When differences in customer needs are small or demographics are not distinctive, a
business may elect to use a ________ strategy.
A) small-segment
B) vertical integration
C) horizontal integration
D) mass-market
E) niche-segment
Crowdsourcing differs from mass collaboration in that crowdsourcing initiatives
________.
A) use collaborative web sites and wikis
B) yield results very slowly
C) facilitate an information-sharing environment
D) have a specific purpose or problem to solve
E) are open-source projects
Which of the following is an example of an indirect B2C marketing channel?
A) Wellspring Cosmetics sells its products exclusively through its monthly catalogs,
mailed to a subscriber list.
B) GTB Computers uses its own sales force to initiate sales contacts, but uses external
local dealers to provide products and after-sales services.
C) Radix Inc., a manufacturer of automotive parts, sells its products to a number of
automobile companies.
D) More4Less.com buys products from manufacturers and sells them to consumers
through its Web site.
E) Apparel retailer UrbanScene elected to close all its brick-and-mortar stores and sell
products only through its online storefront.
Which of the following is true about database marketing?
A) It is at the core of customer relationship marketing.
B) It assumes that all customers have the same needs.
C) It avoids building a more personal relationship between the business and the
customer.
D) It treats all customers as the same, instead of assuming that each customer is unique.
E) It prioritizes creating efficiency through technological advances over building
customer relationships.
In which of the following situations is a business most likely to opt for a direct rather
than an indirect marketing channel system for product distribution?
A) The business manufactures products for the consumer market rather than the
business market.
B) The business’s products are sold in wide markets, and require localized availability
of parts and services.
C) The business is new to the market and does not have a network of contacts in place
for distribution.
D) The business wants to maintain complete control over its marketing messages and
collection of payments for products.
E) The business manufactures a product that people buy on impulse and is generally
sold in small quantities.
Perceived customer value is determined by ________.
A) subtracting relative cost of purchase from relative performance
B) adding performance to enhancement value
C) dividing product performance by average performance
D) dividing product performance by the number of customers
E) comparing the price-performance matrix entries
Organic Harvest Inc. is an American manufacturing firm based in California. The firm
manufactures and sells a line of organic fruit juices under the brand name
OrganicDrinks. The firm also markets a line of medicinal health drinks, under the brand
name HerbalDrinks.
Mini-Case Question. Which of the four types of brand names does OrganicDrinks best
represent?
A) a functional name
B) an invented name
C) a morpheme name
D) an evocative name
E) a founder name
Which of the following types of customers should be rewarded with special offers and
services that are not offered to other customers?
A) loyal customers
B) nonprofit customers
C) new customers
D) dissatisfied customers
E) repeat customers
A recent Consumer Reports study analyzed toasters and found that the average
performance rating for all toasters tested was 70 with an average price of $33. Coffers is
a brand of toaster that sells for $32 and received an overall performance rating of 84.
What is Coffers’s relative performance against other toasters tested?
A) 4
B) 38
C) 83.5
D) 98.5
E) 120
Which of the following is a lifestyle influence that shapes customer needs?
A) income
B) age
C) education
D) occupation
E) interests
With few, if any, competitors in an untapped new market, a business has the opportunity
to pioneer a portion of the market largely ignored by competitors. This is known as
________.
A) network advantage
B) economies of scale advantage
C) horizontal integration advantage
D) first-mover advantage
E) vertical integration advantage
Which of the following is considered an external performance benchmark for a
product’s performance in the market?
A) sales revenues
B) net profits
C) return on sales
D) relative product quality
E) assets as a percentage of sales
The market development index is equal to the ________.
A) product of current market demand and market potential
B) ratio of market potential and market growth
C) ratio of the current market demand to net marketing expenditure
D) ratio of current market demand to market potential
E) product of market potential and market growth
Calculate the customer loyalty index if the customer history is 12, the purchase amount
is 38, the desire to repurchase is 50, the product preference is 20, and there is no
customer recommendation.
A) 30
B) 24
C) 50
D) 65
E) 92
To achieve above-average levels of profitability, low-share niche businesses need to
focus on their products and ________.
A) keep their market share high
B) divest for cash flow
C) keep expenses low
D) harvest for cash flow
E) expand their product line
A broad market definition differs from a narrow market definition in that a broad
market definition ________.
A) includes the articulated needs of customers
B) includes all potential substitute products
C) results in unfulfilled market potential
D) enables managers to define their markets on the basis of the customers they
currently serve
E) limits managers’ perceptions and strategies
Calculate a company’s market share if the company’s relative market share is 60 and the
market shares of its three largest competitors are 14%, 8%, and 16%.
A) 40.6%
B) 20%
C) 46%
D) 22.8%
E) 60%
Global Wood Ventures Inc. is an American firm that manufactures, distributes, and
exports structural plywood. The firm finds that multiple inventory management errors
were causing customer dissatisfaction and reducing the firm’s profits. It identified
several companies, in completely different industries, that were considered to be the
best in inventory management. After obtaining permission, professionals from Global
Wood Ventures Inc. studied the inventory management system of One Stop Mart, a firm
well known for its inventory management techniques. This knowledge helped Global
Wood Ventures Inc. to develop a more error-free inventory management system. In this
example, Global Wood Ventures Inc. uses which of the following strategies?
