass marketing means trying to sell to everyone, whereas mass marketers aim at clearly defined target markets. 20) TRUE Unlike mass marketing, which aims at trying to sell to everyone, mass marketers aim at clearly defined target markets. 21) FALSE Target marketing is not limited to small market segments, only to fairly homogeneous ones. 22) FALSE Mass marketing assumes that everyone is the same and considers everyone a potential customer. 23) TRUE

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Since everyone is different, marketers need to focus efforts on some specific target customers instead of all customers. Target marketing allows marketers to develop a marketing mix that satisfies the needs of select consumers. 24) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 25) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 26) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 27) TRUE Product, Place, Promotion, and Price are the four important variables in a firm's marketing mix. 28) FALSE The customer is the target of all marketing efforts and is not part of the marketing mix. 29) TRUE The customer is not part of the marketing mix, but instead the focus of all marketing efforts. 30) TRUE The customer is not part of the marketing mix, but instead the focus of all marketing efforts. 31) TRUE Version 1

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The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 32) FALSE The Product area is concerned with developing the right product, which may involve a physical good, a service, or both. 33) TRUE The Product area is concerned with developing the right product, which may involve a physical good, a service, or both. 34) TRUE Place is concerned with all the decisions involved in getting the right product to the target market at the right time. A product isn't much good to a customer if it isn't available when and where it's wanted. 35) TRUE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. 36) TRUE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. 37) FALSE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. It may or may not include an intermediary, depending on the industry and type of products offered. 38) FALSE Version 1

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A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. It may or may not include an intermediary, depending on the industry and type of products offered. 39) TRUE Promotion includes personal selling, mass selling, and sales promotion. It is the marketing manager's job to blend these methods of communication. 40) TRUE Promotion includes personal selling, mass selling (advertising, and publicity), and sales promotion. It is the marketing manager's job to blend these methods of communication. 41) FALSE Personal selling involves direct spoken communication between sellers and potential customers. Such sales often require personal attention even after the sale is made. 42) TRUE Customer service is personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. 43) TRUE Advertising refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 44) TRUE Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This includes use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. Version 1

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45) TRUE Sales promotion refers to those promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 46) FALSE Sales promotion refers to those promotion activities other than advertising, publicity, and personal selling those stimulate interest, trial, or purchase. Therefore, neither personal selling nor advertising is a form of sales promotion. 47) TRUE Customer value increases when customers perceive more benefits or lower costs. Marketing managers use the "Four Ps" to deliver customer value to a target market. 48) FALSE No single element of the marketing mix is more important another. All four are equally important. 49) FALSE No single element of the marketing mix is more important than another. All four are equally important. 50) TRUE No single element of the marketing mix is more important than the other. All four are equally important. 51) FALSE Selecting a target market and developing a marketing mix are interrelated. Both parts of a marketing strategy must be decided together. 52) TRUE

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The Toddler University case shows how the needs of a target market, in this case the attentive parents target market, determine the nature of an appropriate marketing mix. 53) FALSE A marketing strategy is a big picture of what a firm will do in some market. A marketing plan is a written statement of a marketing strategy. 54) TRUE A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 55) TRUE A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 56) TRUE Implementation refers to putting marketing plans into operation. 57) FALSE Operational decisions refers to short-run decisions that stay within the guidelines set down during strategy planning made to help implement strategies. 58) FALSE Operational decisions should stay within the guidelines set down during strategy planning, but operational decisions are made regularly, sometimes daily, and should not be confused with planning strategy. 59) FALSE Campbell's has developed different soups that are targeted to the specific needs of different target markets. The marketing plan for each type of soup is different and fits into its overall marketing program.

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60) TRUE Marketing analytics is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. 61) FALSE Most companies implement more than one marketing strategy, and related marketing plan, at the same time. One such company is Procter & Gamble. 62) TRUE A marketing program blends all of the firm's marketing plans into one "big" plan. Its success is based on the care that goes into planning individual strategies. 63) TRUE A marketing program blends all of the firm's marketing plans into one "big" plan. Its success is based on the care that goes into planning individual strategies. 64) TRUE A marketing program blends a firm's various marketing plans into one combined plan. 65) TRUE Customer equity is the expected earnings stream of a firm's current and prospective customers over a period of time. A successful marketing program is expected to identify opportunities that will lead to an increase in a firm's customer equity. 66) TRUE Customer lifetime value (CLV) represents the total profits a single customer contributes to a firm over the length of the relationship. Version 1

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67) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. This includes finding cost-effective ways to serve current customers so they buy more in the future. 68) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. This means that marketing strategies can focus on attracting new customers using cost-effective methods. 69) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. To achieve this, marketing strategies can focus on attracting new customers as well as retaining and growing current customers. 70) FALSE The customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's long-term profits—not just for the next quarter or year. By estimating the impacts that different marketing strategies and marketing programs have on customer equity, a firm can make marketing decisions with long-run financial implications in mind. 71) TRUE Acquiring new customers, retaining current customers, and enhancing the customer value by increasing their purchases are potential sources of new revenue. 72) FALSE Retention rate is the percentage of customers retained as compared to the total number of customers.

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73) FALSE Retention rate is the percentage of customers retained as compared to the total number of customers. If 200 of the deli’s 2,000 customers returned the following year, its retention rate would be 10 percent (200/2,000 = 10%). 74) TRUE Acquisition cost is the expense required to acquire a new customer. 75) TRUE Acquisition cost is the expense required to acquire a new customer. If a firm spent $5,000 in advertising to attract 50 new customers, the acquisition cost would be $100 per customer ($5,000/50 = $100). 76) FALSE Attractive opportunities for a given firm are those that the firm has some chance of exploiting given its resources and objectives. An opportunity that is attractive for one firm may not be attractive for another. 77) TRUE Attractive opportunities for a given firm are those that the firm has some chance of exploiting given its resources and objectives. 78) TRUE Breakthrough opportunities are opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 79) TRUE Breakthrough opportunities are opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 80) TRUE Version 1

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Competitive advantage means that a firm has a marketing mix that the target market sees as better than a competitor's mix. 81) TRUE Even if a firm can't find a breakthrough opportunity, it should try to obtain a competitive advantage to increase its chances for profit or survival. 82) TRUE The marketing strategy planning process narrows down from broad opportunities to specific strategy. 83) FALSE The marketing strategy planning process starts with a broad look at a market and narrows down towards specific strategy such as marketing mixes. 84) TRUE There are usually more different opportunities and strategy possibilities than a firm can pursue—each with its own advantages and disadvantages. 85) TRUE Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. This can be derived from an analysis of the company's objectives and resources. 86) TRUE With a S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 87) FALSE Version 1

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S.W.O.T. analysis is one that identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 88) FALSE S.W.O.T. analysis is one that identifies and lists the firm's strengths, weaknesses, opportunities, and threats. A marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 89) TRUE S.W.O.T. analysis helps a marketing manager identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 90) TRUE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. 91) FALSE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. 92) TRUE Segmentation is the reason why a manager may decide to serve some subgroups of customers and not others. 93) TRUE Differentiation means that the marketing mix of a firm is distinct from what is available with a competitor. 94) FALSE Differentiation means that the marketing mix of a firm is distinct from what is available with a competitor.

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95) TRUE Differentiation often requires that the firm fine-tune all of the elements of its marketing mix to the specific needs of a distinctive target market. 96) TRUE Differentiation should emphasize the differences so target customers will think of the firm as being in a unique position to meet their needs. 97) FALSE Differentiation should emphasize the differences so target customers will think of the firm as being in a unique position to meet their needs. 98) FALSE While the external market environment is outside of the company, it is comprised of trends and forces that can make a potential marketing opportunity more or less attractive or likely to succeed. 99) FALSE It is useful to think of the marketing strategy planning process as a narrowing-down process. The process begins with a broad look at a market but then narrows as marketers evaluate specific qualitative and quantitative screening criteria that help zero in on the best target market and marketing mix. 100) FALSE The first two letters of S.W.O.T. analysis stand for "strengths and weaknesses" and guide managers to look inward to assess a company's internal capabilities and resources. 101) TRUE

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Whereas the first two letters of S.W.O.T. analysis focus on strengths and weaknesses related to a company's internal resources and capabilities, the last two letters examine "opportunities and threats" outside the firm related to customers, competition, and the external marketing environment. 102) TRUE Market penetration means trying to increase sales of a firm's present products in its present markets. 103) TRUE Market penetration means trying to increase sales of a firm's present products in its present markets through a more aggressive marketing mix. 104) FALSE Market development means trying to increase sales by selling present products in new markets. 105) FALSE Market development means trying to increase sales by selling present products in new markets. 106) TRUE Product development means offering new or improved products for present markets. 107) FALSE This is an example of product development, which means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 108) FALSE

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Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 109) FALSE Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 110) FALSE Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 111) TRUE Diversification means moving into totally different lines of business. It could be entirely unfamiliar products, markets, or even levels in the production-marketing system. 112) FALSE Products and customers that are very different from a firm's current base may look attractive, but these opportunities are usually hard to evaluate. That's why diversification usually involves the biggest risk. 113) TRUE Most firms think first of greater market penetration and usually find the most attractive opportunities in markets they already know. 114) FALSE Most firms tend to think first of greater market penetration when they think of diversification. 115) FALSE

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Since diversification opportunities require moving into totally different lines of business—perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system—such opportunities are hard to evaluate and involve the greatest risk. 116) FALSE Advances in e-commerce, transportation, and communications are making it easier and cheaper to reach international customers. With a website and e-mail, even the smallest firm can provide international customers with a great deal of information—and easy ways to order—at very little expense. 117) TRUE If customers in other countries are interested in the products a firm offers, or could offer, serving them may improve economies of scale. Lower costs and prices may give a firm a competitive advantage both in its home markets and abroad. 118) TRUE Unfavorable trends in the market environment at home or favorable trends in other countries may make international marketing particularly attractive. 119) TRUE Marketing managers should consider international opportunities, but risks are often higher in foreign markets. Many firms fail because they don't know the foreign country's culture. 120) FALSE Unfavorable trends in the market environment at home—or favorable trends in other countries—may make international marketing particularly attractive. However, managers must assess both the risks and opportunities. Version 1

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121) TRUE Marketers who are attaining success in domestic markets often fall into the trap of ignoring opportunities in international markets. 122) E Planning, implementation, and control are basic jobs of all managers. 123) C Controlling is vital to the marketing management process because gathering feedback on a plan's results may lead to beneficial adjustments or entirely new plans. 124) D Marketing managers oversee all aspects of the marketing management process, including planning marketing, directing the implementation of the plans, and controlling these plans. Overseeing a firm's financial statements is a duty for financial officers and accountants. 125) D The marketing management process is (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 126) D The marketing management process refers to (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 127) B The job of planning strategies to guide a whole company is called strategic (management) planning—the managerial process of developing and maintaining match between an organization’s resources and its market opportunities. This is a top-management job. Version 1

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128) C Although marketing strategies are not whole-company plans, company plans should be market-oriented. The marketing plan often sets the tone and direction for the whole company. 129) A Marketing strategies are not whole-company plans, but company plans should be market-oriented. 130) D Strategic (management) planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 131) A Strategic (management) planningis the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 132) A Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. 133) E Marketing strategies are not whole-company plans, but company plans should be market-oriented. 134) A A marketing strategy has two interrelated parts (1) a target market, (2) a marketing mix. 135) A A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. Version 1

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136) B A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. 137) B A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. 138) B A target market is a fairly homogeneous (similar) group of customers to whom a company wishes to appeal. 139) C A target market is a fairly homogeneous group of customers to whom a company wishes to appeal. 140) E A marketing mix consists of the controllable variables the company puts together to satisfy a target group. 141) D Target marketing says that a marketing mix is tailored to fit some specific target customers. 142) E Mass marketing is a typical production-oriented approach that aims generally at everyone using the same marketing mix. In contrast, target marketing sees everyone as different and says that a marketing mix is tailored to fit some specific target customers. 143) C Target marketing involves a marketing mix tailored to fit some specific target customers. In contrast, mass marketing vaguely aims at "everyone" with the same marketing mix. Version 1

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144) E Target marketing involves a marketing mix tailored to fit some specific target customers. In contrast, mass marketing vaguely aims at "everyone" with the same marketing mix. Mass marketing assumes that everyone is the same and considers everyone a potential customer. 145) E Target marketing involves a marketing mix tailored to fit some specific target customers. 146) C Mass marketing, with its typical production-oriented approach, assumes that everyone is the same and considers everyone a potential customer. 147) E Mass marketing is the typical production-oriented approach, which vaguely aims at “everyone” with the same marketing mix. Mass marketing assumes that everyone is the same—and it considers everyone to be a potential customer. 148) D Not all potential customers have the same needs, nor do they always want their needs met in the same way. In spite of the many possible differences, there often are segments of consumers who are similar and could be satisfied with the same marketing mix. 149) B Target marketing is not limited to small market segments, only to fairly homogeneous ones. A very large market, sometimes called the "mass market," may be fairly homogeneous, and a target marketer will deliberately aim at it. 150) E Version 1

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Target marketing is not limited to small market segments, only to fairly homogeneous ones. A very large market, sometimes called the "mass market," may be fairly homogeneous, and a target marketer will deliberately aim at it. 151) B Target marketing says that a marketing mix is tailored to fit some specific target customers. However, mass marketers like Kraft Foods and Walmart aim at clearly defined target markets. The confusion with mass marketing occurs because their target markets usually are large and spread out. 152) C The variables of the marketing mix help organize marketing related decisions and simplify the selection of marketing mixes. 153) E The different variables of the marketing mix are Product, Place, Promotion, and Price. 154) D The different variables of the marketing mix are Product, Place, Promotion, and Price. 155) B The different variables of the marketing mix are Product, Place, Promotion, and Price. 156) E The different variables of the marketing mix are Product, Place, Promotion, and Price. 157) D

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The different variables of the marketing mix are Product, Place, Promotion, and Price. 158) B The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 159) E The important thing to remember is that your good or service should satisfy some customers’ needs. 160) E Products include physical goods and/or services and product-related decisions include branding, packaging, and warranties. 161) E Products include physical goods and/or services and product-related decisions include branding, warranties, and packaging. Developing the right new product is also included in "Product." 162) E Apart from the physical product, a service, or a blend of both, productrelated decisions include developing, designing, packaging, and branding. 163) C Price, whether a wholesale price or a consumer price, is not part of Product. 164) B "Market exposure" is part of Place, not Product. 165) E Version 1

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The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 166) B The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 167) C "Packaging design" is part of Product. 168) D "Warranty" is part of Product. 169) D The Product area is concerned with developing the right product for the target market. Dell offers its customers various products. 170) A Packaging and branding are part of Product. 171) D Branding and packaging are important elements of Product-area decisions, while personal selling and mass selling are important elements of Promotion-area decisions. 172) B Place is concerned with all the decisions involved in getting the right product to the target market's place. A product reaches customers through a channel of distribution. Other important decisions include channel type, market exposure, kinds of intermediaries, etc. 173) E Version 1

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Place is concerned with all the decisions involved in getting the right product to the target market's place. 174) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 175) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 176) E Sales reps are a part of the Promotion variable of the marketing mix. 177) D Telling the target market what products are available and where is part of Promotion. 178) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 179) D Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 180) D A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. Version 1

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181) B A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. 182) D Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 183) A Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 184) E There is a channel of distribution, albeit short; there is target marketing; there is promotion; and a marketing orientation is always more effective. 185) C Promotion is that element of the marketing mix that is concerned with telling the target market or others in the channel of distribution about the "right" product. 186) E Promotion is concerned with telling the target market or others in the channel of distribution about the "right" product. Promotion includes personal selling, mass selling, and sales promotion. 187) E Promotion includes personal selling, mass selling (advertising and publicity), and sales promotion. 188) C Version 1

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Promotion includes "training for salespeople." "Packaging and branding" are part of Product. "Kinds of intermediaries" is part of Place. "Discounts and allowances" are part of Price. 189) B Designing new products is a function of the Product variable of the marketing mix. Promotion deals with mass selling, personal selling, advertising, publicity, and sales promotion. 190) C Personal selling is part of Promotion. 191) A Personal selling involves direct spoken communication between sellers and potential customers. It may happen face-to-face, over the telephone, or even via a videoconference over the Internet. 192) E Personal selling and advertising are important components of Promotion, while geographic terms and price allowances are important components of Price. 193) E Customer service refers to personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. This is often a key to building repeat business. 194) C Advertising refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 195) B

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Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services, which includes getting favorable coverage in newspaper stories or on television as well as creating and placing content on the web for customers to find or pass along to others. 196) C Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. It aids the efforts of personal selling and mass selling. 197) C Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 198) E Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 199) B Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 200) D Promotion tells the target customers and others in the channel about the product that has been designed for them. 201) C Version 1

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Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 202) C Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 203) B Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 204) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 205) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 206) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 207) C Version 1

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A manager must know current practices as to markups, allowances, discounts, and other terms of sale while developing a marketing mix. These practices are part of Price. 208) A Current practices such as markups, discounts (including rebates), and other terms of sale are part of Price. 209) E Marketing managers use the "Four Ps" to deliver customer value to the target market. Customers may perceive more value with increased product features (Product), a lower price (Price), more convenient buying options (Place), and effective communication about the product’s value (Promotion). 210) E All the "Four Ps" are needed in a marketing mix. No single variable of the marketing mix is more important than another; they all contribute to one whole. When a marketing mix is being developed, final decisions about the Ps should be made at the same time. 211) B The needs of a target market often virtually determine the nature of an appropriate marketing mix. Therefore, marketers must analyze their potential target markets with great care. 212) D A good marketing mix should ideally flow logically from all the relevant dimensions of a target market. 213) B

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In order to serve the "Attentive Parents" target market, the owner of Toddler University came up with an appropriate marketing mix that met this target market's needs. It did this by combining "fit and function with fun and fashion." 214) B In order to serve the "Attentive Parents" target market, the owner of Toddler University came up with an appropriate marketing mix that met this target market's needs. It did this by combining "fit and function with fun and fashion." 215) E TU's marketing plan spelled out the following details: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. 216) A A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 217) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. It should spell out the following in detail: (1) what marketing mix will be offered, to whom (that is, the target market), and for how long; (2) what company resources (shown as costs) will be needed at what rate (month by month perhaps); and (3) what results are expected (sales and profits perhaps monthly or quarterly, customer satisfaction levels, and the like). 218) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. Version 1

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219) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 220) E An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. It should also include some control procedures so that whoever is to carry out the plan will know if things are going wrong. 221) B An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. 222) B An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. "How frequently the design of the website is changed" does not fall under one of these three questions. 223) E An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. It should also include some control procedures so that whoever is to carry out the plan will know if things are going wrong. 224) B

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Implementation refers to the manager's job of putting marketing plans into operation. 225) D Short-run decisions that help implement strategies are known as operational decisions. 226) A Managers should make operational decisions within the guidelines set down during strategy planning. But operational decisions are short-run decisions to help implement strategies. They do not change the basic strategy. They are made regularly, even daily or weekly. 227) A Operational decisions are short-run decisions that help implement strategies. They are part of the implementation process, but they do not require changes in the basic strategy. 228) B Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 229) B Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 230) D Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 231) C Version 1

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Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 232) E Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 233) E "Carry as limited a line of colors, styles, and sizes as will satisfy the target market" is a strategic decision that pertains to the Product variable of the marketing mix. 234) C Promoting the benefits and value of the special design and how it meets customer needs is a strategic decision that pertains to the Promotion variable of the marketing mix. 235) C Hiring new salespeople is an operational decision that pertains to the Promotion variable of the marketing mix. 236) D In market areas where sales potential is not achieved, adding new retail outlets and/or dropping retailers whose performance is poor are operational decisions that pertain to the Place variable of the marketing mix. 237) A

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Marketing analytics is the practice of measuring, managing, and analyzing market performance to maximize its efficiency and effectiveness. Marketing metrics are the numeric data that are used to perform marketing analytics. 238) B Marketing managers use marketing metrics to perform marketing analytics, which is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. 239) A A marketing program blends all of the firm's marketing plans into one big plan. 240) A A marketing program blends all of the firm's marketing plans into one big plan. 241) D Many firms measure the customer lifetime value or the total profits a single customer contributes to a firm over the length of the relationship. 242) B Over a period of years, a single customer is likely to purchase multiple products from a company. The total profit that a customer could contribute to the company over the length of the relationship is called customer lifetime value. 243) E Calculating a customer's long-range purchasing potential can help marketers recognize the importance of devising plans that build and maintain customer relationships over a lifetime. 244) D Version 1

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Over a period of years, a single customer is likely to purchase multiple products from a company. The total profits a single customer contributes to the company over the length of the relationship is called customer lifetime value. 245) E Many firms measure the customer lifetime value or the total profits a customer contributes to the firm over the length of the relationship. 246) E Many firms measure the customer lifetime value or the total profits a customer contributes to the firm over the length of the relationship. In this situation, the restaurant manager is willing to lose money on a future meal to encourage return visits. 247) D Customer equity is the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time. 248) C We can take the idea of customer lifetime value a step further by taking into account all of a firm's current and future customers and the costs associated with each. Customer equity is the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time. 249) A Customer equity is the expected earnings stream of a firm's current and prospective customers over some period of time. Top management expects marketing strategy planners to help identify opportunities that will lead to an increase in a firm's customer equity. 250) C Version 1

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A focus on customer equity allows a firm's marketing strategies for each of its products to work together to increase the lifetime value of that customer to the firm. 251) E Customer equity is the expected earnings stream of a firm's current and prospective customers over some period of time. Top management expects marketing strategy planners to help identify opportunities that will lead to an increase in a firm's customer equity. 252) D Customer equity does benefit the company because it increases the lifetime value of the customer to the firm. 253) A The customer equity approach suggests three potential paths for growth: (1) acquiring new customers, (2) retaining current customers, and (3) enhancing the customer value by increasing their purchases. 254) A Three marketing metrics are needed to estimate customer lifetime value: (1) retention rate; (2) acquisition cost; and (3) average profit margin. 255) A Three marketing metrics are needed to estimate customer lifetime value: (1) retention rate; (2) acquisition cost; and (3) average profit margin. 256) A Retention rate refers to the percentage of customers retained as compared to the total number of customers. 257) A

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The retention rate refers to the customers retained as compared to the total amount of customers. In determining its retention rate, an Internet retailer would need to know how many customers returned again to its website to make a purchase. 258) A The retention rate refers to the customers retained as compared to the total amount of customers. If Donna had 2,000 customers in her first year in business and 500 of those customers came back the following year, she had a 25 percent retention rate (500/2,000 = 25%). 259) D If the sandwich shop had 1,000 customers last year and retained 250 of those customers, its retention rate is 25 percent (250/1,000). 260) B Acquisition cost is the expense that is required to acquire a new customer. 261) A If a firm spends $5,000 a year on advertising and attracts 50 new customers, its acquisition cost per customer is $100 ($5,000/50). 262) A The acquisition cost is the expense required to acquire each new customer. If the retailer spent $20,000 on promotion and gained 500 new customers, the acquisition cost for each new customer is $40 ($20,000/500). 263) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 264) C Version 1

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Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 265) B Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 266) D Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. None of these options is significant enough to qualify as a breakthrough opportunity. 267) D Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. All of the options are significant enough to qualify as breakthrough opportunities. 268) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 269) A Competitive advantage means that a firm has a marketing mix that the target market sees as better than a competitor's mix. It may result from efforts in different areas of the firm, such as cost cutting in production, innovative research and development, etc. 270) E

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Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. Even if a manager can't find a breakthrough opportunity, the firm should try to obtain a competitive advantage to increase its chances for profit or survival. 271) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. Even if a manager can't find a breakthrough opportunity, the firm should try to obtain a competitive advantage to increase its chances for profit or survival. 272) B An advantage only succeeds if it allows the firm to provide superior value and satisfy customers better than some competitor. 273) D Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. 274) E A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 275) E A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. All these statements about S.W.O.T analysis are true. 276) D

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With S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. This should provide a competitive advantage. 277) E With a S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 278) D A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 279) A A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Having adequate resources is a strength any firm would like to have. 280) C A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Being in a fast-growing industry is an opportunity on which a firm should try to capitalize. 281) D A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Recessionary conditions pose a threat to nearly every firm. 282) B

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A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Firms must quickly remedy the situation of lagging behind in one or more departments, which is a potential weakness. 283) C Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. 284) B A marketing mix won't get a competitive advantage if it just meets needs in the same way as some other firm. Combining analyses of customers, competitors, and company help the marketing manager identify possible strategies that differentiate a marketing mix from the competition. 285) B Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. This means its marketing mix is unique. 286) C Differentiation often requires that the firm fine-tune all of the elements of its marketing mix to the specific needs of a distinctive target market. 287) C Since iRobot has started manufacturing new products for non-military uses and markets, the company is pursuing a product diversification opportunity—the type of opportunity in which businesses create new products for new markets different from the firm's current base. 288) B

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Since firms prefer opportunities close to markets they already know, most managers pursue greater market penetration, which involves selling current products in familiar markets. Market penetration is appealing because firms want to increase profits and grow customer equity where they already have experience and strengths. 289) D A market development opportunity involves trying to increase sales by selling present products in new markets. The E-Z-Go golf cart company's push to sell golf carts for new non-golf settings is an example of market development. 290) E Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 291) D Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 292) B Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 293) A Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 294) A Version 1

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Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 295) B Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 296) D Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 297) A Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 298) E Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 299) B Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 300) E Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. Version 1

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301) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 302) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 303) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 304) C Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 305) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 306) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 307) A

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Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 308) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 309) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 310) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 311) B Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 312) E Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 313) E Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. Version 1

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314) B Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 315) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 316) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 317) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 318) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 319) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 320) C

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Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 321) A Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 322) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 323) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 324) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 325) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 326) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. Version 1

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327) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 328) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 329) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 330) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 331) B Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 332) E Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 333) B

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Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 334) B Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 335) C Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. Products and customers that are very different from a firm's current base may look attractive but are usually hard to evaluate. That's why diversification usually involves the biggest risk. 336) C Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. Products and customers that are very different from a firm's current base may look attractive but are usually hard to evaluate, making diversification very risky. 337) A Usually firms find attractive opportunities fairly close to markets they already know, making market penetration very attractive. 338) C A company (of any size) facing tough competition, thin profit margins, and slow sales growth at home may get a fresh start in another country where demand for its product is just beginning to grow. International trade is increasing worldwide. Version 1

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339) C Unfavorable trends in the market environment at home or favorable trends in other countries may make international marketing particularly attractive. 340) C Advances in e-commerce, transportation, and communications are making it easier and cheaper to reach international customers. With a website and e-mail, even the smallest firm can provide international customers with a great deal of information—and easy ways to order—at very little expense. 341) A There are good reasons to look for opportunities in international markets. However, marketing managers must weigh the risks of operating in foreign markets. Many firms fail because they don’t know the foreign country’s culture, and learning foreign regulations can be difficult and costly.

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CHAPTER 3 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The external market environment is shaped by these four areas: economics, technology, politics/law, and culture/society. ⊚ ⊚

2)

The direct market environment includes customers, competitors, and the IRS. ⊚ ⊚

3)

true false

A mission statement sets out the organization's basic purpose for being. ⊚ ⊚

7)

true false

Company objectives should set the firm's course. ⊚ ⊚

6)

true false

Company objectives should shape the direction and operation of the whole business. ⊚ ⊚

5)

true false

The marketing manager can control the variables in the market environment. ⊚ ⊚

4)

true false

true false

A mission statement should focus on just the key goals for the organization.

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⊚ ⊚

true false

8) A mission statement can help a manager decide which opportunities to pursue and which to screen out. ⊚ ⊚

true false

9) A mission statement sets out the strengths and weaknesses of a firm as well as the opportunities and threats that it faces. ⊚ ⊚

10)

A mission statement substitutes for more specific objectives. ⊚ ⊚

11)

true false

true false

Company objectives should lead to a hierarchy of marketing objectives. ⊚ ⊚

true false

12) The objectives of a firm should direct the operation of the marketing department but aren't important to the rest of the business. ⊚ ⊚

13)

true false

Good marketing objectives should be ambitious and almost impossible to achieve. ⊚ ⊚

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14)

Attractive opportunities should make use of a firm's resources and its unique strengths. ⊚ ⊚

true false

15) A large producer with economies of scale always has a competitive advantage over smaller firms. ⊚ ⊚

true false

16) If the cost of production per unit goes down as the quantity produced increases, small producers can be at a great cost disadvantage. ⊚ ⊚

true false

17) As compared to larger competitors, smaller firms benefit from lower unit costs, which they achieve with lower sales volumes. ⊚ ⊚

true false

18) Smaller producers always have a great advantage in competing with larger producers because of their flexibility. ⊚ ⊚

19)

true false

The opportunities a firm decides to pursue may depend on its resources and capabilities. ⊚ ⊚

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20) The competitive environment has no relationship with the number and types of competitors the marketing manager must face and how they may behave. ⊚ ⊚

true false

21) Although the marketing manager cannot control the competitive environment, he or she can choose strategies that will avoid head-on situations. ⊚ ⊚

true false

22) When the competitive environment moves toward pure competition, producers offer very different products that consumers do not perceive as substitutes for each other. ⊚ ⊚

23)

Over the long run, most product-markets tend toward monopolistic competition. ⊚ ⊚

24)

true false

In market-directed economies, unregulated monopolies are rare. ⊚ ⊚

25)

true false

true false

In monopolistic competition, one firm completely controls a broad product-market. ⊚ ⊚

true false

26) In monopolistic competition, managers sometimes try to differentiate very similar products by focusing on promotion or other elements of the marketing mix.

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⊚ ⊚

true false

27) In a competitor analysis, a current (or planned) target market and marketing mix is compared with what competitors are currently doing (or are likely to do). ⊚ ⊚

true false

28) Competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. ⊚ ⊚

true false

29) The major shortcoming of competitor analysis is that it focuses on the weaknesses of competitors but ignores their strengths. ⊚ ⊚

30)

The first step in a competitor analysis is to identify potential competitors. ⊚ ⊚

31)

true false

true false

Competitive rivals are always easy to identify. ⊚ ⊚

true false

32) Market share is an important marketing metric used by marketing managers to track how well their product is doing in a particular market. ⊚ ⊚

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33) Many people think that it is unethical to spy on competitors to obtain their trade secrets, but it is perfectly legal. ⊚ ⊚

34)

true false

Spying on competitors to obtain trade secrets raises moral issues, but it is not illegal. ⊚ ⊚

true false

35) The technological environment includes such things as national income, economic growth, and inflation. ⊚ ⊚

true false

36) The inflation rate experienced by the United States in recent years was just about the highest in the world. ⊚ ⊚

37) low.

Compared to some countries in Latin America, the rate of inflation in the United States is ⊚ ⊚

38)

true false

true false

Technology is the application of science to convert an economy's resources to output. ⊚ ⊚

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39)

Technology affects marketing through new products and new processes. ⊚ ⊚

40)

true false

Technology provides new opportunities and new challenges for marketers. ⊚ ⊚

true false

41) When a machine operates like a human with respect to learning and decision making, it is referred to as artificial intelligence. ⊚ ⊚

42)

true false

Artificial intelligence and intelligent agents are two separate and distinct technologies. ⊚ ⊚

true false

43) Through machine learning, a software program can learn a specific skill without actual programming. ⊚ ⊚

true false

44) Nationalism may affect marketing strategy planning by determining to whom and how much a firm may sell. ⊚ ⊚

true false

45) Placing the interests of individual consumers before the interests of business is nationalism.

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⊚ ⊚

true false

46) Nationalism—or the emphasis on a country's interests before anything else—may affect the work of some marketing managers. ⊚ ⊚

47)

true false

Strong sentiments of nationalism facilitate growth in importing and exporting. ⊚ ⊚

true false

48) Members of the European Union seek to simplify inter-European commerce by working to reduce conflicting laws, taxes, and other obstacles to trade within Europe. ⊚ ⊚

49)

Many European Union member countries use the same currency, the euro. ⊚ ⊚

50)

true false

true false

The political environment may either block or promote new marketing opportunities. ⊚ ⊚

true false

51) A basic idea in the legal environment in the United States is that efforts by business to limit competition are considered contrary to the public interest. ⊚ ⊚

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52)

Businesses and individual managers are subject to both criminal and civil laws. ⊚ ⊚

true false

53) A manager could be fined for violating the antimonopoly laws, but he or she could not be sent to jail. ⊚ ⊚

54)

The Sherman Act deals with product safety. ⊚ ⊚

55) Act.

true false

true false

The Clayton Act deals with anticompetitive practices that did not fall under the Sherman ⊚ ⊚

true false

56) The Clayton Act focuses on practices that may substantially lessen competition, such as tying contracts, exclusive dealing contracts, and price discrimination by manufacturers. ⊚ ⊚

true false

57) The Consumer Product Safety Act provides for the creation of safety standards but has no power to set penalties for failure to meet these standards. ⊚ ⊚

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58) The Consumer Product Safety Commission tries to encourage safe product design, but the commission has almost no power to deal with unsafe products. ⊚ ⊚

true false

59) In the United States, the Consumer Product Safety Commission sets and enforces product safety standards. ⊚ ⊚

true false

60) Because the Consumer Product Safety Commission has no power to force a product off the market, safety is not a very important consideration in product design. ⊚ ⊚

true false

61) Marketers should be aware of federal legislation, as well as state and local laws, when planning marketing strategy. ⊚ ⊚

62) do.

The cultural and social environment affects how and why people live and behave as they ⊚ ⊚

63)

true false

true false

The cultural and social environment refers to where people live and their income. ⊚ ⊚

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64) When shopping these days, many customers consider sustainability, which is the idea that it is important to meet present needs without compromising the ability of future generations to meet their own needs. ⊚ ⊚

true false

65) The majority of consumers are unwilling to pay more for a product even if it is deemed to be more sustainable. ⊚ ⊚

true false

66) The rate of growth of the U.S. population is lower than the rate of growth of some other countries' populations. ⊚ ⊚

67)

true false

There are over 316 million people living in the United States. ⊚ ⊚

true false

68) The U.S. population is over 316 million people, and the world population is more than 7 billion people. ⊚ ⊚

69)

India has more people than the United States, and China has more people than India. ⊚ ⊚

70)

true false

true false

Less-developed countries usually experience the slowest population growth.

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⊚ ⊚

true false

71) In Argentina, Israel, and Singapore, for example, less than 20 percent of people live in urban areas. ⊚ ⊚

true false

72) The concentration of people in major cities often simplifies Place and Promotion decisions. ⊚ ⊚

true false

73) When considering international markets, income is often one of the most important demographic dimensions. ⊚ ⊚

true false

74) When considering international markets, income is usually not an important demographic dimension. ⊚ ⊚

75)

true false

Both GDP and GNI are measures of national income. ⊚ ⊚

true false

76) Gross domestic product is the total dollar value of a country's exports during a one-year period.

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⊚ ⊚

77)

true false

Gross domestic product includes foreign income earned in a country. ⊚ ⊚

true false

78) GNI is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. ⊚ ⊚

true false

79) GDP income measures can give the impression that people in less-developed nations have more income than they really do. ⊚ ⊚

true false

80) GNI income measures can give the impression that people in less-developed nations have less income than they really do. ⊚ ⊚

true false

81) Generally, the nations with the fastest growth in GDP are not the nations with the largest GDPs. ⊚ ⊚

true false

82) The fastest rate of growth in GDP is occurring in the nations with the largest current GDP.

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⊚ ⊚

true false

83) Even though the more developed industrial nations don't have the largest populations, they do have the biggest share of the world's GDP. ⊚ ⊚

true false

84) Countries where gross national income (GNI) per capita is low do not offer any opportunities for marketers. ⊚ ⊚

true false

85) Because almost all of the world’s population can read and write, international marketers have no problems in communicating with potential customers, no matter where they live. ⊚ ⊚

true false

86) Adoption of the Internet and cell phones is having its greatest impact in developing countries. ⊚ ⊚

87)

California is the U.S. state with the largest population. Texas is a distant second. ⊚ ⊚

88)

true false

true false

New York is the U.S. state with the largest population, and California is a distant second. ⊚ ⊚

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89) In the United States, the West and the Southeast are growing faster than the Northeast and the North Central areas. ⊚ ⊚

90)

In 1980, the median age of the U.S. population was 37. ⊚ ⊚

91)

true false

The median age in the United States increased from 30 in 1980 to 38 in 2018. ⊚ ⊚

92)

true false

true false

Gen X is smaller in number when compared to the Baby Boomers that came before. ⊚ ⊚

true false

93) Gen Y is the result of the echo boom, and its members are more techno-savvy than any other group. ⊚ ⊚

94)

true false

Generation Z is described as "digital natives." ⊚ ⊚

true false

95) When developing a marketing strategy, marketing managers should focus on the generalizations about the different generations (Baby Boomers, Gen X, Millennials, etc.).

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⊚ ⊚

96)

Most changes in the cultural and social environment come slowly. ⊚ ⊚

97)

true false

true false

Changes in the cultural and social environment tend to come about quickly. ⊚ ⊚

true false

98) When evaluating opportunities, quantitative screening criteria help a manager decide what kind of opportunities to pursue. ⊚ ⊚

true false

99) Product-market screening criteria should be mainly quantitative in nature, because qualitative criteria are too subjective. ⊚ ⊚

true false

100) Screening criteria should be in quantitative form—based on factors such as profit and expected sales—so that they are objective and not subject to qualitative judgments and interpretations by different managers. ⊚ ⊚

true false

101) Forecasts of the probable results of implementing whole strategic plans are needed to apply quantitative screening criteria.

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⊚ ⊚

true false

102) The General Electric "strategic planning grid" forces company managers to make threelevel judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. ⊚ ⊚

true false

103) GE's strategic planning grid considers two dimensions—industry attractiveness and business strengths—to identify opportunities that may be categorized as growth, borderline, or no growth. ⊚ ⊚

true false

104) Opportunities that fall into the red boxes of General Electric's "strategic planning grid" are growth opportunities. ⊚ ⊚

true false

105) Using the General Electric strategic planning grid, an opportunity rated "medium" in terms of both industry attractiveness and business strengths is an opportunity that the firm should always avoid. ⊚ ⊚

true false

106) The General Electric "strategic planning grid" relies on subjective judgments about business strengths and industry attractiveness. ⊚ ⊚

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107) The GE "stoplight" evaluation method is a very objective approach because GE feels there are too many possible errors if it tries to use subjective criteria for judging "attractiveness" or "strength." ⊚ ⊚

true false

108) In international markets, marketing managers usually have an easier time understanding the variables in the market environment. ⊚ ⊚

true false

109) Consumer products that are linked to cultural variables tend to be lower risk when entering international markets. ⊚ ⊚

true false

110) Most industrial products tend to be near the "insensitive" end of the continuum of environmental sensitivity. ⊚ ⊚

true false

111) The "continuum of environmental sensitivity" suggests that industrial products are more sensitive to the cultural environments in which they are placed than consumer products that are linked to other cultural variables. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 112) Marketing managers should remember that there are many variables in the ________ that affect strategy planning.

