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 net marketing contribution for Doldrum Inc. is $600 million and its total assets are
worth $2 billion. The other expenses, including interest and taxes, amount to $400
million. Calculate the company’s return on assets.
A) 5%
B) 10%
C) 15%
D) 20%
E) 25%
Which of the following is an internal financial metric?
A) customer awareness
B) market share
C) revenue per customer
D) product defects
E) customer satisfaction
Calculate the number of units produced by a business if the net marketing contribution
and marketing and sales expenses are $625,000 and $175,000, respectively. The margin
per unit is estimated to be $25.
A) 50,000
B) 25,000
C) 32,000
D) 76,000
E) 43,000
In which step of the process of building a marketing plan is a thorough examination of
market forces, competitive position, and current performance undertaken?
A) marketing budget
B) situation analysis
C) profit plan
D) communications strategy
E) marketing mix strategy
For which of the following products or services is the seller most likely to use life-cycle
value pricing?
A) lottery tickets
B) a hotel reservation
C) shampoo
D) a meal at a restaurant
E) a car
In which step of the process of building a marketing plan is a thorough examination of
market forces, competitive position, and current performance undertaken?
A) marketing budget
B) situation analysis
C) profit plan
D) communications strategy
E) marketing mix strategy
Which of the following marketing metrics is an internal forward-looking metric for a
firm?
A) market share
B) customer retention
C) revenue per customer
D) inventory turnover
E) customer satisfaction
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. If the total sales revenue generated was $100 million, the
marketing ROS would be equal to the ________.
A) marketing and sales expenses
B) marketing ROI
C) operating income
D) net marketing contribution
E) general and administrative expenses
The relative market share of a business is equal to the ________.
A) product of the business’s market demand and market share
B) product of the business’s market demand, market share, and product price
C) ratio of the business’s market share to its gross profit
D) difference between the business’s market share and its marketing and sales expenses
E) ratio of the business’s market share to the total share of its three largest competitors
Calculate the marketing expense variance, if the actual marketing expense and
marketing expenses estimated in the plan are $98,000 and $80,000, respectively. The
actual percentage of sales is 15%.
A) $27,000
B) $1,800
C) $2,700
D) $18,000
E) $270,000
Which of the following is true of businesses with a strong customer focus?
A) A customer-focused business lacks a long-term perspective.
B) A customer-focused business realizes higher profits over the short-term.
C) In a customer-focused business, shareholders are more interested in long-run
survival than immediate earnings.
D) In a customer-focused business, managers are usually judged on the last quarter’s
results, and not not on their efforts to ensure the long-run survival of the business.
E) A customer-focused business is in synch with customers’ needs and requirements, not
with competitors’ strategies.
Karen is interested in assessing a market segment’s attractiveness by analyzing the
market demand. Which of the following would be a variable should she assess?
A) number of companies
B) ease of entry
C) customer familiarity with her company
D) market size
E) access to channels that reach target customers
In order to increase the net profit of a business, the NMC of any proposed strategy must
________.
A) be equal to the current NMC
B) be equal to the difference of the current NMC and the marketing and sales expenses
C) be equal to the total operating income
D) be lower than the current NMC
E) exceed the current NMC
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
Why might a business use a combination of direct, indirect, and mixed marketing
channel systems?
A) to have total control over the quality of customer service
B) to lower the risk of distributing products to end-users
C) to attain maximum profits at minimum cost
D) to reach different target markets cost effectively and to deliver the service level
expected by target customers
E) to comply with legal requirements that limit a business from having too much
control over the distribution of products to consumers
Which of the following groups of customers are characterized as skeptics, who wait to
see whether the product or service will really deliver meaningful benefits ?
A) innovators
B) laggards
C) early majority
D) late majority
E) early adopters
The brand equity of LifeSecure Inc., an American health insurance firm, was
diminished when its top executives were subject to money laundering allegations.
Which type of brand liability does this best represent?
A) customer dissatisfaction
B) poor product conformance
C) product or service failures
D) poor record on social issues
E) questionable practices
If there are 20 manufacturers and 500 retailers, and each manufacturer has 15
interactions per year with each retailer at a cost of $200 per transaction, calculate the
total number of transactions.
A) 100,000 transactions per year
B) 150,000 transactions per year
C) 200,000 transactions per year
D) 250,000 transactions per year
E) 300,000 transactions per year
Kate has determined that along the share-development path, her business should
perform at a 85% level of product awareness, 75% in product preference, 60% in
intentions to purchase, 90% in product availability, and 70% in rate of purchase. Kate’s
share development index is 50. What is the market share index for Kate’s business?
A) 12%
B) 6%
C) 18%
D) 22%
E) 28%
Calculate the total marketing and sales expenses incurred by a business if it produces
30,000 units at $15 per unit and its net marketing contribution is $225,000.
A) $300,000
B) $150,000
C) $625,000
D) $225,000
E) $450,000
Which of the following types of budgets is based on the cost of customer acquisition
and retention and the combination of new and retained customers?
A) top-down budget
B) customer-mix budget
C) objective and task budget
D) bottom-up budget
E) total consumer budget
A larger production volume allows for production and purchasing economies that lower
the unit cost of a product, thereby producing a ________ effect.
A) scale
B) scope
C) cluster
D) network
E) Mohring
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
Karl-Mart, a chain of American department stores, spreads its promotional budget
evenly over the year. The firm ensures that its target customers receive advertising
messages throughout the year with the aims of building and maintaining its target
customer awareness and comprehension. Karl-Mart uses which of the following
strategies?
A) a concentrated frequency strategy
B) a distributed frequency strategy
C) a gross frequency strategy
D) an umbrella strategy
E) a heavy-up scheduling strategy
Which of the following is true about customer relationship marketing?
A) It is more focused on what happens before a customer is acquired.
B) It aims to develop a short-term customer relationship to lower the cost of marketing.
C) It has the same meaning as customer relationship management.
D) It is a high-level program for developing ongoing individualized relationships with
certain customers when both company and customer value are very high.
E) It is a range of one-on-one relationship marketing programs based on the level of
company and customer value.
In order to develop a performance plan, a business first translates the objectives of the
market share strategy into a ________.
A) communications strategy plan
B) break-even plan
C) revenue plan
D) situational analysis plan
E) SWOT analysis plan
Calculate the net profit generated by Key Inc.,which has a capital cost of 10% for $450
million of capital invested and generates an economic profit of $20 million.
A) $48.5 million
B) $110 million
C) $78.5 million
D) $65 million
E) $135 million
Which type of marketing channel allows a manufacturer to have the highest degree of
control over service quality?
A) indirect
B) direct
C) intermediate
D) mixed
E) value-added
Which of the following is a marketing effort factor influencing a business’s market
share?
A) price
B) product differentiation
C) product breadth
D) brand image
E) sales promotions
To calculate break-even volume, operating income in the formula is ________.
A) multiplied by 100
B) equal to zero
C) equal to industry operating income
D) equal to variable costs
E) equal to fixed costs
Which core defensive strategy is appropriate for a business with a very strong
competitive advantage operating in a very attractive market?
A) a harvest strategy
B) a monetize strategy
C) an optimize strategy
D) a protect strategy
E) an invest strategy
Calculate the total market demand if a business sells 48,000 units, which represents a
market share of 32%.
A) 224,500
B) 265,000
C) 196,000
D) 150,000
E) 125,300
