Calculate the sales effect in period 15 if the advertising expense for that period is $30
million.
A) $45 million
B) $450 million
C) $2 million
D) $30 million
E) $540 million
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. Organic Harvest Inc. introduces a new line of personal care
products, including soaps and shampoos that are made from natural ingredients. The
firm markets these products under brand name NaturalCare. In this example, Organic
Harvest Inc. uses which of the following product-line extension strategies?
A) vertical brand-line extension
B) horizontal brand-line extension
C) new product-market brand extension
D) cobranding
E) product bundling
An increase from 80% to 90% in customer retention would have what effect on the
average customer life?
A) an increase of 1 year
B) an increase of 2 years
C) an increase of 5 years
D) an increase of 10 years
E) an increase of 20 years
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
A firm finds that 50% of the target market is exposed to a marketing communication,
40% of that group is aware of the offering, 80% understand the message. WIthin that
group, 60% intends to purchase, and 70% of that group actually does purchase. The
customer response index is 6.7%. What is the difference in the value of the customer
response index if 80% of the group intends to purchase and 60% of that group actually
does purchase?
A) 0%
B) 1%
C) 2%
D) 3%
E) 4%
The net marketing contribution for TRX Inc. is $20 million. The marketing and sales
expenses come up to $4 million. Calculate the marketing return on investment for the
company.
A) 66.6%
B) 300%
C) 500%
D) 100%
E) 50%
Which of the following is most likely to be considered when using a cost-based pricing
strategy?
A) price sensitivity in the market
B) company product-price positioning
C) competitors’ product-price positioning
D) customer performance needs
E) desired profit margin
The overall goal of compensation tied to market metrics is to immediately create
________.
A) motivation and responsibility
B) satisfaction
C) accountability
D) persistence
E) harmony
Which of the following refers to using collective intelligence to solve specific problems
or solicit ideas—often as part of a competition or for a reward?
A) onboarding
B) crowdsourcing
C) benchmarking
D) mass collaboration
E) outsourcing
A ________ market-based pricing strategy product position is one in which a business
can equal competitors on all areas of product and service quality but can find one area
of meaningful performance in which it is clearly superior.
A) penetration
B) multi-segment
C) plus-one
D) reduce-focus
E) harvest
Share development index is the ratio of ________.
A) market share index and share potential index
B) current performance and potential performance
C) market demand and market share
D) volume sold and market share
E) current market demand and market potential
Mikon Inc. generates a net profit of $64 million from $160 million of invested capital.
Calculate its return on capital.
A) 4%
B) 40%
C) 16%
D) 61%
E) 24%
Calculate the gross profit if the net marketing contribution is $40 million, the market
share is 5%, the acquisition cost is $10 million and the retention cost is $7 million.
A) $57 million
B) $23 million
C) $230,000
D) $60 million
E) $2.85 million
When pioneers set a standard that other businesses entering the market must follow in
order to compete, the standard is referred to as a ________.
A) competitive lead
B) functional lead
C) dominant design
D) functional design
E) dominant lead
Calculate the average percentage cost of goods sold for the top three competitors of a
business when the cost advantage index of the business is 120 and the percentage cost
of goods sold by the business is 60%.
A) 120
B) 53.22
C) 50
D) 80
E) 42
Calculate the frequency if a business with a 45% target market reach produces a GRP of
270.
A) 6
B) 7
C) 8
D) 9
E) 10
What is the main reason that a business suffers several economic consequences when a
dissatisfied customer leaves?
A) The cost of attracting a new customer is greater than retaining a current customer.
B) The business’s competitors enjoy a greater customer loyalty toward the same type of
products.
C) The amount of money spent on developing the product for the dissatisfied customer
cannot be reimbursed.
D) The business has to pay a large compensation fee to the customer.
E) The future costs for the development of a similar product increases abruptly.
The purchase price of commercial food grinders has a relative importance of 30. Your
food grinder has a purchase price rating of 6, and three of your competitors have a
rating of 4, 3, and 5. What is your relative advantage with regards to the purchase price
of your product?