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A) economic and technological environments B) competitive environment C) cultural and social environment D) political and legal environments E) All these environments have variables that affect strategy planning.

113)

When planning a marketing strategy, managers have control over A) the political and legal environment. B) the cultural and social environment. C) the economic environment. D) their response to forces in the external market environment. E) consumers.

114)

Which of the following is/are among the forces that shape the direct market environment? A) competitors B) economic environment C) demographic trends D) technological environment E) cultural environment

115)

Which of the following is among the major areas of the external market environment? A) technological environment B) company objectives C) competitor strategies D) customer base E) company resources

116)

In the short run, a marketing manager usually cannot control

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A) the competitive environment. B) the cultural environment. C) the legal environment. D) the economic environment. E) All of the answers are correct.

117)

The direct market environment A) includes customers, the company, and competitors. B) consists of variables that can be controlled. C) is broader in scope than the external environment. D) includes economic and technological environments. E) is made up of the political, legal, and social environments.

118)

All of the following are part of the direct market environment except A) customers. B) competitors. C) the company itself. D) the technological environment.

119)

Which of the following is not a part of the direct market environment for Starbucks? A) McDonald's and its coffee B) the Starbucks objective to open 50 new stores in the United States in 2019 C) rising interest rates worldwide D) high awareness of the Starbucks brand name E) growing interest in brewed cacao as a prospective competitor for coffee

120) The objectives that are expected to shape the direction and operation of the whole business are known as ________ objectives. Version 1

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A) R&D B) collective C) price D) personal selling E) company

121) Setting objectives and strategies for the whole company is a job performed by the company's A) marketing department. B) accountants. C) top executives. D) shareholders. E) middle managers.

122)

Which of the following is true of the mission statement of an organization?

A) It focuses on embracing all goals of the organization. B) It encourages managers to hold conflicting objectives in crisis situations. C) It sets out the organization's basic purpose for being. D) It serves as a substitute for more specific objectives guiding the screening of possible opportunities. E) It does not require any revision, even when the market environment changes.

123) In its annual report, Nike claims "The reasons every Nike employee comes to work every day are to create great product, to lead the athletic industry in innovation, and to serve the athlete." This is Nike's

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A) competitive analysis. B) technology environment. C) portfolio management. D) objective analysis. E) mission statement.

124)

Which of the following is true of company objectives? A) They should be set within the framework of marketing objectives. B) They should be set outside the resource limits for better goals. C) They should always be overly ambitious. D) They should only be revised every five years. E) They should guide managers as they search for and evaluate opportunities.

125)

Which of the following could serve as a firm's mission statement?

A) Green is good. B) Promote all brands using viral videos. C) We aim to boost annual sales by 15 percent. D) Create three new product lines. E) We exist to provide customers with the best shopping experience anywhere in cyberspace.

126)

A mission statement

A) should never be revised. B) sets out the organization's basic purpose for being. C) should embrace everything rather than focusing only on a few key goals. D) substitutes for more specific objectives. E) supplies guidelines for general situations but not for situations where managers face difficult decisions.

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127)

Overall company objectives should A) be specific. B) be realistic. C) be realistic and achievable. D) provide guidance in screening possible opportunities. E) All of the answers are correct.

128)

Which of the following statements about company objectives is true?

A) Company objectives should be stated in vague terms to provide flexibility to lowerlevel managers. B) Company objectives should be set by top management with no input from marketing managers. C) A good mission statement can substitute for more specific company objectives. D) Company objectives should be realistic and not overly ambitious. E) All these statements about company objectives are true.

129)

Company objectives A) should be set within the framework of marketing objectives. B) are made redundant by mission statements. C) should always be overly ambitious. D) should only be revised every five years. E) should guide managers as they search for and evaluate opportunities.

130) Typically, firms need a hierarchy of objectives. Which of the following best represents a correct hierarchy of a firm's objectives?

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A) company objectives, sales promotion objectives, marketing objectives, promotion objectives B) marketing objectives, company objectives, promotion objectives, sales promotion objectives C) company objectives, marketing objectives, promotion objectives, sales promotion objectives D) marketing objectives, promotion objectives, sales promotion objectives, company objectives E) promotion objectives, sales promotion objectives, company objectives, marketing objectives

131) Of the following types, the LAST objectives that a firm should specify are its ________ objectives. A) marketing B) sales promotion C) price D) company E) promotion

132)

Of the following, the last that a firm should specify are its A) company objectives. B) marketing objectives. C) promotion objectives. D) publicity objectives. E) price objectives.

133) Which of the following would a firm need to specify BEFORE deciding on its sales promotion objectives?

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A) company objectives B) production objectives C) product objectives D) marketing objectives E) All these objectives would need to be specified beforehand.

134) Along with studying trends in the environment, a first step in looking for attractive opportunities is to A) understand the resources and objectives of the firm. B) decide which product-markets the firm will enter. C) find new markets for present products. D) estimate product-market potentials. E) hire a marketing strategy planner.

135) An energy company that has expertise in drilling for oil would also likely have the resources to A) manufacture automobiles. B) operate a chain of gas stations. C) drill for natural gas. D) sell office supplies. E) make medical devices.

136)

A first step in evaluating marketing opportunities is to A) decide which markets the firm wishes to enter. B) consider the objectives and resources of the firm. C) hire a "futurist" as a marketing consultant. D) estimate market and sales potentials. E) find out if potential competitors are larger.

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137) When looking for attractive opportunities, a marketing manager should consider the firm’s A) producing capability and flexibility. B) financial strengths. C) existing marketing resources. D) present products and markets. E) All of the answers are correct.

138)

Which of the following would not be a marketing strength for a local coffee shop? A) a well-recognized brand B) a patented coffee blend C) established relations with local businesses D) access to large amounts of capital from a long-term relationship with a local bank E) counter staff that knows and understands customer preferences

139)

When a new firm does not have any "in-house" manufacturing for its brand, it is likely to A) have a production cost advantage. B) enjoy less competitive pricing. C) attract potential new markets. D) have the advantage of flexibility. E) fail in marketing research.

140) The environment that affects the number and types of competitors a marketing manager must face and how they might behave is called the ________ environment.

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A) cultural B) social C) economic D) political E) competitive

141) A(n) ________ is a marketing mix that customers see as better than a competitor's mix and that cannot be quickly or easily copied. A) resource combination B) sustainable competitive advantage C) objective-centered approach D) competitor analysis plan E) competitor matrix

142) The competitive environment that most marketing managers experience in developed economies is A) monopoly. B) monopolistic competition. C) pure competition. D) oligopoly. E) regulated competition.

143) When conducting a competitor analysis, it is important for managers to take the viewpoint of A) competitors. B) the CEO. C) target customers. D) supply-chain partners. E) the industry leader.

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144)

Regarding the competitive environment, a marketing manager usually can A) choose strategies to avoid head-on competition. B) control it with the help of the legal environment. C) control it in the short run. D) control it with the help of the political environment. E) control it in the long run.

145) The market situation in which only a few large firms compete in offering very similar marketing mixes to customers is called A) pure competition. B) oligopoly. C) capitalistic competition. D) monopolistic competition. E) monopoly.

146)

Most product-markets head toward ________ over the long run. A) pure competition B) monopolistic competition C) capitalistic competition D) monopoly E) collectivism

147)

Which of the following statements about the competitive environment is false?

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A) Competition-free environments are rare. B) Marketing managers should choose strategies that avoid head-on competition. C) A firm that has a marketing mix that its target market sees as better than its competitors has a competitive advantage. D) Over the long run, most product-markets tend toward monopolistic competition. E) In a competitor analysis, the firm's first step should be to identify all potential competitors.

148) The situation in which competitors offer very similar marketing mixes that customers see as close substitutes, and managers just compete with lower and lower prices as profit margins shrink, is called A) capitalistic competition. B) pure competition. C) monopoly. D) monopolistic competition. E) collectivist competition.

149) The market situation in which one firm completely controls a broad product-market is called A) monopoly. B) oligopoly. C) pure competition. D) monopolistic competition. E) collectivist competition.

150)

Which of the following represents a monopolistic competition?

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A) One firm completely controls a broad product-market. B) Each competitor tries to get control in its "own" target market. C) Competitors offer the same marketing mix. D) Different marketing mixes are nevertheless seen as the same by all customers. E) All customers view various alternatives as substitutes.

151) When conducting a competitor analysis, it is important for managers to take the viewpoint of A) competitors. B) the CEO. C) target customers. D) supply-chain partners. E) producers.

152)

Which of the following observations is not true of monopolistic competition?

A) A number of different firms offer marketing mixes that at least some customers see as different. B) Marketing managers try to differentiate very similar products by relying on other elements of the marketing mix. C) Each competitor tries to get a monopoly in its own target market. D) Most marketing managers in developed economies do not face monopolistic competition. E) Competition exists because some customers see various alternatives as substitutes.

153) Swanson Beverages, Inc., asks its marketing managers to compare the strengths and weaknesses of its current target market and marketing mix with what its competitors are doing (or are likely to do). In this context, what is the approach of Swanson Beverages?

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A) competitor clustering B) scenario analysis C) brand positioning D) marketing mix review E) competitor analysis

154)

Which of the following is true regarding the competitive environment?

A) It is easy to find environments that are "competitor-free." B) Monopoly situations are more common than are situations characterized by monopolistic competition. C) "Competitive rivals" are a firm's closest competitors. D) Competitor analysis should begin with an identification of competitors from the viewpoint of the manager rather than the consumer.

155) The firms that are considered to be the organization's closest challengers are called ________ rivals. A) aggressive B) competitive C) formal D) passive E) indirect

156) The portion of all Dell laptop computers sold in the United States as compared to all laptops sold in the United States in the same period is referred to as A) market share. B) marketing analytics. C) competitor analysis. D) market penetration. E) acquisition cost.

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157) Which of the following statements about the sale of Toyota cars best describes market share? A) the percent of Toyota sedans sold in the United States as compared to all sedans sold in the United States over the same period B) the stream of purchases that a Toyota customer could contribute to the company over the length of their relationship with the company C) a measure of Toyota's long-term market success, including its economic, social, and environmental outcomes D) the percentage of Toyota's new sedan customers in the United States as compared to its total number of customers worldwide E) the expected profitability of Toyota's current and prospective sedan-buying customers over a given period of time

158)

Why would it be important for a marketing manager to track market share? A) to monitor how well a product is doing in a particular market B) to assess progress against competitive rivals C) to compare how market share changes over time D) to understand the product's share of the market in different geographic regions E) All of the answers are correct.

159) A marketing manager may ethically and actively seek information about current or potential competitors by A) searching a firm's public website. B) waiting at a landfill for competitors' trash to find copies of confidential company reports. C) using computer "hackers" to break into a competitor's computer network. D) hiring people from competing firms and then asking them confidential information about the competitor. E) spying on competitors to obtain trade secrets.

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160)

Which of the following is true of the economic environment? A) It has no relationship to the technological environment. B) It is not affected by the way the parts of the macro-marketing system interact. C) It refers to micro-economic factors that do not affect business spending. D) It can change very rapidly. E) It never requires marketing managers to make immediate changes in strategy.

161) A firm that is unable to obtain financing to manufacture new products is likely encountering negative pressures from A) the competitive environment. B) the technological environment. C) the economic environment. D) the political/legal environment. E) the cultural/social environment.

162) Low consumer spending and a lack of adequate financing are conditions that arise mostly due to factors in A) the competitive environment. B) the cultural and social environment. C) the technological environment. D) the political environment. E) the economic environment.

163)

To what does the term economic environment refer?

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A) It refers to the unique micro-economic factors of local markets. B) It refers to the application of science to convert resources to output. C) It refers to the evaluation of the strengths and weaknesses of current competitors' marketing strategies. D) It refers to a marketing mix that customers see as better than a competitor's mix. E) It refers to the macroeconomic factors that affect patterns of consumer and business spending.

164) X-Brand Bikes, a manufacturer of off-road bicycles, carefully developed a strategy for moving into South America. The strategy had poor results after interest rates and inflation rose rapidly in most of its South American markets, demonstrating the influence of the ________ environment on marketing strategy. A) political B) technological C) social D) legal E) economic

165) A change in the ________ environment can affect consumer purchases of homes, cars, and other items usually bought on credit. A) legal B) political C) social or cultural D) technological E) economic

166)

Rising costs and inflation are part of the uncontrollable ________ environment.

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A) technological B) economic C) competitive D) legal E) social

167)

Which of the following is true of interest rates? A) They often change with changes in the economy. B) They affect consumer markets, but not business customers. C) They usually decrease during periods of inflation. D) They do not directly affect the total price borrowers must pay for loans. E) They do not affect the prices buyers pay.

168) The marketing manager for a financial services firm knows that customer preferences for mutual funds and bond accounts will differ depending on the current interest rate. She must plan her offerings with the ________ environment in mind. A) economic B) social C) technological D) cultural E) legal

169) Increased demand for new homes due to low interest rates is an example of the impact of the ________ environment. A) technological B) cultural C) competitive D) economic E) social

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170) When a local bank in Kansas City makes loans to its small business customers, it charges them an interest rate for borrowing money. Interest rates are part of the ________ environment. A) cultural and social B) economic C) legal D) political E) competitive

171) The scientific way in which an economy's resources are converted to output is part of the ________ environment. A) competitive B) economic C) political D) technological E) social

172) Which of the following demonstrates how the technological environment is changing the way marketers promote products? A) Marketing aimed at youth is increasingly regulated by governments. B) Search engines match consumer searches with relevant banner ads. C) Marketers make routine claims that products are eco-friendly. D) Manufacturers partner with local retailers to buy ads that feature both firms. E) New laws regulate consumer privacy.

173)

Underlying any economic environment is technology that affects

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A) how the economy's resources are converted to output. B) how quickly technological developments lead to new consumer protection laws. C) how competitors react to each other. D) how aggressive competitors are in planning new marketing strategies. E) how fast consumer attitudes change.

174) Which of the following is not primarily an example of the influence of technology on the external market environment? A) A camera producer finds a way to enable a camera to store digital pictures—without film. B) Machines are developed to assemble defect-free electronic components. C) Robots on a production line make it possible to lower costs. D) A manufacturer of frozen food is finding that consumers prefer containers that can go from the freezer direct to a microwave oven. E) The government passes a law that prohibits the use of cell phones while driving a vehicle.

175) Which of the following is an example of how the technological environment might affect marketing management? A) A manufacturer uses a computer to send orders directly to a supplier's computer. B) A retailer installs a computerized checkout scanner to replace a manual cash register system. C) A firm develops a substitute for saturated fat in manufactured foods. D) All of these are examples of how the technological environment might affect marketing management.

176) AT&T reacted to the popularity of the smartphone by adding several smartphone models to its line of phones. The availability and popularity of smartphones most likely came about due to changes in the ________ environments.

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A) political and cultural B) technological and legal C) legal and economic D) social and technological

177)

Which of the following best describes the use of artificial intelligence?

A) Google Photos automatically labels your photos using image recognition. B) Dell upgrades its computers to allow for faster computer processing. C) An ATM can dispense money from your account with the use of your bank card and PIN number. D) A home office uses Wi-Fi to access the Internet. E) A Facebook user is able to receive messages from contacts through Facebook Messenger.

178)

Which of the following statements about intelligent agents is accurate? A) Intelligent agents observe an environment and act to achieve a goal. B) Intelligent agents are a separate and distinct technology from artificial intelligence. C) Intelligent agents are devices that allow for faster computer processing. D) Intelligent agents are not currently used by everyday consumers. E) All of the answers are correct.

179)

Which of the following is an example of a use of artificial intelligence? A) voice assistance from Apple's Siri or Amazon's Alexa B) image recognition on Facebook C) shopping recommendations on Amazon D) movie suggestions on Netflix E) All of the answers are correct.

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180) Which of the following statements about artificial intelligence (AI) in marketing is most accurate? A) AI can create customer value by delivering better service to customers. B) Most firms have exhausted the use of AI with customers. C) AI can be helpful in some aspects of marketing but should not be used with customers directly. D) AI should only be used by firms whose target market is Millennials. E) The use of AI in marketing should be avoided until it is proven successful.

181) Which of the following best refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming? A) machine learning B) regression analysis C) GPS D) adaptive intelligence E) data mining

182) In machine learning, which of the following is most necessary to help a software program learn a specific skill? A) a large amount of relevant data B) computer programming by an expert in the field C) a human decision maker inputting correct answers D) hand-picked data E) constant consultation with both computer programmers and subject matter experts

183) A large financial services firm uses technology that analyzes millions of transactions and teaches itself to discern between legal and illegal transactions. This best exemplifies

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A) machine learning. B) database management. C) data mining. D) customer relationship management. E) reactive intelligence.

184)

A country's emphasis on its own interests before everything else is known as A) socialism. B) democracy. C) nationalism. D) capitalism. E) entrepreneurship.

185) In the political environment, a country's emphasis on its own interests before everything else is called A) elitism. B) socialism. C) extremism. D) regionalism. E) nationalism.

186)

"Nationalism" is an issue in the ________ environment. A) competitive B) political C) economic D) cultural E) technological

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187)

Which of the following statements is true about political environments?

A) Consumers in the same country usually share differing political environments. B) The attitudes and reactions of people have no effect on the political environment. C) The political environment can affect local opportunities but not international opportunities. D) Social critics and governments can affect the political environment. E) Nationalistic feelings always increase sales drastically in international markets.

188)

A "Buy American" campaign is an example of A) transnationalism. B) nationalism. C) environmentalism. D) consumerism. E) federalism.

189)

Which of the following was likely an effect of the unification of European markets?

A) Many of the taxes and rules that had limited trade among member countries of the European Union were eliminated. B) The need to adjust strategies to reach submarkets of European consumers disappeared. C) Firms operating in Europe had more difficulty obtaining access to large markets. D) Consumer prices rose and job opportunities became limited. E) The unification complicated inter-European commerce and trade directly.

190) The North American Free Trade Agreement (NAFTA), and its later replacement the United States–Mexico–Canada Agreement (USMCA),

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A) provides a plan to reshape the rules of trade among Germany, the United States, and Colombia. B) has reshaped the rules of trade among the United States, Canada, and Mexico. C) eliminates the need for companies to adjust strategies. D) makes it more difficult to resolve trade disputes among the participating countries.

191) A newspaper article with which of the following headlines would be least likely to involve the political environment? A) U.S.-Vietnamese Joint Ventures in the Future B) Egg Sales Fall as Consumers Switch to Low Cholesterol Diets C) U.S. Signs Trade Agreement with Venezuela D) FDA Adopts New Regulations for Generic Drugs E) Consumers Urged to "Buy American"

192) Which of the following best characterizes the current stance toward free trade in the United States? A) moving toward more trade restrictions B) moving toward less trade restrictions C) reaching a point of absolute free trade D) reaching a point of total isolationism E) status quo toward free trade for the past few decades

193) Which of the following is a reason for the recent movement toward the imposition of more trade restrictions in the United States? A) jobs moving outside of the United States B) American workers seeking greater job protection C) complaints about lax laws in emerging economies D) environmental and labor concerns E) All of the answers are correct.

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194)

American economic and legislative thinking is based on the idea that A) encouraging competition harms the public interest. B) competition among many firms helps the economy. C) attempts by business to limit competition aids large firms during recessions. D) the economic environment provides a base for the technological environment. E) changes in the legal environment lead to changes in the political environment.

195) true?

Which of the following statements about the legal environment in the United States is

A) Individual managers are subject to criminal penalties. B) The Food and Drug Administration (FDA) has no right to seize any product even if it violates the regulations. C) Many laws try to limit competition among firms. D) Consumer protection laws were introduced in the United States after 1940. E) Businesses managers are not subject to civil laws.

196)

A firm may use all of the following methods for beating the competition

except

A) applying for patents. B) seeking a monopoly. C) developing a sustainable competitive advantage. D) conducting a competitor analysis. E) utilizing advanced technology.

197) The largest producer of "fuzz-busters" (radar detectors) sees that many states are increasing the penalty for using them. Clearly, this firm's marketing strategy may have to adapt to these changes in the

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A) economic and technological environments. B) resources and objectives of the firm. C) competitive environment. D) political and legal environments. E) cultural and social environments.

198)

The ________ environment sets the basic rules for how a business can operate in society. A) legal B) social C) economic D) technical E) cultural

199)

American legislative and economic thinking assumes that A) competition among many firms helps the economy. B) firms must have their prices approved by the Federal Trade Commission. C) the free enterprise system is dying. D) laws are needed to prevent firms from competing with similar ("me-too") products. E) government officials are needed to run the economy.

200)

The Sherman Act was A) intended to protect large producers. B) designed to limit competition. C) passed during the rash of corporate takeovers of the 1980s. D) intended to focus on monopoly or anticompetitive practices. E) passed to prohibit fake advertising allowances.

201)

Which of the following is true of the Sherman Act?

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A) It was intended to protect large producers. B) It was passed to prohibit deceptive pricing. C) It was passed after the Depression of the 1930s. D) It focuses on consumer protection. E) It was aimed at efforts to restrain trade or lessen competition.

202)

The Sherman Act sought to A) prevent monopolies and anticompetitive practices. B) establish a Federal Consumer Protection Agency. C) eliminate price differences among different competing suppliers. D) prevent fraud on the Internet. E) restrict importing into the United States.

203)

The Sherman Act is primarily designed to A) prevent monopolies or anticompetitive practices. B) stop the flow of foreign products into the United States. C) prevent unfair or deceptive acts or practices in commerce. D) reduce price discrimination by manufacturers. E) eliminate deceptive selling practices.

204)

The ________ Act prohibits monopoly or conspiracy in restraint of trade. A) Sherman B) Magnuson-Moss C) Robinson-Patman D) Antimerger

205)

Which of the following U.S. antimonopoly laws deals with conspiracy to fix prices?

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A) Clayton Act (1914) B) Magnuson-Moss Act (1975) C) FTC Act (1914) D) Sherman Act (1890) E) Wheeler-Lea Amendment (1938)

206) Act.

The ________ focused on anticompetitive practices that did not fall under the Sherman

A) Antimerger Act B) Clayton Act C) Magnuson-Moss Act D) Wheeler-Lea Amendment E) Federal Trade Commission Act

207)

The Clayton Act is concerned with A) product warranties. B) deceptive pricing. C) buying competitors. D) anticompetitive practices. E) buying producers or distributors.

208) Which of the following is not a consumer protection built into the English and U.S. common law systems? A) requirement that seller protect consumer privacy B) requirement that seller tell the truth C) requirement that seller abide by contracts D) requirement that seller stand behind the firm’s product

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209)

Under the common law system, which of the following is expected to protect consumers? A) vigorous competition in the marketplace B) business monopolies C) a system of comprehensive consumer protections D) intense government regulation E) buyers’ desire for good will

210) Despite an Antimerger Act, there has been some leniency in allowing mergers between firms that have been competitors. When considering a merger, companies should take this aspect of the ________ environments into consideration. A) legal and political B) cultural and economic C) technological and legal D) social and cultural E) political and economic

211)

Safety standards for products such as bicycles are set by the A) Consumer Product Safety Commission. B) U.S. Department of Transportation. C) Federal Trade Commission. D) Environmental Protection Agency. E) Food and Drug Administration.

212)

The Consumer Product Safety Commission is responsible for

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A) developing and enforcing safety standards for consumer products. B) developing and enforcing environmental protection standards. C) preventing the distribution and sale of adulterated or misbranded foods, drugs, and cosmetics. D) None of the answers is correct.

213) If the Climbing High Ladder Company produced ladders that were unstable and caused many injuries, the ________ has the power to force the company to recall its product. A) Consumer Product Safety Commission B) Food and Drug Administration C) Federal Trade Commission D) Environmental Protection Agency E) Consumer Protection Agency

214) Which of the following statements regarding the current legal environment facing U.S. marketing managers is true? A) State and local laws vary but contain important regulations. B) Some consumer protections are built into the common law system. C) Product safety is subject to the Consumer Product Safety Act. D) Businesses and individual managers are subject to both criminal and civil laws. E) All of the answers are correct.

215)

The attitudes and behavior patterns of people are part of the A) political environment. B) social and cultural environment. C) competitive environment. D) firm's resources and objectives. E) economic and technological environment.

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216) Baby Boomers are among the fastest-growing demographic groups on Facebook. Marketers need to study such trends because A) people in this demographic are known for being techno-savvy. B) Baby Boomers typically have little money to spend. C) very large numbers of people make up this demographic. D) online ads are most effective when seen by people of all ages. E) Baby Boomers have played a major role in the social media revolution.

217) The languages people speak, the type of education they have, and their religious beliefs are aspects of the ________ environment. A) political B) economic C) cultural and social D) legal E) technological

218) Which of the following newspaper headlines is MOST likely to be seen as a result of changes in the cultural and social environment? A) McDonald's Changes Its Menu to Cater to Low-Carb Dieters B) General Motors Offers Original Equipment Car Stereos with Satellite Radio Service C) Treasury Department Introduces New Currency to Combat Counterfeiters D) New Projection TVs Are Thinner, Lighter than Traditional TVs E) Gasoline Prices Increase Sharply

219) A marketing analyst for a chicken processor reports that a rising percentage of people are eating chicken because it has less fat than beef. Clearly, this firm's opportunities may improve with this change in the

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A) technological environment. B) cultural and social environment. C) economic environment. D) political and legal environment. E) competitive environment.

220) Consumer emphasis on fitness has created opportunities for firms like Nike, Nautilus, and Schwinn, and illustrates the impact of the changing A) technological environment. B) economic environment. C) competitive environment. D) cultural and social environment. E) political and legal environment.

221) The recent interest in physical fitness has forced producers of food, clothing, and other products to reconsider their marketing strategies. Which of the following does this trend illustrate? A) economic and technological environments B) cultural and social environment C) existing business situation D) political and legal environment E) resources and objectives of the firm

222)

Which of the following is an example of the cultural and social environment? A) growing acceptance of women in business B) growing popularity of exercise C) increased desire for satisfaction with life D) All of the answers are correct.

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223) Which of the following is least likely a result of shifts in the cultural and social environment? A) Domino's Pizza finds that demand for pizza delivered at home has expanded as more consumers are willing to pay for more convenience. B) A toy manufacturer recalls a playpen with a defective latch, and Toys 'R' Us stores removes the playpens from the shelf. C) Haagen-Dazs introduces a nonfat yogurt that is also "low cal." D) Sony recruits more women graduates for sales management positions. E) BMW builds its new plant in South Carolina because of the willingness of "Sun Belt" workers to put in a "full day's work."

224) Few people in Europe diet; so the same soft drink that PepsiCo sells in the United States under the brand name of "Diet Pepsi" is sold in England under the brand name of "Pepsi MAX." This is an example of which area of the external market environment? A) competitive B) legal C) cultural and social D) political E) economic

225)

Which of the following can a firm do to be more sustainable?

A) Produce light bulbs with raw materials that consume more energy. B) Manufacture textiles using chrome and ammonium solutions. C) Use reusable containers for their products. D) Fly the national sales force to a meeting instead of using teleconferencing technology. E) Replace electric delivery vehicles with gas-powered ones.

226) One way that marketers can screen for opportunities that are good for society is to screen based on the criterion of Version 1

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A) growth. B) profitability. C) sustainability. D) return on investment. E) business strengths.

227)

According to estimates, which of the following countries has 100 percent literacy? A) Norway B) Singapore C) Italy D) India E) Brazil

228) If you go into a restaurant in Vienna, Austria, and ask for a Diet Coke, the waiter may have no idea what you are ordering. This is an example of which area of the external market environment? A) political B) cultural and social C) legal D) economic E) competitive

229) According to projections, the population of ________ is likely to grow by 9 percent between 2013 and 2025. A) Japan B) Russia C) the United States D) China E) Egypt

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230)

Which of the following statements about world population trends is true?

A) In general, countries that have higher stages of development experience faster rates of growth than less-developed countries. B) The extent to which a country's population is clustered around urban areas does not vary much from country to country. C) People are moving from rural areas into urban areas. D) The trend toward urbanization has made companies less interested in international markets. E) The concentration of people in major cities often complicates Place and Promotion decisions.

231)

Which of the following statements about population growth is true?

A) The world's population growth varies dramatically from country to country. B) Between 2013 and 2025, population growth will be about 9 percent in the United States and 3 percent in China. C) The population of Ethiopia and Nigeria will likely increase by 35 percent or more between 2013 and 2025. D) All of the answers are correct.

232)

The greatest growth in the world's population over the next several years will come from A) Western Europe. B) Africa. C) Australia. D) Eastern Europe. E) Russia and nations of the former Soviet bloc.

233) Which of the following countries has the fastest projected population growth between 2013 and 2025?

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A) the United Kingdom B) Canada C) Germany D) the United States E) Ethiopia

234) According to projections, the population of ________ is likely to grow by 9 percent between 2013 and 2025. A) Japan B) Russia C) Singapore D) China E) the United States

235)

Which of the following countries is likely to see a population decline from 2013 to 2025? A) Germany B) Canada C) the United States D) the United Kingdom E) China

236) Which of the following statements about population density and population growth is not correct? A) Population density is important to marketers. B) In Ethiopia, more than 85 percent of people live in urban areas. C) People everywhere are moving from rural areas to urban areas. D) Population is very spread out in many of the African countries. E) The population growth rate is higher in the United States than in China.

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237)

Which of the following statements about population density is true? A) High population density occurs only in highly developed economies. B) Some Western European and Asian urban areas are more crowded than U.S. urban

areas. C) The United States is the only country with crowded urban areas. D) There is a worldwide movement back to rural areas. E) None of the statements is true.

238)

Which of the following countries has the highest population density? A) Switzerland B) the United States C) Australia D) Singapore E) Bangladesh

239)

One hundred percent of which country's population was in urban areas in 2013? A) the United States B) Singapore C) the United Kingdom D) Germany E) Italy

240) The total market value of goods and services provided in a country's economy per year by both residents and nonresidents of that country is its gross

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A) domestic product. B) national product. C) national income. D) domestic income. E) disposable income.

241) ________ refers to the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. A) Gross output B) Gross investment C) Gross national income D) Gross fixed capital formation E) Gross domestic product

242)

Gross domestic product (GDP) is the

A) total cost of producing all goods and services sold in a year. B) total market value of goods and services provided in an economy in a year by both residents and nonresidents of that country. C) total market value of goods (but not services) consumed in an economy in a year. D) total market value of goods and services consumed in a year. E) total market value of goods (but not services) produced in an economy in a year.

243)

Gross domestic product (GDP) is the

A) total market value of goods and services provided in an economy in a year by both residents and nonresidents of that country. B) manufacturers' selling price of goods (but not services) produced in a year. C) total market value of goods (but not services) produced in an economy in a year. D) total market value of goods and services consumed in a year. E) None of the answers is correct.

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244)

Gross domestic product

A) is the total market value of goods, but not services, produced in a year. B) is an excellent basis for comparing consumer well-being across different cultures and economies. C) is a widely used measure of income for different countries. D) is the total market value of services, but not goods, produced in a year. E) All of the answers are correct.

245)

One widely used measure of income in most countries is A) gross domestic product. B) total consumption expenditures. C) disposable personal product. D) population times GDP. E) socioeconomic product.

246)

Gross domestic product (GDP) A) is affected by economic conditions and the productivity of workers in the country. B) usually rises when there are bad economic conditions in an economy. C) is the amount of new capital invested in business in a year. D) is the total cost of producing all goods and services in a year. E) is the total market value of goods and services consumed in an economy in a year.

247) Which of the following statements about gross domestic product (GDP) and gross national income (GNI) is true?

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A) GDP income measures can give the impression that people in less-developed nations have more income than they really do. B) GDP includes foreign income earned in a country, but GNI does not. C) Both GDP and GNI are widely used measures of national income. D) GDP and GNI are highest in the more developed industrial nations. E) All of the answers are correct.

248)

Gross national income (GNI) is the total

A) cost of producing all goods and services sold in a year. B) market value of goods and services provided in an economy in a year by residents of that country. C) market value of goods (but not services) consumed in an economy in a year. D) market value of goods and services consumed in a year. E) market value of goods (but not services) produced in an economy in a year.

249)

Gross national income (GNI) is the

A) total market value of goods and services provided in an economy in a year by residents of that country. B) manufacturers' selling price of goods (but not services) produced in a year. C) total market value of goods (but not services) produced in an economy in a year. D) total market value of goods and services consumed in a year. E) None of the answers is correct.

250)

Gross national income (GNI)

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A) is the total market value of goods, but not services, produced in a year. B) is an excellent basis for comparing consumer well-being across different cultures and economies. C) is a measure similar to GDP, but it does not include income earned by foreigners who own resources in that nation. D) is the total market value of services, but not goods, produced in a year. E) All of the answers are correct.

251)

One widely used measure of income in most countries is A) gross national income. B) total consumption expenditures. C) disposable personal product. D) population times GNI. E) socioeconomic product.

252)

Gross national income (GNI) A) is affected by economic conditions and the productivity of workers in the country. B) usually rises when there are bad economic conditions in an economy. C) is the amount of new capital invested in business in a year. D) is the total cost of producing all goods and services in a year. E) is the total market value of goods and services consumed in an economy in a year.

253)

Unlike the GDP, the GNI

A) includes foreign income. B) is the total market value of all goods and services provided in a country's economy in a year by nonresidents. C) includes the income earned by residents who do not own resources in that nation. D) does not include income earned by foreigners who own resources in that nation. E) is a measure of regional income.

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254) If American firm Boeing sets up a factory in China, then the GDP figure for China ________ include those profits and the GNI ________. A) would; would as well B) would; would not C) would not; also would not D) would not; would E) would; would only measure actual sales

255)

Which statement pertaining to GNI per capita is not true? A) The GNI per capita in the United States is the highest in the world. B) The GNI per capita is quite high in the United States, Japan, and Germany. C) GNI per capita gives some idea of the income level of people in that country. D) Many managers see great potential in countries where GNI per capita is low. E) Managers see less competition where GNI per capita is low.

256) true?

Which of the following observations concerning different measures of national income is

A) GDP does not include income earned by foreigners who own resources in that nation. B) Using GNI can give the impression that people in less-developed countries have more income than they really do. C) GNI per capita is a useful figure because it gives some idea of the income level of people in the country. D) The less-developed nations account for the biggest share of the world's GDP. E) GDP is the only measure of national income.

257)

Which of the following countries have the highest GNI per capita?

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A) Saudi Arabia and Iran B) Mexico and Spain C) the United States and Australia D) India and China E) Japan and Germany

258)

Which of the following countries have the lowest GNI per capita? A) Japan and Switzerland B) Mexico and Spain C) Ethiopia and Haiti D) India and Pakistan E) Germany and the United States

259) Literacy studies show that ________ percent of adults worldwide (aged 15 or older) cannot read and write. A) 10 B) 14 C) 38 D) 50 E) 60

260)

Which of the following countries has the highest literacy rate? A) Russia B) Egypt C) Haiti D) Algeria E) Libya

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261)

Which of the following countries has the lowest literacy rate? A) the United Kingdom B) Italy C) Bangladesh D) France E) Egypt

262)

According to estimates, which of the following countries has 100 percent literacy? A) Norway B) Singapore C) Italy D) India E) China

263) As of 2015, which of the following countries does not have more than 80 percent of its population using the Internet? A) Norway B) Germany C) Italy D) Finland

264)

The current U.S. population is largest in which of the following states? A) California B) Florida C) Illinois D) New York E) Texas

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265) Between 2010 and 2020, the highest growth rate in population in the United States occurred in A) the western states. B) the northeastern states. C) the northwestern states. D) the midwestern states.

266)

Which statement about the median age of the U.S. population is true?

A) It was 37 in 1980. B) It was about 30 by 2010. C) It is decreasing because the percentage of population in older age groups has decreased. D) It is growing because the percentage of population in older age groups has increased. E) It has not changed since 1980.

267) The largest projected increase in the U.S. population, between 2005 and 2025, is projected to occur in the ________ age group. A) 50–59 B) 65-and-over C) 10–19 D) 0–9 E) 40–49

268) Baby Boomers are among the fastest-growing demographic groups on Facebook. Marketers need to study this trend because

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A) people in this demographic are known for being techno-savvy. B) Baby Boomers typically have little money to spend. C) very large numbers of people make up this demographic group. D) online ads are most effective when seen by people of all ages. E) most Baby Boomers have fewer considerations for buying.

269)

Which of the following age groups saw a decline in population from 2005 to 2015? A) 0–9 B) 10–19 C) 30–39 D) 40–49 E) 80+

270)

Generation Y refers to those born A) from 1978 to 1994. B) since 1994. C) from 1965 to 1997. D) from 1945 to 1964. E) before 1945.

271)

Generation X refers to those born A) from 1978 to 1994. B) since 1994. C) from 1965 to 1977. D) from 1945 to 1964. E) before 1945.

272)

Baby Boomers were born

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A) between 1978 and 1994. B) after 1994. C) between 1965 and 1997. D) between 1946 and 1964. E) before 1945.

273) Which of the following statements about demographic changes in the United States is not true? A) Demographic changes such as those in population groupings are difficult to anticipate. B) Senior citizens will grow in number rapidly from 2005 to 2025. C) The number of children aged 0–9 will grow from about 40 million to about 45 million from 2005 to 2025. D) In 2025 there will be fewer people over age 80 than under age 10. E) In 2005, the number of children aged 0–9 was about the same as the number of individuals in their 20s.

274)

Which of the following population groups is the most techno-savvy? A) seniors B) Gen X C) Baby Boomers D) Gen Y

275)

Which of the following is true of Generation Z? A) It is the generation born immediately following the Baby Boom. B) People belonging to this generation are also called Millennials. C) This group tends to have optimistic, as opposed to realistic, views of the world. D) This group is a part of a more ethnically diverse United States than their parents. E) This group appears to be less accepting of different cultures, races, and religions.

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276)

Generation Z refers to those born A) between 1965 and 1977. B) since 1995. C) between 1946 and 1964. D) in the generation immediately following the Baby Boom.

277) When developing a strategy, how should marketing managers use information on trends and patterns about the different generations, including Baby Boomers, Generation X, and Millennials? A) Marketing managers should use generalizations about generations as a starting point only. B) Marketing managers should ignore generational generalizations. C) Marketing managers should craft strategies solely using generational generalizations about their target market. D) Marketing managers should only use generational generalizations when it comes to decisions about technology. E) None of the answers is correct.

278)

Which of the following U.S. marketing managers is about to make a serious mistake?

