The ________ index is calculated using the formula based on hierarchical set of
customer response effects: Exposed to Ad X Aware of Ad X Comprehend the Ad X
Intend to Buy X Buy the Product.
A) customer response
B) marketing benefit
C) market penetration
D) brand awareness
E) market share
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
If a company’s cost of purchase index is 30 percent below the industry average, it
means that ________.
A) the company’s shares are more expensive than other companies in the industry
B) the consumers feel that they are required to pay less for the company’s products or
services when compared to other companies in the industry
C) the consumers feel that they receive less real value from the goods and services they
purchase from the company for the price they pay
D) the company’s goods and products are rated 30 percent lower in terms of quality than
those offered by the other companies in the industry
E) the company’s market share is estimated to be 30 percent smaller than its largest rival
company in the industry
MVB Inc.obtains a return of 9.8% from assets worth $248.5 million. Calculate its net
profit.
A) $105.9 million
B) $36.8 million
C) $24.3 million
D) $76.2 million
E) $60.4 million
Calculate the total volume of units sold by a business if there is a market demand of
550,000 units and the business has a market share of 25%.
A) 292,560
B) 440,650
C) 137,500
D) 325,000
E) 110,190
Niche-segment strategies differ from mass-market strategy in that niche-market
strategies ________.
A) address one set of core customer needs of a large market segment
B) have no segment focus
C) are used when demographics are not distinctive
D) are used when the company markets to a closely related attractive segment first
E) involve highly refined marketing effort directed at an overlooked, small group of
customers
In general, businesses in high-share positions in growing or mature markets will use
which type of strategic market plans to maintain cash flow that supports short-run profit
performance and shareholder value?
A) offensive strategic market plans
B) defensive strategic market plans
C) decentralized strategic market plans
D) concentrated strategic market plans
E) multi-segment strategic market plans
Within the dimensions of product performance, which of the following is a product
performance enhancement factor?
A) reliability
B) conformance
C) durability
D) serviceability
E) improvements
To create an overall customer satisfaction index (CSI) for a given sample of customers,
a business ________.
A) computes the average of those customers’ satisfaction ratings
B) sums all of those customers’ satisfaction ratings
C) computes the average of those customers’ satisfaction ratings and divides it by the
industry average
D) computes the sum of those customers’ satisfaction ratings and divides it by a leading
competitor’s customer satisfaction index
E) sums all of those customers’ satisfaction ratings and divides it by 100
If a company sold 54 million units of a particular product, which represents a 6%
market share, calculate the market demand for the product.
A) 900 million
B) 90 million
C) 9 million
D) 324 million
E) 648 million
Repeat customers differ from loyal customers in that repeat customers ________.
A) have a loyalty score between 70 and 100
B) have a high product preference score
C) are likely to recommend a company’s product
D) are often simply “big spenders”
E) have low profit potential
Which of the following defensive strategies allows a business to exit a market slowly?
A) a monetize market strategy
B) a disintermediation market strategy
C) a divest market strategy
D) a harvest market strategy
E) an optimize market strategy
Vincent & Rankine is a company that spends billions of dollars annually on marketing
communications, primarily because they have many brand offerings in several product
categories. Some of these expenditures are used on marketing communications targeted
at end-user consumers of their brand, and other expenditures are used on marketing
communications targeted at intermediaries in the channel of distribution.
Mini-Case Question. As part of its marketing communications effort, Vincent &
Rankine uses many forms of consumer-directed sales promotions, such as coupons,
rebates, sweepstakes, gifts, and rewards. Which type of communication strategy do
these types of tactics represent?
A) a decentralized communication strategy
B) a pull communication strategy
C) a centralized communication strategy
D) a pulsing communication strategy
E) a heavy-up communication 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
Which of the following types of customers should be rewarded with special offers and
services that are not offered to other customers?
A) loyal customers
B) nonprofit customers
C) new customers
D) dissatisfied customers
E) repeat customers
The actual volume and volume estimated in a business plan are 60,000 units and 55,000
units, respectively. If the volume variance of the business works out to $30,000,
calculate the margin per unit estimated in the plan.
A) $6
B) $10
C) $15
D) $18.5
E) $24.5
In which type of marketing budget is each element of the marketing effort budgeted for
specific tasks identified in the marketing plan?
A) top-down budget
B) customer-mix budget
C) bottom-up budget
D) annual budget
E) objective and task budget
Calculate the approximate relative market share of a company whose market share is
76%, while the market shares of its three largest competitors are 13%, 22%, and 26%.
A) 125
B) 81
C) 150
D) 46
E) 27
Under a defensive strategic market plan, calculate the market share of a company that
generates sales revenue of $50 million in a market where the total demand is $493
million.
A) 5.6%
B) 10.14%
C) 25%
D) 32.3%
E) 5.89%
Rondon Inc. has 48 million shares outstanding with an earnings per share of $5.6.
Calculate the net profit it generates.
