A(n) ________ strategy involves the sale of two or more products at an overall price
that is lower than the total price that a customer would pay to purchase the products
separately.
A) pure product bundling
B) impure product bundling
C) cobranding
D) horizontal brand extension
E) vertical brand extension
RVP Inc. realizes a net profit of $230 million and the owner’s equity amounts to $750
million. Calculate the return on equity for the company.
A) 16.5%
B) 30.7%
C) 7.5%
D) 75%
E) 23.2%
Which of the following metrics does a company apply during an operating period rather
than at the end of the operating period?
A) sales revenues
B) market share
C) inventory turnover
D) customer retention
E) return on assets
Shockwave Services is a mobile service providing company based in Chicago. In order
to expand its market, the firm acquires a travel agency in Chicago that provides tourist
packages at low prices. Which of the following offensive strategies is Shockwave
Services pursuing?
A) divest for cash flow
B) enter related new markets
C) develop new markets
D) harvest for cash flow
E) enter unrelated new markets
Suppose the benchmark competitive product has a price of $300, costs $200 to install,
and averages $500 in usage and maintenance costs. Your product is priced at $400,
costs $100 to install, and averages $400 in usage and maintenance costs. In this
situation, the economic value of your product over the benchmark competitive product
is ________.
A) -$200
B) -$100
C) $0
D) $100
E) $200
Calculate the total volume of music players sold by MyTunes Inc. if the total market
demand is 280 million units and the company has a 15% market share.
A) 42 million units
B) 96 million units
C) 136 million units
D) 180 million units
E) 238 million units
Customer value equals ________.
A) relative benefits divided by number of customers
B) relative price divided by number of customers
C) relative price plus relative benefits
D) relative benefits minus relative price
E) relative price minus relative benefits
In a direct channel marketing system, ________.
A) the manufacturer retains title of all products until they are delivered to the customer
B) wholesalers and retailers take ownership of the products for sale
C) the cost of customer sales contact is lower than that in indirect marketing systems
D) the opportunities for sales communication and customer interaction are nonexistent
E) customers who make infrequent, small purchases can be profitably served
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
MyStyle Clothes Inc. is a women’s fashion apparel firm that allows its customers to
personalize their clothes. MyStyle Clothes Inc. has a web site where customers can
choose from a range of fabrics, colors, buttons, fits, and designs to create clothes.
Customers can place orders with their measurements, and the clothes are manufactured
according to the customer’s specifications and sent to her by courier. In this example,
MyStyle Clothes Inc. uses which of the following strategies?
A) mass-personalization
B) mass-customization
C) customer relationship management
D) sub-segment
E) multi-segment
In the context of brand name development, ________ names are either built from root
words and morphemes or are poetic constructions based on the rhythm or experience of
saying them.
A) evocative
B) experiential
C) functional
D) invented
E) realistic
Calculate the net marketing contribution variance, if the actual net marketing
contribution and net marketing contribution estimated in the plan are $450,000 and
$900,000, respectively. The actual percentage of market share is 25%.
A) $450,000
B) $11,250
C) -$450,000
D) -$11,250
E) $225,000
Calculate the percent gross profit for a company if the sales revenue generated is $200
million, and the firm sells 60 products that cost $2 million each to produce.
A) 20%
B) 40%
C) 50%
D) 60%
E) 80%
As a business adds products to its product line that have the same purchased materials
and similar manufacturing processes, it is able to lower the average unit cost of all
products, producing a ________ effect.
A) network
B) scope
C) Mohring
D) scale
E) cluster
Backward-looking marketing performance metrics ________.
A) are leading indicators of a business’s future performance
B) include in-process measures of customer thinking and attitudes
C) include the metrics that measure market share, customer retention, and revenue per
customer
D) involve using uniform benchmarks across all industries
E) are more advanced product-market metrics for companies that are dealing with
pricing issues
Javier’s Pizza Point has a margin per unit of $2.00 for a typical pizza, total fixed
expenses of $10,000, and average variable costs of $3.00 per pizza. How many pizzas
must Javier sell to break even?
A) 2,000
B) 3,334
C) 5,000
D) 20,000
E) 30,000
Calculate the customer value for the product of a business that has an average relative
price of 125 and the relative product quality of 200.
A) 325
B) 75
C) -75
D) -125
E) 200
The whole purpose of ________ market metrics is to track customer perceptions and
attitudes that precede changes in customer behavior and a business’s financial
performance.
A) financial
B) static
C) competitiveness
D) forward-looking
E) backward-looking
Which of the following is true of marketing using a direct marketing channel system?
A) Direct mail and catalog sales are more labor-intensive than telemarketing, but are
more efficient at customer interaction.
B) Using direct salespeople is generally cheaper than using brokers, sales agents, or
manufacturer’s representatives.
C) Telemarketing provides a better opportunity for a sales communication but is more
labor intensive and usually more expensive than direct marketing.
D) Compared to indirect marketing channel systems, direct marketing channel systems
maximize the number of customers that a business can profitably reach.
E) Digital marketing channels have a greater customer reach than other channels, but
are also more expensive.
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
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
Which of the following is an example of a company’s external metrics?
A) return on sales
B) employee turnovers
C) manufacturing defects
D) late deliveries
E) retaining customers
Which of the following is true of cash-and-carry wholesalers?
A) They undertake delivery of the product from manufacturer to consumer.
B) They offer a greater variety of services than retailers and dealers.
C) They do not offer credit facilities to customers.
D) They do not take title to the manufacturer’s products.
E) They are full-function wholesalers.
In which of the following situations would a firm most likely pursue a low-cost leader
strategy?
A) There are no competitors in the market and the firm is the market leader.
B) The nature of its products does not allow the firm to maintain a volume advantage in
the market.
C) The company’s product is a niche product and appeals to only a few customers.
D) The market is quality-sensitive rather than price-sensitive.
E) The firm can minimize its operational expenses in order to sell higher volumes of
products.
A gross rating point equals ________.
A) reach multiplied by frequency
B) frequency multiplied by response
C) frequency multiplied by impact
D) impact multiplied by response
E) reach multiplied by response
Calculate the price elasticity if a business maintains its current gross profit with a 5
percent price reduction and a 20 percent volume gain.
A) -15
B) -4
C) 4
D) 15
E) 25
Which of the following statements is true about reverse innovation?
A) It involves learning what customers want but cannot get from existing products.
B) It refers to a new product that fails to address customers’ needs.
C) It refers to gradual product improvements that come from technological
developments.
D) It starts by encouraging intrapreneurs.
E) It refers to innovative ideas generated by employees within an organization.
A company’s price-earnings ratio (PE) is ________.
A) stock price divided by earnings per share
B) (stock price multiplied by earnings per share) divided by number of shares
C) stock price divided by (earnings per share multiplied by number of shares)
D) stock price divided by total earnings
E) stock price divided by (total earnings multiplied by number of shares)
A business that dominates markets with a relative advantage in distribution, sales
coverage, or marketing communications can control (and often block) market access,
creating a source of competitive advantage. Which source of competitive advantage
does this create?
A) scope advantage
B) market segmentation advantage
C) marketing advantage
D) learning advantage
E) marketing cost scope advantage
________ pricing allows buyers of a product to select the performance configurations
that best fit their needs and price budgets.
A) Customerization value
B) Performance-based
C) Perceived-value
D) Life-cycle value
E) Value-in-use