A) "We are targeting 50- to 59-year-olds because we see this group as the fastestgrowing age group over the next decade." B) "We are refocusing on senior citizens, since they will be a growing market for many years." C) "We are developing special swimsuit designs for older women, as that market is very large and growing." D) "Our company is shifting to international markets, where the population will continue to grow at a more rapid rate." E) None of the marketing managers seems headed for a mistake.

279)

In which external environment(s) do changes usually occur most slowly?

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A) cultural and social environment B) political and legal environments C) resources and objectives of the firm D) competitive environment E) economic and technological environments

280) In the short run at least, which of the following is usually beyond the control of the marketing manager? A) political and legal environments B) economic environment C) cultural and social environment D) competitive environment E) All these environments are beyond the control of the marketing manager in the short run.

281) What is the first and most important question to ask when evaluating product-market opportunities? A) "How does it fit with our objectives and resources?" B) "What is the sales forecast for this product?" C) "How much profit will we make this year?" D) "How much do we need to invest in this product?" E) "How far along is our research and development effort in this area?"

282) When marketers select criteria to help screen for new market opportunities, they should include quantitative components such as

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A) what kind of business the firm wants to be in. B) what resources the firm should build upon. C) what weaknesses need to be avoided. D) what is an acceptable return on investment (ROI). E) what expertise the firm possesses.

283) Since IKEA is known for fashionable modern-style home furnishings, the company would be likely to screen out business opportunities in A) kitchenwares. B) antique furniture reproductions. C) bed and bath. D) rugs. E) interior lighting.

284) A firm's product-market screening criteria for evaluating existing plans and possible new opportunities should consider A) the objectives of top management. B) trends in the market environment. C) the firm's strengths. D) the firm's weaknesses. E) All of the answers are correct.

285)

Product-market screening criteria should A) be qualitative. B) summarize in one place what the firm wants to accomplish. C) be achievable. D) be stated in quantitative terms. E) All of the answers are correct.

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286)

Product-market screening criteria should be A) quantitative. B) qualitative. C) realistic and achievable. D) All of the answers are correct.

287)

When using screening criteria to evaluate opportunities,

A) marketers must try to match opportunities to the firm's resources and objectives. B) quantitative but not qualitative criteria should be considered. C) opportunities that are not expected to be profitable after one year of implementation should always be dropped. D) the firm's weaknesses should be ignored. E) All of the answers are correct.

288) All of the following are examples of quantitative components of screening criteria that are used to narrow down to marketing strategies except A) market share. B) number of units sold. C) strengths of the company. D) annual projected sales dollars. E) projected profit.

289)

Which of the following is a quantitative screening criterion for evaluating opportunities?

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A) weaknesses the firm should avoid B) kinds of business the firm wants to exclude C) kinds of business the firm wants to be in D) resources the firm should build on E) return on investment (ROI) target for the firm

290) When evaluating the potential of possible opportunities (product-market strategies), a marketing manager should A) evaluate each opportunity over the life of the project, since short-term losses may hide long-term profitability. B) avoid using quantitative criteria because they tend to oversimplify the problem. C) look at each opportunity on its own, since there is no good way to compare different plans. D) look only at internal resources, since they are controllable.

291) When a firm has multiple market opportunities from which to choose, marketers can use ________ to compare and identify the best ones. A) competitor analysis B) a competitor matrix C) focus groups D) S.W.O.T. analysis E) a strategic planning grid

292)

General Electric's "strategic planning grid" is an approach for A) evaluating possible marketing objectives. B) selecting target markets. C) evaluating existing and possible plans. D) developing new products. E) developing marketing mixes.

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293) The ________ dimension of the GE grid helps managers answer the following question: Does this product-market plan look like a good idea? A) business strengths B) quantitative criteria C) industry attractiveness D) relative positioning E) qualitative criteria

294)

The business strengths dimension of the GE grid focuses on A) market diversity. B) market growth rate. C) the ability of the company to pursue a product-market plan effectively. D) industry profitability. E) the social and legal environment.

295)

Which of the following is true about the General Electric strategic planning grid?

A) It supports the industry attractiveness dimension's focus on the ability of the company to pursue a product-market plan effectively. B) It encourages managers to follow an objective, single-factor approach. C) It allows the business strengths dimension's focus on whether the product-market plan looks like a good idea. D) It helps managers make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. E) It suggests that opportunities that fall into the red boxes are the firm's best growth opportunities.

296)

General Electric's strategic planning grid

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A) focuses on market share and market growth rate. B) ignores some important issues—such as competitive structure and the environmental impact of a plan. C) requires that all opportunities be judged either "High" or "Low." D) substitutes quantitative estimates for management judgment. E) None of the answers is correct.

297) Using General Electric's strategic planning grid, an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as which of the following? A) yellow—borderline B) red, for no growth C) green, for growth D) It could be evaluated as yellow, red, or green—because the grid really doesn't deal with "medium" ratings.

298) Using General Electric's strategic planning grid, an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as which of the following? A) yellow—borderline B) red, for no growth C) green, for growth D) It could be evaluated as yellow, red, or green—because the grid suggests that opportunities with medium ratings need more analysis.

299) According to the General Electric strategic planning grid, an opportunity that is low on the "business strengths" dimension but high on the "industry attractiveness" dimension should be

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A) called a strategic business unit. B) supported if it is an existing business, but probably not supported if it is a new opportunity. C) immediately supported with large investment. D) sold off or discontinued. E) viewed as a "green" (high growth) opportunity.

300)

General Electric's strategic planning grid A) focuses on market share and market growth rate. B) requires subjective judgments about business strengths and industry attractiveness. C) requires that all opportunities be judged either "High" or "Low." D) substitutes quantitative estimates for management judgment. E) All of the answers are correct.

301)

GE's planning grid approach

A) doesn't work, because given the subjective evaluations involved, different managers usually come to different conclusions. B) is really the same thing as the total profit approach. C) overemphasizes short-term profitability. D) is superficial because it considers only size and expected market share and ignores other possibly important factors. E) could be adapted easily by another firm with different objectives.

302)

GE's planning grid approach to evaluating proposed and existing plans and businesses A) considers how profitable opportunities are likely to be. B) reflects the corporation's objectives. C) helps managers see why some ideas are supported and others are not. D) is a subjective, multiple-factor approach. E) All of the answers are correct.

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303) Evaluating opportunities in international markets is uniquely challenging for managers because A) international variables are confusing and unfamiliar to outsiders. B) there are so many opportunities from which to choose. C) marketing in other countries is entirely different from marketing in a domestic setting. D) international consumers rarely share the same needs. E) other nations do not welcome foreign businesses.

304) Which of the following would help prevent marketing mistakes in evaluating international market opportunities? A) Assume that all cultures around the world are the same. B) Do not "think locally." C) Use machine translators. D) Include local citizens in the evaluation process. E) Save money by cutting research into foreign markets.

305)

The "continuum of environmental sensitivity" suggests that

A) some products are more adaptable to international markets than others. B) it is extremely risky to sell basic commodities in international markets. C) industrial products need to be adapted more than consumer products for international markets. D) All of the answers are correct.

306) According to the "continuum of environmental sensitivity," which of the following types of products is less sensitive to environmental changes?

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A) "fad"-type consumer products B) industrial products C) basic commodity-type consumer products D) consumer products that are linked to cultural variables E) All of these types of products are equally sensitive to environmental changes.

307) Which of the following types of products is least sensitive to environmental changes, according to the "continuum of environmental sensitivity"? A) industrial products B) commodity-type consumer products C) consumer products linked to cultural variables D) "me-too" products E) fad products

308) According to the "continuum of environmental sensitivity," which of the following types of products would be most insensitive to environmental changes? A) basic commodity-type consumer products B) industrial products C) consumer products that are tied to cultural variables D) consumer products closely linked to social variables E) international products

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Answer Key Test name: Chap 03_17e 1) TRUE The external market environment includes four major areas: economic environment, technological environment, political/legal environment, and cultural/social environment. 2) FALSE The direct market environment includes customers, the company, and competitors. 3) FALSE Managers can't alter the variables of the market environment. 4) TRUE The objectives of a company should shape the direction and operation of the whole business. 5) TRUE Company objectives should shape the direction and operation of the whole business. 6) TRUE Many firms develop a mission statement, which sets out the organization's basic purpose for being. 7) TRUE A mission statement should focus on a few key goals rather than embracing everything. 8) TRUE

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A mission statement should supply guidelines that help managers determine which opportunities to pursue. 9) FALSE A mission statement is not a substitute for more specific objectives that provide guidance in screening possible opportunities. 10) FALSE A mission statement is not a substitute for more specific objectives. 11) TRUE Firms need a hierarchy of objectives, moving from company objectives to marketing department objectives. 12) FALSE Firms need a hierarchy of objectives, moving from company objectives to marketing department objectives. Firms also need objectives for each of the Four Ps. 13) FALSE Marketing objectives should be realistic and achievable. Overly ambitious objectives are useless if the firm lacks the resources to achieve them. 14) TRUE Every firm has some unique resources, and opportunities come from making use of these strengths. 15) FALSE Smaller firms can be at a great cost disadvantage if they try to win business from larger competitors. On the other hand, new or smaller firms sometimes have the advantage of flexibility. 16) TRUE Version 1

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Smaller firms can be at a great cost disadvantage when the cost of producing and selling each unit decreases as the quantity increases. 17) FALSE Smaller firms can be at a great cost disadvantage if they try to win business from larger competitors when the cost of producing and selling each unit decreases as the quantity increases. 18) FALSE Sometimes but not always, new or smaller firms have the advantage of flexibility. 19) TRUE The opportunities a firm decides to pursue may depend on its resources and capabilities. 20) FALSE The number and types of competitors the marketing manager must face and how they may behave is affected by the competitive environment. 21) TRUE Although marketing managers usually can't control the competitive environment factors, they can choose strategies that avoid head-on competition. 22) FALSE When most product-markets head toward pure competition, competitors offer very similar products that consumers see as close substitutes. 23) FALSE Many product-markets head toward pure competition—or oligopoly— over the long run. 24) TRUE Version 1

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Monopoly situations, in which one firm completely controls a broad product-market, are rare in market-directed economies. 25) FALSE In monopolistic competition, each competitor tries to get control in its own target market. But competition still exists because some customers see the various alternatives as substitutes. 26) TRUE In monopolistic competition, marketing managers sometimes try to differentiate very similar products by focusing on other elements of the marketing mix. 27) TRUE The basic approach to competitor analysis is to compare the strengths and weaknesses of the current (or planned) target market and marketing mix with what competitors are currently doing or are likely to do. 28) TRUE The basic approach to competitor analysis is to compare the strengths and weaknesses of the current target market. 29) FALSE Competitor analysis is an organized approach for evaluating the strengths and weaknesses of competitors' marketing strategies. 30) TRUE The initial step in competitor analysis is to identify potential competitors. 31) FALSE Competitive rivals offering similar products are usually easy to identify, but not always.

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32) TRUE Market share is the portion of total sales in a product category accounted for by a particular brand. Marketing managers often track market share over time to monitor how well a product is doing in a particular market. 33) FALSE Beyond the moral issues, spying on competitors to obtain trade secrets is illegal. 34) FALSE Beyond the moral issues, spying on competitors to obtain trade secrets is illegal. 35) FALSE The economic environment refers to macroeconomic factors that include national income, economic growth, and inflation. 36) FALSE In some Latin American countries, inflation has exceeded 400 percent a year in recent years. In contrast, in the last couple of decades, the United States and most developed countries have experienced inflation rates well below 5 percent. 37) TRUE In some Latin American countries, inflation has exceeded 400 percent a year in recent years. In contrast, in the last couple of decades, the United States and most developed countries have experienced inflation rates well below 5 percent. 38) TRUE Technology is the application of science to convert an economy's resources to output. 39) TRUE Version 1

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Technology affects marketing in two basic ways: opportunities for new products and the development of new processes. 40) TRUE Marketing managers that anticipate changes in technology will be in a better position to take advantage of the opportunities that come from new technology. 41) TRUE Artificial intelligence (AI) refers to having machines operate like humans with respect to learning and decision making. 42) FALSE Artificial intelligence is implemented by an intelligent agent, which is a device that observes an environment and acts to achieve a goal. 43) TRUE Machine learning refers to a type of skill where a software application becomes more accurate in predicting outcomes without actual programming. 44) TRUE Nationalism can affect macro-marketing systems and how marketing managers work. It can reduce sales, or even block all marketing activity. 45) FALSE Nationalism is placing a country's interests before everything else. 46) TRUE Nationalism can affect how marketing managers work as well. 47) FALSE Strong sentiments of nationalism can reduce sales, or even block all marketing activity, in some international markets. Version 1

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48) TRUE Important dimensions of the political environment are likely to be similar among nations that have banded together to have common regional economic boundaries—one such example being the unification of European markets. 49) TRUE Many of the member countries of the EU use the euro. 50) TRUE The political environment can affect opportunities at a local or international level. 51) TRUE American economic and legislative thinking is based on the idea that efforts by business to limit competition are considered contrary to the public interest. 52) TRUE Businesses and individual managers are subject to both criminal and civil laws. 53) FALSE Managers are subject to both criminal and civil laws, and where criminal law applies, jail sentences can be imposed. 54) FALSE The Sherman Act outlaws anticompetitive activities and actions that create or attempt to monopolize a market. 55) TRUE The Clayton Act (1914) deals with anticompetitive practices that did not fall under the Sherman Act.

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56) TRUE As stated in Exhibit 3–3, the Clayton Act focuses on practices that may substantially lessen competition, such as tying contracts, exclusive dealing contracts, and price discrimination by manufacturers. 57) FALSE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards and can impose penalties for failure to meet these standards. 58) FALSE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards and can impose penalties for failure to meet these standards. 59) TRUE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards. 60) FALSE The commission has the power to force a product off the market or require expensive recalls to correct problems, so it is obvious that safety must be considered in product design. 61) TRUE Besides federal legislation, marketers must be aware of state and local laws. 62) TRUE The cultural and social environment affects how and why people live and behave as they do. 63) FALSE

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The cultural and social environment affects how and why people live and behave as they do. 64) TRUE Sustainability—the idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs—has become increasingly more important to consumers. 65) FALSE Sustainability has become increasingly more important to consumers. Two out of three consumers are willing to pay more for a product that is deemed more sustainable. 66) TRUE The world's population is growing fast, but that population growth varies dramatically. For example, between 2013 and 2025, population is projected to grow 35 percent or more in Ethiopia and Nigeria and about 25 percent in Egypt, Singapore, and Bangladesh. During this same time, growth will be about 9 percent in the United States. 67) TRUE The United States has a current population of over 316 million people. 68) TRUE With a current population of over 316 million, the United States makes up only 4.9 percent of the world's population of over 7 billion people. 69) TRUE As stated in Exhibit 3–3, India has more people than the United States, and China has more people than India. 70) FALSE

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The world's population is growing fast, but that population growth varies dramatically from country to country. For example, between 2013 and 2025, the population is projected to grow more than 35 percent or more in both Ethiopia and Nigeria. 71) FALSE More than 90 percent of the population in Japan, Singapore, Israel, and Argentina live in urban areas. 72) TRUE The extent of urbanization varies widely and the concentration of people in major cities often simplifies Place and Promotion decisions, prompting increased interest in international markets. 73) TRUE Income is often one of the most important demographic dimensions when considering international markets. 74) FALSE Income is often one of the most important demographic dimensions when considering international markets. 75) TRUE There are a variety of different measures of national income. The most widely used are GDP and GNI. 76) FALSE Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in one year. 77) TRUE Gross domestic product includes income earned by foreigners who own resources in that nation.

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78) FALSE Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 79) TRUE Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. 80) FALSE Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. 81) TRUE Exhibit 3–3 gives an estimate of GDP for each country listed. The more developed industrial nations, including the United States, Germany, and Japan, have the largest GDPs; but it is the developing nations who have the fastest rate of growth in GDP. 82) FALSE Exhibit 3–3 gives an estimate of GDP for each country listed. The fastest rate of growth in GDP is occurring in the developing nations, not the more developed industrial nations. 83) TRUE The more developed industrial nations (including the United States, Japan, and Germany) do not have the largest populations, but they account for the biggest share of the world's GDP. 84) FALSE Many managers, however, see great potential and less competition where GNI per capita is low. 85) FALSE Version 1

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The United Nations estimates that 14 percent of adults (age 15 or older) in the world cannot read and write. 86) TRUE Adoption of cell phone and Internet usage varies across the globe. While penetration is still low in many of the poorest nations, those countries are experiencing very fast adoption rates. 87) TRUE As shown in Exhibit 3–4, California is the state with the largest population, and Texas is a distant second. 88) FALSE As shown in Exhibit 3–4, California is the state with the largest population, and Texas is a distant second. 89) TRUE As shown in Exhibit 3–4, in the United States, the West and the Southeast are growing faster than the Northeast and the North Central areas. 90) FALSE In 1980, the median age of the U.S. population was 30, but by 2018 the median age had risen to 38. 91) TRUE In 1980, the median age of the U.S. population was 30, but by 2018 the median age had risen to 38. 92) TRUE Gen X is much smaller in number than the Baby Boomers it follows. 93) TRUE

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Gen Y refers to those born from 1978 to 1994; this group emerged from the echo boom and grew up with technology. 94) TRUE People of the Generation Z group were born into a world that already used text messaging, cell phones, and the Internet. They are part of a more ethnically diverse United States than their parents and appear to be more accepting of different cultures, races, and religions. 95) FALSE Marketing managers should be cautious about using generational generalizations as anything more than a starting point. When developing a strategy, marketing managers should focus on a more specific target. 96) TRUE The demographic data show that changes in related cultural values and social attitudes come slowly. 97) FALSE The demographic data show that changes in related cultural values and social attitudes come slowly. 98) TRUE The product-market screening criteria include both quantitative and qualitative components. The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. These help a manager decide what kind of opportunities to pursue. 99) FALSE The product-market screening criteria include both quantitative and qualitative components. 100) FALSE

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The product-market screening criteria include both quantitative and qualitative components. Screening criteria summarize in one place what the firm wants to accomplish; thus, marketing decisions are not just made or accepted based on intuition and gut feel. 101) TRUE Forecasts of the probable results of implementing a marketing strategy to apply the quantitative part of the screening criteria is needed because only implemented plans generate sales, profits, and return on investment. 102) TRUE General Electric's (GE) strategic planning grid forces company managers to make three-level judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. 103) TRUE General Electric's (GE) strategic planning grid forces company managers to make three-level judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. 104) FALSE Opportunities that fall into the red boxes (lower right-hand corner of the grid) suggest a no-growth policy. 105) FALSE Yellow businesses are borderline cases, where opportunities are rated "medium" in terms of both industry attractiveness and business strengths. GE may continue to support an existing yellow business but will probably reject a proposal for a new one.

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106) TRUE GE's evaluation method is a subjective, multiple-factor approach. 107) FALSE GE's "stoplight" evaluation method is a subjective, multiple-factor approach. 108) FALSE In international markets it is often harder to fully understand the market environment variables. 109) FALSE The “continuum of environmental sensitivity” suggests that industrial products are more insensitive to the cultural environments in which they are placed than consumer products that are closely linked to social or cultural variables. 110) TRUE Most industrial products are near the insensitive end of the continuum of environmental sensitivity. 111) FALSE The "continuum of environmental sensitivity" suggests that industrial products are more insensitive to the cultural environments in which they are placed than consumer products that are linked to other cultural variables. 112) E Variables in the economic, technological, cultural, social, political, and legal environments affect strategy planning. 113) D

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Managers can't alter the variables of the market environment. However, they can select a strategy that leads the firm into a market where competition is not yet strong or where trends in the external market are likely to support market growth. 114) A The direct market environment includes customers, the company, and competitors. In contrast, the external market environment is made up of the economic environment, technological environment, political and legal environment, and cultural and social environment. 115) A There are four areas of the external market environment: technological, economic, cultural and social, and political and legal. 116) E Variables in the economic, competitive, cultural, and legal environments affect strategy planning, and since managers can't alter these variables, they are considered uncontrollable. 117) A The direct market environment includes customers, the company, and competitors. 118) D The direct market environment includes customers, the company, and competitors. 119) C The direct market environment includes customers, the company, and competitors. Interest rates are part of the economic environment, which is more broadly part of the external market environment. 120) E Version 1

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Company objectives should shape the direction and operation of the whole business. It is difficult to set objectives that really guide the present and future development of a company. 121) C Setting whole company objectives is ultimately the responsibility of top management. Top management must look at the whole business, relate its present objectives and resources to the external environment, and then decide what the firm wants to accomplish in the future. 122) C A mission statement sets out the organization's basic purpose for being. A good mission statement focuses on a few key goals rather than embracing everything. 123) E A mission statement sets out the organization's basic purpose for being. A good mission statement should focus on a few key goals rather than embracing everything. 124) E Company objectives guide managers as they search for and evaluate opportunities—and later plan marketing strategies. 125) E The mission statement sets out the organization's basic purpose for being. A good mission statement should focus on a few key goals rather than providing specific detailed objectives. 126) B A mission statement sets out the organization's basic purpose for being. 127) E

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Overall company objectives should be specific, provide guidance in screening possible opportunities, and must be realistic and achievable. 128) D When setting objectives, managers should keep in mind what is realistic and achievable. Overly ambitious objectives are useless if the firm lacks the resources to achieve them. 129) E Company objectives should guide managers in determining which opportunities to pursue. 130) C As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then sales promotion objectives. 131) B As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then sales promotion objectives. 132) D Firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then advertising objectives. 133) E As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, product objectives, and then sales promotion objectives. 134) A

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Every firm has some unique resources, and opportunities come from making use of these strengths. 135) C The opportunities a firm decides to pursue may depend on its resources and capabilities. A firm's expertise in drilling for oil can easily be expanded to capitalize on a new opportunity of drilling for natural gas. 136) B Every firm has some unique resources, and opportunities come from making use of these strengths. 137) E When looking for opportunities, a marketing manager should analyze the firm's present products and markets, producing capability and flexibility, financial strengths, and existing marketing resources. 138) D Access to large amounts of capital from a long-term relationship with a local bank would be a financial strength, not a marketing strength. 139) D Many new—or smaller—firms sometimes have the advantage of flexibility. They are not handicapped with large, special-purpose facilities that are obsolete or poorly located. Many firms increase flexibility by not having any "in-house" manufacturing for their brands. 140) E The competitive environment affects the number and types of competitors the marketing manager must face and how they may behave. 141) B

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Marketing managers should actively seek sustainable competitive advantage, a marketing mix that customers see as better than a competitor's mix and that cannot be quickly or easily copied. 142) B Most marketing managers in developed economies face monopolistic competition. In monopolistic competition, a number of different firms offer marketing mixes that at least some customers see as different. Each competitor tries to get control (a monopoly) in its own target market. But competition still exists because some customers see the various alternatives as substitutes. 143) C A competitor analysis is an organized approach for evaluating the strengths and weaknesses of competitors' marketing strategies. To identify potential competitors, it is useful to take the viewpoint of target customers. Companies may offer quite different products, but they are competitors if customers see them as offering close substitutes. 144) A The competitive environment affects the number and types of competitors the marketing manager faces and how they may behave. Although marketing managers usually can't control these factors, they can choose strategies that avoid head-on competition. 145) B In oligopoly there are a few large firms competing, whereas in pure competition there are often many firms. In oligopoly and pure competition, competitors offer very similar marketing mixes, and customers see the alternatives as close substitutes. 146) A Most product-markets head toward pure competition over the long run. Version 1

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147) D Most product-markets head toward pure competition over the long run. 148) B In pure competition, competitors offer very similar marketing mixes. Because customers see the different available products as close substitutes, managers just compete with lower and lower prices, and profit margins shrink. 149) A In monopoly situations, one firm completely controls a broad productmarket. 150) B In monopolistic competition, different firms offer marketing mixes that at least some customers see as different. Each competitor tries to get control (a monopoly) in its "own" target market. 151) C A competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. To identify potential competitors, it is useful to take the viewpoint of target customers. Companies may offer quite different products, but they are competitors if customers see them as offering close substitutes. 152) D Most marketing managers in developed economies face monopolistic competition. 153) E

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Competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. 154) C Competitive rivals are firms that will be the closest competitors. 155) B Competitive rivals are firms that will be the closest competitors. 156) A Market share is the portion of total sales in a product category accounted for by a particular brand. The market share of Dell laptops in the United States is the portion of Dell laptops sold in the United States in a given period of time as compared to all laptops sold in the United States. 157) A Market share is the portion of total sales in a product category accounted for by a particular brand. The percent of Toyota sedans sold in the United States as compared to all sedans sold in the United States over the same period is an example of market share. 158) E A marketing manager would track market share for all of these reasons. 159) A A firm that puts all of its marketing information on a public website for customers also makes it readily available to competitors. 160) D The economic environment can, and does, change quite rapidly. It refers to macroeconomic factors that affect patterns of consumer and business spending.

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161) C The economic environment refers to macroeconomic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. While marketers encounter many challenges from the external market environment, the inability of firms to acquire financing is usually due to forces in the economic environment. 162) E Marketers that evaluate opportunities during an economic downturn can expect depressed consumer spending and a potential lack of financing from lending institutions. These considerations arise from within the economic environment. 163) E The economic environment refers to macroeconomic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. 164) E Interest rates and inflation are part of the economic environment. 165) E Changes in the economy are often accompanied by changes in the interest rate. Many consumers borrow money to buy expensive purchases, like a new home or car, and then pay back the money with interest. Interest rates directly affect the total price borrowers must pay for products. So the interest rate affects when, and if, they will buy. 166) B Rising costs and inflation are part of the economic environment. 167) A Version 1

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Changes in the economy are often accompanied by changes in the interest rate. 168) A In the economic environment, interest rates directly affect the total price borrowers must pay for products; so the interest rate affects when, and if, they will buy. 169) D In the economic environment, interest rates directly affect the total price borrowers must pay for products; so the interest rate affects when, and if, they will buy. 170) B Changes in the economy are often accompanied by changes in the interest rate. This is part of the economic environment. 171) D Technology is the application of science to convert an economy's resources to output. 172) B Technology has led to the increasing use of online advertising, most notably search-related advertising. 173) A Technology is the application of science to convert an economy's resources to output. 174) E Laws are part of the legal environment, not the technological environment. 175) D Version 1

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Technology affects marketing in two basic ways: opportunities for new products and development of new processes. All the examples given illustrate new products or new processes. 176) D Technology affects marketing in two basic ways: opportunities for new products and development of new processes. 177) A Artificial intelligence refers to having machines operate like humans with respect to learning and decision making. The ability of Google Photos to automatically label photos using image recognition is the best example of artificial intelligence. 178) A Intelligent agents are devices that observe an environment and act to achieve a goal. 179) E All of these are examples of the use of artificial intelligence in our everyday lives. 180) A Many companies today use AI to deliver better customer service—and more value—to customers. 181) A Machine learning refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming. 182) A

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Machine learning refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming. Through machine learning, a program makes predictions, receives feedback on whether it was correct or not, and then updates the program. With access to a lot of data, machine learning can help a software program learn a specific skill rather quickly. 183) A With access to a lot of data, machine learning can help a software program learn a specific skill rather quickly. 184) C Nationalism is an emphasis on a country's interests before everything else. 185) E In the political environment, nationalism is an emphasis on a country's interests before everything else. 186) B One issue in the political environment is nationalism. 187) D The attitudes and reactions of people, social critics, and governments all affect the political environment. Consumers in the same country usually share a common political environment, but the political environment can also affect opportunities at a local or international level. 188) B The "Buy American" policy in many government contracts and business purchases reflects nationalistic feelings in the United States and is an example of nationalism. Version 1

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189) A Twenty years ago, each country in Europe had its own unique trade rules and regulations but now almost 30 countries of the European Union (EU) are reducing conflicting laws, taxes, and other obstacles to trade within Europe. 190) B Since its inception in 1994, the North American Free Trade Agreement (NAFTA), and its later replacement the United States–Mexico–Canada Agreement (USMCA), has reshaped the rules of trade among the United States, Canada, and Mexico. 191) B "Egg Sales Fall as Consumers Switch to Low Cholesterol Diets" would be least likely to involve the political environment. It would instead involve the cultural and social environment. 192) A After a few decades of movement toward free trade, the United States and some other countries have recently begun to impose trade restrictions. 193) E After free trade moved many jobs out of the country, American workers sought greater protection for their jobs. Emerging economies often have fewer laws that protect workers and the environment, opponents of free trade argue that this subjects women and children to grueling working conditions and degrades natural resources. 194) B American economic and legislative thinking is based on the idea that competition among many firms helps the economy.

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195) A Businesses and individual managers are subject to both criminal and civil laws. Penalties for breaking civil laws are limited to blocking or forcing certain actions—along with fines. 196) B Attempts by business to limit competition are considered contrary to the public interest. More than a century ago, Congress passed a series of antimonopoly laws that were designed to keep one company from dominating the market. 197) D A tapestry of state and local laws may necessitate adapting marketing strategies to local requirements. 198) A The legal environment regulates marketing practices for the purpose of protecting consumers, promoting competition, or prohibiting deceptive marketing practices. 199) A American economic and legislative thinking is based on the idea that competition among many firms helps the economy. 200) D The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 201) E The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. Version 1

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202) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 203) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 204) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 205) D The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 206) B The Clayton Act (1914) focused on anticompetitive practices that did not fall under the Sherman Act. 207) D The Clayton Act (1914) focused on anticompetitive practices that did not fall under the Sherman Act. 208) A

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Some consumer protections are built into the English and U.S. common law systems. A seller must tell the truth (if asked a direct question), abide by contracts, and stand behind the firm’s product (to some reasonable extent). The legislature has introduced laws in situations where the average consumer may not have the ability to make informed judgments, as in the case of consumer privacy. 209) A Beyond the few protections built into the common law system, it is expected that vigorous competition in the marketplace will protect careful consumers. 210) A The legal environment exists of laws that promote competition among other things. 211) A The Consumer Product Safety Act (of 1972) set up the Consumer Product Safety Commission. 212) A The Consumer Product Safety Act (of 1972) set up the Consumer Product Safety Commission. The CPSC has broad power to set safety standards and can impose penalties for failure to meet these standards. 213) A The Consumer Product Safety Commission has the power to force a product off the market or require expensive recalls to correct problems. 214) E

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Besides federal legislation and consumer protections built into the English and U.S. common law systems, marketers must be aware of state and local laws, which vary but contain important regulations. Prosecution is serious, and businesses and individual managers are subject to both criminal and civil laws. 215) B The cultural and social environment affects how and why people live and behave as they do. 216) C Baby Boomers born between 1946 and 1964 are a powerful demographic force, as there are large numbers of people in this group. 217) C The cultural and social environment affects how and why people live and behave as they do. Some examples are the languages people speak; the type of education they have; and their religious beliefs. 218) A Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 219) B Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family.

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220) D Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. Fitness is a variable in this environment, also. 221) B Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. Physical fitness is a variable in this environment, also. 222) D Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 223) B The example of the toy manufacturer recalling a playpen is part of the legal environment. 224) C Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 225) C Version 1

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Many organizations now screen opportunities on sustainability—the idea that it's important to meet present needs without compromising the ability of future generations to meet their needs. Many major firms are testing reusable containers for their products. PepsiCo now uses refillable glass bottles for its Tropicana orange juice. 226) C Many organizations now screen opportunities on sustainability—the idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs. 227) A As shown in Exhibit 3–3, Norway has 100 percent literacy. 228) B Many variables make up the cultural and social environment, including the types of food that different people eat. 229) C Between 2013 and 2025, population growth will be about 9 percent in the United States. 230) C Just 50 years ago about two-thirds of the world's population lived in rural areas. Today about half live in urban areas as more people move to cities for better job opportunities. 231) D The world's population is growing fast, but that population growth varies dramatically from country to country. Between 2013 and 2025, population is projected to grow more than 35 percent in Ethiopia and Nigeria. During this same period, growth will be about 9 percent in the United States and 3 percent in China. Version 1

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232) B Between 2013 and 2025, population is projected to grow 35 percent or more in Ethiopia and Nigeria. 233) E Between 2013 and 2025, the population is projected to grow more by 35 percent in Ethiopia. 234) E Between 2013 and 2025, population growth will be about 9 percent in the United States. 235) A See Exhibit 3–3. Between 2013 and 2025, some European countries like Germany will experience declining populations. 236) B In Ethiopia, 25 percent or less of the population lives in urban areas. 237) B See Exhibit 3–3. Population density in the U.S. is only 35 per square kilometer, but in Singapore, for example, it is 7,807. 238) D As shown in Exhibit 3–3, Singapore has the highest population density. 239) B As shown in Exhibit 3–3, 100 percent of Singapore's population was in urban areas. 240) A Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. Version 1

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241) E Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 242) B Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 243) A Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 244) C There are a variety of different measures of national income. One widely used measure is gross domestic product (GDP). 245) A There are a variety of different measures of national income. One widely used measure is gross domestic product (GDP). 246) A GDP is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country; thus, it is affected by economic conditions and the productivity of the country's workers. 247) E

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Two widely used measures of national income are GDP and GNI. GNI does not include income earned by foreigners, but GDP does include foreign income. Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. Both GDP and GNI are highest in more developed industrial nations. 248) B Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. Gross national income (GNI) is a measure that is similar to GDP but does not include income earned by foreigners. 249) A Gross national income (GNI) is a measure that is similar to GDP but does not include income earned by foreigners. 250) C Gross national income (GNI) is one of the widely used measures of income for different countries. 251) A Gross national income (GNI) is one of the widely used measures of income for different countries. 252) A GNI is affected by economic conditions and the productivity of workers in the country. 253) D GNI is a measure that is similar to GDP but does not include income earned by foreigners. 254) B Version 1

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GNI does not include income earned by foreigners, but GDP does include foreign income. 255) A Exhibit 3–3 gives the GNI per capita in the United States as $55,980, but it shows a higher GNI per capita in both Norway and Australia. 256) C GNI per capita (per person) is a useful figure because it gives some idea of the income level of people in the country. 257) C Of the choices given, the United States and Australia have the highest GNI per capita. See Exhibit 3–3. 258) C Of the choices given, Ethiopia and Haiti have the lowest GNI per capita. See Exhibit 3–3. 259) B The United Nations estimates that 14 percent of adults (aged 15 or older) in the world cannot read and write. 260) A As shown in Exhibit 3–3, Russia (and Norway) have the highest literacy rate. 261) C Of the choices given, Bangladesh has the lowest literacy rate. See Exhibit 3–3. 262) A As shown in Exhibit 3–3, Norway (and Russia) have 100 percent literacy. Version 1

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263) C See Exhibit 3–3. Italy had just 66 percent of its population using the Internet in 2015. 264) A As shown in Exhibit 3–4, California is the state with the largest population. 265) A The greatest growth is in the western and southeastern United States. 266) D The median age is growing because the percentage of the population in older age groups has increased. 267) B As shown in Exhibit 3–5, three age bands show a large increase by 2025:60–69, 70–79, and 80+. 268) C Baby Boomers born between 1946 and 1964 are a powerful demographic force, as there are large numbers of people in this group. 269) D See Exhibit 3–5. 270) A Generation Y, sometimes called Millennials, refers to the generation born from 1978 to 1994. 271) C Generation X, sometimes called Gen X, refers to the generation born immediately following the baby boom—from 1965 to 1977. 272) D Version 1

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Baby Boomers are those born between 1946 and 1964. 273) A See Exhibit 3–5. 274) D Of the choices given, Generation Y, sometimes called Millennials, is the most techno-savvy. 275) D Generation Z refers to those born since 1995. This group is still young, so ideas about its emerging values are speculative. The Zs are part of a more ethnically diverse United States than their parents and appear to be more accepting of different cultures, races, and religions. 276) B Generation Z refers to those born since 1995. This group is still young, so ideas about its emerging values are speculative. 277) A Marketing managers need to be cautious when using generational generalizations as anything more than a starting point. When developing a strategy, marketing managers should focus on a more specific target market. 278) A The 50- to 59-year-old age group is actually going to decline in population between 2015 and 2025. See Exhibit 3–5. 279) A Changes in related cultural values and social attitudes come slowly. 280) E

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Managers can't alter these uncontrollable variables of the market environment. 281) A The first thing to do when evaluating product-market opportunities is to analyze the firm's resources and the objectives of top management. 282) D When developing product-market screening criteria, managers should include quantitative components such as sales, profit, and return on investment (ROI). 283) B Since modern design is a key strength at IKEA, the company would be likely to screen out business opportunities in antique furniture reproductions. 284) E A set of product-market screening criteria should analyze the firm's resources (for strengths and weaknesses), the environmental trends the firm faces, and the objectives of top management. 285) E Product-market screening criteria should include both quantitative and qualitative components, be achievable, and summarize in one place what the firm wants to accomplish. 286) D Product-market screening criteria should include both quantitative and qualitative components and should be realistic and achievable. 287) A When evaluating product-market opportunities, marketers must analyze the firm's resources and the objectives of top management. Version 1

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288) C The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. The qualitative components summarize what kinds of businesses the firm wants to be in, what businesses it wants to exclude, what weaknesses it should avoid, and what resources (strengths) and trends it should build on. 289) E The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. The qualitative components summarize what kinds of businesses the firm wants to be in, what businesses it wants to exclude, what weaknesses it should avoid, and what resources (strengths) and trends it should build on. 290) A When evaluating the potential of possible opportunities (product-market strategies), it is important to evaluate similar things—that is, whole plans over longer time periods. 291) E When a firm has many scenarios to evaluate, it usually has to compare quite different ones. This problem is easier to handle with graphical approaches such as the nine-box strategic planning grid used by many companies. 292) C General Electric's (GE) strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. 293) C

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The industry attractiveness dimension helps managers answer this question: Does this product-market plan look like a good idea? 294) C The business strengths dimension of the GE focuses on the ability of the company to pursue a product-market plan effectively. 295) D General Electric's strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness. 296) E General Electric's strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness and focuses on the ability of the company to pursue a product-market plan effectively. It is a subjective, multiple-factor approach. 297) A In a General Electric's strategic planning grid, yellow businesses are borderline cases wherein opportunities are rated "medium." 298) C GE feels opportunities that fall into the green boxes of the grid are its best growth opportunities. 299) B When an opportunity is low on the business strengths dimension but high on industry attractiveness, GE may continue to support an existing business but will probably reject a proposal for a new one. 300) B GE's evaluation method is a subjective, multiple-factor approach. Version 1

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301) E GE's planning grid approach could be adapted by another firm that might modify the evaluation to emphasize other screening criteria, depending on its objectives and the type of product-market plans it is considering. 302) E General Electric's (GE's) strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. GE's "stoplight" evaluation method is a subjective, multiple-factor approach. 303) A Due to their lack of familiarity, managers have difficulty understanding the market environment variables of other nations. 304) D A local citizen who knows the market environment may be able to identify an obvious problem ignored even in a careful analysis; thus, it is very useful for the analysis to include inputs from locals. 305) A The "continuum of environmental sensitivity" suggests that some products are more adaptable to international markets than others. 306) B Most industrial products are near the insensitive end of continuum of environmental sensitivity. 307) A Most industrial products are near the insensitive end of the continuum of environmental sensitivity. Version 1

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308) B Most industrial products are near the insensitive end of the "continuum of environmental sensitivity." Consumer products closely linked to other social or cultural variables are near the sensitive end of this continuum.

