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
Uncovering key performance issues that normally might go unnoticed in day-to-day
business operations is the primary purpose of the ________ step of a marketing plan.
A) situation analysis
B) revenue planning
C) performance evaluation
D) performance gap
E) channel strategy
Paterson Inc. is a business that purchases computers, printers, modems, fax machines,
software, and telecommunications equipment from several manufacturers and markets
them as complete (bundled) customized systems to small businesses to meet their
specific needs. What type of channel intermediary is Paterson Inc.?
A) wholesaler
B) value-added reseller
C) original equipment manufacturer
D) sales agent
E) distributor
Growth-oriented entrepreneurs differ from cost-focused sustainers in that
growth-oriented entrepreneurs ________.
A) are more interested in maintaining the status quo at the lowest cost
B) have a lower level of formal education at the leadership level
C) are less likely to have a working financial plan
D) are confused by value-added solutions
E) are more sophisticated in their operations
Brand equity is equal to ________.
A) total brand assets minus total brand liabilities
B) total brand assets divided by total brand liabilities
C) total company assets minus total company liabilities
D) total company assets divided by total company liabilities
E) total company liabilities minus total brand liabilities
Which of the following terms refers to an incremental implementation of a marketing
plan that allows for feedback and corrective adjustments early in the implementation
process?
A) adaptive persistence
B) adaptive rollout
C) channel strategy
D) marketing mix
E) benchmarking
Which of the following is a part of a company’s culture?
A) number of employees
B) years in business
C) innovativeness
D) number of locations
E) sales volume
Maxim Computer has 10 percent of a $250 billion market. Maxim is a low-cost leader
and realizes a 20% margin on sales, and marketing, and administrative expenses
equaling 10% of sales. What is Maxim’s gross profit?
A) $250 billion
B) $25 billion
C) $5 billion
D) $2.5 billion
E) $500 million
Costigan’s Skates Inc., a firm that manufactures and exports skateboards, wants to grow
financially, but decides that the market for skateboards is fairly saturated. The firm’s
management team decides to expand into manufacturing snowboards, as they believe
the Costigan brand will have credibility in this area and the market will not be
saturated. In this example, Costigan’s Skates Inc. is using the ________ offensive
strategy.
A) divest for cash flow
B) enter related new markets
C) develop new markets
D) harvest for cash flow
E) enter unrelated new markets
Which of the following is a product adoption force affecting new product penetration?
A) felt need
B) personal risk
C) ease of use
D) trialability
E) observability
Dynamo Inc., a motor company, started by selling sturdy, affordable, low-maintenance
motorcycles in the U.S. Initially the firm pursued a single-segment focus, and targeted
the middle-income group. When the company reached the point of full market
penetration of the middle-income group, it marketed to a closely related attractive
segment by introducing a line of luxury motorcycles for the high-income group of
consumers. Which of the following type of market segmentation strategy does Dynamo
Inc. use when it targets the high-income group of consumers?
A) multi-segment strategy
B) adjacent-segment strategy
C) mass-customization strategy
D) niche-segment strategy
E) mass-market strategy
Erb Manufacturing Group is an American manufacturer of electrical wire and cable
based in Pennsylvania. The firm offers price reductions to its distributors and retailers,
as well as offers them financial incentives to promote and provide greater shelf space to
Erb products. In this example, Erb Manufacturing Group uses which of the following
communication strategies?
A) a push communication strategy
B) a pull communication strategy
C) a cobranding communication strategy
D) a centralized communication strategy
E) a lateral communication strategy
Which of the following is considered a market force factor that influences a market’s
attractiveness?
A) buyer power
B) number of competitors
C) price rivalry
D) channel access
E) sales requirements
Which of the following is true of product line advantage?
A) A business with a broad line of products has to be more focused in order to be cost
effective in its marketing efforts.
B) It is important to expand a business’s product line during the emerging stage of the
product life cycle.
C) Businesses with narrow product lines are more profitable during the emerging and
growing stages of a product life cycle.
D) A narrow line of products creates more selling opportunities for the sales force and
channel partners.
E) It is a source of competitive advantage that is independent of differentiation
advantage.
Which of the following is true for businesses with above average customer value?
A) They need to spend more to acquire customers.
B) The cost of purchase equals performance benefits.
C) They produce higher levels of pre-tax return on investment.
D) The cost of purchase exceeds performance benefits.
E) They have great difficulty in retaining customers.
With reference to the six-category scale, a consumer satisfaction index (CSI) of 60
denotes that the customer is ________.
