Offensive strategic market plans are strategies that ________.
A) have a 1-year time horizon
B) are ineffective at growing sales revenue
C) reduce the long-run share position
D) limit short-run profit performance
E) result in short-term profits without any additional investment
Which of the following statements is true?
A) American managers are more likely than Japanese managers to drop a marketing
plan when it meets resistance.
B) The concept of continuous improvement is implicit in American marketing plan
implementation, unlike Japanese marketing plan implementation.
C) The term adaptive persistence has been used to describe the success of many
Japanese marketing plans.
D) One of Japanese management’s greatest assets is the ability to abandon a marketing
plan quickly when it is not working.
E) Japanese managers are not as determined as American managers to make their
marketing plans work.
Brand reputation advantage is a type of ________ advantage.
A) variable cost
B) differentiation
C) channel
D) operating cost
E) marketing cost
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
Once the market share has exceeded the outlet share, the rate of market share growth
________ with further increase in outlet share.
A) becomes zero
B) becomes infinity
C) remains constant
D) increases
E) decreases
The ________ represents the ongoing monitoring of marketing and profit performance
in light of the marketing plan’s timeline.
A) marketing budget
B) industry analysis
C) force field analysis
D) situation analysis
E) performance review
During the ________ stage of the product life cycle, the negative NMC is the result of
marketing and sales expense exceeding the gross profits.
A) introduction
B) middle growth
C) late growth
D) maturity
E) decline
Which of the following is true of value-based pricing?
A) The cost of making a product and the desired profit margin are the two primary
determinants in setting a value-based price.
B) Value-based pricing does not consider what customers require from a product in
terms of performance and price.
C) Value-based pricing takes customer needs into account, but fails to consider
customers’ price sensitivity.
D) In value-based pricing, price is developed around a product’s relative strengths to
give customers greater benefits than competing products offer.
E) Value-based pricing is based on features of the product, but fails to consider the
prices of similar products in the market.
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. As the market for this product matures, Coller may need to rethink
its pricing in order to optimize profits as the market growth slows. If the objective is to
optimize profits, is it a good idea for Coller Inc. to decrease the price by 10% in an
attempt to increase market share to 6%?
A) Yes, because sales revenues will increase by $16 million.
B) Yes, because margin per unit will increase by $200.
C) Yes, because gross profit will increase by $16 million.
D) No, because gross profit will decrease by $16 million.
E) No, because variable costs will increase by 10%.
Calculate the perceived customer value if the relative performance of the product is 100
and its relative cost of purchase is 75.
A) 25
B) 75
C) 100
D) 125
E) 175
Calculate the net marketing contribution if the gross profit generated is $30 million and
the total marketing and sales expenses is $15 million.
A) $15 million
B) $45 million
C) $30 million
D) $500,000
E) $2 million
Calculate the price per unit if the variable cost per customer is $6 and the margin per
unit is $24.
A) $30
B) $4
C) $18
D) $15
E) $9
Palmer Enterprises has a net marketing contribution of $60 million. Its general and
administrative expenses and other operating expenses are $20 million and $15 million,
respectively. Calculate its operating income.
A) $95 million
B) $75 million
C) $45 million
D) $40 million
E) $25 million
What does it mean if the market development index is equal to 60?
A) There is only 60% potential market share available for businesses in this industry.
B) This is a highly saturated industry and there is little room for growth.
C) There are many potential customers who have not entered the market.
D) The average market share for businesses operating in this industry is 60%.
E) The maximum market share that any business operating in this industry can attain is
equal to 60%.
A market definition that is limited to a particular product focus concentrates on
________ needs of customers.
A) unserved
B) future
C) articulated
D) unarticulated
E) hidden
Customers for whom the offerings of the current business do not fit their needs are
called ________.
A) misfits
B) spinners
C) captive customers
D) customer terrorists
E) underachievers
Forward-looking marketing metrics are particularly important because ________.