A) competitive benchmarking
B) perceptual mapping
C) disintermediation
D) competitor analysis
E) vertical integration
As an operational component of channel performance, operating efficiency refers to
________.
A) cost to serve
B) volume
C) customer reach
D) return on sales
E) retention
The first level of customer relationship marketing is a ________ strategy that
recognizes individual customers by name and buying behavior.
A) mass-personalization
B) decentralization
C) mass-market
D) core-segment
E) sub-segment
Victor has determined that along the share-development path, his business should
perform at a 90% level of product awareness, 75% in intentions to purchase, 75% in
product availability, and 65% in rate of purchase. If the share potential index for
Victor’s business is 30%, at what level of product preference should his business
perform?
A) 52%
B) 60%
C) 73%
D) 91%
E) 82%
In case of monetize, harvest, and divest defensive strategies, each strategy is designed
to ________.
A) maximize immediate cash flow
B) maximize brand equity
C) increase customer loyalty
D) facilitate long-run growth in market share
E) diversify growth
Aster Technologies Inc., a firm that sells inventory management software, has labor
savings of 20% (0.33), a product warranty of five years (0.42), a competitive price
(1.0), and no customer callbacks (0.83). Calculate its customer value index (CVI).
A) -0.26
B) 0.26
C) 0.92
D) 1.08
E) 2.58
Clarion Inc. is a firm that produces components for the manufacturing equipment
market and currently enjoys a 42% market share. Through an analysis of the share
development path, the marketing department of the firm estimates that the firm should
perform at a 95% level in product awareness, 85% in product preference, 80% in
intentions to purchase, 90% in product availability, and 75% in rate of purchase.
Mini-Case Question. What is the share development index (SDI) of Clarion Inc.?
A) 18
B) 85
C) 43.6
D) 77.8
E) 97
The role of a SWOT analysis is to ________.
A) evaluate the effort that is needed to recover a business’s investment
B) document all present and possible future influences on performance
C) monitor the marketing and profit performance in light of the marketing plan’s
timeline
D) specify each marketing task and the amount needed to accomplish it
E) allocate resources based on the strategic market plan
If there are 10 manufacturers and 200 retailers, and each manufacturer has 12
interactions per year with each retailer at a cost of $100 per transaction, the total
transaction cost of doing business through this channel method is ________.
A) $2,000
B) $24,000
C) $200,000
D) $1,200,000
E) $2,400,000
NaturalBeauty Inc. is a firm that manufactures a range of herbal cosmetic products
under the brand name NaturalBeauty. To improve its odds of developing successful
disruptive innovations, the firm listens to its lead customers and identifies product
benefits that are not met by the existing cosmetic products in the market. After careful
analysis, the firm chooses the most lucrative opportunity and uses an “invent to order”
process to develop a new product. In this example, NatureFresh Inc. is using which of
the following methods?
A) reverse innovation
B) diversification
C) vertical integration
D) horizontal integration
E) market penetration
Which of the following is true of price elasticity?
A) When the price elasticity equals 0, we have unitary elasticity where the percentage
change in volume is equal to the percentage change in price.
B) Price elasticity is almost always a negative number due to the inverse relationship
between price and volume.
C) Prestige products that can see an increase in demand when their prices are increased
have negative price elasticity.
D) Price elasticities between –1 and –10 are inelastic because the percentage change in
volume is greater than the percentage change in price.
E) Price elasticities between zero and -1 are considered elastic, as the percentage
change in volume is less than the percentage change in price.
Your brother, Fred, owns ATZ Inc., a company that provides wireless
telecommunications network in several cities in the Midwest region. You are taking a
marketing class in college, and you asked Joe for some information about his business
for a class project. You determined that one of his customers has a long customer
history of 75, an above-average purchase amount of 55, a low repurchase desirability of
20, a weak product preference of 10, and the customer does not recommend ATZ
services to potential customers. The customer is clearly dissatisfied, but since ATZ Inc.
is the only wireless telecommunications network provider in the city he is compelled to
use it.
Mini-Case Question. Based on the values provided, determine the customer loyalty
index.
A) 28
B) 32
C) 36
D) 40
E) 44
In which of the following situations is a business most likely to opt for a direct rather
than an indirect marketing channel system for product distribution?
A) The business manufactures products for the consumer market rather than the
business market.
B) The business’s products are sold in wide markets, and require localized availability
of parts and services.
C) The business is new to the market and does not have a network of contacts in place
for distribution.
D) The business wants to maintain complete control over its marketing messages and
collection of payments for products.
E) The business manufactures a product that people buy on impulse and is generally
sold in small quantities.
The net marketing contribution for a firm is the firm’s ________.
A) profits
B) profits – (other operating expenses)
C) gross profit – (marketing and sales expenses)
D) (all revenues) – (all expenses)
E) (sales revenues) – (cost of goods sold)
A marketing mix strategy differs from a strategic market plan in that a marketing mix
strategy ________.
A) is a long-term strategy
B) needs to be reviewed each year
C) has specific performance objectives
D) has a 3- to 5-year time horizon
E) has a 5-to 10-year time horizon