________ communication strategies are directed at channel intermediaries.
A) Push
B) Pull
C) Heavy-up
D) Centralized
E) Pulsing
The economic profit generated by a company is its ________.
A) (capital x cost of capital) / net profit
B) net profit / (capital x cost of capital)
C) net profit + (capital x cost of capital)
D) net profit – (capital x cost of capital)
E) (capital x cost of capital) – net profit
The operating income of Carbon Footwear is $10 million. Its net marketing contribution
is derived from sales of $80 million and the marketing and sales expenses amount to
$15 million. The general and administrative expenses and other operating expenses
amount to $20 million.
Mini-Case Question. What is the total amount of Carbon Footwear’s net marketing
contribution?
A) $10 million
B) $20 million
C) $30 million
D) $40 million
E) $50 million
Clarence Inc. conducts a market research, which reveals that its market size is of 40%
relative importance and the attractiveness rating of this factor is 80 (i.e., attractive). It
identifies that its market growth is of 30% relative importance and scores a rating of 60
(i.e., somewhat attractive); and its buyer power is of 30% relative importance and
scores a rating of 40 (i.e., somewhat unattractive). The firm has a market forces factor
importance of 30%. Calculate the overall market attractiveness score for the assessed
opportunity.
A) 18.6
B) 54
C) 60
D) 62
E) 207
The brand equity of many oil companies is lower when associated with oil spills or
controversial drilling practices. Which type of brand liability does this best represent?
A) customer dissatisfaction
B) poor record on social issues
C) product or service failures
D) inadequate product line development
E) poor product conformance
Which of the following involves the transfer of quality perceptions derived from a core
product or brand to product line extensions that use the same brand name?
A) a pure product bundling strategy
B) a mixed bundling strategy
C) a product unbundling strategy
D) an umbrella branding strategy
E) a vertical integration strategy
Calculate the net profit generated by Cabaye Inc. if it obtains a return of 12% from the
owner’s equity amounting to $675 million.
A) $118 million
B) $8.1 million
C) $562 million
D) $5.6 billion
E) $81 million
In television advertising, the combined impact of message frequency and reach
produces an index called ________.
A) customer response index
B) marketing penetration index
C) advertising elasticity index
D) gross rating points
E) market share index
Advertising elasticity is calculated as the ________.
A) absolute change in sales divided by the percent change in advertising expenses
B) percent change in sales divided by the percent change in advertising expenses
C) absolute change in advertising expenditures divided by the percent change in
revenue
D) percent change in advertising expenses divided by the percent change in revenue
E) percent change in sales minus the percent change in advertising expenditures
Brand reputation advantage is a type of ________ advantage.
A) variable cost
B) differentiation
C) channel
D) operating cost
E) marketing cost
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
Mass-customization differs from mass-personalization in that mass-customization
________.
A) is a customer relationship marketing strategy
B) assumes that all customers have the same needs
C) allows each customer to build a custom product to meet that customer’s specific
needs
D) involves pursuing a large-segment strategy
E) recognizes individual customers by name, needs, and buying behavior.
If a business produces 400,000 units and the market demand for the product is 2 million
units, what is its percentage of market share?
A) 8%
B) 20%
C) 16%
D) 40%
E) 80%
Microsoft Office 2010 allows buyers and users to quickly identify the Microsoft
product and its newness to older versions of the same brand. This is an example of
using a ________ branding strategy.
A) company name
B) company and brand name
C) brand and subbrand name
D) company, brand, and product name
E) company and brand name, and number
Which of the following refers to a situation where downward price moves by one
competitor force “follower moves” by other competitors in order to minimize lost
profits?
A) a technology trap
B) competitive benchmarking
C) the prisoner’s dilemma
D) a monopoly market
E) a free market situation
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
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
A company’s operating income as a percentage of sales is equal to the ________ minus
other expenses as a percentage of sales.
A) gross profit
B) marketing ROI
C) sales-to-assets ratio
D) marketing ROS
E) net marketing contribution
Chloe is examining her company’s marketing performance metrics. Which of the
following would be on the list?
