The end result of underwhelming customers and shareholders is ________.
A) an unfocused value proposition
B) a higher pressure for short-run results
C) an above-average profit performance
D) a low rate of customer turnover
E) a high level of customer loyalty
Marketing return on investment equals ________.
A) profits/marketing & sales expenses x 100%
B) net marketing contribution/marketing & sales expenses x 100%
C) gross margin/total expenses x 100%
D) net marketing contribution/operating expenses x 100%
E) sales revenues/marketing & sales expenses x 100%
A business determines that 75% of its customers are satisfied. This business also learns
that 80% of a leading competitor’s customers are satisfied. If this business implements a
program to reach 80% customer satisfaction, this is called ________.
A) competitive parity
B) focused value proposition
C) managing to the averages
D) wide-angle view of customer satisfaction
E) forward-looking indicator
Calculate the net marketing contribution, if a business produces 25,000 units at $10
margin per unit, with total marketing and sales expenses of $100,000.
A) $50,000
B) $350,000
C) $100,000
D) $250,000
E) $150,000
Which of the following customer relationship marketing strategies allows customers to
become their own individual market segments?
A) mass-personalization
B) core-segment strategy
C) decentralization
D) mass-customization
E) database marketing
In which type of marketing budget is each element of the marketing effort budgeted for
specific tasks identified in the marketing plan?
A) top-down budget
B) customer-mix budget
C) bottom-up budget
D) annual budget
E) objective and task budget
Which of the following is most likely to be a barrier to exit?
A) high advertising expenses
B) specialized assets
C) many product substitutes
D) high customer power
E) R&D expenses
Which of the following is calculated using the formula: Labor Savings +Warranty+
Price +Callbacks?
A) overall performance factor
B) overall performance index
C) perceived customer value
D) customer value index
E) life-cycle cost
Which of the following events occur when there is minimal focus on customers?
A) high customer loyalty
B) reduction in customer turnover
C) below-average profits
D) long-run strategies to improve sales
E) low cost of marketing and sales
Consumers can purchase inkjet printers for as little as $30. However, the price of
replacement ink cartridges can be as much or more than the purchase price of the
printer. This is part of the ________ of an inkjet printer.
A) disposal costs
B) acquisition costs
C) usage costs
D) repair costs
E) ownership costs
The relative performance metric can be created by ________.
A) dividing the performance rating of a product by the average performance rating of
all products in the market
B) dividing the overall rating of a product’s performance by the rating of the
top-performing brand
C) dividing the overall rating of a product’s performance by its price
D) dividing the overall rating of a product’s performance by the average price for
products in that product category
E) dividing the overall rating of a product’s performance by the cost of manufacturing
the product
Kristy’s Decorations Inc. is a firm that manufactures and sells Halloween decorations in
Oakland. The firm starts heavily advertising its products during September and October,
and sets up temporary shops in various neighborhoods during this period. After
Halloween is over, the firm does not direct any messages to its target customers till the
next year. In this example, Kristy’s Decorations Inc. uses which of the following
marketing communications strategies?
A) a distributed frequency strategy
B) a gross frequency strategy
C) an umbrella strategy
D) a concentrated frequency strategy
E) a heavy-up message strategy
Which type of strategy is best utilized for exiting a market by selling or closing down
the business or eliminating the product?
A) a harvest strategy
B) a monetize strategy
C) a horizontal integration strategy
D) a vertical integration strategy
E) a divest strategy
Which of the following is true of new customers?
A) They are usually the profit driver of a business.
B) They are a company’s best customers.
C) They have no impact on the net marketing contribution.
D) They are less likely to recommend a company’s product to others.
E) They generally buy more than retained customers.
Dairy Products Inc. is a manufacturing firm that produces and sells a line of butter
packs under the brand name Melt Butter. The firm created Melt Tasty Butter and Melt
Low-Fat Butter so that health-conscious customers can quickly differentiate its benefits.
In this example, Dairy Products Inc. is using which of the following brand encoding
strategies?
A) company name only
B) company and brand name
C) brand and subbrand name
D) brand and product name
E) brand name only
FunTime Inc., is an American toy manufacturing firm, with its headquarters in New
York. The firm specializes in manufacturing educational toys for children. The table
given below shows the educational toys market segment performance for FunTime Inc.
Mini-Case Question. What is the net marketing contribution of FunTime Inc?