A) they focus on the past performance of a company
B) they are leading indicators of a business’s future performance
C) they include both customer metrics and competitiveness metrics
D) they allow a business to measure the revenue per customer
E) they are more advanced product-market metrics for companies that are dealing with
pricing issues
Mason Enterprises’ net marketing contribution of $50 million is derived from sales of
$200 million. If its marketing and sales expenses amount to $20 million, what is its
percentage of gross profit margin?
A) 40%
B) 35%
C) 20%
D) 25%
E) 30%
Which of the following is a mode of pull marketing communication?
A) channel marketing
B) sales incentives
C) channel financing
D) direct marketing
E) co-op advertising
Which of the following is a performance metric used to measure brand-image
communications?
A) high recall of key content
B) high rate of purchase
C) high ad and brand recall
D) response to requested action
E) low ownership costs
A large-segment strategy differs from a mass-market strategy in that a large-segment
strategy ________.
A) addresses one set of core customer needs
B) has no segment focus
C) is used when demographics are not distinctive
D) is used when differences in customer needs are small
E) allows customers to build their own products
The fair price for the Merrill Microwaves, manufactured by Merrill Inc., is considerably
higher than its actual price of $140. Merrill Microwaves have a relative performance
rating of 125. According to this data, Merrill Microwaves provides ________.
A) lower-quality products at higher prices
B) superior-quality products at higher prices
C) products with very high life-cycle cost
D) relatively lower value to the customers when compared to an average relative
performance rating
E) a very good value for customers, but it may be underpricing the product
The maximum number of customers who can enter the market given a specific served
market definition is known as ________.
A) market penetration
B) market potential
C) rate of entry
D) current market demand
E) market diversification
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
The second step in the situation analysis level of a marketing plan involves ________.
A) conducting a performance review
B) developing a revenue plan
C) performing a SWOT analysis
D) developing a performance plan
E) initiating a share valuation process
A business with a share development index equal to 45 means that the business
________.
A) can only achieve 45 percent of the total market share
B) achieved a 45 percent growth in market share
C) achieved only 45 percent of its share potential index
D) achieved a 45 percent growth in competitive advantage
E) has to achieve 45 percent more in market share to reach its potential market share
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 refers to change along the technology innovation curve that
allows for the development of products that are less expensive, smaller, and often easier
to use?
A) discontinuous innovation
B) disruptive innovation
C) continuous innovation
D) end-user innovation
E) radical innovation
Net marketing contribution equals ________.
A) (volume/margin per unit) – marketing and sales expenses
B) volume x margin per unit x marketing and sales expenses
C) (volume x margin per unit) – marketing and sales expenses
D) (volume x marketing and sales expenses) – margin per unit
E) (margin per unit/volume) – marketing and sales expenses
Which of the following terms refers to businesses that emulate the dominant design and
enter the market after letting another firm invest in developing the technology,
establishing the design standard, and initiating market development?
A) pioneers
B) first-movers
C) market leaders
D) early followers
E) technological leaders
Which of the following statements regarding customer satisfaction is true?
A) Very satisfied customers usually switch back and forth with competitors’ products.
B) Over 90 percent of dissatisfied customers lodge complaints.
C) Very satisfied customers often buy higher margin products and extra services.
D) Dissatisfied customers who complain cannot usually be retained.
E) Satisfied customers are very loyal and buy in relatively large amounts.
S.K. Group of Manufacturers produces and distributes mattresses and pillows under the
brand name SoftComfort. In this example, S.K. Group of Manufacturers uses which of
the following types of brand names?
A) a founder name
B) an experiential name
C) a functional name
D) an acronym
E) a morpheme
Maurice has determined that along the share-development path, his business should
perform at a 90% level of product awareness, 80% in product preference, 50% in
intentions to purchase, 80% in product availability, and 70% in rate of purchase. What
is the approximate share potential index for Maurice’s business?
A) 20%
B) 37%
C) 45%
D) 50%
E) 74%