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CHAPTER 4 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A market is a group of two or more sellers who offer substitute ways of satisfying customer needs. ⊚ ⊚

2)

true false

A market is a group of competitors selling similar products. ⊚ ⊚

true false

3) The main difference between a "product-market" and a "generic market" is whether customer needs are similar or different. ⊚ ⊚

4)

true false

A generic market description looks at markets broadly and from a customer's viewpoint. ⊚ ⊚

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5) A generic market is a market in which sellers offer substitute products which are so similar that customers see them as "all the same." ⊚ ⊚

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6) A product-market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. ⊚ ⊚

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7) A firm's "relevant market for finding opportunities" should be bigger than the present product-market but not so large that it couldn't expand and still be an important competitor. ⊚ ⊚

8)

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Product type describes the goods and/or services that customers want. ⊚ ⊚

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9) The definition of a product-market includes a product type, while the definition of a generic market does not include a product type. ⊚ ⊚

10)

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A generic market description includes customer needs and product-type terms. ⊚ ⊚

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11) Effective market segmentation is a two-step process that starts with naming broad product-markets and then goes on to segmenting these broad product-markets into more homogeneous submarkets. ⊚ ⊚

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12) Market segmentation is a two-step process that involves naming broad product-markets and segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. ⊚ ⊚

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13) Market segmentation says that target marketers should develop one good marketing mix aimed at a fairly large market. ⊚ ⊚

14)

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Marketing-oriented managers think of segmenting as a disaggregating process. ⊚ ⊚

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15) Marketing-oriented managers see segmenting as a process of aggregating people with similar needs into a group. ⊚ ⊚

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16) Ideally, segmenters should start with the idea that each person is "one of a kind" and can be described by a special set of dimensions that may be used to aggregate similar customers together. ⊚ ⊚

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17) One of the difficult things about segmenting is that not every customer will neatly fit into some market segment. ⊚ ⊚

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18) The correct number of submarkets in a broad product-market is usually obvious, so the likelihood of managerial error is small. ⊚ ⊚

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19) A "good" market segment should be composed of people who are as homogeneous as possible with respect to their likely responses to marketing mix variables. ⊚ ⊚

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20) "Homogeneous within" means that the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. ⊚ ⊚

true false

21) "Good" market segments should be homogeneous (similar) within, heterogeneous (different) between, substantial, and operational. ⊚ ⊚

22)

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"Good" market segments should be heterogeneous within and homogeneous between. ⊚ ⊚

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23) If a product-market segment is "homogeneous within," it is called a "substantial" target market. ⊚ ⊚

24)

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A "substantial" market segment is one that is big enough to be profitable. ⊚ ⊚

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25) Saying that a market segment is "substantial" means that it contains customers from a variety of demographic variables. ⊚ ⊚

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26) Planning the Place and Promotion elements of a marketing mix is especially difficult if the dimensions of a product-market are not operational. ⊚ ⊚

27)

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A product-market segment is "operational" if it is big enough to be profitable to the firm. ⊚ ⊚

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28) A personality trait like moodiness is a good example of an "operational" segmenting dimension. ⊚ ⊚

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29) With the "multiple target market approach," the marketer combines two or more homogeneous submarkets into one larger target market as a basis for one strategy. ⊚ ⊚

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30) The combined target market approach involves segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix. ⊚ ⊚

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31) A manager who aggregates all potential customers into a single product-market segment is likely to find that the segment is not homogeneous. ⊚ ⊚

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32) The more heterogeneous a firm's target market becomes, the more likely the firm will see competition from an innovative segmenter. ⊚ ⊚

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33) A segmenter is more likely than a combiner to really satisfy a target market and build such a close relationship with customers that it faces no real competition. ⊚ ⊚

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34) A profit-oriented firm will usually want to continue aggregating potential customers into larger submarkets until every consumer fits neatly into some segment. ⊚ ⊚

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35) Making a very specific marketing mix for a particular group is always less profitable than a more general marketing mix that appeals to a larger segment. ⊚ ⊚

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36) Cost considerations usually favor more aggregating and larger market segments, but smaller segments may be required to satisfy needs more exactly. ⊚ ⊚

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37) Dimensions that should be considered when segmenting consumer markets are: geographic location and other demographic characteristics; behavioral needs; urgency to get needs satisfied; and willingness to compare and shop. ⊚ ⊚

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38) When segmenting markets, one should look at geographic location and demographic characteristics, as well as customers' desire and willingness to compare and shop; but behavioral needs aren't important for this purpose. ⊚ ⊚

true false

39) Segmenting a broad product-market usually requires using several segmenting dimensions at the same time. ⊚ ⊚

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40) Market segmentation applies only to consumer goods and services; it cannot be applied to business products. ⊚ ⊚

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41) Qualifying dimensions are those that actually affect the customer's purchase of a specific brand in a product-market. ⊚ ⊚

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42) A determining dimension for segmenting markets actually affects the purchase of a specific brand in a product-market.

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⊚ ⊚

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43) A marketing manager who is able to use qualifying dimensions in forming market segments will not need to worry about determining dimensions. ⊚ ⊚

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44) The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. ⊚ ⊚

45)

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International marketing typically requires less segmenting than domestic markets. ⊚ ⊚

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46) A firm involved in international marketing should pay even more attention to segmenting than a firm that sells only in the United States. ⊚ ⊚

true false

47) The first step in segmenting international markets is to group countries that are close to each other into "common markets." ⊚ ⊚

48)

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Clustering techniques try to find similar patterns within sets of data. ⊚ ⊚

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49) Clustering is a technique that divides a large group of people into smaller groups, so that each small group is as diverse as the large group from which it was formed. ⊚ ⊚

true false

50) Clustering techniques can be used in segmenting to help find similar patterns within sets of data to identify homogeneous groups of people. ⊚ ⊚

true false

51) Computer-aided segmenting approaches eliminate the need for managerial judgment and intuition in selecting segmenting dimensions. ⊚ ⊚

true false

52) A firm is most likely to rely on customer relationship management (CRM) approaches when it does not have a database of information on individual customers. ⊚ ⊚

53)

CRM is a variation of the positioning approach. ⊚ ⊚

54)

true false

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CRM approaches are based on information from detailed customer databases. ⊚ ⊚

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55) Many e-commerce companies have the ability to track and store real-time data on a customer in order to continuously update a customer’s placement in a market segment. ⊚ ⊚

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56) By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. ⊚ ⊚

true false

57) "Positioning" shows how proposed and/or present brands are located in a market as seen by customers. ⊚ ⊚

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58) "Positioning" means using a map to show where a firm's products are distributed geographically. ⊚ ⊚

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59) Positioning issues are especially important when competitors in a market appear to be very similar. ⊚ ⊚

60)

A positioning analysis is a product-oriented approach. ⊚ ⊚

61)

true false

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Positioning analysis may lead a firm to segmenting, rather than combining.

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⊚ ⊚

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62) Marketing managers for Mountain Dew used a positioning statement to help focus efforts and gain market share in a competitive environment. ⊚ ⊚

true false

63) Sometimes marketing managers use a positioning statement to provide focus for a marketing mix. ⊚ ⊚

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 64) A "market" consists of A) customers who are willing to exchange something of value. B) a group of potential customers with similar needs. C) sellers offering various ways of satisfying customer needs. D) All of the answers are correct.

65)

The process of marketing strategy planning is about

A) identifying as many market opportunities as can be imagined. B) narrowing down possible market opportunities to the most attractive ones. C) creating products that managers like. D) choosing the most profitable market opportunity, regardless of the firm's current abilities and resources. E) figuring out how to offer products at the lowest possible price.

66)

When identifying a company's market, managers need to avoid the mistake of

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A) finding out what customers need. B) thinking of a market as a group of customers with similar needs who will exchange money for goods and services that meet those needs. C) trying to identify specific target markets within a general market. D) describing their markets solely in terms of the products they sell. E) thinking of the issue from the customer's point of view.

67) To understand the narrowing-down process, it is useful for managers to think in terms of a ________ market and a ________ market. A) generic; product B) buyer's; seller's C) goods; services D) primary; secondary E) risky; certain

68) A market in which sellers offer various, often diverse, ways of satisfying needs is called a ________ market. A) product B) diverse C) general D) relevant E) generic

69) A ________ is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services.

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A) segment B) market C) product D) consumer forum E) generic industry

70)

A marketing manager has just learned about generic markets. This may lead the manager

A) to see a larger set of potential competitors. B) to put less emphasis on market penetration or market development opportunities and more emphasis on product development opportunities. C) to think about new ways of satisfying the needs of his or her current customers. D) All of the answers are correct.

71)

Compared to a product-market, a generic market A) is more narrowly defined. B) has sellers offering a more diverse set of products. C) can never help marketers identify opportunities. D) None of these answers is correct.

72)

Which of the following is most likely to happen in a generic market? A) Sellers offer various, often diverse, ways of satisfying broadly similar needs. B) Consumers are offered various close substitute ways of satisfying needs. C) Everything is the same as in a product-market. D) Customers have very diverse needs. E) Sellers produce unbranded products.

73) A ________ market is a market with broadly similar needs and sellers offering various— and often diverse—ways of satisfying those needs. Version 1

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A) planned B) target C) central D) generic E) relevant

74) A ________ market is a market with broadly similar needs and sellers offering various— and often diverse—ways of satisfying those needs. A) homogeneous B) product C) relevant D) generic E) target

75)

A generic market A) may include sellers who compete in different product-markets. B) would probably be broader than the firm's target market. C) might be composed of several different product-markets. D) has sellers offering a more diverse set of products. E) All of the answers are correct.

76)

In a generic market, A) diverse types of products may compete for customers. B) customers have broadly similar needs. C) there may be many ways to satisfy customers' needs. D) sellers may compete in different product-markets. E) All of the answers are correct.

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77)

A generic market is one in which

A) products from different industries compete for customers by trying to satisfy the same basic need. B) no firm can establish a competitive advantage. C) a number of firms are all offering new or improved products in an effort to increase sales. D) one seller has a patent for a superior product and other competitors imitate the leader with inferior products. E) None of the answers is correct.

78)

A generic market A) related to a consumer's functional need is smaller than a related product-market. B) might involve competition among skis, roller blades, bicycles, and ice skates. C) might logically include rubber, cement, a lamp, and a CD player. D) is usually narrower than the firm's target market. E) All of the answers are correct.

79) A digital camera, a computer video camera, and a computer scanner might compete in the same A) single target market. B) generic market. C) multiple target market. D) combined target market. E) product-market.

80) A smartphone, a subscription to Spotify, and a portable CD player might compete in the same

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A) single target market. B) multiple target market. C) product-market. D) combined target market. E) generic market.

81)

A pencil, a dictating machine, and a computer might compete in the same A) target market. B) generic market. C) product-market. D) Any of the answers could be correct.

82)

Which of the following is the best example of a generic market? A) the senior citizen recreation market B) the designer shoes market C) the frozen yogurt market D) the transportation market E) the Hispanic-American market

83)

Which of the following is the best example of a generic market? A) the meat market B) the minivan market C) the e-commerce market D) the beer market E) the "singles" entertaining market

84)

Which of the following is the best example of a generic market?

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A) the adult "personal expression" market B) the roller blade market C) the female exercise shoes market D) the sports drink market E) the sporting goods market

85) Which of the following is least likely to compete in the same generic market with the others? A) garlic powder B) pepper C) Tabasco sauce D) salt E) potato chips

86) Which of the following is least likely to compete in the same generic market with the others? A) long-stem roses B) tomatoes C) champagne D) greeting cards E) telegrams

87) Which of the following is least likely to compete in the same generic market with the others? A) popcorn B) soft drinks C) napkins D) cookies E) ice cream

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88) Which of the following is least likely to compete in the same generic market as the others? A) ice cream B) apple pie C) fruit salad D) chocolate chip cookies E) pretzels

89)

Which of the following is the worst example of a generic market? A) the information storage market B) the recreation market C) the designer jeans market D) the home improvement market E) the entertainment market

90)

What is the main difference between a generic market and a product-market?

A) A generic-market involves a less similar set of needs than does a product-market. B) A product-market is usually larger than a generic market. C) Product-markets usually don't involve competition, but generic markets do. D) Sellers in a generic market are more concerned with prices than sellers in a productmarket. E) There is no difference between the two.

91)

One basic difference between a generic market and a product-market is seen in

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A) whether or not sellers in the market rely on e-commerce. B) how similar the competing sellers' products are. C) whether customer needs are similar or different. D) whether the market includes only buyers—or both buyers and sellers. E) There is no difference—the terms mean the same thing.

92) A ______ is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. A) generic market B) standard market C) target market D) global market E) product-market

93)

Which if the following describes a product-market most accurately?

A) Exchanges are based on barter rather than money. B) One seller has a patent for a superior product and other firms try to imitate the leader the best they can. C) All the customers want the same product but will consider a substitute if their preferred brand is not available. D) Competing sellers offer physically or conceptually similar products. E) No intermediaries operate in the market.

94)

A product-market is one in which

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A) products from different industries compete for customers by trying to satisfy the same basic need. B) price is the determining factor in deciding which brand to buy. C) all the customers want the exact same product but will consider a substitute if their preferred brand is not available. D) one seller has a monopoly and there is no competition. E) None of the answers is correct.

95)

A product-market is one in which

A) demand is inelastic. B) products that are close substitutes for each other compete for customers by trying to satisfy very similar needs. C) breakthrough opportunities are no longer possible. D) one seller has a patent for a superior product and other competitors try to imitate the leader. E) All of the answers are correct.

96)

A product-market is a market in which A) all sellers offer exactly the same product. B) one firm has achieved a competitive advantage. C) all sellers offer products that are unique and innovative. D) sellers offer very close substitute ways of satisfying potential customers' needs. E) sellers offer substitute products that are quite different, physically or conceptually.

97)

Which of the following is not true of a product-market? A) Competing suppliers offer close substitutes to satisfy needs. B) Customers in a product-market have very similar needs. C) Very different types of products may compete for consumer dollars. D) Naming product-markets includes consideration of where the customers are.

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98)

Which of the following is the best example of a product-market? A) the smartphone market B) the young adult exercise market C) the software market D) the convenience market E) the status symbol market

99) When you are "in the market" for a new car and are considering different brands to purchase, what type of market is involved? A) product-market B) qualifying market C) generic market D) determining market

100)

A firm's "relevant market for finding opportunities" should

A) have no geographic boundaries. B) be bigger than the firm's present product-market—but not so big that the firm couldn't be an important competitor. C) be no larger than the firm's present product-market. D) usually be named in product-related terms. E) have no strong competitors.

101)

Which of the following is true of a firm's "relevant market for finding opportunities"?

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A) It should be limited to products the firm already produces. B) It should be bigger than the firm's present product-market—but not so big that the firm could not be an important competitor. C) It should have no geographic boundaries. D) It should be as large as possible. E) It should be no larger than the firm's present product-market.

102)

A complete product-market definition includes all the following descriptions except A) what is the product type. B) who are the firm's competitors. C) what customers' needs will be satisfied. D) which customer types will desire the product. E) in which geographic region will the firm compete for customers.

103)

A product-market definition should include A) product type. B) customer types. C) customer needs. D) geographic area. E) All of the answers are correct.

104)

Which of the following is not part of a product-market definition? A) information about consumer needs B) information about the final customer (or user) of the product C) information about which specific retailers will sell the product D) a description of the type of product

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105) A complete product-market definition includes a four-part description comprising all of the following except A) geographic area. B) customer needs. C) customer types. D) product type. E) marketing mix.

106)

Unlike a generic market description, a product-market definition includes A) customer needs. B) customer types. C) geographic area. D) product type. E) an organization chart.

107)

A generic market definition includes all of the following except A) customer needs. B) product type. C) geographic area. D) customer type.

108)

The customer type component of the product-market should include A) the buyer of the product. B) the type of good and service. C) the user of the product. D) the geographic area in which customers live. E) the guarantees offered.

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109)

Customer type A) should be defined by identifying the buyer instead of the user. B) should be assigned a nickname that describes all potential types of customers. C) must always consider intermediaries even if they are not final users. D) refers to the final consumer or user of a product type. E) None of the answers is correct.

110)

A generic market definition includes A) customer (user) needs, customer types, geographic area, and product type. B) customer (user) needs, customer types, and geographic area. C) customer (user) needs, customer types, product design, and product type. D) customer types, product design, and product type. E) customer types, product design, product type, and customer needs.

111)

A generic market description should not include A) customer needs. B) geographic area. C) product type. D) customer types.

112)

A generic market description should not include A) customer needs. B) geographic area. C) competitors' names. D) customer types.

113)

One helpful way to find new opportunities is to

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A) use generic market names. B) use product-type terms in the market description. C) stick to a product-market description. D) define markets in terms of current products. E) avoid market segmentation.

114) For a product-market, which of the following refers to where a firm competes, or plans to compete, for customers? A) product type B) user needs C) customer types D) geographic area E) warranty period

115)

Why are product-market boundaries important? A) They provide focus. B) They identify similar needs. C) They specify marketing mix variables. D) They define the strategy. E) They compare competitor offers.

116) ________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. A) Market segmentation B) Strategic planning C) Mass marketing D) Market positioning E) Implementation

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117)

The process of market segmentation involves A) identifying small target markets and expanding them into broad product-markets. B) identifying broad product-markets and segmenting then into narrower target markets. C) identifying target groups with the fewest potential customers. D) selecting a marketing mix to reach everyone. E) identifying target markets based on consumers' gender alone.

118)

Which of the following is not a valid criterion of a "good" market segment? A) homogeneous within B) heterogeneous between C) substantial D) remarkable E) operational

119) ________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. A) Market positioning B) Market segmentation C) Mass marketing D) Diversification E) Strategic planning

120) The process of naming broad product-markets and then segmenting them in order to select target markets and develop suitable marketing mixes is called

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A) market penetration. B) market segmentation. C) market development. D) market research. E) market pioneering.

121)

The first step in market segmentation should be A) deciding what new product you could develop. B) evaluating what segment(s) you currently serve. C) finding a demographic group likely to use your products. D) listing features of your current products. E) defining some broad product-markets where you may be able to operate profitably.

122)

Which is the first step in market segmentation? A) finding one or two demographic characteristics to divide up the whole mass market B) clustering people with similar needs into a market segment C) naming a broad product-market of interest to the firm D) evaluating market segments to determine if they are large enough E) None of the answers is correct.

123)

Which of the following statements about market segmentation is not true? A) It starts by segmenting broad product-markets. B) It involves naming broad product-markets. C) A market grid with submarkets can be a visual aid to market segmentation. D) It segments broad product-markets in order to develop suitable marketing mixes. E) Segmenting is an aggregating process.

124)

The disaggregating step in market segmentation involves

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A) brainstorming about very different solutions to various generic needs. B) looking for similarities in needs. C) selecting target markets. D) developing suitable marketing mixes. E) selecting a target marketing approach.

125) The marketing management team for Dada Motors brainstormed a variety of solutions to the problem of how to transport people in the world. This process came during the ________ step in the market segmentation process. A) disaggregating B) market definition C) segmenting D) aggregating E) approach selection

126)

Which of the following is the most accurate characterization of segmenting? A) It is a disaggregating or "breaking down" process. B) It assumes that each person should be treated as a separate target market. C) It assumes that all customers can be clustered into profitable market segments. D) It is an aggregating process. E) It uses scientific rules to decide how many submarkets exist.

127)

Segmenting is best viewed as a(n) ________ process. A) assorting B) mechanical, nonjudgmental C) "clustering" or aggregating D) "breaking apart" or disaggregating E) combining

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128) What is the main difference between naming broad product-markets and market segmentation? A) Naming is a computerized process, while segmentation requires more thought. B) Naming is concerned with customers, while segmentation is concerned with product features. C) Naming involves breaking down markets, while segmentation involves aggregating customers with similar needs. D) Naming involves looking for similarities, while segmentation involves looking for differences. E) Naming identifies popular terms associated with the product, while segmentation identifies a market.

129)

The segmenting step of the segmentation process involves A) brainstorming possible marketing mixes. B) fitting potential customers neatly into market segments. C) disaggregating all possible needs. D) selecting a target marketing approach. E) looking for similarities in needs.

130) Which of the following is not likely to be a part of the segmenting step in market segmentation? A) looking for similarities rather than basic differences in needs B) naming a broad product-market of interest to the firm C) clustering people with similar needs into a "market segment" D) determining an appropriate number of segments E) aggregating individual customers into market segments

131) A ________ is a relatively homogeneous group of customers who will respond to a marketing mix in a similar way.

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A) market segment B) market grid C) consumer network D) market network E) generic market

132)

One visual aid used in market segmentation is called the A) marketing grid. B) target market. C) market boundary. D) homogenous market. E) heterogeneous market.

133)

Market segmentation A) means the same thing as marketing strategy planning. B) assumes that most submarkets can be satisfied by the same marketing mix. C) is the same thing as positioning. D) tries to identify homogeneous submarkets within a product-market. E) None of the answers is correct.

134) Given its interest in the broad product-market for "ready-to-eat, health-conscious snack foods," which of the following should the Good Health Foods Co. do first? A) develop a plan for getting support from intermediaries B) develop each of the Four Ps at the same time C) segment the product-market to try to identify homogeneous submarkets and select an attractive target market D) determine whether to compete on a price basis E) decide what low-fat product or products it will offer

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135)

"Good" market segments are those that are A) heterogeneous between. B) operational. C) substantial. D) homogeneous within. E) All of the answers are correct.

136)

"Good" market segments are those that are A) homogeneous between. B) heterogeneous within. C) operational and substantial. D) international in nature. E) substantial all the time.

137) Marketing managers want market segments to have each of the following characteristics except to be A) as similar as possible within segments. B) as different as possible between segments. C) as numerous as possible. D) useful for identifying marketing mix variables. E) large enough to be profitable.

138) Which of the following criteria should a marketing manager use when segmenting a broad product-market?

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A) The segments should be substantial (big enough to be profitable) and operational (useful for identifying customers and deciding on marketing mix variables). B) The people within a market segment should be as homogeneous as possible with respect to the segmenting dimensions and their likely response to marketing mix variables. C) The people in different market segments should be as heterogeneous as possible with respect to the segmenting dimensions and their likely response to marketing mix variables. D) All of the answers are correct.

139) Which of the following criteria should a marketing manager use when segmenting a broad product-market? A) The segments should be operational—i.e., only quantitative dimensions are useful. B) The people in different segments should be as heterogeneous as possible with respect to their likely response to marketing mix variables. C) The people within a market segment should be as heterogeneous as possible with respect to their likely response to marketing mix variables. D) The market segments should be substantial—i.e., big enough to minimize the firm's costs. E) The market should always be homogenous in nature.

140)

Saying that a good market segment should be "heterogeneous between" means that

A) the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. B) the customers in a market segment should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. C) the customers in different segments should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. D) the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. E) the segmenting dimensions should be useful for identifying different customers and deciding on marketing mix variables.

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141)

Saying that a good market segment should be "substantial" means that A) the company does not have to worry about substantial competition for a long time. B) people should have substantially different reactions to marketing mix variables. C) it should be large enough to be profitable. D) people in different market segments should be as different as possible. E) the product and its offerings are substantial in nature.

142) Use of which of the following segmenting dimensions is least likely to result in segments that will meet the criteria that product-market segments should be "operational"? A) geographic region B) personality C) family size D) age E) income level

143) A company plans to sell its products to a market segment consisting of "outgoing personalities." This will likely not be a good market segment, primarily because of which of the following criteria? A) homogeneous within B) heterogeneous between C) generic D) operational E) substantial

144)

A market-oriented strategy planner applies the ________ target market approach.

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A) combined B) multiple C) single D) Any of theanswers could be correct.

145)

Target marketers create marketing mixes for A) all customer needs. B) some generic market. C) multiple generic markets. D) one broad product-market. E) homogeneous product-market segments.

146) A target marketer who uses a single marketing mix strategy to appeal to both office tablet computer users and home tablet computer users is applying the A) broad market approach. B) single target market approach. C) multiple target market approach. D) combined target market approach. E) generic market approach.

147) A target marketer who uses two different marketing mix strategies to make two separate appeals to office tablet computer users and home tablet computer users is applying the A) broad market approach. B) single target market approach. C) multiple target market approach. D) combined target market approach. E) generic market approach.

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148)

Target marketers who are "segmenters"

A) increase the size of their target markets by combining two or more segments. B) use one marketing mix to appeal to multiple submarkets, even though the submarkets have some distinct differences. C) believe that one marketing mix works well enough with multiple submarkets, even though the target groups have some distinct differences. D) use one single marketing mix to appeal to an individual market segment and do not attempt to combine or merge segments together. E) are called mass marketers.

149) Which of the following does not identify one of the target marketing approaches for developing market-oriented strategies in a broad product-market? A) multiple B) single C) exclusive D) combined

150) Gina wanted to start a decorating business. She identified several possible target markets, but decided to serve a market composed of recently married couples that owned their first home. Gina appears to be following the ________ approach. A) multiple target market B) single target market C) combined target market D) mass marketing E) niche market targeting

151) A food processing company considering snack-food opportunities identified three possible market segments and gave them "nicknames": the dieters, the health faddists, and the nutrition-conscious parents. It developed a marketing mix around a line of good-tasting, nutritious children's snacks. The firm is apparently

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A) relying on cluster analysis techniques. B) using a multiple target market approach. C) using a single target market approach. D) using a combined target market approach. E) ignoring the criteria that good market segments should be operational.

152) Electro Technologies, Inc. (ETI) has limited capital and wants to reduce the risk of competitors taking customers if it invests in a new product-market. Its broad product-market consists of three reasonably distinct submarkets. To identify a target market, ETI should probably focus on using the ________ approach. A) combined target market B) mass marketing C) multiple target market D) single target market E) None of these is a good choice for Electro Technologies, Inc.

153) A large firm with ample resources wants to minimize the risk of "inviting" competitors to "chip away" at its target market(s). It has segmented its broad product-market and identified several homogeneous submarkets—each of which is large enough to offer attractive sales and profit potential. Which of the following approaches should the firm use? A) multiple target market approach B) mass marketing approach C) combined target market approach D) single target market approach E) niche market targeting approach

154) Jazzy Tile Co. segmented its broad product-market and decided to aim at two different segments, offering each segment a different marketing mix. Jazzy Tile Co. is following the ________ approach.

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A) mass marketing B) multiple target market C) combined target market D) single target market E) None of the answers is correct.

155) When Procter & Gamble offers both Pantene and Vidal Sassoon shampoos to its customers, which target market approach is Procter & Gamble using? A) multiple B) single C) combined D) generic E) clustering

156) When a firm develops a marketing mix for teenage boys that is different from its marketing mix for teenage girls, which target market approach is it using? A) single B) generic C) combined D) clustering E) multiple

157) Watson's Bakery found five different market segments among customers for its bakery goods. When developing a market-oriented strategy, the marketing manager used a ________ approach, putting two target markets together and developing a single marketing mix that would meet the needs of the new larger segment.

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A) particular target market B) multiple target market C) combined target market D) product-market target market E) specialty targeting

158) Merging two or more submarkets into one larger target market as a basis for one strategy is known as the ________ target market approach. A) particular B) multiple C) combined D) compound E) blended

159)

Combiners A) look at various submarkets for differences rather than similarities. B) try to increase the size of their target markets by merging two or more segments. C) aim at one or more market segments and offer each different marketing mixes. D) have decided to sacrifice profits for sales volume. E) aim at one submarket with a specialized marketing mix.

160)

Combiners (as opposed to segmenters)

A) try to satisfy target customers "very well" rather than "pretty well." B) try to develop a different marketing mix for each submarket. C) want to avoid "inviting" competition. D) are not target marketers—they aim at everybody. E) try to increase the size of their target markets by combining two or more market segments.

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161)

Which of the following statements about the combined target market approach is true?

A) Combiners feel that two or more segments are similar enough that—together—they can be treated as one large target market. B) Combiners try to extend their basic offering to satisfy customers from multiple segments with a single marketing mix. C) Combiners may fall victim to an innovative segmenter that offers a more attractive marketing mix to a segment of the combined target market. D) All of these statements about the combined target market approach are true.

162)

The combined target market approach

A) tends to focus on small, homogeneous market segments. B) aims at several target markets and offers each target market a unique marketing mix. C) tries to improve the general appeal of a firm's basic marketing mix rather than tailor it to meet the strongly felt needs of some people. D) works well only when each submarket of a product-market has a different demand curve. E) None of the answers is correct.

163)

A combined target market approach A) sacrifices possible economies of scale. B) requires more investment than a multiple target market approach. C) may not satisfy customers as well as the multiple target market approach. D) trades off sales volume to provide a small market superior value. E) aims at two or more segments with multiple marketing mixes.

164) Quality Ceramic, Inc. (QCI) defined five submarkets within its broad product-market. To obtain some economies of scale, QCI decided not to offer each of the submarkets a different marketing mix. Instead, it selected two submarkets whose needs are fairly similar, and is counting on promotion and minor product differences to make its one basic marketing mix appeal to both submarkets. QCI is using the Version 1

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A) combined target market approach. B) single target market approach. C) multiple target market approach. D) mass marketing approach. E) None of the answers is correct.

165) Having segmented its broad product-market, Blue Chip, Inc. feels that three segments are similar enough that together they can be treated as one large target market and offered the same marketing mix. Blue Chip, Inc. is following the ________ approach. A) mass marketing B) multiple target market C) combined target market D) single target market E) None of the answers is correct.

166) In segmenting the smart watch product-market, smart watch maker Super Watch found one segment that valued sending text messages from their watch and another that wanted their watch to record their daily activity. The firm developed a single watch for both market segments and used the same marketing mix in targeting both segments. For this product-market, Super Watch operated as a A) combiner. B) value operator. C) market leader. D) segmenter. E) multisegmenter.

167) ________ aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.

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A) Combiners B) Segmenters C) Segment aggregators D) Segment combiners E) Multipliers

168) A producer of electrical components combined electrical supply wholesalers and manufacturers of electrical equipment into the same market segment—one of several segments it was targeting. Soon it lost the manufacturers' business to a competitor. It seems that the firm failed to consider the risk of A) too much aggregating. B) insulting the manufacturers by putting them in the same market segment with the wholesalers. C) picking market segments based on qualifying dimensions. D) selecting market segments that were not substantial. E) using too many segmenting dimensions.

169) Which of the following is a possible danger when using a combining approach to target marketing? A) Competitors may do a better job appealing to submarkets. B) Coordinating the different marketing mixes for the different segments is difficult. C) The target market may become larger over time. D) Economies of scale may develop. E) Effective product marketing mix variables are not achieved.

170)

"Too much" aggregating in market segmenting

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A) ignores the criterion that product-market segments should be substantial. B) leaves the firm vulnerable to competitors. C) is usually not a very serious error because it results in economies of scale. D) usually makes segments more homogeneous. E) always tends to make the segments heterogeneous.

171)

How is "segmenting" different from "combining"?

A) Combiners usually have more sales potential than segmenters. B) A combiner tries to meet the demand in several segments. C) Segmenters try to develop a marketing mix that will have general appeal for several market segments to obtain economies of scale. D) A segmenter assumes that a broad product-market consists of a fairly homogeneous group of customers. E) Both segmenters and combiners try to satisfy some people very well rather than a lot of people fairly well.

172)

Which of the following statements about segmenting is true?

A) Segmenting is usually a riskier approach than combining. B) Segmenters try to satisfy consumers "very well" instead of "pretty well." C) Segmenting limits a firm to smaller sales potential and lower profits. D) A segmenter with limited resources may have to use the multiple target market approach instead of the single target market approach. E) All of the answers are correct.

173)

Segmenting, in contrast to combining,

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A) tends to focus more on customer similarities than on differences. B) tries to identify homogeneous submarkets and develop different marketing mixes for each submarket. C) usually means settling for a smaller sales potential. D) relies more on promotion appeals and minor product differences to create general customer appeal among several submarkets. E) All of the answers are correct.

174)

Segmenters, in contrast to combiners, A) try to aim at homogeneous submarkets of larger product-markets. B) see one aggregate demand curve for a generic market. C) are accepting the likelihood of lower sales. D) assume that everyone in a broad product-market has the same needs. E) develop general-purpose marketing mixes that appeal to several submarkets.

175)

Which of the following statements about market-oriented strategy planning is true? A) Segmenters aim at more heterogeneous markets than combiners. B) Both "segmenters" and "combiners" can be target marketers. C) All segmenters follow the single target market approach. D) Combiners follow a mass marketing strategy. E) Most combiners follow a substantial market approach.

176)

How do combiners make compromises in developing the marketing mix?

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A) Combiners identify two or more segments and treat each as a separate market with differences. B) Combiners pick one of the many homogenous market segments as the firm's target market. C) Combiners look for similarities in the submarkets and try to extend or modify the basic offering. D) Combiners include demographic dimensions such as age, sex, income, location, and family size. E) Combiners look for operational markets that are homogenous within and heterogeneous in between.

177)

Which of the following tasks should a segmenter be engaged in? A) assuming a whole market with a similar set of customers B) fine-tuning the marketing mix for each target market C) merging various submarkets together to satisfy them more easily D) selecting a marketing mix that works fairly well with each segment E) providing a unique brand name that does not become common

178)

Which of the following offers a firm the greatest potential for profit? A) mass marketing B) the multiple target market approach C) the combined target market approach D) the single target market approach E) These can all offer profit potential equally—depending on the situation.

179)

When segmenting broad product-markets, cost considerations tend to

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A) encourage managers to disregard the criterion that a product-market segment should be substantial. B) lead to more aggregating. C) be unimportant as long as the segmenting dimensions are operational. D) lead to a large number of small, but very homogeneous, product-market segments. E) dissuade segmenters from exploring other variables in the market.

180) When segmenting markets, cost considerations typically encourage a company to ________ and ________. A) disaggregate; combine segments B) aggregate; use different segments C) disaggregate; use different segments D) aggregate; combine segments E) disaggregate; use one segment

181)

When deciding how far to carry the segmenting process,

A) profit should be the balancing point—determining how unique of a marketing mix the firm can offer to some target market. B) it is easier to develop effective marketing mixes for larger, more heterogeneous segments. C) cost considerations encourage less aggregating. D) the threat of potential competitors suggests more aggregating. E) segmenters should consider the demographic attributes of the target customers.

182) Which of the following statements about approaches to market-oriented strategy planning is not true?

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A) It is usually safer to be a combiner. B) Cost considerations encourage aggregating. C) Demand considerations encourage less aggregating. D) The approach a firm uses depends in part on the firm's resources. E) Generally, it is better to try and satisfy some customers very well instead of many just fairly well.

183)

Segmenting dimensions A) are useful for segmenting consumer markets, but not business markets. B) help guide marketing mix planning. C) are always demographic or geographic. D) fall into two general categories: qualifying and purchasing. E) may be called qualifying or non-qualifying.

184)

Marketers segment broad markets into smaller target segments based on a variety of A) marketing grids. B) positioning maps. C) dimensions. D) qualifiers. E) data.

185)

Target market dimensions should influence all the following strategy decisions except A) what product features and assortments will be offered. B) what prices should be set. C) where products will be available for purchase. D) which types of advertising and promotion will be utilized. E) which industry a firm should choose.

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186)

What is a qualifying dimension for people who consider purchasing a pill for pain relief? A) the region of the country in which they live B) income level C) physiological need D) ethnicity E) occupation

187) Which of the following would be a determining dimension for a customer who needs to buy a marketing textbook for school? A) avid reader B) status as college student C) income level D) traveler E) age

188)

Ideally, product-markets should be described in terms of

A) behavioral needs, attitudes, and how present and potential goods or services fit into customers' consumption patterns. B) the urgency to get needs satisfied and desire and willingness to compare and shop. C) geographic location and other demographic characteristics of potential customers. D) All of the answers are correct.

189) If geographic location and other demographic characteristics are used as target market dimensions, which potential strategy decision area is mostly likely to be affected?

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A) promotion—what potential customers need B) target markets—size C) price—what customers might be willing to pay D) product line assortment E) product—which features to include

190) Strategy decisions pertaining to product features, packaging, product line assortment, and branding will be most affected by which target market dimension? A) geographic location B) urgency to get need satisfied C) behavioral needs and attitudes of consumers D) demographic characteristics of potential customers E) geodemographic characteristics of potential customers

191) Which of the following would best aid a marketing manager to better identify segmenting dimensions? A) answering why, what, and who questions about customers B) understanding the when and how of customer purchases C) disregarding all behavioral dimensions of the consumer market D) focusing only on one dimension of a broad product-market E) homing in on customers' determining dimensions

192)

With regard to segmenting dimensions, which of the following statements is accurate?

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A) Why, what, and who questions can help a marketing manager identify segmenting dimensions. B) Segmenting dimensions are ancillary to marketing mix planning. C) Only one segmenting dimension should be considered at a time. D) Segmenting dimensions remain constant across submarkets within broad productmarkets. E) All of the answers are correct.

193)

The most useful dimensions for segmenting markets are A) geographic and demographic dimensions. B) brand familiarity and consumption patterns. C) social class. D) benefits sought. E) The most useful depends on what product-market one is segmenting.

194)

Behavioral (as opposed to demographic) segmenting dimensions include A) family life cycle. B) geographic location. C) education. D) social class. E) purchase relationship.

195)

Behavioral (rather than demographic) segmenting dimensions include A) type of problem-solving. B) kind of shopping. C) brand familiarity. D) benefits sought. E) All of the answers are correct.

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196)

Which of the following is a behavioral segmenting dimension? A) needs B) region of the world or country C) income D) education E) ethnicity

197) Sanders Beverages, Inc. is targeting non-juice drinkers with a new line of healthy fruit juices. Which segmenting dimension is most likely being used by Sanders Beverages? A) geographic B) behavioral C) geodemographic D) demographic E) urgency to get need satisfied

198)

Which of the following possible segmenting dimensions is a demographic dimension? A) benefits sought B) social class C) purchase relationship D) brand familiarity E) rate of use

199)

Which of the following is a demographic segmenting dimension?

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A) rate of use B) brand familiarity C) type of problem solving D) benefits sought E) family life cycle

200)

Which of the following is a consumer market demographic dimension? A) income distribution B) stage in family life cycle C) family size D) ethnic group E) All of the answers are correct.