A) 30
B) 180
C) 20
D) 60
E) 6
Which of the following fundamental offensive strategic market plans is most likely be
pursued in the core strategy of invest to enter new markets?
A) enter new market segment
B) improve customer loyalty
C) develop new markets
D) build marketing advantage
E) expand market demand
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 is true about an offensive strategic market plan?
A) It is inappropriate for a market with high market attractiveness and low competitive
advantage.
B) It is used for entering a new market with no established share position.
C) It is appropriate if a business wants to improve profits by optimizing its market focus
with minimal investment.
D) It is used to protect the current position of a business.
E) It is used in markets with market attractiveness below 20 where the business has low
competitive advantage.
________ buy components from manufacturers and assemble them to make their own
products.
A) Wholesalers
B) Value-added resellers
C) Original equipment manufacturers
D) Sales agents
E) Distributors
A business’s return on sales is ________.
A) sales divided by net marketing contribution
B) net marketing contribution multiplied by sales
C) net marketing contribution divided by sales
D) net profit multiplied by sales
E) net profit divided by sales multiplied by 100%
ABL Inc. is a large consumer goods company that recently released some new shower
gels in the market. Two of the most touted shower gels in this new line of products
failed in the market, while the range of shower gels designed for adolescents called
“Rebel” did very well in the market. Which of the following benefits would accrue to
ABL Inc. from the success of “Rebel” in the market?
A) reduced barriers of entry
B) increased cost-efficiency
C) reduced need for quality controls
D) reduced customer retention rates
E) increased break-even sales figures
Which of the following is considered a competitive environment factor that influences a
market’s attractiveness?
A) buyer power
B) growth rate
C) price rivalry
D) channel access
E) sales requirements
Which of the following refers to expenses other than the purchase price that are
associated with the acquisition and use of a product?
A) fixed costs
B) ownership costs
C) variable costs
D) differentiation costs
E) opportunity costs
Which of the following is true of direct marketing channels?
A) Direct marketing channels offer the greatest opportunity for sales communication
and customer interaction.
B) Direct marketing channels yield very low margins for the manufacturer.
C) Direct marketing channels do not allow the manufacturer control over the sales
messages and service quality.
D) Direct marketing channels are most suited for inexpensive products that are bought
in low quantities.
E) Direct marketing channels result in the lowest out-of-pocket marketing expenses for
the manufacturer.
Moreno Motors Inc. identifies that bikers are usually the first users of their newly
launched products. The firm sends consultants to biker rallies to discover how bikers
who use Moreno motorcycles modify them to extend their usage, as well as the desired
benefits. Recent visits revealed that bikers were seeking items, such as bolt-on chrome
products, horsepower performance enhancers, and improved braking systems in
Moreno motorcycles. In this example, Moreno Motors Inc. is studying which of the
following groups of customers?
A) lead users
B) mainstream customers
C) laggards
D) captive customers
E) spinners
A firm uses a core offensive strategic market plan of investing to improve competitive
position. The strategic objective of the firm is to improve margins. Which of the
following strategies is the firm most likely to use?
A) reduce market focus
B) harvest for cash flow
C) enter unrelated new markets
D) divest for cash flow
E) improve marketing productivity
A firm plans to use a defensive core strategy of optimize position, with the strategic
objective of maximizing profits. Which of the following strategies is the firm most
likely to implement as a part of its core strategy?
A) enter new related markets
B) reduce market focus
C) develop new markets
D) divest for cash flow
E) harvest for cash flow
TDZ Manufacturing wants to change its distribution system from an indirect channel to
a direct channel system. Which of the following should the company use to achieve
this?
A) cash-and-carry wholesalers
B) retailers
C) full-function wholesalers
D) traveling sales representatives
E) dealers
Which of the following is a part of the second stage of reverse innovation?
A) probing for new insights
B) verifying the size of the opportunities
C) determining new product benefits that address unmet customer needs
D) building a value proposition around the competitive advantages of the product
E) “inventing to order” with continuous customer involvement and feedback
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