A) dissatisfied
B) satisfied
C) very satisfied
D) somewhat dissatisfied
E) somewhat satisfied
Which of the following is true of the net marketing contribution of a firm?
A) It sets a benchmark to gauge improving or deteriorating marketing profitability.
B) General and administrative expenses are included to assess the net marketing
contribution.
C) It is an internal in-process financial metric.
D) It is equal to the revenues of the firm.
E) It includes all operating expenses.
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%.
Which of the following is true of single-segment pricing strategy?
A) A single-segment pricing strategy is most likely to be employed during the decline
stage of the product life-cycle.
B) A single-segment pricing strategy is a cost-based pricing strategy rather than a
value-based one.
C) The company does not base the price of a product on the savings that customers
realize over the life of the product.
D) The main goal of single-segment pricing is to lower the cost to potential customers
in order to attract their purchase volume.
E) A single-segment pricing strategy overlooks both competitor’s offerings and price
sensitivity.
If a business is a large purchaser of a commodity product (less important to the buyer)
and is in an industry in which switching costs are low, generally the supplier power
________.
A) is low
B) is high
C) is greater than customer buying power
D) is equal to customer buying power
E) is likely to increase with a decrease in switching costs
Frosty Inc. is an American firm that manufactures and markets a line of ice creams
under the brand name Frosty Delight. Together with Magic Bakes, a popular brand of
baking mixes and canned frostings, the firm introduces a line of Frosty Magic Bakes, a
line of ice cream cake mixes. The new product line, Frosty Magic Bakes, uses the logos
of both Frosty Delight and Magic Bakes. This is an example of ________.
A) franchising
B) cobranding
C) pure product bundling
D) mixed product bundling
E) licensing
Julio lives in Summit County, in Colorado. He has taken health insurance from Pro-Life
Inc., a health maintenance organization in Colorado that has a network of health care
providers. Julio can visit the health care providers in the Pro-Life Inc. network, and get
services at much lower rates. Julio regularly visits Dr. Amy Page, the best general
physician in the Pro-Life Inc. network in Summit County even though he is not satisfied
with her services. When any his friend require medical services, Julio does not
recommend Dr. Amy Page to them. For Dr. Amy Page, Julio is a(n) ________ customer.
A) intermediate
B) loyal
C) captive
D) repeat
E) unprofitable
The operating income of a company is $10 million, the net marketing contribution is
$30 million and general and administrative expenses are $5 million. Calculate the other
operating expenses.
A) $10 million
B) $5 million
C) $15 million
D) $20 million
E) $25 million
We-Move-It Inc. is a moving company located in Athens, Ohio. The firm has its
heaviest business during the summer months. Thus, the firm maintains a GRP of 40
throughout the year and a GRP of 100 during April and May, which is the prime buying
period for its services. In this example, We-Move-It Inc. uses which of the following
approaches to message reinforcement?
A) a heavy-up exposure pattern
B) an average frequency strategy
C) a gross frequency strategy
D) a pulsing strategy
E) a benchmarking strategy
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 an industry force that shapes the attractiveness of a
competitive environment?
A) competitor intelligence
B) knowledge advantage
C) cost advantage
D) market share advantage
E) customer buying power
The rapid growth of database marketing technologies has lured many businesses down
a side road where technology is seen as the solution instead of a tool for building a
solution. Without a solid commitment to serving individual customer needs, these
businesses can fall into a ________.
A) reverse marketing trap
B) technology trap
C) customization trap
D) downward spiral
E) price trap
The primary purpose of company metrics is ________.
A) to achieve maximum customer satisfaction
B) to make optimal use of the organization’s resources
C) to maintain an ongoing measure of marketing performance
D) to maximize the organization’s return on assets
E) to minimize the defects in the organization’s products
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%
The most significant impact of satisfying and retaining customers is ________.
A) that a business can redirect marketing efforts to better serve dissatisfied customers
B) that a business can redirect marketing efforts to attaining new customers
C) that a desired increase in the level of profitability requires an increase in sales
volume of only half as much
D) that a business can eliminate the need for advertising
E) that it can result in tremendous financial leverage
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. Based on the values provided, determine the customer loyalty
index.
A) 28
B) 32
C) 36
D) 40
E) 44
Calculate the net profit generated by Toby Inc. for a return of 8.6% from sales of $240
million.
A) $20.6 million
B) $78.4 million
C) $120 million
D) $206 million
E) $12.6 million