A) $70 million
B) $120 million
C) $18 million
D) $75 million
E) $190 million
In ________, the price of a product is set to provide customers with an attractive
savings after considering the life-cycle costs of acquiring, owning, using, maintaining,
and disposing of a product.
A) value-in-use pricing
B) customerization value pricing
C) perceived-value pricing
D) performance-based pricing
E) cost-based pricing
Offensive portfolio strategies differ from defensive portfolio strategies in that offensive
portfolio strategies ________.
A) add significantly to short-run cash flow
B) are more growth oriented
C) protect important strategic market positions
D) are less likely to be used in attractive markets
E) hinder long-run profit performance
Coller Inc. is an American firm that manufactures flat panel LCD computer monitors.
The firm has a 5% share of a 2 million unit market. The firm’s marketing department
calculates that its acquisition cost is $13 million and retention costs is $5 million. The
market for flat panel LCD computer monitors is in the late growth stage of the product
life cycle, and Coller currently sells its product for $2,000 and experiences variable
costs per unit of $1,600.
Mini-Case Question. If Coller Inc. has a gross profit of $40 million, what is its net
marketing contribution?
A) $2 million
B) $2.5 million
C) $22 million
D) $250,000
E) $160,000
The operating income for TRX Inc. is $100 million. If the cost of goods is $30 million,
SGA expenses are $15 million, and other operating expenses are $5 million, find the
sales revenues for TRX.
A) $200 million
B) $100 million
C) $50 million
D) $150 million
E) $25 million
Which of the following benefits with respect to a customer’s service needs and
expectations must a business consider to determine if a channel system is viable?
A) product quality
B) product assortment
C) availability/delivery
D) product form
E) image benefits
An optimize position strategy differs from a harvest strategy in that an optimize
position strategy ________.
A) involves a conscious effort to reduce the customer base in order to reach a more
profitable level of business
B) is used to protect an attractive market position in which the business dominates with
respect to competitive position
C) is an offensive strategic market plan that seeks to improve a business’s competitive
position in an attractive segment of the market
D) is used to maximize profits and cash flow as a business slowly exits a
product-market
E) is used for exiting a market by selling or closing down the business or eliminating
the product
Calculate the cost of capital of Grantz Inc. when the net and economic profits generated
by the company are $180 million and $24 million, respectively, and the total invested
capital is $940 million.
A) 24.3%
B) 20.5%
C) 12.2%
D) 8.5%
E) 16.6%
Adapting the marketing plan, a force that contributes to the successful implementation
of a marketing plan, involves ________.
A) conducting a variance analysis
B) using an adaptive rollout
C) creating ownership teams
D) promoting the business-as-usual routine
E) developing and using detailed action plans
Which of the following is a customer adoption force?
A) felt need
B) affordability
C) easy of use
D) preferred availability
E) desired performance
The three dimensions of competitive position are ________.
A) an actual position, a past position, and a target position
B) an aggressive strategy position, a passive strategy position, and a neutral strategy
position
C) a target position, a perceived position, and a real position
D) a differentiation position, a cost position, and a marketing position
E) a revenue position, a sales position, and a brand position
The ________ is an estimate of the share performance index if the business were to
achieve maximum levels of performance for each share metric.
A) market share index
B) share development index
C) share potential index
D) market development index
E) bond market index
Which of the following steps involves a plan being proposed with respect to
profitability and market share objectives for a specified planning horizon?
A) marketing budget
B) situation analysis
C) SWOT analysis
D) strategic market plan
E) revenue plan
The marketing and sales budget of Wilson Inc. is estimated to be $250 million. It has
retained 450,000 customers and acquired 100,000 new customers. The marketing
administration cost of the company is $90 million. If the retention cost per customer is
$75, calculate the acquisition cost per customer.
A) $450
B) $1,262.5
C) $1,580.5
D) $676
E) $980
Maxim Computer has a 10 percent of a $250 billion market. Maxim is the low-cost
leader and realizes a 20% margin on sales, and marketing, sales, and administrative
expenses equaling 10% of sales. What is Maxim’s net marketing contribution?
A) $250 billion
B) $25 billion
C) $5 billion
D) $2.5 billion
E) $500 million
A firm has a gross profit of $60 million and a net marketing contribution of $14 million.
The firm has a market share of 6% and a margin per unit of $70. Calculate the
marketing and sales expenses of the firm.
A) $46 million
B) $70 million
C) $ 420,000
D) $10,000
E) $14 million