201)

Which of the following is a consumer market demographic dimension? A) gender B) age C) occupation D) education E) All of the answers are correct.

202) Tom and Sally Jones are preparing to purchase a new car. Tom currently has a Toyota Camry and Sally has a Honda Accord. They now have two children under age 5, so they plan to trade in Sally's car to purchase a minivan. Sally and Tom decide on a Honda Odyssey because Sally is familiar with Hondas and thinks they are very reliable. In this purchase situation, Tom and Sally's family life cycle stage is a ________ segmenting dimension, and the benefit Sally seeks (reliability) is a ________ segmenting dimension.

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A) geographic; demographic B) demographic; behavioral C) geographic; behavioral D) demographic; geographic E) behavioral; demographic

203) Coorgs Coffee, Inc. has substantial market share in South America but seeks growth. Its managers want to expand into North America and target cities with populations of 50,000– 99,999. Which segmenting dimension is most likely being used by Coorgs Coffee? A) geographic B) behavioral C) urgency to get need satisfied D) demographic E) attitudes of consumers

204) When Hallmark stores offer a product line that includes everything you need to have a Spiderman-themed birthday party, what is the primary segmenting dimension that Hallmark is using? A) gender B) family size C) benefits sought D) rate of use E) size of city

205) When Hallmark designs its website so that a teenage girl can send a theme card to her boyfriend's cell phone, what is the primary segmenting dimension that Hallmark is using?

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A) rate of use B) age C) family size D) income E) education

206) When major airlines target business travelers because they travel often and typically pay at least three times the price for a ticket as leisure travelers, these airlines are segmenting the market primarily on A) income. B) education. C) rate of use. D) ethnicity. E) age.

207) Manufacturer, service provider, government agency, wholesaler, etc., are designations used to segment business and organizational markets according to A) kind of relationship. B) type of customer. C) demographics. D) product use. E) buying situation.

208) When a company segments its business customers on the basis of whether or not they require contract bids over the Internet, what segmenting dimension is the company using?

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A) kind of relationship B) demographics C) type of customer D) how customer will use product E) purchasing methods

209) ________ segmenting dimensions help decide whether a person might be a potential customer, but not which specific products or brands that person might buy. A) Determining B) Qualifying C) Operational D) Customer-related E) Situation-related

210) Deciding whether a group of customers should be included in a target market is the purpose of ________ dimensions. A) behavioral B) demographic C) determining D) qualifying E) geographic

211)

Qualifying dimensions, in contrast with determining dimensions,

A) are the only kind of dimensions useful for marketing strategy planning. B) indicate whether a person might be a potential customer but do not show which product or brand that person might buy. C) are the customer-related dimensions in a product-market. D) affect the product or brand a person is likely to purchase. E) None of the answers is correct.

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212)

Qualifying dimensions A) need to be very specific. B) help identify the "core benefits." C) work in isolation in marketing strategy planning. D) affect the customer's purchase of a particular product. E) affect the customer's brand choice.

213) ________ segmenting dimensions are those that actually affect a person's purchase of a specific product type or brand in a product-market. A) Operational B) Qualifying C) Customer-related D) Determining E) Situation-related

214) ________ dimensions actually affect the customer's purchase of a specific product or brand in a product-market. A) Behavioral B) Demographic C) Determining D) Qualifying E) Geographic

215)

Compared to qualifying dimensions, determining dimensions

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A) are more likely to be related to whether a customer will make a purchase in the product-market at all. B) help identify the "core benefits" offered to everyone in the product-market. C) are usually much more specific. D) are relevant to including a customer type. E) None of the answers is correct.

216) Which of the following is most likely to be a determining dimension with respect to purchase of a particular brand of coffee? A) taste B) income C) age D) sex E) None of the answers is likely to be a determining dimension in this situation.

217) James is a prospective car buyer. In his context, which of the following statements would reflect a determining dimension? A) He must have enough money, or credit, to buy a car and insure it. B) He needs to have a valid driver's license. C) He has kids who have to be carpooled. D) He needs a safe car. E) His office is 2.5 miles from home.

218)

Product-type determining dimensions A) are generally relevant to purchasing behavior. B) affect the customer's purchase of a specific product brand. C) affect the customer's choice of a specific kind of product. D) are relevant to including a customer type in the product-market. E) are less specific than qualifying dimensions.

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219) Marketers at General Mills found that many people try to check e-mail or drive a car while eating breakfast or lunch. For many of these target customers the real ________ dimension in picking a snack is whether it can be eaten "one-handed." A) potential B) qualifying C) determining D) geodemographic E) time

220)

What are buyer personas? A) fictional depictions of customers in each target segment B) artificial intelligence that behaves like potential customers C) the façades used by consumers use when pretending interest in a product D) actual individuals in each segment who buy a firm’s products E) all of a firm’s target customers

221)

Planning marketing strategies for international markets

A) is usually most effective when the marketing manager uses the same marketing strategy for all markets. B) is often easier than planning domestic strategies because economic, political, and other uncontrollable variables are less important. C) is "easy" because each country should be treated as one target market. D) None of the answers is correct.

222)

Segmenting international markets, as contrasted with domestic markets,

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A) is more complicated because qualifying dimensions are not helpful. B) may be more difficult because critical data may not be available or dependable. C) usually involves less risk because more potential target markets are available. D) usually involves fewer segmenting dimensions. E) None of the answers is correct.

223) Segmenting in international markets can be more challenging than segmenting in domestic markets because A) there is less diversity in the key segmenting dimensions. B) there is often more data available about key segmenting dimensions. C) critical data is often less available and less dependable. D) profit is the balancing point that determines the marketing mix; and the markets are homogenous between and heterogeneous within.

224)

Segmenting international markets can be more difficult because

A) the concepts and approaches for segmenting domestic markets simply do not apply. B) there are more dimensions and many unfamiliar variables. C) there are fewer useful dimensions. D) a manager must rely entirely on his or her own judgments about people in other countries. E) the quantity and quality of available market data are usually greater.

225)

The first step in segmenting international markets is to

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A) develop a marketing mix. B) treat all the countries in the "foreign market" as one segment. C) segment by country or region—looking at demographic, cultural, and other characteristics. D) list the suppliers who serve the market. E) consider the number, size, kind, and location of business and organizational customers.

226)

When evaluating international markets, the marketing manager should

A) focus primarily on consumer markets because foreign business markets are in general too risky. B) not worry very much about segmenting because marketing concepts are not very well developed in most other economies. C) consider the whole "foreign market" as a segment. D) use broad criteria, such as geographic region or stage of economic development, to define submarkets before further segmenting. E) treat each foreign market as a separate segment.

227) When moving to international markets, some firms insist that local operations and decisions should be handled by natives because A) their operations and decision making can be centralized. B) international markets are less particular about segmenting dimensions. C) the needs and preferences of target customers are the same in all submarkets. D) their local responsiveness can be reduced. E) the natives have a feel for the market.

228) true?

In the context of segmenting international markets, which of the following statements is

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A) Segmenting based on demographic, cultural, and other characteristics helps find regional or national submarkets that are similar. B) Qualifying and determining dimensions of segmenting work independent of each other in marketing strategy planning. C) It is not possible for each different submarket within a broad product-market to be motivated by a different set of segmenting dimensions. D) Segmenting dimensions become less specific when the target market segment seeks to purchase a particular brand of a product. E) Critical data is easily available and highly dependable as firms move into international markets.

229)

Clustering techniques applied to segmenting markets

A) usually require computers to group people based on data from market research. B) remove the need for managerial judgment. C) eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers. D) affect the customer's purchase of specific product or brand. E) include the specialty markets that the segmenters are working with.

230)

The clustering techniques that can be used in segmenting A) eliminate the need for management intuition and judgment. B) group people together into heterogeneous product-market segments. C) try to find similar patterns within sets of data. D) allow managers to ignore segmenting dimensions. E) None of the answers is correct.

231)

Clustering techniques

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A) help sellers fine-tune the marketing effort with information from a detailed customer database. B) establish how customers think about proposed or present brands in a market. C) try to find similar patterns within sets of data. D) group customers into heterogeneous segments. E) use intuition and judgment to do what was previously done by computers.

232) A detailed customer database, containing past purchases and other segmenting information, is used to focus marketing efforts on individual customers in a A) clustering management system. B) product positioning matrix. C) product differentiation matrix. D) diversification management system. E) customer relationship management system.

233) Alpine Auto Repair keeps a record of customer oil changes and sends a reminder postcard to its customers when it's time for the next oil change. This is an example of a ________ system. A) customer relationship management B) qualifying dimensions C) positioning matrix D) geographic targeting E) clustering

234) A variant of the clustering approach relies on ________, where the seller adjusts the marketing effort with information from a database with customer information.

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A) customer relationship management B) corporate governance C) social audit D) cluster sampling E) data warehouse management

235) Every new customer at Five Elements Spa is asked to register his or her personal details, which includes the customer's age, purpose of visit, and contact information. With this information, the company regularly keeps in touch with its customers, reminding them of their next appointments, new spa offers, and any other promotions. The database is used to predict a customer's next visit to the spa based on his or her previous visits. It also helps the company design service packages to suit the customer's individual needs. In this scenario, Five Elements Spa is using A) corporate governance. B) social audit. C) customer relationship management. D) supply chain management. E) service design prototyping.

236) When a customer orders a book at Amazon.com, the online retailer recommends related books that have been purchased by other customers who bought that book. Amazon is using a(n) A) aggregating approach. B) CRM database. C) clustering approach. D) disaggregating approach. E) generic market.

237)

Customer relationship management (CRM) helps consumer marketers

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A) limit their personalization efforts. B) treat all submarkets as a single huge market. C) reduce their focus on local customers. D) deliver the same marketing mix to all customer segments. E) treat customers individually as segments of one.

238)

Customer relationship management (CRM) data is generally used by firms to A) reduce their focus on local customers. B) treat all submarkets as a single huge market. C) develop a prediction score for each customer. D) limit the need for customization. E) deliver the same marketing mix to all customer segments.

239)

The ultimate in personalization occurs when A) merging multiple submarkets. B) targeting a segment of one. C) identifying generic markets. D) creating opportunities in niche markets. E) offering extended warranties.

240)

Customer relationship management (CRM) helps consumer marketers A) limit their personalization efforts. B) treat all submarkets as a single huge market. C) reduce their focus on local customers. D) deliver a different marketing mix to different customer segments. E) ignore the differences in the needs and preferences of target customers.

241)

Business-to-business markets, with very large customers, have typically

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A) treated customers individually as segments of one. B) mass marketed the same products to all customer segments. C) delivered the same marketing mix to all customer segments. D) reduced their personalization efforts to the lowest levels possible. E) avoided applying the principles behind customer relationship management.

242) Which of the following best describes the use of real-time data to continuously update a customer’s placement in a market segment? A) dynamic behavioral segmentation B) clustering technique C) positioning D) machine learning E) competitor analysis

243) Each time a customer visits the Jayco’s website, the site’s CRM records their clicks and analyzes their behavior. Jayco uses this real-time data to send a “pop-up” message based on the customer’s placement in a market segment. This is best described as A) dynamic behavioral segmentation. B) a single target market approach. C) generic marketing. D) qualifying dimensions. E) a competitor analysis.

244) The benefits of focusing on a specific target market (with the aid of marketing segmentation) do not include which of the following?

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A) Marketers can fine-tune their marketing mixes, thus providing superior value to customers. B) Marketers can build a competitive advantage by effectively meeting customers' needs. C) Customers will view the firm's offerings as uniquely suited to their preferences and needs. D) Managers can identify the best technology for improving production methods. E) Managers will gain a clear, shared vision for how to proceed with marketing mix decisions.

245) How customers think about the various brands in a market can be graphically represented and tracked through A) segmenting. B) positioning. C) targeting. D) researching. E) clustering.

246)

Positioning maps are based on A) the actual objective characteristics of products. B) the opinions of the marketing managers. C) the potential places where a product may be sold and purchased. D) the prices of competing products. E) customers' perceptions of products.

247)

A marketer will likely need to reposition a product if

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A) very few competitors offer similar products. B) customers see the product as distinct from other products in the market. C) marketers see the product as distinct from other products in the market. D) customers see the product as very similar to other products in the market. E) marketers see the product as very similar to other products in the market.

248)

Differentiating the marketing mix is important for which of the following reasons?

A) It can help the firm build a competitive advantage with a group of target customers. B) It can help target customers to view the firm's position in the market as uniquely suited to their preferences and needs. C) It can clarify the position the firm wants to achieve with customers. D) It can contribute to better blending of marketing mix decisions to achieve desired objectives. E) All of the answers are correct.

249) When a company becomes aware that a new product is being test marketed by one of its competitors in St. Louis, it decides to create a similar product and rush it to market. This company can be described as a(n) A) copycat. B) innovator. C) me-too imitator. D) first mover. E) early adopter.

250) ________ is a marketing management aid that refers to how customers think about proposed and/or present brands in a market.

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A) Brand familiarity B) Positioning C) Market scanning D) Market segmentation E) Customer relationship management (CRM)

251)

________ refers to how customers think about proposed or present brands in a market. A) Differentiating B) CRM C) Clustering D) Positioning E) Dimensioning

252)

Positioning is a marketing management aid that refers to

A) a product's ability to provide both immediate satisfaction and social responsibility. B) how customers think about proposed and/or present brands in a market. C) a firm's ability to distribute products through intermediaries who are in the right position to reach target customers. D) how a firm approaches customer relationship management. E) All of the answers are correct.

253)

Positioning is a marketing management aid that refers to A) how closely existing products match customers' ideal preferences. B) how customers think about proposed and/or present brands in a market. C) whether some products are viewed as very similar. D) All of the answers are correct.

254)

When considering positioning, a marketing manager should

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A) avoid targeting strategies. B) focus on specific product features of all generic competitors. C) rely on how customers think about proposed and/or existing brands in a market. D) plan physical product changes rather than image changes. E) None of the answers is correct.

255)

Positioning A) applies to new products but not existing products. B) helps strategy planners see how customers view competitors' offerings. C) is concerned with obtaining the best shelf space in retail outlets. D) is useful for combining but not for segmenting. E) eliminates the need for judgment in strategy planning.

256) Ford Motor Co. asks members of its target market to rate its cars and those of General Motors and Chrysler on a 7-point scale in terms of two dimensions (comfortable seats and engine power) so that it can establish a quadrant-grid map of these ratings. What type of analysis is Ford conducting? A) positioning B) combining C) qualifying D) dimensional E) insight management

257)

Positioning might lead a marketing manager to

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A) introduce a new product for a segment with unsatisfied needs. B) change a product's promotion to make its image fit more closely with the needs and attitudes of the target market. C) shift attention to another market segment where competition is weaker. D) physically change his or her product to compete more effectively with a competitor aiming at the same target market. E) All of the answers are correct.

258)

Which of the following statements about positioning is not true?

A) Positioning techniques position products on a graph based on price level and quantity demanded. B) Positioning requires a firm to collect data about consumer perceptions of products. C) Positioning techniques are sometimes called "perceptual mapping" techniques. D) Positioning techniques typically rely on a "product space" diagram to show the relationship among various products. E) Positionining may use information about consumers' "ideal" products, so that the preferences of different segments of consumers can be considered.

259)

Which of the following statements about positioning is FALSE?

A) Positioning often makes use of techniques such as perceptual mapping. B) Positioning refers to how customers think about proposed or present brands in a market. C) Positioning issues are especially important when competitors in a market are highly dissimilar. D) Positioning helps marketing managers know how customers view the firm's offering. E) Managers make graphs for positioning decisions by asking consumers to make judgments about different brands.

260)

Which of the following statements about positioning is true?

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A) Positioning refers to how managers think about proposed or present brands in a market. B) Positioning issues are not important when competitors in a market appear to be very similar. C) Usually, the positions of products are related to six or seven product features that are important to product managers. D) None of the answers is correct.

261)

Positioning analysis A) helps managers understand the actual characteristics of their products. B) is not a product-oriented approach. C) is a visual aid to understanding a product-market. D) shows that managers and customers usually view present brands similarly. E) always leads a firm to segmenting and not combining.

262) A company provides its advertising agency with a statement about a new product to use in designing an advertising campaign, and this statement includes a description of the target market, the product type, the primary benefits of using the product, and how this product is different from, and better than, competitive products. What type of statement is this? A) qualifying B) positioning C) determining D) clustering E) combining

263) When PepsiCo asked its advertising agency to develop an advertising program for its Mountain Dew soft drink, it gave the agency a statement describing the age and fun-loving spirit of its target market and the one-of-a-kind citrus flavor of the new product. What type of statement was this?

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A) clustering B) determining C) combining D) positioning E) qualifying

264)

Why is it not always possible for marketing managers to keep their offerings unique? A) The market segment is quite broad. B) There are too many competitors. C) The customers do not care. D) The market is in "segments of one." E) The customer is a copycat.

265)

When is repositioning needed? A) when the direction of the marketing strategy is not clear or focused B) when customers are not viewing the brand the desired way C) when each market segment has its own preferences D) when ethical issues arise in selecting segmenting dimensions E) when markets become homogenous between

266) "For ( our target market), ( our brand) of all ( product type) delivers ( key benefit or point of differentiation) because ( our brand) is ( reasons to believe)." This is A) a positioning statement. B) a marketing plan. C) a competitor analysis. D) a mission statement. E) target marketing.

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267)

What purpose does a positioning statement serve? A) to provide focus for a marketing mix B) to find patterns within sets of data C) to identify segmenting dimensions D) to set out a firm's basis purpose for being E) to compare marketing strategies among competitors

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Answer Key Test name: Chap 04_17e 1) FALSE A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 2) FALSE A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services. 3) FALSE A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 4) TRUE A generic market description looks at markets broadly and from a customer's viewpoint. 5) FALSE A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 6) FALSE A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 7) TRUE Version 1

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The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 8) TRUE Product type describes the goods and/or services that customers want. Sometimes the product type is strictly a physical good or strictly a service. 9) TRUE A product-market definition includes a product type that describes the goods and/or services that customers want, whereas a generic market definition doesn't include any product-type terms. 10) FALSE A generic market description doesn't include any product-type terms. It consists of only three parts of the product-market definition—without the product type. 11) TRUE Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 12) TRUE Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 13) FALSE Market segmentation deals with segmenting broad product-markets in order to select target markets and develop suitable marketing mixes. 14) FALSE Version 1

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Marketing-oriented managers think of segmenting as an aggregating process. 15) TRUE Marketing-oriented managers think of segmenting as an aggregating process—clustering people with similar needs into a "market segment." 16) TRUE Segmenters start with the idea that each person is one of a kind but that it may be possible to aggregate some similar people into a productmarket. Segmenters see each of these one-of-a-kind people as having a unique set of dimensions. 17) TRUE The difficulty with segmenting is that some potential customers just don't fit neatly into market segments. Forcing them into one of the groups would make these segments more heterogeneous and harder to please. 18) FALSE Under broad product-market, a segmenter may aggregate submarkets into arbitrary numbers that are relatively homogeneous. 19) TRUE The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 20) TRUE The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 21) TRUE Version 1

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"Good" market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. 22) FALSE "Good" market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial, and operational. 23) FALSE "Good" market segments meet the following criteria: (1) homogenous within; (2) heterogenous between; (3) substantial; and (4) operational. "Substantial" means that the segment is big enough to be profitable. 24) TRUE A substantial market segment is one that should be big enough to be profitable. 25) FALSE A substantial market segment is one that should be big enough to be profitable. 26) TRUE Operational segment dimensions should be useful for identifying customers and deciding on marketing mix variables like Place and Promotion. 27) FALSE A product-market segment is "substantial" if it is big enough to be profitable to the firm. 28) FALSE Moodiness might be related in some way to purchases, but it would not be a useful dimension for segmenting. Version 1

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29) FALSE The multiple target market approach deals with segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix. 30) FALSE The combined target market approach involves combining two or more submarkets into one larger target market as a basis for one strategy. 31) TRUE Aggregating all potential customers into a single product-market segment is dangerous because the more aggregating, the less homogeneous the customers in the single segment. Generally, it is safer for a firm to try to provide a smaller segment that is very homogeneous with superior value, and thus satisfy it better. 32) TRUE A segmenter wants to aggregate individual customers into some workable number of homogeneous (not heterogeneous) target markets so that it can target them more successfully and avoid competition. 33) TRUE A segmenter that really satisfies the target market can often build such a close relationship with customers that it faces no real competition. 34) FALSE Some people are simply too unique to be catered to and may have to be ignored. A profit-oriented firm will continue aggregating potential customers until the segment is substantial (that is, the segment is big enough to be profitable). 35) FALSE

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A segmenter that offers a marketing mix precisely matched to the needs of the target market can often charge a higher price that produces higher profits. Customers are willing to pay a higher price because the whole marketing mix provides better customer value. 36) TRUE Cost considerations usually encourage more aggregating and favor combining, as costs often drop due to economies of scale. On the other hand, many customers prefer to have their needs satisfied more exactly—and will be more satisfied by a segmenter that develops a marketing mix that more closely matches their needs. 37) TRUE Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers' consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics. 38) FALSE Behavioral needs are important. Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers' consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics. 39) TRUE Regardless of whether customers are final consumers or organizations, segmenting a broad product-market usually requires using several different dimensions at the same time. 40) FALSE Version 1

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Market segmentation can be applied to business products. Exhibit 4–9 shows the dimensions for segments markets when the customers are businesses, government agencies, or other types of organizations. 41) FALSE Qualifying dimensions are those relevant to including a customer type in a product-market. 42) TRUE Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 43) FALSE The more specific you want to be, the more particular the determining dimensions may be. The determining dimensions may seem minor. However, they are important. 44) TRUE The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 45) FALSE Success in international marketing requires even more attention to segmenting. There are over 192 nations with their own unique cultures, and they differ greatly in language, customs, beliefs, religions, race, and income distribution patterns. 46) TRUE Success in international marketing requires even more attention to segmenting. There are over 192 nations with their own unique cultures, and they differ greatly in language, customs, beliefs, religions, race, and income distribution patterns. 47) FALSE Version 1

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Segmenting international markets may require more dimensions. First, marketers segment by country or region—looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 48) TRUE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 49) FALSE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 50) TRUE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 51) FALSE Clustering approaches use computers to search all the data for homogeneous groups of people, but when the computer finds them, marketers then study the characteristics of the people in the groups to determine why the computer clustered them together. This involves managerial judgment and intuition. 52) FALSE With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information. Version 1

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53) FALSE A variation of the clustering approach is based on customer relationship management methods. 54) TRUE With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information. 55) TRUE Through the use of dynamic behavioral segmentation, firms can use realtime data to continuously update a customer’s placement in a market segment. 56) TRUE By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. When this happens, target customers view the firm's position in the market as uniquely suited to their preferences and needs. 57) TRUE Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 58) FALSE Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate.

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59) TRUE Positioning issues are especially important when competitors in a market appear to be very similar. 60) TRUE In positioning analysis, once you know what customers think, you can then decide whether to leave the product alone or reposition it. 61) FALSE Positioning analysis may lead a firm to combining—rather than segmenting—if managers think they can make several general appeals to different parts of a "combined" market. 62) TRUE The marketing strategy based on Mountain Dew's positioning statement helped it gain market share with 16- to 24-year-old males, its target market. 63) TRUE A positioning statement concisely identifies the firm's desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claims. It is sometimes used by marketing managers to provide focus for the marketing mix. 64) D A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 65) B The marketing strategy planning process involves careful evaluation of the market opportunities and then narrowing down to focus on the most attractive target market and marketing mix. Version 1

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66) D When identifying a company's market, some managers get into trouble because they describe their markets solely in terms of products they sell. 67) A To understand the narrowing-down process, it is useful to think of two basic types of markets. A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 68) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 69) B A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 70) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Any one of many very different products may satisfy those needs so this would be a reason to emphasize product development opportunities more. 71) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

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72) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 73) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 74) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 75) E A generic market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. It may be composed of several different product-markets and its sellers may also compete in different product-markets. By definition, a generic market is likely broader than the firm's target market. 76) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers also compete in different product-markets. 77) A A generic market is a market with broadly similar needs—sellers offering various, often diverse, ways of satisfying those needs. 78) B A generic market is a market with broadly similar needs—amd sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 79) B Version 1

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A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 80) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 81) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 82) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A generic market description looks at markets broadly and from a customer's viewpoint. 83) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers in a generic entertainment-seeker market have to focus on the needs the customers want satisfied. 84) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A "personal expression" market is an example of a generic market. 85) E

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A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 86) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 87) C A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 88) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. In this case, four of the choices are all desserts. 89) C A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A generic market description looks at markets broadly and from a customer's viewpoint. 90) A

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A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 91) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 92) E A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 93) D A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. In a product-market concerned with specific products, consumers compare them with similar products that may satisfy their needs. 94) E A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 95) B A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 96) D A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 97) C Version 1

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A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 98) A A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 99) A A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. Many brands may compete with each other for the customer's dollars. 100) B The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 101) B The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 102) B When evaluating opportunities, a product-market definition does not include an identification of a firm's competitors. 103) E A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. 104) C A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area.

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105) E A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. 106) D A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. A generic market description doesn't include any product-type terms. 107) B A generic market description doesn't include any product-type terms. It consists of only three parts of the product-market definition—without the product type. 108) C Customer type refers to the final consumer or user of a product type. To define customer type, marketers should identify the final consumer or user of the product type, rather than the buyer—if they are different. 109) D Customer type refers to the final consumer or user of a product type. To define customer type, marketers should identify the final consumer or user of the product type, rather than the buyer—if they are different. 110) B A generic market definition includes customer needs, customer types, and geographic area. A generic market description doesn't include any product-type terms. 111) C A generic market definition includes customer needs, customer types, and geographic area. A generic market description doesn't include any product-type terms. Version 1

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112) C A generic market definition includes customer needs, customer types, and geographic area. It does not include any competitors' names. 113) A Generic market names open up new opportunities. The generic market, by leaving out the product type, opens the idea of using other products to address customer needs. 114) D The geographic area is where a firm competes, or plans to compete, for customers. Naming the geographic area may seem trivial, but understanding the geographic boundaries of a market can suggest new opportunities. 115) A This idea of making a decision about the boundaries of a market applies not just to geographic areas served but also to decisions about customer needs and product and customer types. Thus, naming the market is not simply an exercise in assigning labels. Rather, the manager's market definition sets the limits of the market(s) in which the firm will compete. 116) A Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 117) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 118) D Version 1

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Good market segments are homogeneous within, heterogeneous between, substantial, and operational. 119) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 120) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 121) E Marketers must break apart—disaggregate—all possible needs into some generic markets and broad product-markets in which the firm may be able to operate profitably. 122) C The first step in effective market segmentation involves naming a broad product-market of interest to the firm. Marketers must break apart— disaggregate—all possible needs into some generic markets and broad product-markets in which the firm may be able to operate profitably. 123) A The first step in effective market segmentation involves naming a broad product-market of interest to the firm, not segmenting broad productmarkets. 124) A

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The naming—disaggregating—step involves brainstorming about very different solutions to various generic needs and selecting some broad areas—broad product-markets—where the firm has some resources and experience. 125) A The naming—disaggregating—step involves brainstorming about very different solutions to various generic needs and selecting some broad areas—broad product-markets—where the firm has some resources and experience. 126) D Marketing-oriented managers think of segmenting as an aggregating process—clustering people with similar needs into a "market segment." 127) C Segmenting is an aggregating process—clustering people with similar needs into a "market segment." 128) C Naming involves breaking down markets (disaggregating), whereas segmenting is an aggregating process—clustering people with similar needs into a "market segment." 129) E Segmenting is an aggregating process—clustering people with similar needs into a "market segment." 130) B

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Segmenting is an aggregating process—clustering people with similar needs into a "market segment." Segmenters look for similarities rather than basic differences in needs. They determine an appropriate number of segments and aggregate some similar people into a product-market. Naming a broad product-market is not likely a part of the segmenting step. 131) A A market segment is a (relatively) homogeneous group of customers who will respond to a marketing mix in a similar way. 132) A The market grid is a visual aid used in market segmentation. 133) D The segmenter wants to aggregate individual customers into some workable number of relatively homogeneous target markets and then treat each target market differently. 134) C The segmenter wants to aggregate individual customers into some workable number of relatively homogeneous target markets and then treat each target market differently. 135) E A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. 136) C A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. Version 1

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137) C A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial—the segment should be big enough to be profitable; and operational—it should be useful for identifying marketing mix variables. 138) D A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial—the segment should be big enough to be profitable; and operational—it should be useful for identifying marketing mix variables. 139) B In segmenting a broad product-market, the people in different segments should be as heterogeneous (different) as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 140) D "Heterogeneous (different) between" means that customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 141) C A good market segment should be substantial—i.e., the segment should be big enough to be profitable. 142) B A "good" market segment should be operational. This leads marketers to include demographic dimensions such as age, sex, income, location (geographic region), and family size, but not personality. 143) D Version 1

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A "good" market segment should be operational—i.e., segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables. 144) D There are three basic ways to develop market-oriented strategies in a broad product-market: single target market approach; multiple target market approach; and combined target market approach. 145) E Once target marketers narrow down some generic market into a broad product-market, they then create marketing mixes for homogeneous product-market segments within that broad product-market. 146) D In the combined target market approach, target marketers formulate one marketing mix strategy to appeal to two or more submarkets within one broad product market. In this scenario, the broad product-market is tablet computer users, which is then segmented into two subsegments: office tablet users and home tablet users. When a target marketer uses one marketing mix strategy to appeal to both subsegments at the same time, the marketer is using the combined target market approach. 147) C In the multiple target market approach, target marketers formulate multiple marketing mix strategy to appeal to two or more submarkets within one broad product-market. In this scenario, the broad productmarket is tablet computer users, which is then segmented into two subsegments: office tablet users and home tablet users. Since the target marketer is treating each subsegment separately and formulating a different marketing mix for each, the marketer is using the multiple target market approach. Version 1

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148) D Target marketers known as "segmenters" aim at one or more homogeneous segments and develop a different marketing mix for each segment. They do not attempt to combine or mix submarkets, but instead treat submarkets separately to better serve the needs of each group. 149) C There are three basic ways to develop market-oriented strategies in a broad product-market: single target market approach; multiple target market approach; and combined target market approach. "Exclusive" is not among the approaches. 150) B Gina appears to be following the single target market approach. It means segmenting the market and picking one of the homogeneous segments as the firm's target market. 151) C The firm is using a single target market approach. It means segmenting the market and picking one of the homogeneous segments as the firm's target market. 152) D ETI should probably focus on single target market approach—i.e., segmenting the market and picking one of the homogeneous segments as the firm's target market. 153) A The firm should use the multiple target market approach. It means segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.

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154) B Jazzy Tile Co. follows the multiple target market approach, because it segments the market and chooses two or more segments, and then treats each as a separate target market needing a different marketing mix. 155) A Procter & Gamble is using the multiple target market approach, as it segments the market and chooses two or more segments, and then treats each as a separate target market needing a different marketing mix. 156) E The firm uses the multiple target market approach, which means segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix. 157) C The marketing manager used a combined target market approach that deals with combining two or more submarkets into one larger target market as a basis for one strategy. 158) C Combining two or more submarkets into one larger target market as a basis for one strategy is known as the combined target market approach. 159) B Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. 160) E

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Combiners try to increase the size of their target markets by combining two or more segments. They try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 161) D Combiners try to increase the size of their target markets by combining two or more segments. They try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 162) C Combiners try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 163) C A combined target market approach doesn't try to fine-tune each element of the marketing mix to appeal to each of the smaller submarkets. 164) A Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. They don't try to fine-tune each element of the marketing mix to appeal to each of the smaller submarkets. 165) C Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. Then they try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 166) A

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Combiners look at various submarkets for similarities rather than differences. Then they try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 167) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 168) A Cost considerations usually encourage more aggregating and favor combining, as costs often drop due to economies of scale. However, many customers prefer to have their needs satisfied more exactly and are vulnerable to competitors who offer them more targeted approaches. 169) A A segmenter that really satisfies the target market can often build such a close relationship with customers so that it faces no real competition. However, combiners are always vulnerable to competitors. 170) B Cost considerations usually encourage more aggregating and favor combining as costs often drop due to economies of scale; yet too much aggregating can leave the company vulnerable to competitors. 171) B Combiners look at various submarkets for similarities rather than differences. They then try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 172) B

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Segmenters usually fine-tune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. 173) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 174) A Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 175) B Both combiners and segmenters are target marketers but their approaches are different. Combiners try to increase the size of their target markets by combining two or more segments. Segmenters usually fine-tune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. 176) C Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences, and they then try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 177) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. They usually finetune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. Version 1

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178) E Which approach offers the greatest profit potential is dependent on many factors not provided here, so it could be any of these. There is not enough information to give a reliable answer. 179) B Cost considerations usually encourage more aggregating and favor combining as costs often drop due to economies of scale. 180) D Cost considerations usually encourage more aggregating and favor combining submarkets as costs often drop due to economies of scale. 181) A Profit is the balancing point. It determines how unique a marketing mix the firm can afford to offer to a particular market segment. 182) A It's usually safer to be a segmenter—that is, to try to satisfy some customers very well instead of many just fairly well. 183) B Segmenting dimensions should help guide marketing mix planning. 184) C Marketers segment markets based on various dimensions. Dimensions used for segmenting consumer markets include a range of behavioral dimensions, geographic dimensions, and demographic dimensions. 185) E Target market dimensions (whether geographical, demographic, or behavioral) guide marketing mix planning including decisions about the Four Ps of Product, Price, Place, and Promotion.

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186) C Qualifying dimensions are those dimensions that are relevant to including a customer type in a product-market. Determining dimensions, on the other hand, motivate a consumer to buy a specific product or brand. A customer with the physiological need to relieve pain would be a candidate to buy this product. 187) B A consumer's status as a college student would be a determining dimension in the decision to purchase a marketing textbook. Determining decisions are those factors that actually affect the customer's purchase of a specific product. 188) D Potential target market dimensions include (1) behavioral needs; (2) urgency to get needs satisfied and desire and willingness to seek information; and (3) geographic location and other demographic characteristics. 189) B Geographic location and other demographic characteristics of potential customers affect the dimensions of target markets. 190) C Behavioral needs and attitudes of consumers affect product features, packaging, product line assortment, and branding. 191) A Answering why, what, and who questions allow a marketing manager to better identify the dimensions on which customers are similar and different. 192) A Version 1

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Basic why (Why are customers making a purchase decision?), what (What have customers done before making a decision?), and who (Who are the customers?) questions can help guide a marketing manager as they narrow down to particular segmenting dimensions. 193) E Whether customers are final consumers or organizations, segmenting a broad product-market usually requires using several different dimensions at the same time. It depends on what product-market is being segmented. 194) E Behavioral segmenting dimensions include purchase relationship. 195) E Behavioral segmenting dimensions include type of problem solving, kind of shopping, brand familiarity, and benefits sought. 196) A Customer needs are behavioral segmenting dimensions. 197) B In targeting non-juice drinkers, Sanders Beverages is using the behavioral segmenting dimension. 198) B Social class is a demographic segmenting dimension. 199) E Family life cycle is a demographic segmenting dimension. 200) E Income distribution, stage in family life cycle, family size, and ethnic group are all examples of the consumer market demographic dimension. Version 1

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201) E Gender, age, occupation, and education are examples of consumer market demographic dimensions. 202) B Demographic segmenting dimensions include income, gender, age, marital status, family size, family life cycle, occupation, education, ethnicity, and social class. Behavioral segmenting dimensions include needs, benefits sought, thoughts, rate of use, purchase relationship, brand familiarity, kind of shopping, type of problem solving, and information required. 203) A Geographic segmenting dimensions include region of world/country, region in country, and size of city. 204) C The primary segmenting dimension that Hallmark is using is benefits sought. 205) B The primary segmenting dimension that Hallmark is using is age. 206) C The airlines are segmenting the market primarily on rate of use. 207) B As stated in Exhibit 4–9, manufacturer, service producer, government agency, military, nonprofit, wholesaler or retailer are designations used to segment business and organizational markets according to type of customer. 208) E

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The company is using the purchasing method segmenting dimension— vendor analysis, purchasing specifications, Internet bids, negotiated contracts. 209) B Qualifying dimensions are those relevant to including a customer type in a product-market. The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 210) D Qualifying dimensions are those relevant to including a customer type in a product-market. The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 211) B The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 212) B The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 213) D Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 214) C Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 215) C

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Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 216) A Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. How specific the determining dimensions are depends on whether you are concerned with a general product type or a specific brand. 217) D How specific the determining dimensions are depends on specific interests, such as the kind of safety, performance, or appearance the customer wants. 218) B How specific the determining dimensions are depends on whether you are concerned with a general product type or a specific brand. 219) C General Mills has figured out that for many of these target customers the real determining dimension in picking a snack is whether it can be eaten "one-handed." 220) A Buyer personas are fictional depictions of customers illustrative of each target segment. Buyer personas emerge from customer research and are used to help everyone across an organization (research and development, customer service, advertising, website development, etc.) to better empathized with target customers and develop a marketing orientation. 221) D

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Success in international marketing requires even more attention to segmenting and another step. There are over 192 nations with their own unique cultures. They differ greatly in language, customs (including business ethics), beliefs, religions, race, and income distribution patterns. 222) B Additional differences can complicate the segmenting process. Critical data is often less available and less dependable as firms move into international markets. 223) C Critical data is often less available and less dependable as firms move into international markets. 224) B Segmenting international markets may require more dimensions. Critical data is often less available and less dependable as firms move into international markets. 225) C Marketers segment by country or region looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 226) D Marketers segment by country or region looking at demographic, cultural, and other characteristics, including stage of economic development. 227) E

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Critical data is often less available—and less dependable—as firms move into international markets. This is one reason why some firms insist that local operations and decisions be handled by natives. They, at least, have a feel for their markets. 228) A Marketers segment international markets by country or region—looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 229) A The computer searches all the data for homogeneous groups of people. When it finds them, marketers then study the dimensions of the people in the groups to see why the computer clustered them together. The results sometimes suggest new, or at least better, marketing strategies. 230) C Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 231) C Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 232) E With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information.

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233) A With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. The database stores information that is useful for segmentation. 234) A A variation of the clustering approach relies on customer relationship management (CRM), where the seller fine-tunes the marketing effort with information from a detailed customer database. The database stores information that is useful for segmentation. 235) C CRM data is generally used by firms to develop a prediction score for each customer. The database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. 236) B The CRM system at the website recommends related books that have been purchased by other customers who bought that book. A CRM system usually includes data on a customer's past purchases as well as other segmenting information. 237) E Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." CRM helps consumer marketers do the same. 238) C CRM data is generally used by firms to develop a prediction score for each customer. The database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. Version 1

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239) B The ultimate in personalization occurs when firms consider each customer his or her own segment. Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." 240) D A customer database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. 241) A The ultimate in personalization occurs when firms consider each customer a unique segment. Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." 242) A Many firms utilize dynamic behavioral segmentation, which refers to the use of real-time data to continuously update a customer’s placement in a market segment. 243) A Many firms utilize dynamic behavioral segmentation, which refers to the use of real-time data to continuously update a customer’s placement in a market segment. 244) D Marketing segmentation's many benefits do not extend to identifying the most efficient or high-tech methods of production. Production techniques and processes are largely beyond the scope of the marketing function of any organization.