A) $480 million
B) $268.8 million
C) $634.8 million
D) $345.4 million
E) $196 million
The average life expectancy of a customer for a company with 75% customer retention
is ________.
A) 1 year
B) 2 years
C) 3 years
D) 4 years
E) 5 years
What is the current market demand for Valiant running shoes if its market development
index is 64 and its market potential is 480 million?
A) 1333.3 million
B) 307.2 million
C) 750 million
D) 172.8 million
E) 721.8 million
The marketing team at Wallace Waterworks has been working on a marketing plan for
the impending quarter. The team completed a SWOT analysis and incorporated its
results into a strategic market plan. After evaluating the company’s competitiveness and
creating a revenue plan, the team now has to determine the resources necessary to meet
the performance objectives of the strategic market plan. Which of the following steps
will help the company determine the resource allocation for the coming quarter?
A) marketing and sales budget
B) situation analysis
C) SWOT analysis
D) strategic market plan
E) marketing mix plan
Vermont Home Builders conducted a study of the customers in the housing sector,
which revealed that there are seven kinds of buyers, each a little different and each
differently profitable. Vermont Home Builders decided to focus their attention on the
three most profitable segments. In this example, Vermont Home Builders uses which of
the following market segmentation strategies?
A) mass-market strategy
B) niche-segment strategy
C) adjacent-segment strategy
D) multi-segment strategy
E) subsegment strategy
Which of the following would be considered a break-even analysis component of
performance plan?
A) expenditures
B) marketing profits
C) pricing
D) asset turnover
E) profitability risk
If 75% of consumers are aware of Ace Motors’ newly launched line of hybrid cars
called the Opus, and 45% of that group likes the product’s benefit, and 44% of that
group finds the price acceptable, and 51% of that group intends to buy the product in
their local market, and 75% of that group actually purchase the product from Ace
Motors and its dealers, then the market share index for the Opus is ________.
A) 1.2%
B) 3.6%
C) 5.7%
D) 7.5%
E) 12.9%
Marketing return on investment equals ________.
A) profits/marketing & sales expenses x 100%
B) net marketing contribution/marketing & sales expenses x 100%
C) gross margin/total expenses x 100%
D) net marketing contribution/operating expenses x 100%
E) sales revenues/marketing & sales expenses x 100%
Aster Inc. is an American firm that manufactures and markets cell phones for sale in
discount stores and other retail settings. The firm also sells cell phone accessories. Aster
Inc. conducted an analysis of its competitive advantage for one of its product-markets
and conducted research to learn the following information:
Mini-Case Question. Aster Inc. identifies that the market attractiveness index for the cell
phone market is equal to 25. The firm decides to adopt a strategy of minimizing
investment in its business, and striving for maximum cash flow from its market position.
Aster Inc. aims to manage prices and marketing resources in a way that maximizes its cash
flow without exiting the market. Aster Inc. is considering on using which of the following
strategic market plans?
A) an invest to grow strategy
B) a monetize strategy
C) an optimize position strategy
D) a harvest strategy
E) a disintermediation strategy
Which of the following is a customer relationship marketing strategy?
A) mass-market strategy
B) mass-customization strategy
C) core-segment strategy
D) sub-segment strategy
E) decentralization strategy
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
VitaMind manufactures a line of vitamins and supplements, and distributes them
through retail health food and organic grocery stores. While this young company is
currently realizing profits, the owners want to plan for future growth and are beginning
the formal market planning process.
Mini-Case Question. In which of the following steps of the market planning process
will VitaMind need to conduct a thorough examination of market forces, competitive
position, and current performance?
A) situation analysis
B) revenue planning
C) performance gap
D) marketing mix strategy
E) performance review
FunTime Inc., is an American toy manufacturing firm, with its headquarters in New
York. The firm specializes in manufacturing educational toys for children. The table
given below shows the educational toys market segment performance for FunTime Inc.
Mini-Case Question. What is the marketing ROS for FunTime Inc.?
A) 27.5%
B) 50%
C) 10%
D) 15%
E) 52%
Which of the following statements is true about a reduce-market-focus defensive
strategy?
A) It involves introducing new lines of products.
B) It requires an increase in the marketing budget.
C) It will likely lead to lower levels of profitability as a percentage of sales.
D) It is most appropriate when a business has the resources to invest in protecting its
current share position.
E) It involves trimming market share in an effort to improve profit performance.
Kindest Inc. generates a net profit of $345.1 million from 17 million shares. Calculate
the earnings per share of the company.
A) $20,300 per share
B) $2,030 per share
C) $203 per share
D) $2.3 per share
E) $20.3 per share
Which of the following is true about licensing?
A) It is a bad option for products that are difficult to produce.
B) It refers to the transfer of trademark rights held by one party to another party.
C) It allows owners of intellectual property to obtain payment for their creations in a
lump sum.
D) It involves the legal assignment of the rights to a product from one party to another.
E) It is a method of protecting the brand name and logo of a company.