A) capacity utilization
B) operating expenses
C) earnings per share
D) customer value
E) return on assets
Calculate the advertising elasticity if a company has a 1.3% change in sales and a 5.2%
change in ad expenses.
A) 0.25
B) 0.52
C) 0.4
D) 4.0
E) 6.5
Which of the following is the strategic objective of the defensive core strategy, protect
position?
A) maintain profits
B) improve competitive position
C) maximize cash flow
D) diversify growth
E) grow in existing markets
Calculate the economic profit generated by a business with a capital cost of 5% for
$680 million of capital invested and a net profit of $40 million.
A) $18.5 million
B) $10 million
C) $6 million
D) $35 million
E) $22.5 million
Which of the following statements is true regarding choosing offensive strategic market
plans?
A) A business with a good cash position that is facing stagnant growth in maturing
markets might pursue the market penetration strategy.
B) A market-based business will often find that it has more resources to fund market
opportunities than there are market opportunities.
C) A business with a long-run need for better profit performance would be inclined to
select the share penetration strategy.
D) The selection of one offensive strategic market plan over another depends on the
business’s long-run profit needs.
E) A business has to prioritize strategic market opportunities on the basis of its
performance objectives.
Mass-customization differs from mass-personalization in that mass-customization
________.
A) is a customer relationship marketing strategy
B) assumes that all customers have the same needs
C) allows each customer to build a custom product to meet that customer’s specific
needs
D) involves pursuing a large-segment strategy
E) recognizes individual customers by name, needs, and buying behavior.
The degree to which a marketing strategy is successful will be detected first by
________.
A) gains or losses in revenue
B) market metrics that track customer satisfaction, retention and perceptions of value
C) the financial performance measure of cash flow
D) shareholder value
E) net profit
Calculate the margin per unit if 250,000 units generates a gross profit of $50 million.
A) $2,000
B) $125
C) $1,250
D) $200
E) $500
Which of the following is a brand and product line strategy?
A) product differentiation
B) brand differentiation
C) bundling and unbundling
D) brand identity
E) low cost of purchase
Which of the following statements is true about maximize net marketing contribution
strategy?
A) It is an offensive core strategy.
B) It results in inefficient use of marketing resources.
C) It requires careful margin management.
D) Its first step is to focus on optimal management of price-volume rather than
margin-volume.
E) It is most effective in very unattractive markets where the firm has a very weak
competitive position.
Which of the following market segments is most likely to be considered attractive by a
firm?
A) a market segment with many substitute products
B) a market segment with limited product differentiation
C) a market segment with low barriers to competitor entry
D) a market segment with high price competition
E) a market segment with cost-effective access to customers
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. If the same customer has a high repurchase desirability, a strong
product preference, and recommends ATZ wireless telecommunications services to his
friends and acquaintances, what type of customer would he be?
A) a new customer
B) a captive customer
C) an unprofitable customer
D) a repeat customer
E) a loyal customer
Which of the following is true about investing to protect position in growth markets?
A) Protecting a share leadership position in a growth market requires a much lower
investment in new products than would be required in a mature market.
B) Growing markets are inherently prone to inducing share loss.
C) The faster a market is growing, the lower the investment a company must make in
marketing resources to protect share from new and existing competitors.
D) There is a direct relationship between market share change and size of market share.
E) The effects of market growth on market share change remain the same across
industries.
Under a defensive strategic market plan, calculate the market demand of a particular
product that generates sales revenue of $32 million at a market share of 15 percent.
A) $480 million
B) $4.8 million
C) $46.9 million
D) $213.3 million
E) $320 million
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
Amtech Inc., an American firm that manufactures inkjet cartridges, also provides inkjet
refill services at all its stores. The firm manufactures and sells “do it yourself” kits that
allows customers to do their own inkjet refills. Amtech Inc. lowers the total cost of the
product by solving its customers’ problem of throwing away empty cartridges, and also
enables customers to save money. In this example,
Amtech Inc. reduces which of the following costs for their customers?
A) resale costs
B) acquisition costs
C) repair costs
D) insurance costs
E) disposal costs