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245) B Positioning refers to how customers think about proposed or present brands in a market. Managers research this information by asking consumers to make judgments about different brands and then representing those perceptions graphically on a positioning map. 246) E Positioning maps are based on customers' perceptions of products, not actual characteristics of products. The actual characteristics of the products (as determined by a chemical test, for example) might be remarkably different from consumer perceptions. 247) D Positioning issues are especially important when competing products in a market appear to be very similar in the eyes of customers. Once managers know what customers think, they can choose to leave the product (and marketing mix) alone or reposition it. Repositioning a product can mean physical changes in the product or simply image changes based on promotion. 248) E By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. Target customers view the firm's position in the market as uniquely suited to their needs and everyone in the firm is clear about what position it wants to achieve. 249) C The marketing manager may want customers to see the firm's offering as unique, which is not always possible. Me-too imitators may come along and copy the firm's strategy. 250) B Version 1

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Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 251) D Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 252) B Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 253) D Positioning refers to how customers think about proposed or present brands in a market. Positioning issues are especially important when competitors in a market appear to be very similar. Managers ask consumers to make judgments about different brands including their "ideal" brand. 254) C Positioning refers to how customers think about proposed or present brands in a market. Managers ask consumers to make judgments about different brands including their "ideal" brand. 255) B Positioning refers to how customers think about proposed or present brands in a market, thereby helping strategy planners see how customers view competitors' offerings. Version 1

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256) A Positioning maps are based on customers' perceptions—the actual characteristics of the products might be different. 257) E Physical changes to a product, or image changes based on promotion, could be a result of positioning. Also, introducing a new product or shifting attention to another less competitive segment are possible moves. 258) A Managers make graphs for positioning decisions by asking consumers to make judgments about different brands, including their "ideal" brand, and then use computer programs to summarize the ratings and plot the results. But managers do not position products on a graph based on price level and quantity demanded. 259) C Positioning analysis usually focuses on specific product features and brands that are close competitors in the product-market. 260) D Positioning usually focuses on specific product features and brands that are close competitors in the product-market and that are related to two or three product features that are important to product managers. Positioning refers to how customers, not managers, view brands in a market. 261) C

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A positioning analysis is a product-oriented approach that helps managers understand how customers see products. The actual characteristics of the products may be quite different from customer perceptions, and managers and customers may view the brands quite differently. Positioning analysis is a visual aid. It may lead to combining rather than segmenting. 262) B Some firms use a template like this to guide the creation of a positioning statement. 263) D A positioning statement concisely identifies the firm's desired target market, the product type, the primary benefit (or point of differentiation), and the main reasons a buyer should believe the firm's claims. 264) C Although the marketing manager may want customers to see the firm's offering as unique, that is not always possible. Me-too imitators may come along and copy the firm's strategy. Further, even if a firm's marketing mix is different, consumers may not know or care. They're busy and, simply put, the firm's product may not be that important in their lives. 265) B Sometimes research shows the marketing manager that target customers are not viewing the brand in the desired way—it needs to be repositioned. Changing customers' perceptions of a brand is not easy— and requires changes to the marketing mix. 266) A

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A positioning statement concisely identifies the firm's desired target market, the product type, the primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claims. Some firms use a template like the one given to aid in the preparation of a positioning statement. 267) A Positioning statements are sometimes used by marketing managers to provide focus for a marketing mix.

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CHAPTER 5 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Consumer buying decisions are influenced by economic needs, psychological variables, social influences, culture and ethnicity, and the purchase situation. ⊚ ⊚

true false

2) The economic-buyer theory assumes that consumers know all the facts and logically compare choices. ⊚ ⊚

true false

3) Economists sometimes assume that consumers are economic buyers who logically evaluate choices to get the greatest satisfaction from spending their time and money. ⊚ ⊚

true false

4) Economic needs include such things as self-respect, accomplishment, fun, freedom, and relaxation. ⊚ ⊚

true false

5) The economic buyer view of consumers says that individuals will only buy the cheapest goods and services available, regardless of quality. ⊚ ⊚

6)

true false

Economic needs are concerned only with getting the best quality at the lowest price. ⊚ ⊚

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7)

The median income of U.S. families in 2017 was about $61,822. ⊚ ⊚

8)

true false

In 2017, half of all American households earned more than $75,442. ⊚ ⊚

true false

9) After taking inflation into account, the median income in the United States has been flat over the last two decades. ⊚ ⊚

10)

In 2017, 50 percent of U.S. families earned less than $61,822 in income. ⊚ ⊚

11)

true false

Discretionary income is the income from investments. ⊚ ⊚

13)

true false

Discretionary income is what is left after paying taxes. ⊚ ⊚

12)

true false

true false

Discretionary income is the income adjusted to take out the effects of inflation. ⊚ ⊚

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14) Discretionary income is an elusive concept because the definition of necessities varies from family to family and over time. ⊚ ⊚

true false

15) Most marketing managers think that the economic-buyer theory explains buyer behavior very well. ⊚ ⊚

true false

16) Motivation, perception, learning, attitudes, trust, and lifestyle are psychological variables that affect consumer buying. ⊚ ⊚

true false

17) Family, social class, reference groups, and culture are the psychological variables that affect a consumer's buying decisions. ⊚ ⊚

18)

Wants are the basic forces that motivate a person to do something. ⊚ ⊚

19)

true false

true false

Wants are needs that are learned during a person's life. ⊚ ⊚

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20)

A drive is a strong stimulus that encourages action to reduce a need. ⊚ ⊚

21)

Food, liquid, sex, and rest are examples of physiological needs. ⊚ ⊚

22)

true false

true false

Examples of personal needs include accomplishment, fun, freedom, and relaxation. ⊚ ⊚

true false

23) The "hierarchy of needs" model suggests that most products must fill more than one need at the same time. ⊚ ⊚

true false

24) According to the hierarchy of needs, consumers are motivated to first satisfy their higherorder needs; then they will focus on their lower-level needs. ⊚ ⊚

true false

25) The hierarchy of needs suggests that a consumer would not try to satisfy physiological and safety needs until social and personal needs have been completely satisfied. ⊚ ⊚

26)

true false

The hierarchy of needs suggests that only one need can be satisfied at a time. ⊚ ⊚

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27)

Consumers do not usually see or hear all the stimuli that come their way. ⊚ ⊚

true false

28) In selective exposure we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. ⊚ ⊚

true false

29) Selective exposure refers to a person's ability to screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. ⊚ ⊚

30)

Learning is a change in a person's thought processes caused by prior experience. ⊚ ⊚

31)

true false

true false

A cue is likely to result in a consumer response only if there is a drive to satisfy. ⊚ ⊚

true false

32) Reinforcement of a response decreases the likelihood of the same response the next time the drive occurs. ⊚ ⊚

33)

true false

Reinforcement strengthens the relationship between the cue and the response.

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⊚ ⊚

34)

true false

Adding lemon scent to Pledge furniture polish is an example of using a positive cue. ⊚ ⊚

true false

35) A perfume ad that suggests that people who use the product have more appeal to the opposite sex is an example of a positive cue. ⊚ ⊚

true false

36) That "new car" smell that includes an aroma of leather and wood is an example of using a positive cue. ⊚ ⊚

true false

37) An attitude is a person's point of view about something, and usually involves liking or disliking. ⊚ ⊚

true false

38) The main difference between attitudes and beliefs is that beliefs always involve liking or disliking, but attitudes don't necessarily involve liking or disliking. ⊚ ⊚

39)

true false

Beliefs are not as action-oriented as attitudes. ⊚ ⊚

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40)

Beliefs are more action-oriented than attitudes. ⊚ ⊚

true false

41) Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. ⊚ ⊚

true false

42) A consumer's belief about a product may have a positive or negative effect on his or her attitude about the product. ⊚ ⊚

43)

Attitudes are very good predictors of intention to buy. ⊚ ⊚

44)

true false

true false

An expectation is a future outcome or event that a person anticipates will happen. ⊚ ⊚

true false

45) Consumers may evaluate a product not just on how well it performs, but on how it performs relative to their expectations. ⊚ ⊚

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46) In light of the relationships between consumer expectations and satisfaction, it's usually best for promotion to slightly "over promise" what the firm can actually deliver. ⊚ ⊚

true false

47) Trust is the confidence a person has in the promises or actions of another person, brand, or company. ⊚ ⊚

true false

48) Highly trusted people, brands, and companies have many disadvantages in the marketplace. ⊚ ⊚

49)

Activities, interests, and opinions are the AIO variables used in lifestyle analysis. ⊚ ⊚

50)

true false

true false

Attitudes, income, and opinions are the AIO variables used in lifestyle analysis. ⊚ ⊚

true false

51) Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's activities, interests, and opinions. ⊚ ⊚

true false

52) Marital status, age, and the age of any children in a household are the three demographic dimensions that determine the stage of family life cycle.

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⊚ ⊚

true false

53) The stage of family life cycle is usually determined by two demographic dimensions: income and number of children. ⊚ ⊚

54)

true false

Singles and young couples seem less willing to try new products because they earn less. ⊚ ⊚

true false

55) Younger families with no children are a good market for durable goods such as automobiles and furniture. ⊚ ⊚

56)

Older people seem to be more open to new products and brands than younger people. ⊚ ⊚

57)

true false

Families with teenagers tend to spend more on durables than younger families. ⊚ ⊚

58)

true false

true false

Teens play an increasingly minor role in shaping family purchases. ⊚ ⊚

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59) Empty nesters are people whose children are grown and who are now able to spend their money in other ways. ⊚ ⊚

60)

true false

Empty nesters is a term that refers to young couples with no children. ⊚ ⊚

true false

61) Consumer buying decisions are affected by social influences such as motivation, perception, learning, attitudes, and personality. ⊚ ⊚

true false

62) Buying responsibility and purchase influence between husband and wife vary greatly depending on the product and the specific family. ⊚ ⊚

63)

true false

Income by itself is usually a pretty good measure of social class. ⊚ ⊚

true false

64) The U.S. social class system is usually measured in terms of occupation, education, and housing arrangements. ⊚ ⊚

true false

65) People who have the same amount of income but who are in different social classes tend to spend their income in the same way.

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⊚ ⊚

true false

66) Given the same income, consumers in different social classes will handle themselves and their money very differently. ⊚ ⊚

true false

67) The group of people to whom an individual looks when forming attitudes about a particular topic is his or her reference group for that topic. ⊚ ⊚

68)

A person normally has several reference groups. ⊚ ⊚

69)

true false

true false

An associative reference group includes people an individual desires to be like. ⊚ ⊚

true false

70) A group that an individual does not want to be like is referred to as a dissociative reference group. ⊚ ⊚

true false

71) An opinion leader is usually wealthier and better educated than the people he or she influences. ⊚ ⊚

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72) Opinion leaders for one subject or product are also usually opinion leaders for many other subjects or products. ⊚ ⊚

true false

73) Marketers who want to aim at people within several different cultures are usually able to use the same marketing mix for all of them. ⊚ ⊚

true false

74) In the United States, the number of ethnic consumers is growing at a faster rate than the rest of the United States. ⊚ ⊚

true false

75) Both the birthrate and the buying power of ethnic groups in the United States are increasing. ⊚ ⊚

true false

76) Among ethnic minorities in the United States, the birthrate is lower than the overall population. ⊚ ⊚

77)

true false

Hispanics are the largest ethnic group in the United States. ⊚ ⊚

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78)

Asian Americans are the largest ethnic group in the United States. ⊚ ⊚

true false

79) Of all the major ethnic groups in the United States, Asian Americans have the highest average household income. ⊚ ⊚

80)

true false

African Americans have the highest median family income of the major ethnic groups. ⊚ ⊚

true false

81) By 2019, the buying power of Hispanics and African Americans will each exceed $1 trillion a year. ⊚ ⊚

true false

82) Planning for cultural differences in international markets is easier than in domestic markets. ⊚ ⊚

83)

true false

The reaction of Italian women to Swiffer is an example of cultural influence. ⊚ ⊚

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84) Needs, benefits sought, attitudes, motivation, and even how a consumer selects certain products all vary depending on the purchasing situation. ⊚ ⊚

true false

85) Different purchase situations may require different marketing mixes, even when the same target market is involved. ⊚ ⊚

true false

86) The consumer decision process begins when a consumer becomes aware of an unmet need. ⊚ ⊚

true false

87) As part of the basic problem-solving steps, a consumer searches for information, identifies alternatives and what factors are important, and then evaluates one or more products before deciding how best to meet a need. ⊚ ⊚

true false

88) How much effort is put into a buying decision depends on economic needs, psychological variables, social influences, culture, purchase situation, and the amount of risk involved. ⊚ ⊚

true false

89) Consumers use extensive problem solving when they put even limited effort into deciding how to satisfy a need. ⊚ ⊚

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90) Consumers use limited problem solving when they put much effort into deciding how to satisfy a need. ⊚ ⊚

true false

91) Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. ⊚ ⊚

true false

92) A consumer interested in making a low-involvement purchase is most likely to use limited problem solving, rather than one of the other levels of problem solving. ⊚ ⊚

true false

93) Limited problem solving is used when the consumer has a lot of experience in meeting a need and has no need for additional information. ⊚ ⊚

94)

true false

Routinized response behavior is typical for low-involvement purchases. ⊚ ⊚

true false

95) When finding their favorite brand of shampoo temporarily out of stock, a supermarket shopper is more likely to take part in routinized response behavior than limited problem solving. ⊚ ⊚

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96) The idea of a decision process implies that consumers always apply rational processes in their buying decisions. ⊚ ⊚

true false

97) Dissonance takes place when an individual is not confident about the rightness of a decision. ⊚ ⊚

true false

98) After making a purchase, buyers often wonder if they made the right choice. The resulting tension is called dissonance. ⊚ ⊚

99)

true false

The power of negative purchase experiences is greater than that of positive experiences. ⊚ ⊚

true false

100) Adoption process refers to the steps that individuals go through on the way to accepting or rejecting a new idea. ⊚ ⊚

true false

101) The steps in the adoption process are awareness, interest, evaluation, trial, decision, and confirmation. ⊚ ⊚

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102) In the evaluation stage of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. ⊚ ⊚

true false

103) In the confirmation stage of the adoption process, the adopter continues to rethink the decision and searches for support for the decision. ⊚ ⊚

104)

true false

In the adoption process, the confirmation step usually precedes the decision step. ⊚ ⊚

true false

105) To monitor how a new idea is being adopted by the market, a marketing manager may use marketing analytics. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 106) Which of the following would be most helpful for predicting why a final consumer selects one of several similar brands? A) population data B) consumer spending patterns C) behavioral principles D) consumer income E) All of the answers would be equally helpful.

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107)

Which of the following is true of consumer behavior?

A) Specific behaviors vary a great deal for different people, products, and purchase situations. B) Understanding consumer behavior is a simple and a straightforward procedure. C) Cataloging all the possibilities for consumer behavior is easy to do. D) Psychological variables are not relevant in the consumer decision process. E) In today's global markets, variations in specific behaviors are not very common.

108) Which of the following is not a need that affects the buying behavior of economic buyers? A) economy of purchase or use B) convenience C) dependability in use D) motivation E) efficiency in operation or use

109)

Discretionary income is the portion of a person's income that pays for A) rent. B) food. C) luxuries. D) taxes. E) insurance.

110)

Of the following appeals, the one that has the most relevance to an economic buyer is

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A) "I'm lovin' it" (McDonald's). B) "Expect great things" (Kohl's). C) "Live for now" (Pepsi). D) "Who doesn't want 50% more cash?" (Capital One Rewards Card). E) "Relentlessly protecting your identity" (LifeLock).

111)

An economic buyer is a person who A) compares choices to get the best deal. B) makes buying decisions based only on price. C) will not pay extra for convenience. D) always buys products at the lowest price possible. E) is averse to spending time and money.

112)

An economic buyer is a person who

A) makes buying decisions based on behavioral needs rather than economic needs. B) logically compares choices to get the greatest satisfaction from expenditures of time and money. C) always buys the product that has the lowest price. D) is not willing to pay extra for convenience. E) All of the answers are correct.

113)

The economic-buyer theory assumes that A) income data are very useful for predicting consumer behavior. B) buyers logically compare choices in order to maximize their satisfaction. C) consumers should purchase only low-priced products. D) buyers focus primarily on price. E) None of the answers is correct.

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114) ________ are concerned with making the best use of a consumer's time and money—as the consumer judges it. A) Economic needs B) Psychological needs C) Social influences D) Behavioral influences E) Perceptual needs

115)

Which of the following is an economic need? A) desire for self-satisfaction and convenience B) desire for efficiency in the consumer's investment plans C) desire for efficiency in the use of the consumer's time and money D) desire for prestige and paying a high price for the best quality E) desire for status and paying a high price for the best quality

116)

Which of the following is not an economic need? A) dependability in use B) hunger C) economy of use D) convenience E) efficiency in use

117)

Which of the following is not an economic need of consumers? A) convenience B) dependability in use C) economy of purchase D) efficiency E) hunger

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118) At Home Depot, a customer can purchase a gallon of one-coat paint that contains the ingredients for both a primer and a color. What is the primary economic need being satisfied by this type of paint? A) dependability in use B) economy of purchase C) improvement of earnings D) convenience

119) A magazine ad for GEICO car insurance shows the GEICO gecko lying down while the copy reads, "Don't take high car insurance rates lying down." What primary economic need is being satisfied in this magazine ad? A) convenience B) improvement of earnings C) dependability in use D) economy of purchase E) efficiency in operation

120) An app for the iPhone that includes voice directions for a built-in GPS system can be helpful in finding a motel that is "off the beaten track." What is the primary economic need being satisfied by this app? A) economy of purchase B) dependability in use C) efficiency in use D) convenience E) improvement of earnings

121) In a television commercial for Maytag appliances, the spokesperson "Old Lonely" acts bored because no one is calling him to schedule a repair of their appliances. What is the primary economic need being illustrated in this TV ad?

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A) dependability in use B) convenience C) economy of purchase D) improvement of earnings E) efficiency in operation

122) A busy mom stops at a 7-Eleven store on the way home from work to purchase some bread, milk, and ice cream. What primary economic need is being satisfied by the 7-Eleven? A) dependability in use B) economy of purchase C) efficiency in operation D) convenience

123)

In 2017, ________ percent of households reported an income of less than $30,001. A) 25 B) 77 C) 29 D) 10 E) 5

124)

The median family income in the United States in 2017 was a little over A) $35,000. B) $40,000. C) $60,000. D) $75,000. E) $100,000.

125)

Discretionary income is defined as

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A) total market value of goods and services produced. B) gross domestic product per capita. C) income available after taxes. D) income available before taxes. E) income available after taxes and necessities.

126)

Discretionary income is a family's A) income after taxes. B) total purchasing power. C) income spent on durable goods. D) income after paying taxes and paying for necessities.

127) The amount of income a family has left after paying taxes and paying for its necessities is called its ________ income. A) personal B) discretionary C) marginal D) family E) modified

128)

What is left of income after paying for taxes and paying for necessities? A) net income B) real income C) deductible income D) gross income E) discretionary income

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129) Misty Hancock is a sales rep for a computer producer. Her salary last year was $30,000, and she earned another $5,000 in sales commissions. She paid $6,000 in taxes, and spent $8,000 on food, housing, a car, and other "necessities." What is Misty's discretionary income? A) $21,000 B) $34,000 C) $15,000 D) $24,000 E) $8,000

130) A young working couple earned $55,000 last year. They paid $16,000 in taxes and $20,000 in rent, food, insurance and other necessities. What was their discretionary income for the year? A) $39,000 B) $55,000 C) $30,000 D) $35,000 E) $19,000

131) A young working couple earned $35,000 last year and paid $10,000 in taxes. They spent $13,000 on rent, food, insurance, and other "necessities." What is their discretionary income? A) $12,000 B) $35,000 C) $22,000 D) $25,000

132) Keith McPherson earned $20,000 last year as a carpenter. He paid $6,000 for food, rent, medical expenses, and other "necessities." There was little construction work in February, so he took a trip to the Caribbean and spent $4,000. What was Keith's discretionary income last year?

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A) $4,000 B) $20,000 C) $10,000 D) $12,000 E) The information given is insufficient.

133) As the owner of a women's clothing store, Caroline Lipscomb has an income of $75,000. She pays $30,000 per year in taxes and another $17,000 per year for grocery bills, home mortgage payments, and car payments. Last year she went on a holiday to Italy and spent an additional $4,000. What was Caroline's discretionary income last year? A) $45,000 B) $75,000 C) $26,000 D) $28,000 E) The information given is insufficient.

134) A young working couple earned $50,000 last year. Of that, they paid $16,000 in taxes and $15,000 in rent, food, insurance and other necessities. Their discretionary income for the year was A) $35,000. B) $50,000. C) $19,000. D) $34,000. E) $15,000.

135) Ginny Paulson was just promoted to marketing manager for her company. She also gets a big raise with the promotion. On which of the following might Ginny spend her increased discretionary income?

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A) furnace repairs B) automobile insurance C) a smart TV D) medical services E) grocery staples

136) As the owner of a Bluetooth specialties store, Alicia Fountainbleau has an income of $72,000. She pays $30,000 per year in taxes and another $22,000 per year in grocery bills, house mortgage, and car payment. Last year she spent an additional $4,000 on a two-week vacation at a Club Med in Rio de Janeiro. What was Alicia's discretionary income last year? A) $20,000 B) $4,000 C) $42,000 D) $26,000 E) $50,000

137) Bart Thunderheart has an annual income of $75,000 a year. He pays $25,000 in taxes and spends another $15,000 on his home, car, food, and other "necessities." Last year, he decided to really enjoy his annual vacation, so he spent $5,000 to go skiing in Austria. What was Bart's discretionary income last year? A) $20,000 B) $5,000 C) $35,000 D) $30,000 E) $50,000

138) Manuel Acala is a marketing analyst, but he made only $28,000 last year because he was employed only part of the year. He paid $5,000 in taxes and spent another $10,000 for food, housing, a car, and other "necessities." Manuel's discretionary income was

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A) $28,000. B) $13,000. C) $23,000. D) $18,000. E) The information given is insufficient.

139) Kira Johannson's salary as a sales rep was reduced to $32,000 last year, but she earned an additional $10,000 in sales commissions. Her tax bill was $14,000, and bills covering other necessities such as food, housing, and transportation amounted to $11,000. Kira's discretionary income last year was A) $17,000. B) $11,000. C) $32,000. D) $28,000. E) $42,000.

140) Alberto Romez earned $100,000 last year as a Mercedes sales rep. He paid $10,000 in taxes and another $25,000 on food, housing, and other necessities. Alberto's discretionary income was A) $75,000. B) $65,000. C) $55,000. D) $45,000. E) $35,000.

141)

The economic-buyer theory

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A) says that most consumers do not know the economic value of the products they purchase. B) explains why people behave the way they do. C) includes psychological variables and social influences. D) is too simplistic to explain consumer behavior. E) assumes that consumers always buy the lowest-price alternative.

142)

The economic-buyer model

A) is seen as too simplistic by most marketing managers. B) assumes that consumers Are Affected by psychological variables and social influences. C) suggests that men and women behave differently as buyers. D) assumes that buyers don't have enough information to make logical choices and, as a result, buy products that are not a good value. E) None of the answers is correct.

143) ADT commercials that advertise the value of having a home burglar alarm system appeals to consumers' A) personal needs. B) economic needs. C) social needs. D) safety needs. E) physiological needs.

144) Of the following, the firms most likely to attract consumers by making an appeal to social needs are

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A) tire companies. B) online dating sites. C) tax preparation services. D) banks. E) electric companies.

145) Many consumers mentally block out marketing messages that do not interest them. This phenomenon is part of a person's A) motivation. B) needs. C) perception. D) attitudes. E) learning.

146)

________ is one of the psychological variables that affects a person's buying behavior. A) Perception B) Family C) Social class D) Reference groups E) Convenience

147) Which of the following lists includes only psychological variables that affect consumer buying? A) motivation, learning, perception, attitudes B) culture, learning, perception, attitudes C) culture, personality, perception, attitudes D) attitudes, personality, learning, culture E) perception, personality, learning, culture

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148)

Which of the following is not a psychological variable? A) attitudes B) social class C) motivation D) learning E) perception

149)

Regarding consumer motivation, the text states that A) wants are the basic forces that motivate people to do something. B) all needs and wants are caused by drives. C) wants are learned needs. D) the terms needs and wants mean the same thing. E) None of the answers is correct.

150)

What are the basic forces that motivate a person to do something? A) desires B) drives C) actions D) aspirations E) needs

151)

Wants are A) an effort to satisfy a drive. B) more basic than needs. C) strong stimuli that encourage action to reduce a need. D) needs that are learned during a person's life. E) unchanging during a person's life.

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152) Marci Bello is status oriented. When she buys clothing, she only considers items with well-known labels that her friends will notice. This behavior illustrates A) satisfaction of a need. B) satisfaction of a want. C) satisfaction of a belief. D) the economic buyer model of buyer behavior. E) All of the answers are correct.

153)

A ________ is a strong stimulus that encourages action to reduce or satisfy a need. A) want B) motivation C) drive D) desire E) deed

154)

When a consumer actually purchases a particular product, it is the direct result of a A) need. B) want. C) drive. D) desire for physical well-being. E) None of the answers is correct.

155)

Good marketing managers know that

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A) marketing strategies can't influence consumer "wants." B) marketers can't create internal drives in consumers. C) it is not that difficult to develop a marketing strategy that gets consumers to do what they don't want to do. D) None of the answers is correct.

156) After working for 18 hours, Katrina arrived home exhausted and wanted to go straight to sleep. Katrina's need to sleep is a ________ need. A) psychological B) social C) physiological D) behavioral E) emotional

157) Frustrated by a lack of freedom to make decisions at her work, Betty quit her job to find one with greater independence. What type of need motivated Betty's actions? A) psychological B) social C) physiological D) economic E) cultural

158)

The four-level PSSP hierarchy of needs includes A) psychological needs, safety needs, social needs, and personal needs. B) physiological needs, safety needs, personal needs, and social needs. C) psychological needs, financial needs, social needs, and personal needs. D) physiological needs, psychological needs, social needs, and financial needs. E) physiological needs, psychological needs, safety needs, and personal needs.

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159)

As ranked from lowest level to highest level, the hierarchy of needs model includes A) personal, social, safety, and physiological needs. B) physiological, safety, social, and personal needs. C) safety, personal, social, and psychological needs. D) social, personal, safety, and psychological needs. E) physiological, safety, personal, and social needs.

160) According to the hierarchy of needs model, the first needs most people try to satisfy are their ________ needs. A) safety B) personal C) physiological D) social E) Any of the answers may be correct, depending on the culture.

161)

Physiological needs are concerned with A) protection and physical well-being. B) love, friendship, status, and esteem. C) an individual's need for personal satisfaction. D) biological needs. E) responsibility and independence.

162)

________ needs are concerned with things that involve a person's interaction with others.

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A) Physiological B) Safety C) Biological D) Personal E) Social

163) Needs such as accomplishment and relaxation, which are unrelated to what others think or do, are known as A) physiological needs. B) safety needs. C) social needs. D) personal needs. E) biological needs.

164)

Which of the following are examples of personal needs? A) food, liquid, and rest B) accomplishment, fun, and freedom C) solutions, protection, and physical well-being D) love and friendship E) status and connecting with others

165) L'Oreal advertises its hair color with the popular tagline, "So it costs a bit more. But I'm worth it!" Here, L'Oreal's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social needs B) safety needs C) physiological needs D) personal needs

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166) Newman's Own (a salad dressing brand) donates 100 percent of its after-tax profits to progressive causes. Newman's Own is focusing on satisfying which level in the hierarchy of needs? A) social needs B) personal needs C) safety needs D) physiological needs

167) Hallmark advertises its gift items with the popular tagline, "When you care enough to send the very best." Here, the marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal E) psychological

168) Harley Owners Group connects motorcycle riders to one another. This group is focusing on satisfying which level in the hierarchy of needs? A) safety B) physiological C) social D) personal

169) Allstate Insurance promotes its auto and home insurance by telling consumers, "You're in good hands with Allstate." Which of the following types of needs is Allstate trying to satisfy?

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A) personal needs B) social needs C) physiological needs D) safety needs E) behavioral needs

170) The American Heart Association promotes its awareness campaign with the popular tagline, "Learn and Live." Here, The American Heart Association's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal

171) On its website, Tylenol identifies the top headache triggers and offers solutions to headache sufferers. Tylenol is focusing on satisfying which level in the hierarchy of needs? A) physiological needs B) behavioral needs C) personal needs D) safety needs E) social needs

172) In the PSSP hierarchy of needs model, which level is illustrated by a Fidelity campaign on TV that proclaims its individual retirement account (IRA) is a sound investment for the future? A) personal needs B) physiological needs C) social needs D) safety needs

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173) The Cleveland Water Department promotes its safe water with a catchy tagline, "The label says Fiji because it's not bottled in Cleveland." Here, the Cleveland Water Department's marketing effort focuses on satisfying which level in the hierarchy of needs? A) physiological B) social C) safety D) personal

174) The California Dairy Association promotes its milk campaign with the popular tagline, "Got milk?" Here, the California Dairy Association's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal E) psychological

175) In the PSSP hierarchy of needs model, which level is illustrated by a "Got Milk?" magazine campaign that encourages customers to drink more milk? A) physiological needs B) safety needs C) social needs D) personal needs

176)

Which of the following statements about "needs" is true?

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A) A higher-level need may develop before lower-level needs are all satisfied. B) If lower-level needs are reasonably satisfied, those at higher levels become more dominant. C) A particular product may satisfy more than one need at the same time. D) All of the statements are true.

177)

When studying consumer needs, a marketer should

A) know that a product may be a want or a need depending on what the consumer has learned during his or her life. B) try to understand how the marketing mix can satisfy a set of needs, rather than only one. C) realize that he or she cannot create needs, merely identify them. D) All of the answers are correct.

178)

________ refers to how we gather and interpret information from the world around us. A) Retention B) Perception C) Attitude D) Learning E) Lifestyle analysis

179) us?

What selective processes are used in gathering and interpreting marketing stimuli around

A) selective exposure, selective perception, and selective attention B) selective attention, selective perception, and selective retention C) selective exposure, selective attention, and selective reception D) selective exposure, selective perception, and selective retention

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180)

Which of the following is not one of the selective processes? A) selective perception B) selective distribution C) selective exposure D) selective retention

181) The way our eyes and minds seek out and notice only information that interests us is called A) conscious cognition. B) selective exposure. C) selective retention. D) preconscious perception. E) selective perception.

182) Selective ________ refers to processes that screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. A) exposure B) learning C) retention D) attention E) perception

183) When consumers screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs, it is called

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A) cognitive perception. B) selective perception. C) selective retention. D) conscious perception. E) selective exposure.

184)

Consumers remembering only what they want to remember is called A) conscious response. B) selective retention. C) selective exposure. D) cognitive learning. E) selective perception.

185) While planning a vacation, Betty Jo visited the website of a package tour provider and closed a pop-up ad without even noticing what it was for. This is an example of selective A) retention. B) exposure. C) perception. D) learning. E) action.

186) When listening to music on the radio, many consumers automatically switch stations when commercials begin to run, and they search until they find another station that is playing music. This tendency is an example of selective A) exposure. B) perception. C) retention. D) learning. E) reception.

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187) Tammi Soloft has itchy eyes and a stuffy nose, and she suddenly becomes aware of many TV ads for allergy products that she never noticed before. This illustrates selective A) exposure. B) perception. C) retention. D) cognition. E) None of these answers is correct.

188) Carmela Sanchez is planning to buy a pair of running shoes. Recently, she has been noticing more Adidas advertising in magazines. This is an example of A) a physiological need. B) dissonance. C) need satisfaction. D) selective exposure. E) a consumer expectation.

189) On his way to a GM dealership to pick up a new truck he has purchased, Ian Mann hears a Ford ad that says that Ford trucks have more power than Chevy trucks. Ian thought that the ad said that the Chevys had more power. This illustrates A) selective perception. B) learning. C) selective retention. D) reinforcement. E) selective exposure.

190) After his Political Science class, Andre only remembered the parts of his professor's lecture that he agreed with. This is an example of selective

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A) retention. B) exposure. C) information. D) attention. E) action.

191)

________ is a change in a person's thought processes caused by prior experience. A) Selective retention B) Processing C) Wanting D) Learning E) Perception

192)

Which of the following is not a major step in the learning process? A) dissonance B) drive C) response D) cues E) reinforcement

193)

The order of the steps in the learning process is A) drive, cue, response, reinforcement. B) cue, response, drive, reinforcement. C) cue, response, reinforcement, drive. D) drive, response, reinforcement, cue. E) reinforcement, drive, cue, response.

194)

Which of the following statements about the learning process is true?

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A) A cue is a strong stimulus that drives an individual. B) Learning occurs only when a drive is satisfied. C) Cues are the causes of drives. D) Reinforcement strengthens the relationship between a cue and a response. E) All of the statements are true.

195)

Which of the following statements about learning is false?

A) Satisfaction with a product purchase is reinforcement. B) Repeated reinforcement is likely to lead to routine buying. C) A marketing manager can use a package as a cue. D) Reinforcement in the learning process weakens the relationship between a cue and a response. E) Almost all consumer behavior is learned.

196)

Which of the following statements concerning reinforcement is false?

A) Reinforcement of the learning process occurs when the response is followed by satisfaction. B) Reinforcement strengthens the relationship between the cue and the response. C) Reinforcement leads to satisfaction and an increase in the drive. D) Repeated reinforcement leads to development of a habit. E) If an experience is satisfactory, positive reinforcement occurs.

197)

Which of the following observations about learning is false? A) Learning is rarely based on direct experience. B) Consumer learning may result from things that marketers do. C) Learning can be based on indirect experience or associations. D) Consumer learning may result from stimuli that have nothing to do with marketing. E) Almost all consumer behavior is learned.

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198) A movie theater runs a film clip that shows pictures of candy, popcorn, and soft drinks prior to running the featured movie. The intent is to get theater patrons to make purchases at the concession stand in the theater lobby. This process is an example of which of the following behavioral influences on buying behavior? A) attitudes B) beliefs C) selective processes D) learning E) None of the answers is correct.

199) In the learning process, ________ can be in the form of products, signs, ads, and other stimuli in the environment. A) reinforcement B) responses C) signals D) retention E) cues

200)

Which of the following is an example of using a cue to attract consumers? A) using a label with red, white, and blue colors to stir patriotic feelings B) adding lemon scent to a soap C) using a package that looks like the one for a popular brand D) adding pine scent to a cleansing fluid E) All of the answers are correct.

201)

When Taco Bell shows a large close-up of a chicken taco in a television ad, it is

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A) encouraging selective retention. B) hoping to encourage extensive problem solving by the audience. C) appealing to the social needs of the audience. D) appealing to the economic needs of the audience. E) using a cue to encourage a particular response to the hunger drive.

202) A divorced dad commuting to work on a major highway notices a billboard for McDonald's any-size $1 soft drink. This billboard is an example of a(n) A) reinforcement. B) response. C) drive. D) cue. E) attitude.

203) A grocery store sprays an aerosol scent that smells like fresh baked bread near its packaged bakery items. This is A) a case of a manager developing a need. B) likely to have no effect because selective retention will eliminate any effect of the smell. C) a case of linking a response with a drive. D) an example of trying to link a cue with a marketing mix. E) a violation of the selective processes.

204)

An attitude is A) the same as an intention to buy. B) a person's point of view about something. C) easy to change. D) the same as a belief. E) All of the answers are correct.

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205) A(n) ________ is a person's point of view toward a product, an advertisement, a salesperson, a firm, or an idea. A) attitude B) belief C) preference D) impression E) cue

206)

Attitudes are A) things we believe strongly enough to be willing to take some action. B) more action-oriented than beliefs. C) reasonably enduring points of view about something. D) usually thought of as involving liking or disliking. E) All of the answers are correct.

207)

Which of the following statements about consumer buying behavior is true? A) Attitudes affect the selective processes, learning, and buying decisions. B) Many consumers with a favorable attitude toward a product may have no intention to

buy it. C) Beliefs are less action-oriented than attitudes. D) All of the statements are true.

208)

Some marketers stretch the meaning of "attitude" to include

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A) intention to buy. B) needs. C) beliefs. D) psychographics. E) actual purchasing behavior.

209)

Consumers' attitudes can be learned from A) exposure to the attitudes of others. B) promotion that is directed toward them. C) previous experiences. D) family and friends. E) All of the answers are correct.

210)

Which of the following observations concerning beliefs is false? A) Beliefs don't necessarily involve any liking or disliking. B) A belief is a person's opinion about something. C) Beliefs may help shape a consumer's attitudes. D) Beliefs are more action-oriented than attitudes.

211)

The statement "I like Southwest Air" is an example of a(n) A) belief. B) intention. C) attitude. D) drive. E) None of the answers is correct.

212)

The statement "Almond Joy is made with real almonds" is an example of a(n)

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A) belief. B) intention. C) attitude. D) cue. E) None of the answers is correct.

213)

The statement "I plan to see the new Tom Hanks movie" is an example of A) a drive. B) reinforcement. C) an attitude. D) a belief. E) an intention.

214)

Which of the following would be the most difficult task facing a marketing manager? A) discovering the attitudes of the firm's target market B) changing existing negative attitudes C) creating new attitudes toward his or her brand D) promoting existing attitudes E) strengthening existing positive attitudes

215)

When dealing with consumer attitudes, marketers should know that

A) it is usually easier to change a negative attitude about a product than to reinforce a positive attitude. B) consumer attitudes tend to be enduring. C) attitudes are very good predictors of how people will behave. D) consumer attitudes are less action-oriented than consumer beliefs. E) None of the answers is correct.

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216)

A(n) ________ is an outcome or event that a person anticipates or looks forward to. A) response B) need C) desire D) expectation E) attitude

217)

An expectation is A) an event that a person likes to remember. B) a positive cue. C) an unfulfilled need. D) an outcome that a person looks forward to. E) None of the answers is correct.

218)

Trust is the confidence a person has in the promises or actions of A) another person. B) a brand. C) a company. D) a recommender. E) All of the answers are correct.

219)

Psychographics may also be called A) personality analytics. B) social group dynamics. C) lifestyle analysis. D) opinion insight. E) attitude measures.

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220)

The AIO items used in lifestyle analysis include A) activities, intentions, and opinions. B) attitudes, intentions, and opinions. C) attitudes, income, and opinions. D) activities, interests, and opinions. E) attitudes, interests, and opinions.

221)

Psychographics, or lifestyle analysis, analyzes an individual's A) opinions. B) demographics. C) activities. D) interests. E) All of the answers are correct.

222) Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's A) safety, social, and personal needs. B) actions, interests, and occupation. C) activities, interests, and opinions. D) culture, beliefs, and attitudes. E) psychological and physiological needs.

223) Studying a consumer's psychographic characteristics will help marketers understand the target audience's hobbies, politics, and

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A) geographic area. B) age bracket. C) family size. D) income level. E) recreational interests.

224)

In psychographics AIO analysis, all of the following are examples of activities EXCEPT A) age. B) entertainment. C) club membership. D) shopping. E) hobbies.

225)

Consumer buying behavior is affected by A) opinion leaders. B) social class. C) physiological, safety, social, and personal needs. D) reference groups. E) All of theanswers affect consumer buying behavior.

226) Which of the following social influences will likely have the greatest impact on a teenager's purchase of a skateboard? A) family B) reference group C) culture D) ethnic group E) social class

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227) Parents who spent years limiting purchases to home necessities and kids' entertainment often embrace more luxury-oriented buying patterns later in life. This phenomenon is related to A) changes in purchase situation. B) selective retention. C) reinforcement. D) changed physiological needs. E) empty nester behavior.

228) The inclusion of multiple language options in automated bank teller machines illustrates how some marketers are responding to A) the growing singles market. B) emerging reference groups. C) situational buying. D) growing ethnic groups. E) social class fragmentation.

229) Marketers increasingly hire celebrities and even full-time bloggers to engage consumers in social media discussions about new products. A person who is able to influence followers to try products is a(n) A) channel captain. B) consumer advocate. C) marketer. D) figurehead. E) opinion leader.

230)

________ is a social influence that affects a person's buying behavior.

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A) Perception B) Family C) Motivation D) Learning E) Attitude

231)

Which of the following dimensions affects family spending? A) income B) age of children C) age of the couple D) marital status E) All of these dimensions affect family spending.

232)

Which of the following is not a stage in the traditional flow of the family life cycle? A) young single B) young married without children C) young divorced with children D) middle-aged married without dependent children E) young married with children

233) The traditional family flow, according to the family life cycle, does who are

not include people

A) middle-aged divorced without dependent children. B) young married with children. C) middle-aged married with children. D) middle-aged married without dependent children. E) young married without children.

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234)

Which of the following statements is true?

A) Divorced families usually have more discretionary income than traditional families. B) Singles and young couples are less willing to try new products than are older couples. C) Empty nesters are frequently big spenders. D) Buying responsibility and influence vary little from one family to another. E) None of the statements is true.

235)

Of the following, which are the most receptive to new products and new brands? A) families with small children B) older people with no children C) families with teenagers D) families whose children are grown E) younger people with no children

236)

Of the following, which are the most receptive to new products and new brands? A) young people B) senior citizens C) empty nesters D) middle-aged people E) All of these are equally receptive to new products and new brands.

237)

Regarding the family life cycle, singles and younger couples without children A) are more willing to try new products and brands. B) tend to be carefree shoppers who are not very price-conscious. C) often wait to buy basic durable goods until they have children. D) feel more financially squeezed than couples with young children. E) All of the answers are correct.

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238) Ted and Amy Balderas were married last year, at age 24. They have no children, and both are currently working hard to build their careers. Couples like Ted and Amy A) are likely to be a poor target for firms that are trying to market a new brand or new product concept. B) usually focus on buying durables, such as furniture and appliances. C) usually don't spend money on discretionary purchases. D) are unlikely to be careful, price-conscious shoppers. E) None of the answers is correct.

239) Which of the following statements is not true of the effect of marital status, age, and the age of any children in the family on how people spend their income? A) Singles and young couples are more willing than older married people to try new products and brands. B) Younger people usually earn more than older consumers but spend less on discretionary items. C) Only as children arrive and grow does family spending shift to soft goods and services. D) Young families with children often make more purchases on credit and save less of their income.

240)

Teenagers A) have no influence on the buying behavior of their parents. B) are not an attractive market because they do not spend much money. C) have become a target for many firms. D) have essentially the same buying habits as they had before reaching their teen years. E) None of the answers is correct.

241)

American teenagers

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A) are not interested in expensive clothes. B) are not involved in shopping. C) currently spend around $200 billion a year. D) develop recreation and education needs that are easy on the family budget. E) do not influence family purchases.

242)

U.S. teenagers spend about ________ per year. A) $100 billion B) $150 billion C) $200 billion D) $250 billion E) $300 billion

243)

Empty nesters A) are senior citizens. B) are people over 65 who live alone. C) often have high incomes and fewer required expenses. D) are singles and couples without children who have much discretionary income. E) None of the answers is correct.

244)

Empty nesters A) are usually in the 30 to 44 age group. B) are not an attractive market for any items. C) spend a larger percentage of their income on childcare. D) are people whose children are grown. E) disrupt the family life-cycle pattern.

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245) HomeFront Construction Company built large, single-family homes for 25 years. Then there was a shift toward more demand for small luxury condominiums, and HomeFront changed its focus. The change in demand could be explained by A) the increasing number of empty nesters. B) the fact that consumers in urban areas generally have higher incomes. C) the increasing number of people whose children are grown. D) All of the explanations could be relevant.

246)

Current consumer research suggests that the family's purchasing agent is now the A) husband. B) child or children. C) wife. D) It varies depending on the product and the family.

247) Peter Janca noticed, during his weekly grocery shopping, that 7-Up was on sale. Even though he could have saved money with the 7-Up, Peter bought Mountain Dew because that's the brand his children prefer. Peter was responding to A) selective exposure. B) dissonance. C) a marketing influence. D) a social influence. E) a drive.

248)

Your social class level does not depend directly on your

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A) housing location. B) income level. C) occupation. D) education. E) type of housing.

249)

The social class system in the United States A) does not affect how people spend, but it does affect how they save. B) may put people with the same income level in different social classes. C) is based on a person's educational level. D) is much more rigid than in Europe and Asia. E) does not affect people's attitudes.

250)

Social class in the United States is usually measured in terms of A) income. B) occupation, education, and housing arrangements. C) income, occupation, and education. D) race, religion, and occupation. E) income, occupation, and religion.

251) In the United States, social class groupings are typically based on all of the following EXCEPT A) type of housing. B) education. C) community participation. D) occupation. E) location of housing.

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252)

Which of the following statements about social class is

false?

A) The various classes tend to have different attitudes. B) The various classes tend to save money in different ways. C) Income by itself can be a pretty good measure of social class. D) The various classes tend to have different beliefs. E) The various classes tend to borrow money in different ways.

253)

Which of the following statements concerning social class is false? A) Income by itself is usually a good measure of social class. B) In most countries, social class is closely related to a person's occupation. C) In most countries, there is a general relationship between income level and social

class. D) Almost every society has some social class structure. E) People in different social classes often spend, save, and borrow money in very different ways.

254)

Which of the following statements about social class is false?

A) People in different social classes tend to have different beliefs and feelings. B) People with the same income level are always in the same social class. C) Variables such as occupation, education, and type of housing form the basis of simple approaches for measuring social class. D) A social class is a group of people who have approximately equal social position as viewed by others in the society.

255) ________ refers to the people to whom an individual looks when forming attitudes about a particular topic.

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A) Family B) Social class C) Ethnic group D) Focus group E) Reference group

256)

Which of the following statements about reference groups is true?

A) Reference group influence is so strong that a person normally has only one. B) Reference group influence is greatest for older people. C) Reference groups sometimes include people an individual does not want to be like. D) Reference group members may not even know the people who influence their values and attitudes. E) None of the statements is true.

257)

A good marketing manager knows that

A) there are different types of reference groups that might influence a decision. B) most consumers have only one reference group. C) a consumer's family is not a reference group. D) reference groups usually have the most influence on purchases of products that are not easily seen by others. E) None of the answers is correct.

258)

Which of the following observations about reference groups is false?

A) Reference groups are people to whom an individual looks when forming attitudes about a particular topic. B) An individual usually has a single reference group for all topics. C) An individual may make buying decisions based on what the group thinks. D) Reference group influence is stronger for products that others can observe. E) Reference group influence is stronger for products that relate to status in the group.

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259) Reference group influence would be weakest for determining which particular ________ a person buys. A) watch B) cosmetics C) clothing D) laundry soap E) car

260) Reference group influence is likely to have the strongest effect on the particular brand of ________ purchased. A) dishwasher detergent B) frozen peas C) batteries D) watch E) Reference group influence would be about the same for each of these products.

261) Natasha Talbott was interested in a new set of golf clubs. She discussed the various types with some knowledgeable friends and relied on their advice. Natasha's friends were acting as A) an economic influence. B) routinized decision makers. C) a social class. D) a lifestyle group. E) a reference group.

262) In the Jockey underwear ads showing young people on the beach and the slogan, "Let 'em know you're Jockey," the company is hoping to use ________ groups to influence consumer behavior.

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A) cultural B) family C) opinion D) reference E) social

263) When Ariat gave boots away to popular rodeo riders, other riders began asking for the Ariat brand, and Western stores were eager to sell the boots. Ariat used ________ groups to influence consumer behavior. A) social B) family C) reference D) cultural E) opinion

264) Marty plays pee-wee football in a small town in Massachusetts. He insists on wearing Under Armor clothing because it is endorsed by his favorite athlete, quarterback Tom Brady of the New England Patriots. This is an example of a(n) A) aspirational reference group. B) selective exposure. C) discretionary perception. D) routinized response behavior. E) associative reference group.

265) Which of the following is the best example of the influence of an associative reference group?

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A) Jada asked her mom to buy her Vans sneakers because all her friends got them for Christmas. B) Tyler no longer wears a t-shirt promoting a rock star who was recently arrested for domestic assault. C) Karen likes to wear Nike clothing because it is endorsed by her favorite athlete, Simone Biles. D) Warren is in the market for a Ford pickup truck and now they seem to be everywhere he looks. E) Kayla is a person who uses social media to influence others’ buying decisions.

266)

A ______ reference group includes people that an individual does not want to be like. A) dissociative B) aspirational C) associative D) selective E) dissonance

267)

Opinion leaders are A) usually better educated than others. B) usually wealthier than others. C) people who influence others. D) rarely involved in product-related discussions with the people who "follow" them. E) All of the answers are correct.

268)

Which of the following statements about opinion leaders is true?

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A) Opinion leaders are usually wealthier and better educated than others. B) Opinion leaders on one subject aren't necessarily opinion leaders on another. C) Firms always aim their marketing mixes at general consumers, not opinion leaders. D) Favorable publicity from opinion leaders rarely helps a marketing mix. E) Opinion leaders are the same as reference groups.

269) Which of the following is true of the impact that social media has on the consumer decision process? A) Marketing managers have direct control over social media influences. B) Social media limits consumers' exposure to a wide range of reference groups. C) Social media amplifies the voices of opinion leaders. D) Consumer adoption of the web and social media has had no significant effect on the consumer decision process. E) Marketing managers do not need to monitor the use of social media by opinion leaders.

270) Which of the following examples illustrates social media's amplification of the voice of opinion leaders? A) an e-commerce site providing attractive offers to its regular customers B) a retail store announcing a sweepstake on its company website C) a seasoned tourist posting a long, detailed, positive review at Hotels.com D) a podcast that receives thousand views and hits E) a brand sending a message about Twitter to its followers

271) A group of new-generation mothers blogging about products they like and dislike attracts a lot of readers, mainly those who are expecting a baby. These new-generation mothers are examples of

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A) message mediators. B) gatekeepers. C) liaisons. D) opinion leaders. E) category captains.

272) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous group of people is a(n) A) culture. B) family. C) evoked set. D) social class. E) reference group.

273) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people is a(n) A) tradition. B) class. C) society. D) culture. E) ethnicity.

274) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people is called a(n) A) personal environment. B) culture. C) motivation. D) learned set. E) opinion set.

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275)

Which of the following statements about culture and consumer behavior is true?

A) Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. B) Culture may exert many subtle influences on other aspects of consumer behavior. C) Different cultural subgroups are likely to require different marketing mixes. D) All these statements are true.

276)

People from different ethnic groups A) create challenges for marketers, not opportunities. B) do not play an important role in the American marketplace. C) may be influenced by very different cultural variables. D) have common needs. E) have similar ways of thinking.

277)

Which of the following statements is true of culture and international markets?

A) Assuming cultural homogeneity across nations almost guarantees success in international markets. B) Planning strategies that consider cultural differences in international markets are simple and straightforward. C) Treating each foreign market as a separate market with its own submarkets and culture is a useful method in marketing. D) General human tendencies do not vary across cultures; therefore, it is insignificant to consider cultural differences in international markets. E) Ignoring cultural differences is almost a guarantee of success in international markets.

278) U.S.-based Myva Foods Inc. is expanding its business to the Asian market. Which of the following will not be effective in the company's efforts to expand to international markets?

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A) paying close attention to the cultural differences between Myva's home country and the host countries B) finding new ways to blend the Four Ps of the marketing mix in the new market by making an effort to understand the local culture C) applying the same marketing mix Myva uses in the U.S. market to the Asian market D) putting more effort into planning strategies for the international markets, even though it has experienced success in the U.S. market

279)

Which of the following statements regarding ethnic shifts in the American market is true?

A) Estimates indicate that in 2019 the buying power of Hispanics will exceeded a trillion and half dollars. B) Estimates indicate that by 2019 the buying power of African Americans will exceed 1 trillion dollars. C) Estimates indicate that in 2018 Asian Americans had over 1 trillion dollars in buying power. D) The buying power of ethnic submarkets is increasing rapidly. E) All of the statements are true.

280)

Which of the following statements about ethnic dimensions of the U.S. market is true? A) Ethnic groups buy differently and have different needs. B) Many firms make the mistake of treating all consumers in an ethnic group as a single

group. C) The number of ethnic consumers is growing at a faster rate than the overall society. D) The buying power of ethnic submarkets is increasing rapidly. E) All of the statements are true.

281)

Ethnic markets are becoming more important to marketers because

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A) the buying power of ethnic submarkets has been decreasing. B) the median age of Asian Americans, African Americans, and Hispanics is much higher than that of whites. C) the number of ethnic consumers is growing at a much faster rate than the overall society. D) they make a clear segment with similar backgrounds and common language, religion, and culture. E) the birthrate of Asian Americans, African Americans, and Hispanics is lower than that of whites.

282)

Which of the following statements by marketing managers is not logical and true?

A) "We are planning to appeal more to Hispanic consumers, since this group has surged and is now over 15 percent of the population." B) "We're building supermarkets that will appeal to Hispanic consumers; it's a big investment, but the Hispanic population in the United States spends more than $1 trillion a year." C) "We are adapting our diaper promotion to target African American and Hispanic parents, since the birthrate in those groups is higher than for whites." D) "We will target Hispanics in California, New York, and Texas, since over half of their population in the United States is concentrated in those three states." E) "We are going to appeal to the African American group because it is a large, homogeneous target market."

283)

The largest ethnic minority group in the United States is composed of A) African Americans. B) Asian Americans. C) Native Americans. D) Polish Americans. E) Hispanics Americans.

284)

Which of the followings statements about the Hispanic population is false?

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A) More than half of all Hispanics in the United States live in three states. B) In 2017, over 25 percent of the U.S. population was Hispanic. C) The Hispanic population is much younger than the population in general. D) Hispanics are the largest ethnic group in the United States. E) In 2019, the buying power of U.S. Hispanics is estimated to exceed $1.5 trillion.

285) Compared to the other major ethnic groups in the United States, which of the following would an African American consumer be more likely to buy? A) a product tied to cultural traditions B) fragrances C) electronic goods D) dried grains E) a product sold online

286)

Which of the following statements about Asian Americans is false? A) Asian Americans are the largest and fastest-growing ethnic group in the United

States. B) One-third of all Asian Americans live in California. C) Asian Americans have the highest average household income of the major ethnic groups. D) Asian Americans make up 6 percent of the U.S. population. E) Asian Americans disproportionately buy more fresh produce, organic foods, and electronic goods, as compared with other groups.

287) A college student on her way to take an exam remembers that she doesn't have a pencil with an eraser, which the instructor asked everyone to bring. The store where she stops doesn't have regular pencils, but it does sell Scripto mechanical pencils priced at $2.95. That is what she buys. This case illustrates the effect of

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A) the personal environment. B) culture. C) the purchase situation. D) the learned set. E) dissonance.

288) A person who purchases flowers will select different floral arrangements for a retirement party, a funeral, and a Valentine's Day date. This illustrates the impact of ________ on purchase decisions. A) economic needs B) psychological variables C) social influences D) the purchase situation E) extensive problem solving

289) Which of the following illustrates time and surroundings as factors of the purchase situation that can greatly stimulate buying behavior? A) routine trip to grocery store B) using mass transit to travel to and from work C) Black Friday shopping D) buying online E) paying a monthly cell phone bill

290) A salesperson driving to visit a client located two hours away has a tire blow out on the highway. He walks about a mile to the next exit, where he finds a service station. The owner of the station says he can replace the blown tire, but it will cost twice as much as it would to purchase a tire in the salesperson's home city. The salesperson, not wanting to be late for his appointment, agrees to pay the higher price in order to get back on the road. This case illustrates the effect of ________ on buying behavior.

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A) cultural background B) social groups C) the purchase situation D) the learning situation E) reference groups

291)

________ is a time-related factor. A) Demographic intensity B) Urgency of a need C) Environmental viability D) Economy of purchase E) Sociological interest

292)

When the need for a product or service is urgent, customers are A) less inclined to evaluate a range of options. B) more likely to downplay convenience. C) less likely to be stimulated by impulse. D) more likely to be involved in extensive problem solving. E) more likely to extend the adoption process.

293)

In which of the following situations is time influencing the purchase situation the most?

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A) Jiah purchases a gift for his mother after viewing an online offer. B) Henry visits a discount store to compare the store's pricing with other regular stores before purchasing a lawn mower. C) Kelly visits the city's central mall and checks various brands of sunglasses before she decides to purchase one from the Lanezone brand. D) Beulah, on her way to work, realizes that her car has a flat tire. She gets it fixed at the nearest auto service station without evaluating other alternatives. E) Ronaldo reviews websites and a consumer magazine as he considers buying a new television.

294) An on-site auction may stimulate a different response than an online auction. This is an example of ________ affecting the purchase decision. A) demographics B) time C) surroundings D) task E) culture

295)

The consumer decision process begins with A) a routinized response. B) need awareness. C) information search. D) problem solving. E) alternative evaluation.

296) For a home-based purchase of a furnace, the consumer decision process typically begins when

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A) home heating commercials create product awareness. B) a furnace sale is advertised in coupon mailings. C) the first cold day of winter sets in. D) a malfunction occurs in an older furnace. E) ten years have passed since the last purchase.

297) Which of the following would have the least influence on a consumer purchase of a 5gallon waterproof sealant for wood decks and fences? A) the purchase situation B) social influences C) economic needs D) psychological variables E) opinion of an opinion leader

298) A consumer who seeks to purchase a 4K TV for the first time for a home entertainment theater is likely to A) use a routinized response behavior. B) engage in limited problem solving. C) engage in extensive problem solving. D) make a low-involvement purchase. E) seek the brand with the lowest prices.

299) Which of the following is an important problem-solving step for a consumer trying to satisfy a need? A) search for information B) identify alternatives C) set criteria D) evaluate alternatives E) All of the answers are correct.

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300) When consumers use a problem-solving process to make purchase decisions, what is the next step after they become aware of a problem? A) evaluating alternative solutions B) gathering information about possible solutions C) deciding on the appropriate solution D) evaluating the decision E) making the commitment to purchase a particular product or service

301) Alejandro Allende needs a new computer. He is researching the different brands by talking to friends, discussing it with his company's IT department, and looking at different computer-company websites. In terms of consumer problem solving, Alejandro is A) searching for information. B) identifying alternatives. C) setting criteria. D) evaluating alternatives. E) recognizing needs.

302) Which of the following is not one of the levels of consumer problem solving discussed in the text? A) dissonance problem solving B) routinized response behavior C) extensive problem solving D) limited problem solving

303) When a consumer puts much effort into deciding how to satisfy a need, the consumer engages in

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A) extensive problem solving. B) critical problem solving. C) routinized response behavior. D) limited problem solving. E) intensive problem solving.

304)

What is the likely level of involvement in a purchase decision for a new couch? A) extensive B) limited C) low D) moderate E) routine

305) Extensive problem solving probably would be required by a recent college graduate in the purchase of A) living room furniture. B) a new computer. C) a new home. D) a sports car. E) All of the answers are correct.

306) Extensive problem solving probably would not be required by young newlyweds in the purchase of a A) stereo system. B) soft drink. C) home. D) an Ultra HD TV. E) car.

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307) Lars Sorenson is a college student who needs to purchase a suit for job interviews. In the past his father has helped him buy suits. This time, he is the sole decision maker and is paying for the $450 suit with money he earned at his part-time job. Lars is concerned about good fit and good value, so he visits several stores before making his purchase. For Lars, this situation seems to be one of A) routinized response behavior. B) low-involvement purchasing. C) extensive problem solving. D) limited problem solving. E) adoption purchasing.

308) Chelsea is buying her first television. She wants to make the right decision, so she consults several websites for product reviews, talks to friends and salespeople at electronics stores, determines several key criteria, and evaluates six different sets. For her television purchase, Chelsea has used A) extensive problem solving. B) a focused information search. C) routinized response behavior. D) limited problem solving. E) low-involvement buying.

309)

Limited problem solving is used A) when consumers put much effort into deciding how to satisfy a need. B) for purchases that have little importance or relevance for the customer. C) by consumers when some effort is required in deciding the best way to satisfy a need. D) when consumers regularly select a particular way of satisfying a need when it occurs. E) mostly for impulse purchases.

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310) Monica does not find her regular brand of shampoo at the store. She looks at the bottles of three other brands before deciding on the Shine-On brand. Monica has engaged in ________ problem solving. A) limited B) intensive C) routinized D) extensive E) analytical

311) What is the likely level of involvement in a purchase decision for a small kitchen appliance? A) extensive B) limited C) low D) moderate E) routine

312)

The purchase of which of the following items involves routinized response behavior? A) a laptop B) a mattress C) a new suit D) a silver ring E) a fast-food restaurant meal

313)

Limited problem solving probably would be required by empty nesters in the purchase of

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A) sports clothes. B) a restaurant's services. C) a plumbing repair service. D) a replacement garbage disposer. E) All of the answers are correct.

314) Eddie Falco went to a grocery store to buy his favorite brand of ice cream; however, the store was temporarily out of that brand, so he looked over the other familiar brands and decided to try one that is well-advertised. This case illustrates A) routinized response behavior. B) intensive problem solving. C) limited problem solving. D) extensive problem solving. E) low-involvement behavior.

315)

Which type of problem solving is typical for a low-involvement purchase? A) extensive problem solving B) critical problem solving C) limited problem solving D) intensive problem solving E) routinized response behavior

316)

Routinized response behavior

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A) is most likely when past purchases of similar products have not satisfied the consumer's needs. B) is more likely when previous behavior has not yet been reinforced. C) is most common for purchases where the consumer has much experience in how to meet a need. D) increases the time required to make a purchase decision. E) is likely in a new purchase situation.

317) More than 600,000 loyal customers signed up in advance to purchase the new iPhone 8 in an Apple store the first day it was available for sale in the United States What type of response behavior were these Apple followers demonstrating? A) low-involvement buying B) limited problem solving C) extensive problem solving D) routinized response E) dissonance response

318) When Corey runs out of shampoo, he buys whatever brand is on sale at his local CVS drugstore. What is his level of involvement in the purchase decision for shampoo? A) extensive B) limited C) moderate D) modest E) routine

319)

Which of the following is least likely to be an example of routinized response behavior?

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A) buying a Coke B) purchasing a new pair of shoes C) buying soap at a convenient supercenter D) buying a burrito at Taco Bell E) filling the car with gasoline

320) Routinized response behavior would probably be used by many consumers in the purchase of A) soap. B) canned fruit. C) salt. D) milk. E) All of the answers are correct.

321) Which of the following products would probably involve the lowest-involvement purchase for most consumers? A) paper towels B) summer vacation C) smartphone D) sweater E) cough syrup

322)

Dissonance is a A) tension caused by uncertainty about the rightness of a decision. B) conflict between opinion leaders. C) confirmation in the learning process. D) kind of belief. E) form of social influence.

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323)

Which of the following is true of dissonance? A) It discourages a consumer from considering information once a purchase is made. B) It is likely to result in a consumer buying the same product next time. C) It is more likely to occur with low-involvement products. D) It is less likely to occur when a consumer has repeatedly purchased the same product. E) It occurs in the adoption process after a consumer becomes interested in a product.

324) Laurie Michaels just bought a smartphone after spending several weeks considering all the possibilities. She likes the new phone, but she still wonders if another brand at a slightly higher price would have been better. This is an example of A) the relationships among drives, cues, and reinforcement. B) dissonance. C) a reference group influence. D) the stimulus-response reaction. E) routinized response behavior.

325) After buying an expensive new mobile phone, Kevin experiences ________ when he has second thoughts and wonders if he made the right choice. A) attitude adjustment B) variance C) conflict D) dissonance E) evaluation

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326) Billy Longstreet bought a new car and was a bit uncertain about whether or not he had done the right thing. Two days after he purchased it, he decided to take it back to the dealer for installation of some additional optional equipment. When Billy returned to the dealership to pick up the car after the installation, the salesman who sold Billy the car said, "You know, in the last two hours three different customers told me how much they liked the looks of your new car. One of them even wanted to know if it was for sale!" This attempt by the salesman to confirm the wisdom of Billy's purchase decision seems to be aimed at reducing A) post-purchase regret. B) reference group influence. C) adoption jitters. D) a stimulus-response reaction. E) dissonance.

327) A consumer who purchases a new computer but encounters frustration with set up and technical support may experience A) limited problem solving. B) extensive problem solving. C) dissonance. D) evaluation. E) an information search.

328) For a long time, Jessica felt disappointment over a new pair of jeans that never fit quite right. Jessica experienced A) high-involvement purchasing. B) dissonance. C) post-purchase regret. D) confirmation. E) selective feedback.

329) Which of the following refers to a marketer countering negative publicity to save a product's image? Version 1

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A) perceptual mapping B) dissonance process C) adoption process D) information filtering E) damage control

330)

Damage control is important for marketers because

A) the Internet limits the rights of people to share their opinions about a product or service with a large audience. B) many consumers share opinions about their good and bad experiences with a product or service. C) consumers are more likely to share stories about being satisfied than dissatisfied. D) recommendations from friends and family have no effect on consumers' purchase choices. E) car wrecks can be caused by shopping while driving.

331) Many firms use ________ to evaluate data in an attempt to forecast unknown future events. A) predictive analytics B) psychographics C) selective exposure D) market segmentation E) clustering techniques

332)

Which of the following is an example of the use of predictive analytics?

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A) Spotify recommends a new artist based on past listening history. B) Dropbox introduces online storage to a target market. C) Netflix unveils a new advertising campaign to differentiate itself from its competitors. D) An in-store promotion makes sure that Hershey's candy is put at point-of-purchase locations throughout the store. E) Sales associates at Nordstrom check out customers through the use of handheld devices so that customers do not need to wait in line.

333)

Predictive analytics is used to A) anticipate outcomes. B) adopt ideas. C) confirm decisions. D) reduce dissonance. E) reinforce behavior.

334)

The steps individuals go through in accepting or rejecting a new idea are known as A) the adoption process. B) the dissonance process. C) belief formation. D) information search. E) extensive problem solving.

335) A consumer who is interested in making the switch from a desktop computer to a tablet computer may require a prolonged learning and trial process known as

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A) the consumer decision process. B) limited problem solving. C) the adoption process. D) selective exposure. E) lifestyle analysis.

336)

In the adoption process, an individual moves through six definite steps. These steps are A) awareness, interest, evaluation, trial, decision, and confirmation. B) awareness, interest, involvement, trial, decision, and confirmation. C) involvement, interest, evaluation, trial, decision, and confirmation. D) evaluation, interest, awareness, trial, decision, and confirmation. E) evaluation, interest, involvement, trial, decision, and confirmation.

337)

Which of the following gives the correct order of the steps in the adoption process? A) interest, awareness, trial, decision, evaluation, dissonance B) awareness, interest, evaluation, trial, decision, confirmation C) awareness, interest, trial, evaluation, decision, dissonance D) awareness, interest, trial, decision, evaluation, confirmation E) awareness, interest, evaluation, decision, trial, confirmation

338) Consumers go through six steps when deciding to accept or reject a new idea. In this adoption process, the A) confirmation step follows the decision step. B) evaluation step follows the trial step. C) awareness step follows the interest step. D) trial step follows the awareness step. E) None of the answers is correct.

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339)

With regard to the adoption process, A) interest is the first step. B) decision is the final step. C) awareness follows interest. D) evaluation precedes trial. E) decision follows confirmation.

340)

In the adoption process, A) interest is the first stage. B) confirmation is the last stage. C) trial precedes evaluation. D) evaluation precedes interest. E) None of the answers is correct.

341)

The adoption process suggests that A) confirmation must come before the decision to adopt or reject. B) evaluation usually comes before trial and decision. C) the decision to reject may follow confirmation. D) confirmation comes from a satisfactory evaluation. E) decision usually follows trial and confirmation.

342) A marketing manager for a new brand of bar soap decides to mail free samples to consumers. The logic for using this approach is best explained by the A) economic-buyer model. B) stimulus-response model. C) typical consumer's adoption process. D) need to reduce dissonance. E) high level of problem solving required with such a product.

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343) In the ________ step of the adoption process, a consumer begins to give the product a mental trial by applying it to his or her personal situation. A) interest B) confirmation C) trial D) decision E) evaluation

344) Ken Prescott has noticed several television commercials for BestYet—a new brand of shampoo. While washing his hair, he thinks about what would happen if he replaced his current shampoo with BestYet. What stage in the adoption process has Ken reached? A) evaluation B) feedback C) decision D) interest E) awareness

345) In the ________ stage of the adoption process, the consumer may buy the product to experiment with it in use. A) interest B) awareness C) evaluation D) trial E) decision

346) A potential customer for a new Audi sedan takes the car for a two-hour test drive to see how it responds on the open road. This customer is at the ________ stage of the adoption process.

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A) awareness B) interest C) decision D) confirmation E) trial

347) In which step of the adoption process does the adopter continue to rethink the decision and search for support for the decision? A) interest B) evaluation C) trial D) confirmation E) awareness

348) Which of the following would most help a marketing manager in their attempt to monitor how a new idea is being adopted by the market? A) marketing analytics B) limited problem solving C) reference group analysis D) psychographics E) lifestyle analysis

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Answer Key Test name: Chap 05_17e 1) TRUE Consumer buying decisions are influenced by economic needs, psychological variables, social influences, culture and ethnicity, and the purchase situation. 2) TRUE The economic-buyer theory assumes that consumers are economic buyers—people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 3) TRUE Some economists assume that consumers are economic buyers—people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 4) FALSE Some examples of economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. 5) FALSE Economic buyers are people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. Some consumers look for the lowest price, but others will pay extra for convenience, etc. Some consumers may weigh price and quality for the best value. 6) FALSE

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Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. 7) TRUE In 2017, 25 percent of households had income of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 8) FALSE In 2017, 25 percent of households had incomes of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 9) TRUE After taking inflation into account, the median income in the United States has been flat over the last two decades. 10) TRUE In 2017, 25 percent of households had incomes of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 11) FALSE Discretionary income is what is left of income after paying taxes and paying for necessities. 12) FALSE Discretionary income is what is left of income after paying taxes and paying for necessities. 13) FALSE

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Discretionary income is what is left of income after paying taxes and paying for necessities. 14) TRUE Discretionary income is an elusive concept because the definition of necessities varies from family to family and over time. It depends on what they think is necessary for their lifestyle. 15) FALSE Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 16) TRUE Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. 17) FALSE Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables which affect consumer buying. 18) FALSE Needs are the basic forces that motivate a person to do something. Wants are "needs" that are learned during a person's life. 19) TRUE Wants are "needs" that are learned during a person's life. Needs are the basic forces that motivate a person to do something. 20) TRUE A drive is a strong stimulus that encourages action to reduce a need. In marketing, a product purchase results from a drive to satisfy some need. 21) TRUE

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Physiological needs are concerned with biological needs such as food, liquid, rest, and sex. 22) TRUE Personal needs are concerned with an individual's need for personal satisfaction, unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation, as well as a desire to make the world a better place. 23) TRUE A four-level "hierarchy of needs" model suggests that most products must fill more than one need at the same time. The lowest-level needs are physiological. After that come safety, social, and personal needs. 24) FALSE A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. 25) FALSE A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. A person can be motivated by more than one need at the same time. Further, more than one need can be satisfied at a time. 26) FALSE The four-level hierarchy of needs suggests that more than one need can be satisfied at a time. 27) TRUE We are constantly bombarded by stimuli, like ads, products, and stores; yet we may notice only a small number of these. 28) FALSE Version 1

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In selective exposure our eyes and minds seek out and notice only information that interests us. 29) FALSE In selective exposure our eyes and minds seek out and notice only information that interests us. In selective perception we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 30) TRUE Learning is a change in a person's thought processes caused by prior experience. Learning is often based on direct experience. 31) TRUE Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response. A response is an effort to satisfy a drive. 32) FALSE Reinforcement occurs when the response is followed by satisfaction, that is, reduction in the drive. It may lead to a similar response the next time the drive occurs. 33) TRUE Reinforcement of the learning process occurs when the response is followed by satisfaction, that is, reduction in the drive. Reinforcement strengthens the relationship between the cue and the response. 34) TRUE

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Sometimes marketers try to identify cues that have positive associations from some other situation and relate them to their marketing mix. Companies often add lemon scent to household cleaning products (Clorox bleach and Pledge furniture polish) because it has these associations. 35) TRUE Sometimes marketers try to identify cues that have positive associations from some other situation and relate them to their marketing mix. Firms like Calvin Klein use ads suggesting that people who use their products have more appeal to the opposite sex. 36) TRUE Luxury-car makers try for a "new car" smell with an aroma of leather and wood, even though the car would really smell more like metal and adhesives as it comes off the production line in a factory. Marketers often use cues with positive associations in their marketing mix. 37) TRUE An attitude is a person's point of view toward something. Because attitudes are usually thought of as involving liking or disliking, they have some action implications. 38) FALSE Attitudes are usually thought of as involving liking or disliking. Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. 39) TRUE Because attitudes are usually thought of as involving liking or disliking, they have some action implications. Beliefs are not so action-oriented. 40) FALSE Version 1

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Because attitudes are usually thought of as involving liking or disliking, they have some action implications. Beliefs are not so action-oriented. 41) TRUE Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. 42) TRUE Beliefs about a product may have a positive or negative effect in shaping consumers' attitudes. 43) FALSE Managers who must forecast how much of their brand customers will buy are particularly interested in the intention to buy. Forecasts would be easier if attitudes were good predictors of intentions to buy; unfortunately, it's not that simple. 44) TRUE An expectation is a future outcome or event that a person anticipates will happen. 45) TRUE Consumer expectations often focus on the benefits or value that the consumer expects from a firm's marketing mix. 46) FALSE A consumer is likely to be dissatisfied if his or her expectations are not met. Promotion that overpromises can create this problem. 47) TRUE Trust is the confidence a person has in the promises or actions of another person, brand, or company. 48) FALSE Version 1

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Highly trusted people, brands, and companies have many advantages in the marketplace. Consumers prefer to buy from and are more loyal to brands they trust. 49) TRUE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 50) FALSE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 51) TRUE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 52) TRUE Marital status, age, and the age of any children in the family have an especially important effect on how people spend their income. Put together, these dimensions tell us about the life-cycle stage of a family. 53) FALSE Marital status, age, and the age of any children in the family have an especially important effect on how people spend their income. Put together, these dimensions tell us about the life-cycle stage of a family. 54) FALSE Singles and young couples seem to be more willing to try new products and brands, and they are careful, price-conscious shoppers. 55) TRUE Version 1

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Younger families, especially those with no children, accumulate durable goods, such as automobiles and home furnishings. 56) FALSE Singles and young couples seem to be more willing to try new products and brands, and they are careful, price-conscious shoppers. 57) FALSE Younger families, especially those with no children, accumulate durable goods, such as automobiles and home furnishings. Only as children arrive and grow does family spending shift to soft goods and services, such as education, medical, and personal care. 58) FALSE Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs that are hard on the family budget. 59) TRUE Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 60) FALSE Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 61) FALSE A consumer's family, social class, and reference groups are social variables that influence the consumer decision process. 62) TRUE Buying responsibility and influence vary greatly depending on the product and the family.

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63) FALSE People with the same income level may be in different social classes, so income by itself is usually not a good measure of social class. 64) TRUE In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 65) FALSE Various classes have different attitudes toward spending and saving, even when they have the same income level. 66) TRUE Various classes have different attitudes toward spending and saving, even when they have the same income level. 67) TRUE A reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. 68) TRUE People normally have several reference groups for different topics. 69) FALSE An aspirational reference group includes people an individual desires to be like. An associative reference group includes people who more realistically reflect and individual. 70) TRUE A dissociative reference group includes people that an individual does not want to be like. 71) FALSE Version 1

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An opinion leader is a person who influences others. Opinion leaders aren't necessarily wealthier or better educated. 72) FALSE An opinion leader is a person who influences others. Opinion leaders on one subject aren't necessarily opinion leaders on another. 73) FALSE It is often useful to think of subcultures within cultural groupings. Failure to consider cultural differences, even subtle ones, can result in problems. 74) TRUE In the United States the number of ethnic consumers is growing at a much faster rate than the rest of the United States. 75) TRUE Ethnic minorities in the United States have a higher birthrate, and the buying power of these ethnic groups is increasing rapidly. 76) FALSE The growth of ethnic groups in the United States can be contributed to high birthrates. 77) TRUE Hispanics are the largest ethnic group in the United States. 78) FALSE Hispanics are the largest ethnic group in the United States. 79) TRUE Asian Americans have the highest average household income ($81,33) of the major ethnic groups. 80) FALSE Version 1

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African Americans have a median household income of $40,258. By comparison, the median household income of Hispanics was $50,486. 81) TRUE The buying power of ethnic groups is increasing rapidly. Estimates indicate that by 2019 Hispanic and African American consumers will have more than $1 trillion a year in buying power. 82) FALSE Planning strategies that consider cultural differences in international markets can be a challenge, as each foreign market may need to be treated as a separate target market with its own submarket. Ignoring cultural differences almost guarantees failure in international markets. 83) TRUE Products that make cleaning easier have popular appeal in the United States, but many Italian women doubt that something that works easily will meet their standards for cleanliness. So, for the Italian market, Swiffer was modified, and beeswax was added. 84) TRUE Needs, benefits sought, attitudes, motivation, and even how a consumer selects certain products all vary depending on the purchase situation. 85) TRUE Different purchase situations may require different marketing mixes, even when the same target market is involved. 86) TRUE The consumer decision process begins when a consumer becomes aware of an unmet need. The consumer's problem-solving process then focuses on how best to meet that need. 87) TRUE Version 1

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A consumer may search for information, identify alternatives, decide what factors (criteria) are important, and then evaluate one or more alternative products that might meet the need. 88) TRUE How much effort is put into a buying decision depends in part on economic needs, psychological variables, social influences, culture, and purchase situation factors. It's also tied to the amount of risk a buyer sees in making a wrong choice. 89) FALSE Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need. Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. 90) FALSE Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need. Limited problem solving is used by consumers when only some effort is required in deciding the best way to satisfy a need. 91) TRUE Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. This is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 92) FALSE Routinized response behavior is typical for low-involvement purchases—purchases that have little importance or relevance for the customer, where less effort is required from the consumer.

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93) FALSE Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 94) TRUE Routinized response behavior is typical for low-involvement purchases—purchases that have little importance or relevance for the customer. 95) FALSE Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information. Here, the shopper needs to find a supermarket that has their favorite brand of shampoo in stock or they need to choose another brand. Therefore, they will take part in limited problem solving. 96) FALSE The idea of a decision process does not imply that consumers always apply rational processes in their buying decisions. 97) TRUE Dissonance is a feeling of uncertainty about whether the correct decision was made. 98) TRUE After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 99) TRUE When a post-purchase experience fails to live up to expectations, a customer will be disappointed. And consumers are more likely to share stories about being dissatisfied than satisfied. Version 1

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100) TRUE The adoption process is the steps individuals go through on the way to accepting or rejecting a new idea. 101) TRUE In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 102) TRUE In the evaluation step, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 103) TRUE In the confirmation step, the adopter continues to rethink the decision and searches for support for the decision—that is, further reinforcement. 104) FALSE In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation, respectively. 105) TRUE A marketing manager may use marketing analytics to monitor how a new idea is being adopted by the market. 106) C There are general behavioral principles—frameworks—that marketing managers can apply to better understand their specific target markets. 107) A

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Understanding consumer behavior can be a challenge. Specific behaviors vary a great deal for different people, products, and purchase situations. In today's global markets, the variations are countless. That makes it impractical to catalog all the possibilities. 108) D Motivation is not an economic variable but is a psychological variable. 109) C A family's purchase of luxuries comes from discretionary income—what is left of income after paying taxes and paying for necessities. 110) D Since economic buyers seek a good value for the money they spend, the Capital One Cash Rewards Card appeal has the most relevance. 111) A Economic buyers are those people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 112) B Economic buyers are those people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 113) B The economic-buyer theory assumes that consumers are economic buyers, which are people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 114) A

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Economic needs are concerned with making the best use of a consumer's time and money—as the consumer judges it. 115) C Economic needs are concerned with making the best use of a consumer's time and money—as the consumer judges it. 116) B Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. Hunger is not an economic need. 117) E Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. Hunger is not an economic need. 118) B Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Here, the paint is satisfying economy of purchase or use. 119) D Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Here, the magazine ad is satisfying economy of purchase. 120) C Most consumers appreciate firms that offer products that are designed to work better, require less service, or last longer. Here, the iPhone app is satisfying efficiency in operation or use. 121) A

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Most consumers appreciate firms that offer them improved economic value for the money they spend. Products can be designed to work better, require less service, or last longer. This TV ad is illustrating dependability in use. 122) D Many firms adjust their marketing mixes for target markets that place a high value on convenience. The example illustrates the economic need of convenience. 123) A In 2017, 25 percent of households reported an income of less than $30,001. 124) C In 2017, the median income—where half the households earned more and half earned less—was $61,822. 125) E Discretionary income is what is left of income after paying taxes and paying for necessities. 126) D Discretionary income is what is left of income after paying taxes and paying for necessities. 127) B Discretionary income is what is left of income after paying taxes and paying for necessities. 128) E Discretionary income is what is left of income after paying taxes and paying for necessities.

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129) A Discretionary income is what is left of income after paying taxes and paying for necessities: $30,000 + $5,000 −$6,000− $8,000 = $21,000. 130) E Discretionary income is what is left of income after paying taxes and paying for necessities: $55,000− $16,000− $20,000 = $19,000. 131) A Discretionary income is what is left of income after paying taxes and paying for necessities: $35,000− $10,000− $13,000 = $12,000. 132) E Discretionary income is what is left of income after paying taxes and paying for necessities. Information on Keith McPherson's taxes is not given here. 133) D Discretionary income is what is left of income after paying taxes and paying for necessities: $75,000− $30,000− $17,000 = $28,000. 134) C Discretionary income is what is left of income after paying taxes and paying for necessities: $50,000− $16,000− $15,000 = $19,000. 135) C A family's purchase of "luxuries" comes from discretionary income— what is left of income after paying taxes and paying for necessities. A smart TV is a luxury. 136) A Discretionary income is what is left of income after paying taxes and paying for necessities: $72,000− $30,000− $22,000 = $20,000.

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137) C Discretionary income is what is left of income after paying taxes and paying for necessities: $75,000− $25,000− $15,000 = $35,000. 138) B Discretionary income is what is left of income after paying taxes and paying for necessities: $28,000− $5,000− $10,000 = $13,000. 139) A Discretionary income is what is left of income after paying taxes and paying for necessities: $32,000 + $10,000− $14,000− $11,000 = $17,000. 140) B Discretionary income is what is left of income after paying taxes and paying for necessities: $100,000− $10,000− $25,000 = $65,000. 141) D Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 142) A Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 143) D Home alarms that protect people from burglaries appeal to consumers' safety needs. These needs are concerned with protection and well-being. 144) B Of the choices, online dating sites are the firms that are most likely to attempt to attract customers by making an appeal to social needs. 145) C Version 1

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Consumers select varying ways to meet their needs sometimes because of differences in perception—how people gather and interpret information from the world around them. Perception includes the filtering processes of selective exposure, selective perception, and selective retention. 146) A Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. 147) A Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. Culture is not a psychological variable; it is a social influence. 148) B Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. Social class is not a psychological variable; it is a social influence. 149) C Wants are "needs" that are learned during a person's life. 150) E Needs are the basic forces that motivate a person to do something. 151) D Wants are "needs" that are learned during a person's life. 152) B Needs are more basic than wants. Wants are "needs" that are learned during a person's life. Marci Bello learned to buy well-known labeled items.

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153) C A drive is a strong stimulus that encourages action to reduce a need. 154) C In marketing, a product purchase results from a drive to satisfy some need. 155) B Drives are internal to the individual—that is, they are the reasons behind certain behavior patterns. Marketing managers cannot create internal drives in consumers. 156) C Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 157) A Psychological needs are concerned with nurturing, curiosity, independence, and love. 158) B A four-level PSSP hierarchy of needs model includes physiological needs, safety needs, social needs, and personal needs. 159) B The lowest-level needs are physiological. After these come safety, social, and personal needs. 160) C A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. 161) D Version 1

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Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 162) E Social needs are concerned with love, friendship, status, and esteem— those things that involve a person's interaction with others. 163) D Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation. 164) B Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation. 165) D Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. L'Oreal is aiming at personal satisfaction. 166) B Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. A desire to make the world a better place is an example. 167) A Social needs are concerned with love, friendship, status, and esteem— things that involve a person's interaction with others. 168) C Social needs are concerned with love, friendship, status, and esteem— things that involve a person's interaction with others. Version 1

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169) D Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 170) B Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 171) D Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 172) D Safety needs are concerned with protection and physical well-being, such as financial security. 173) A Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 174) C Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 175) A Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 176) D A four-level hierarchy of needs model suggests that most products must fill more than one need at the same time. The lowest-level needs are physiological; then come safety, social, and personal needs. But higherlevel needs may develop before lower-level needs are completely satisfied. Version 1

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177) D Needs are the basic forces that motivate a person to do something. Wants are "needs" that are learned during a person's life. A good marketing manager studies what consumer drives, needs, and wants already exist and how they can be satisfied better. Marketers should try to develop marketing mixes that address multiple needs. 178) B Perception refers to how we gather and interpret information from the world around us. 179) D Selective exposure, selective perception, and selective retention are included in the selective processes. Selective attention is not. 180) B Selective exposure, selective perception, and selective retention are included in the selective processes. Selective distribution is not. 181) B Selective exposure is when our eyes and minds seek out and notice only information that interests us. 182) E Selective perception is the way we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 183) B Selective perception is when we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 184) B Version 1

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Selective retention is a process of remembering only what we want to remember. 185) B Selective exposure is when our eyes and minds seek out and notice only information that interests us. 186) A Selective exposure is when our eyes and minds seek out and notice only information that interests us. 187) A Selective exposure is when our eyes and minds seek out and notice only information that interests us. 188) D Selective exposure is when our eyes and minds seek out and notice only information that interests us. 189) A Selective perception is when we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 190) A Selective retention is a process where we remember only what we want to remember. 191) D Learning is a change in a person's thought processes caused by prior experience. 192) A The learning process involves drive, cues, response, and reinforcement. Version 1

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193) A The learning process involves drive, cues, response, and reinforcement. 194) D Reinforcement strengthens the relationship between the cue and the response, and it may lead to a similar response the next time the drive occurs. 195) D Reinforcement strengthens the relationship between the cue and the response. 196) C Reinforcement of the learning process occurs when the response is followed by satisfaction—that is, reduction in the drive. 197) A Learning is often based on direct experience. 198) D Consumer learning may result from things that marketers do. Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response to satisfy a drive. 199) E Cues can be in the form of products, signs, ads, and other stimuli in the environment. 200) E Cues can be in the form of products, signs, ads, and other stimuli in the environment. Hence, all the given choices are examples of cues. 201) E

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Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response to satisfy a drive. 202) D Cues can be in the form of products, signs, ads, and other stimuli in the environment. 203) D Sometimes marketers use cues or images that have positive associations from some other situation and relate them to their marketing mix. 204) B An attitude is a person's point of view toward something. 205) A An attitude is a person's point of view toward something. The "something" may be a product, an advertisement, a salesperson, a firm, or an idea. 206) E An attitude is a person's point of view toward something. Because attitudes are associated with liking or disliking, they have some action implications. Consumer attitudes tend to be enduring. 207) D Attitudes affect the selective processes, learning, and the buying decisions. Beliefs are not as action-oriented as attitudes. Forecasts for sales would be easier if attitudes were good predictors of intentions to buy, but it's not that simple. 208) A

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In an attempt to relate attitude more closely to purchase behavior, some marketers stretch the attitude concept to include consumer "preferences" or "intention to buy." 209) E An attitude is a person's point of view toward a product, an advertisement, a salesperson, a firm, or an idea. Consumers' attitudes can be learned from attitudes of others, promotion directed toward them, and previous experiences. 210) D Beliefs are not as action-oriented as attitudes. 211) C An attitude is a person's point of view toward something. Attitudes are usually thought of as involving liking or disliking. 212) A A belief is a person's opinion about something, but it does not necessarily involve any liking or disliking. 213) E Plans and intentions are usually interchangeable and mean the same thing. 214) B Changing negative attitudes is probably the most difficult job marketers face. 215) B Because consumer attitudes tend to be enduring, it's usually more economical for marketers to work with them than try to change them. 216) D Version 1

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An expectation is an outcome or event that a person anticipates or looks forward to. 217) D An expectation is an outcome or event that a person anticipates or looks forward to. 218) E Trust is the confidence a person has in the promises or actions of another person, brand, or company. 219) C Psychographics are also called lifestyle analysis. 220) D Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 221) E AIO dimensions (activities, interests, and opinions), along with some demographics, can be used to add detail to the lifestyle profile of a target market. 222) C Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions. 223) E

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Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions. Recreation is an example of interests. The other choices are demographic dimensions, not psychographic dimensions. See Exhibit 5–6. 224) A Examples of activities include work, vacation, hobbies, entertainment, shopping, social events, club membership, and sports. Age is a demographic dimension. 225) E The consumer decision process is influenced by psychological variables like needs (physiological, safety, social, and personal) and social influences—such as consumer's family, social class, reference groups, opinion leaders, culture, and ethnic groups. 226) B A reference group is the people to whom an individual looks when forming attitudes about a particular topic. Teen purchases are heavily influenced by reference groups. 227) E People whose children are grown are able to spend their money in other ways. This empty nester period tends to be a high-income time in which adults spend more on travel and other things they couldn't afford earlier in life. 228) D More marketers pay attention to ethnic groups now because the number of ethnic consumers is growing at a much faster rate than the overall society. Much of this growth results from higher birthrates among ethnic minorities. Version 1

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229) E An opinion leader is a person who influences others. Some marketing mixes aim especially at opinion leaders, since their opinions affect others and they have many product-related discussions with "followers." The Internet has helped some opinion leaders get more followers and therefore more influence. 230) B Social influences like the consumer's family, social class, and reference groups influence the consumer decision process. 231) E Marital status, age, and the age of any children in the family have an especially important effect on how families spend their income. 232) C Stages in the traditional flow of the family life cycle are young single, young married without children, young married with children, middleaged married with children, middle-aged married without dependent children, older married, and older unmarried. SeeExhibit 5–7. 233) A Stages in the traditional flow of the family life cycle are young single, young married without children, young married with children, middleaged married with children, middle-aged married without dependent children, older married, and older unmarried. See Exhibit 5–7. 234) C Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 235) E

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Singles and young couples seem to be more willing to try new products and brands. 236) A Singles and young couples seem to be more willing to try new products and brands. 237) A Singles and young couples seem to be more willing to try new products and brands and are careful, price-conscious shoppers. 238) B The younger families, especially those with no children, are still accumulating durable goods, such as automobiles and home furnishings. 239) B Younger families, especially those with no children, are still accumulating durable goods, such as automobiles, and home furnishings, and therefore spend more (not less) on discretionary items. 240) C Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs. They are a target for many firms. 241) C Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs that are hard on the family budget. American teens currently spend almost $200 billion a year. 242) C American teens currently spend almost $200 billion a year. 243) C Version 1

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Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period. 244) D Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period, especially for white-collar workers. 245) D Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period, especially for white-collar workers. Hence, all of the explanations could be relevant. 246) D Buying responsibility and influence vary greatly depending on the product and the family. 247) D Although often only one family member goes to the store for a specific purchase, other family members may influence the decision or really decide what to buy. This is an example of a social influence. 248) B In most countries—including the United States—there is some general relationship between income level and social class. But people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 249) B

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In most countries—including the United States—there is some general relationship between income level and social class. But people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 250) B In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 251) C In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 252) C In the United States, people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 253) A In the United States, people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 254) B In the United States, people with the same income level may be in different social classes. 255) E A reference group isthe people to whom an individual looks when forming attitudes about a particular topic. 256) D Version 1

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A dissociative reference group is one that includes people that an individual does not want to be like. 257) A People normally have several reference groups for different topics. Three different types of reference groups might influence purchase decisions: associative reference groups; aspirational reference groups; and dissociative reference groups. 258) B People normally have several reference groups for different topics. 259) D Reference groups most often influence purchases that others can observe. 260) D Reference groups most often influence purchases that others can observe. 261) E A reference group is the people to whom an individual looks when forming attitudes about a particular topic. 262) D Reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. 263) C Reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. Reference group influence is stronger for products that others can observe. 264) A Version 1

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An aspirational reference group includes people an individual desires to be like, like performers or athletes. For this reason, many brands use famous personalities to endorse their products. 265) A An associative reference group includes people who more realistically reflect an individual—perhaps friends, family members, or coworkers. Teens, for example, often check out what friends wear when deciding what clothes to purchase. 266) A A dissociative reference group includes people that an individual does not want to be like. 267) C An opinion leader is a person who influences others. 268) B Opinion leaders on one subject aren't necessarily opinion leaders on another. 269) C Social media amplifies the voices of opinion leaders. Marketing managers are still trying to figure out how to manage this type of influence. 270) C Social media amplifies the voices of opinion leaders. Think about the impact of a traveler posting a long, detailed, positive review at Hotels.com, or of a movie fan telling Facebook friends how much they disliked a new movie. 271) D

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Some firms make opinion leaders the target market. For example, some moms have had great success writing blogs that attract tens of thousands of readers. They often blog about products they like—and don't like. 272) A Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 273) D Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 274) B Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 275) D Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. It is useful to think of subcultures within cultures, as they influence consumer behavior and therefore require different marketing mixes. 276) C People from different ethnic groups may be influenced by very different cultural variables. 277) C Planning strategies that consider cultural differences in international markets are complex to develop and even harder to implement. It makes more sense to treat each foreign market as a separate market with its own submarkets. Ignoring cultural differences—or assuming that they are not important—almost guarantees failure in international markets. 278) C Version 1

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It is an ineffective practice to apply the same marketing mix to the Asian market as to the U.S. market. Each foreign market may need to be treated as a separate market with its own submarkets. 279) E The buying power of ethnic submarkets is increasing rapidly. Estimates indicate that the buying power of Hispanics, African Americans, and Asian Americans each exceeded 1 trillion dollars in 2019. 280) E Ethnic groups buy differently and have different needs. Many firms make the mistake of treating all consumers in an ethnic group as homogeneous. The number of ethnic consumers is growing at a faster rate than the overall society. The buying power of ethnic submarkets is increasing rapidly. Hence, all the statements are true. 281) C More marketers pay attention to ethnic groups now because the number of ethnic consumers is growing at a much faster rate than the rest of the United States. 282) E Many firms make the mistake of treating all consumers in a particular ethnic group as a single group. 283) E Hispanic Americans are the largest and fastest-growing ethnic group in the United States. 284) B

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The Hispanic market is large and growing. In 2017, Hispanics comprised 18 percent of the U.S. population, and Hispanics were the largest ethnic group in the nation. More than half of all U.S. Hispanics live in three states—California, Texas, and Florida. 285) A As compared to the other major ethnic groups, African American consumers are more likely to purchase products tied to cultural traditions and family gatherings. 286) A While there are only 19 million Asian Americans (6 percent of the population), Asian Americans have the highest average household income ($81,331) of the major ethnic groups. One-third of Asian Americans live in California and, compared to other groups, they disproportionately purchase more fresh produce, organic foods, and electronic goods. 287) C Consumer behavior varies in different situations. The urgency of the need is a time-related factor that influences buying behavior. This is an example of purchase situation. 288) D Why and how a consumer selects certain products may vary greatly depending on the purchase situation. Different purchase situations may even require different marketing mixes—even when the same target market is involved. 289) C Black Friday (the day after U.S. Thanksgiving) is a unique once-a-year shopping event in which retailer discounts and mass selling displays stimulate frenzied buying. Version 1

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290) C Shopping for tires is much more urgent when one has a flat, as compared to when one notices that the tread is just starting to wear thin. Consumer behavior varies in different situations. The urgency of the need is a timerelated factor that influences their buying behavior. Therefore, this is an example of a purchase situation. 291) B Time influences a purchase situation. When consumers seek to make a purchase, the time they have available for shopping will influence their behavior. The urgency of the need generally shortens the amount of time spent comparing products. 292) A When the need is urgent, customers will be less inclined to evaluate a range of options—and place more emphasis on speed and convenience. Time influences a purchase situation. 293) D Shopping for tires is much more urgent when one has a flat tire as compared to when one notices that the tread is just starting to wear thin. When the need is urgent, customers will be less inclined to evaluate a range of options—and place more emphasis on speed and convenience. 294) C Surroundings can affect buying behavior. The excitement at an on-site auction may stimulate impulse buying. Checking out an auction online might lead to a different response. 295) B The consumer decision process begins when a consumer becomes aware of an unmet need.

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296) D The consumer decision process begins when a consumer becomes aware of an unmet need. In the case of buying a home furnace, most consumers recognize they have a need when the present furnace begins to malfunction. 297) B Many hardware and home-improvement purchases are utility-oriented and based in necessity. As a result, such items are influenced least by social influences like culture, reference groups, or social class. 298) C Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need—as is likely for a completely new purchase or to satisfy a need for the right equipment to place in a home entertainment theater. 299) E Problem solving involves the following steps: information search, identifying alternatives, setting criteria, and evaluating alternatives. 300) B Problem-solving involves the following steps: information search, identifying alternatives, setting criteria, and evaluating alternatives. 301) A Alejandro is in the information search step of consumer problem solving. He is seeking information about specific brands and looking for information from other customers, experts, and company promotions. 302) A

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There are three levels of problem solving that relate to the amount of effort the buyer puts into the decision: extensive problem solving, limited problem solving, and routinized response behavior. 303) A Extensive problem solving is when the consumer puts much effort into deciding how to satisfy a need. 304) A Extensive problem solving is when a consumer puts much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 305) E Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 306) B Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 307) C Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 308) A Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 309) C Version 1

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Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. 310) A Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 311) B Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. This is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 312) E Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information—for example, purchase of a fast-food restaurant meal. 313) E Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. Empty nesters would likely apply limited problem solving to all of the purchases given here. 314) C Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 315) E

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Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 316) C Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information. 317) D Routinized response also may occur when a buyer trusts a company, brand, or a friend's recommendation. Because trust lowers the risk of making the wrong choice, less effort is required from the buyer. 318) E Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 319) B A consumer uses routinized response behavior when he or she regularly selects a particular way of satisfying a need when it occurs. Purchasing a new pair of shoes is not an example of routinized response behavior. 320) E Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. Soap, canned fruit, salt, and milk are low-involvement purchases. 321) A

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Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 322) A Dissonance is a feeling of uncertainty about whether the correct decision was made. 323) D Dissonance is a feeling of uncertainty about whether the correct decision was made. Dissonance does not generally occur for frequently purchased items, as they are low-involvement purchases. 324) B After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 325) D After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 326) E Dissonance is a feeling of uncertainty about whether the correct decision was made. This may lead a customer to seek additional information to confirm the wisdom of the purchase. 327) C After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance—a feeling of uncertainty about whether the correct decision was made. All the other choices given take place prior to a purchase. 328) C

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When a post-purchase experience fails to live up to expectations, a customer will be disappointed. 329) E At times, a marketer's career might call for countering negative publicity—damage control—to save a product's image. Many consumers talk about their purchases and share opinions about their good and bad experiences. 330) B At times, a marketer's career might call for countering negative publicity—damage control—to save a product's image. Many consumers talk about their purchases and share opinions about their good and bad experiences. Recommendations from friends can have a big influence on whether we try a new restaurant, buy a hybrid car, or choose a veterinarian. 331) A Predictive analytics is a process that firms used to analyze data to make predictions about unknown future events. 332) A Predictive analytics can be used to identify alternatives to customers. A recommendation by a music streaming service based on a listener's past listening behavior is an example of the use of predictive analytics. 333) A Based on data about a customer and their behavior, predictive analysis is used to make predictions about unknown future events. 334) A Adoption process refers to the steps individuals go through on the way to accepting or rejecting a new idea. Version 1

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335) C When consumers face a truly new concept, their previous experience may not be relevant. These situations involve the adoption process—the steps individuals go through on the way to accepting or rejecting a new idea. Although the adoption process is similar to the decision making process, learning plays a clearer role, and promotion's contribution to a marketing mix is more visible. 336) A In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 337) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 338) A In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 339) D In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 340) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation.

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341) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 342) C Adoption process refers to the steps that individuals go through on the way to accepting or rejecting a new idea. Sampling (or trial) is one of these steps. 343) E In the evaluation step of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 344) A In the evaluation step of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 345) D In the trial step of the adoption process, the consumer may buy the product to experiment with it in use. 346) E In the trial step of the adoption process, the consumer may buy the product to experiment with it in use. In this case, the customer took the car for a test drive. 347) D In the confirmation step of the adoption process, the adopter continues to rethink the decision and searches for support for the decision—that is, further reinforcement. 348) A

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Marketing managers can use marketing analytics to monitor how a new idea is being adopted by the market. Marketing metrics at each step can be used in the evaluation.

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CHAPTER 6 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) There are more final consumers than business and organizational customers, so more is purchased by final consumers. ⊚ ⊚

2)

Manufacturers and developers are often categorized as intermediaries. ⊚ ⊚

3)

true false

Organizational buyers are also referred to as industrial or intermediate buyers. ⊚ ⊚

5)

true false

Organizational buyers are often referred to as the B2B market. ⊚ ⊚

4)

true false

true false

The process of organizational buying is entirely different from consumer buying. ⊚ ⊚

true false

6) For many firms, marketing strategy planning is about meeting the needs of organizational customers, not final consumers. ⊚ ⊚

7)

true false

Buyers always take into account three areas of need—company, individual, and society.

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8)

true false

Organizations always focus on economic factors when they make purchase decisions. ⊚ ⊚

true false

9) Dependability of supply is usually much less important than price for most business customers. ⊚ ⊚

10)

true false

Purchasing managers seldom use purchasing specifications to buy on the Internet. ⊚ ⊚

true false

11) Purchasing managers are buying specialists for organizations and may have a lot of power. ⊚ ⊚

true false

12) "Multiple buying influence" means that several people in an organization share in making a purchase decision, but top management is never involved. ⊚ ⊚

true false

13) "Multiple buying influence" means that the buyer shares the purchasing decision with several people. ⊚ ⊚

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14) "Multiple buying influence" means that several people rather than top management share in making a purchase decision. ⊚ ⊚

true false

15) A buying center is generally thought of as all the people who participate in or influence a purchase. ⊚ ⊚

true false

16) In a large company, the "buying center" refers to all the purchasing managers who work for the firm. ⊚ ⊚

true false

17) A seller's marketing mix should satisfy both the needs of the customer company and the needs of individuals in the buying center. ⊚ ⊚

18)

A requisition is a request to buy something. ⊚ ⊚

19)

true false

true false

A person who needs to purchase something usually completes a requisition. ⊚ ⊚

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20) Like final consumers, organizations make purchases to satisfy specific needs, but their basic need is for goods and services that will help them satisfy their own customers or clients. ⊚ ⊚

true false

21) Business and organizational customers are selective buyers who buy for the sole purpose of resale. ⊚ ⊚

22)

true false

Organizational buyers often buy on the basis of a set of purchasing specifications. ⊚ ⊚

true false

23) A description of what a firm wants to buy is called its purchasing specifications, whether that description is written or electronic. ⊚ ⊚

true false

24) Purchasing specifications should be used only with products where quality is highly standardized. ⊚ ⊚

true false

25) Purchase specifications for services are usually very simple because services tend to be very standardized. ⊚ ⊚

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26) Purchasing specifications may be very simple (with only a brand name or part number) or very detailed (as with services). ⊚ ⊚

27)

true false

A straight rebuy is a routine repurchase that may have been made many times before. ⊚ ⊚

true false

28) New-task buying is an in-between process in which some review of the buying situation is done. ⊚ ⊚

true false

29) Straight-rebuy buying takes longer than modified-rebuy or new-task buying and offers more opportunity for promotion impact by the seller. ⊚ ⊚

true false

30) Few purchasing managers have been able to turn over any of their order placing to computers because so few organizational purchases are routine. ⊚ ⊚

31)

true false

Straight rebuys can automatically be handled by e-commerce systems. ⊚ ⊚

true false

32) When a variety of information sources are readily available in new-task buying, a buyer is much less likely to use a trusted source.

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⊚ ⊚

true false

33) Since Millennials are increasingly responsible for organizational buying, marketing managers should focus on approaches that appeal to them like e-mail newsletters and printed brochures. ⊚ ⊚

true false

34) Most purchasing managers use search engines as their first step to satisfy new or unfamiliar questions. ⊚ ⊚

35)

true false

Specialized search engines can help a business buyer search for products by description. ⊚ ⊚

true false

36) Specialized search engines can help a business buyer search for products using purchase specifications. ⊚ ⊚

true false

37) A business buyer who uses general purpose and/or specialized search engines may reduce the need to arrange for custom-produced items. ⊚ ⊚

true false

38) White papers, case studies, blogs, and video content are all ways for a seller to make its website more useful.

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⊚ ⊚

true false

39) Online communities are one way for buyers to connect with others who have already dealt with a similar need. ⊚ ⊚

true false

40) As B2B buyers rely more on social networks, it's more likely that communications from sellers will have even more influence. ⊚ ⊚

true false

41) A competitive bid is the terms of sale offered by a supplier in response to the purchase specifications posted by a buyer. ⊚ ⊚

true false

42) The Internet makes it faster and easier for organizational buyers to use competitive bidding procedures. ⊚ ⊚

true false

43) Procurement sites operate for the benefit of buyers by directing suppliers to them at one convenient site. ⊚ ⊚

44)

true false

At a procurement site, competition among sellers is likely to increase.

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⊚ ⊚

true false

45) B2B e-commerce has had little effect on the way organizations make purchase decisions and deal with suppliers. ⊚ ⊚

true false

46) The goal of vendor analysis is to maximize the total costs associated with purchases in order to ensure maximum product quality. ⊚ ⊚

true false

47) The best vendor is one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. ⊚ ⊚

true false

48) Internet tools used in the B2B market that focus primarily on lowering price do not always lower total purchasing costs. ⊚ ⊚

true false

49) In business markets, suppliers usually want close relationships with customers; however, there's little benefit to the customer of having closer relationships with suppliers. ⊚ ⊚

50)

true false

A close buyer-seller relationship in a business market may reduce a firm's flexibility.

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51)

true false

A long-term commitment by an organization to a partner may reduce flexibility. ⊚ ⊚

true false

52) In business markets, a seller would always prefer to have a closer relationship with a customer. ⊚ ⊚

true false

53) In business markets, buyer-seller relationships tend to be an "all or nothing" arrangement—either very close or not at all close. ⊚ ⊚

true false

54) Although we talk about close relationships between firms in business markets, in practice it is just the relationship between the salesperson and purchasing manager that becomes close. ⊚ ⊚

true false

55) In cooperative relationships in a business market, the buyer and seller work together to jointly achieve both mutual and individual objectives. ⊚ ⊚

true false

56) Just-in-time delivery reliably helps to get products and store them long before the customer needs them.

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⊚ ⊚

true false

57) Just-in-time relationships between buyers and sellers usually require operational linkages and information sharing. ⊚ ⊚

true false

58) Negotiated contract buying means agreeing to contracts that allow for changes in the purchase arrangements. ⊚ ⊚

true false

59) Negotiated contract buying would be used when the buyer knows precisely what he or she wants and the requirements of the job aren't likely to change as the job is done. ⊚ ⊚

true false

60) Relationship-specific adaptations involve changes in a firm's product or procedures that are unique to the needs or capabilities of a relationship partner. ⊚ ⊚

true false

61) Specific adaptations are usually made when the buying organization chooses to outsource. ⊚ ⊚

true false

62) Relationship-specific adaptations are usually not required when the buying organization uses outsourcing.

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⊚ ⊚

true false

63) To protect themselves from unpredictable events, most purchasing managers seek several dependable sources of supply. ⊚ ⊚

64)

Most manufacturers have more than 500 employees. ⊚ ⊚

65)

true false

Compared to final consumers, manufacturers tend to be more spread out geographically. ⊚ ⊚

66)

true false

true false

In the United States, many factories are concentrated in rural areas. ⊚ ⊚

true false

67) It is very common for manufacturers to concentrate in certain geographic areas and by type of industry. ⊚ ⊚

68)

true false

The U.S. government collects and publishes data by the NAICS codes. ⊚ ⊚

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69)

NAICS stands for New Auto Industry Classification Survey. ⊚ ⊚

true false

70) The U.S. government reports data on the number of firms, sales volume, and number of employees by NAICS code. ⊚ ⊚

true false

71) Firms that are described by NAICS code 3152 are more similar than firms described by NAICS code 31. ⊚ ⊚

true false

72) In a market composed of service producers, most firms are small and geographically dispersed. ⊚ ⊚

true false

73) There are about 17 times as many service firms as manufacturing firms in the United States. ⊚ ⊚

true false

74) Purchasing managers are even more likely to be involved in buying by small service firms than in buying by large producers. ⊚ ⊚

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75) Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. ⊚ ⊚

true false

76) Most retail and wholesale buyers see themselves as purchasing agents for their target customers. ⊚ ⊚

true false

77) Sales reps calling on large food retailers must often make their sales presentations to a buyer who doesn't have the final decision responsibility. ⊚ ⊚

true false

78) Most wholesalers and retailers pay very close attention to each item they handle, treating most products as new-task purchases. ⊚ ⊚

79)

true false

The government is the largest customer group in all countries. ⊚ ⊚

true false

80) Government is one of the smallest groups (in sales volume) of customers in the United States. ⊚ ⊚

81)

true false

When selling to government customers, competitive bids are common.

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⊚ ⊚

true false

82) To share in the government market, it is advantageous to be on the list of approved suppliers. ⊚ ⊚

true false

83) To compete in the government market, it is very important that marketing mixes be well matched with different bid procedures. ⊚ ⊚

84)

true false

The Internet is not very useful for firms that want to target government markets. ⊚ ⊚

true false

85) Although outright influence peddling is common in some international markets, it is not allowed under the Foreign Corrupt Practices Act. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 86) Which of the following statements about U.S. business and organizational customers is true?

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A) More goods and services are purchased by business and organizational customers than by final consumers. B) There are more business and organizational customers than final consumers. C) There are more manufacturers than all other types of business and organizational customers combined. D) More goods and services are purchased by government buyers than by all other business and organizational customers. E) None of the answers is correct.

87)

In marketing, business and organizational customers are distinct from A) intermediaries. B) government units. C) final consumers. D) manufacturing and service firms. E) nonprofit organizations.

88)

The "business-to-business" market (B2B market) is comprised of A) nonprofit organizations only. B) wholesalers and retailers only. C) manufacturers only. D) all businesses, governments, and nonprofits. E) government units only.

89)

Which of the following are "business and organizational customers"? A) wholesalers B) manufacturers C) financial institutions D) government units E) All of the answers are correct.

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90)

Which of the following is an organizational buyer? A) the Red Cross buying office supplies B) a sporting goods retailer buying skis C) a law office buying a background music service D) a country club buying tennis balls for a tournament E) All of the answers are correct.

91)

Which of the following is not an example of an organizational buyer? A) a government buyer purchasing a new desk for the mayor's office B) a woman buying cookware to sell to her friends and neighbors C) a sales rep buying a new necktie to make a good impression D) a wholesaler buying a delivery truck

92) Which of the following is a business or organizational customer, as opposed to an individual final consumer? A) a wholesaler purchasing merchandise for resale B) a business executive purchasing a new suit C) a teacher filling her car with gasoline D) a homeowner buying flowers at a garden center E) None of the answers is correct.

93) The college or university that you attend is considered which type of organizational customer?

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A) producer B) intermediary C) government D) broker E) charitable

94)

John Deere is considered which type of organizational customer? A) producer B) intermediary C) government D) nonprofit E) charitable

95)

Bank of Omaha is an example of which type of organizational customer? A) government B) nonprofit C) producer D) intermediary E) resident buyer

96)

Macy's is considered which type of organizational customer? A) producer B) intermediary C) government D) charitable E) nonprofit

97)

Best Buy is an example of which type of organizational customer?

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A) retailer B) producer C) government D) nonprofit E) wholesaler

98)

The St. Louis Symphony is an example of which type of organizational customer? A) government B) wholesaler C) intermediary D) resident buyer E) nonprofit

99) Which of the following statements accurately compares marketing to final consumers with marketing to organizational customers? A) Marketing to organizations is just like marketing to final consumers. B) Business-to-business marketing includes marketing to final consumers. C) As compared to those made by consumers, purchasing decisions by organizational buyers are usually more economic. D) Firms may choose to serve either organizational buyers or final consumers, but not both. E) As compared to B2B buyers, consumers are more likely to utilize purchasing specifications.

100)

Which of the following identifies a concern of organizational buyers?

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A) original cost and ongoing costs of purchase B) impact of purchase on productivity C) product quality D) seller's ability to provide speedy maintenance and repair E) All of the answers are correct.

101)

Which of the following is true of the buying behavior of organizational customers?

A) Organizational buyers are solely influenced by economic factors. B) Purchasing managers and others involved in organizational buying decisions do not expect friendly relationships with suppliers. C) In organizational buying, the needs of individuals who influence the purchase are not important. D) Product reliability is a more important concern for final consumers than for organizational customers. E) Behavioral dimensions like security, status, and a sense of accomplishment affect organizational buying.

102)

On what do organizations most focus when making purchase decisions? A) social factors B) cultural factors C) political factors D) emotional factors E) economic factors

103)

Which of the following is not true regarding organizational buyers?

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A) Buyers for all kinds of organizations (governments, nonprofit groups, intermediaries) tend to buy in much the same way as do manufacturers. B) A seller’s marketing mix may need to consider both the needs of the company and individuals within the company. C) Marketing strategies aimed at them are often tailored to each individual customer. D) Their purchases are made to help their organizations meet the demands for their products. E) Their needs are usually harder to define than for final consumers.

104)

Organizational customers

A) purchase goods in order to satisfy their customers, but the services they purchase are for themselves. B) are more emotional in their buying than final consumers. C) try to consider the total cost of selecting a supplier, not just the initial cost of the product. D) typically focus on behavioral needs instead of economic factors in making purchases. E) select their suppliers randomly in order to avoid bias.

105)

What should the seller's marketing mix focus on? A) satisfying the needs of the buying company and its purchasing manager B) satisfying the needs of the individuals buying the product and other prospective

buyers C) satisfying the needs of the buying consumer and the middlemen D) satisfying the needs of the company and the individuals who influence the purchase E) satisfying the needs of the company to make more profit and generate monetary rewards for the purchasing manager

106) A buying firm may take into account three areas of need. Which of the following best describes an individual need within a customer organization?

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A) comfort B) profit C) growth D) survival E) innovation

107) Which of the following best describes overlapping needs of the customer organization and individual influencers within the organization? A) As Schmidt Industries implements plans for growth, it plans to promote some current employees, and increase wages for all employees. B) Jordan Parks is a purchasing manager at Schmidt Industries with three children at home, she is mostly concerned with job security and career advancement. C) Schmidt Industries is focused on providing customer satisfaction while implementing a plan for rapid growth. D) Schmidt Industries has partnered with the community to implement new voluntary environmental standards at its manufacturing plant.

108)

If a firm targets business and organizational markets,

A) the geographic location of the customer is likely to be less important than in segmenting consumer markets. B) NAICS codes may help in segmenting manufacturers but not producers of services. C) each customer may need to be treated as a different segment. D) All of the answers are correct.

109)