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Marketing managers for Mountain Dew used a positioning statement to help focus
efforts and gain market share in a competitive environment.
Business customers are sometimes less price sensitive if there are switching costs.
Some advertising media are "must buys" because they are obvious choices to reach the
target audience.
Price lining tends to result in faster turnover, fewer markdowns, quicker sales, and
simplified buying.
The average retail store is too small to gain economies of scale.
When measuring an advertising campaign, success depends on the total marketing mix.
Adopting the marketing concept requires that a business firm eliminate all functional
departments.
How much a nation's money is worth in some other nation's currency can impact the
price level in both local and international markets.
Place decisions make goods and services available in the right quantities and locations,
when customers want them.
Bulk-breaking means separating products into grades and qualities desired by different
target markets.
Goods are typically mass-produced in a factory far away from customers, while
services are produced in their presence.
During the "production era" a company focuses on productionbecause few products are
available in the market.
Direct investment in a foreign market involves the biggest commitment and the biggest
risk.
Allowances are given to final consumers, business customers, or channel members for
accepting more of something.
During the sales decline stage of the product life cycle, no firm can earn a profit.
Mass-merchandisers have become the primary place to shop for many frequently
purchased consumer products.
The product life cycle describes the stages a really new product idea goes through from
beginning to end.
Marketing can be viewed as a set of activities performed by organizations, but not as a
social process.
Because wholesalers and retailers are closer to the final user, they are in an ideal
position to assume the channel captain role.
Attractive opportunities are those that the firm has some chance of doing something
about given its resources and objectives
The product life-cycle concept tells a manager how long each stage of the cycle will
last.
Marketing is both a set of activities performed by organizations and a social process.
During the various stages of the product life cycle, the attitudes and needs of target
customers do not change.
The term "3/10, net 30" means that thirty percent of the face value of the invoice is due
immediately, and that the rest must be paid within 30 days.
A straight rebuy is a routine repurchase that may have been made many times before.
Good marketing objectives should be ambitious and almost impossible to achieve.
Agent wholesalers usually have higher operating expenses (as a percentage of sales)
than merchant wholesalers.
"Voluntary chains" are retailer-sponsored groupsand "cooperative chains" are
wholesaler-sponsored groupsthat work together to better compete with corporate chains.
E-commerce refers to exchanges between organizations (not individuals) and the
activities that facilitate those exchanges.
Intensive distribution is selling through only those intermediaries who will give the
product special attention.
According to the U.S. Census Bureau, wholesaling is defined as the activities of firms
that sell to retailers, but do not sell in large amounts to final consumers, manufacturers,
or other institutional users.
The best way to ship a large shipment of coal (which is a heavy and bulky good) from
Pennsylvania to California at a relatively low cost would be to use:
A. Rail
B. Water
C. Truck
D. Air
E. Pipeline
To understand the narrowing-down process, it's useful for mangers to think in terms of a
_____ market and a _____ market.
A. generic; product
B. buyer's; seller's
C. goods; services
D. primary; secondary
E. risky; certain
Which degree of market exposure would probably be most suitable for a heterogeneous
shopping product which has achieved brand preference and sells for about $300?
A. Concentrated distribution
B. Selective distribution
C. Administered distribution
D. Intensive distribution
E. Exclusive distribution
The legal obligation of sellers to pay damages to individuals who are injured by
defective or unsafely designed products is called:
A. product responsibility.
B. breach of warranty.
C. rule of reason.
D. product liability.
E. design enforcement.
A situation analysis
A. can never eliminate the need for further research.
B. is used primarily in the problem solving step.
C. is expensive compared with more formal research efforts.
D. can be very informative, but takes little time.
E. must be quantitative to be useful.
World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the U.S. Raul
Fernandez, the firm's marketing manager, is comparing his firm's distribution with two
major competitors.
1) WTB sells its products through four regional distributors who then sell to 22 sporting
goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its
website, WTB also sells directly to any customer who will purchase a minimum
quantity of 24 tennis balls. WTB cooperates with members of its channel, but maintains
some control through its economic power and leadership. It helps to direct the activities
of the whole channel and tries to avoid or resolve channel conflicts.
2) American Tennis Ball (ATB) is a competitor that sells through two distributorseach
with half the country. The distributors then sell through 6 sporting goods wholesalers,
and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods
chains and two general merchandise stores). ATB and its channel make little effort to
work together. However, because of a relatively low level of competition between the
distributors, the wholesalers, or the retail stores, each member of the channel gives the
product special attention.
3) National Tennis Ball (NTB) sells its products through only three tennis specialty
wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that
handle its products. NTB's balls are only available at certain tennis clubs and NTB
limits coverage to only one club in a particular geographic area.
Which of these companies appears to operate as a channel captain?
A. WTB
B. ATB
C. NTB
D. All of the companies appear to be channel captains.
E. None of the companies is a channel captain.
Persuading ads for a product work best in which stage of the adoption process?
A. Awareness
B. Interest
C. Evaluation and trial
D. Decision
E. Confirmation
A major difference between functional accounts and natural accounts is that functional
accounts
A. are based on the contribution-margin approach and natural accounts are based on the
full cost approach.
B. always total to a lower overall expense than the total of the natural accounts.
C. might be used to compare the costs of serving different customersbut natural
accounts are not suited to that purpose.
D. are the basis for most accounting systems, but natural accounts are more useful for
marketing managers.
E. do not consider fixed costs, but natural accounts do.
The first step in marketing cost analysis is to:
A. Reclassify the dollar cost entries in the functional accounts into natural cost
accounts.
B. Use the entries in the functional accounts to evaluate the profitability of profit
centers.
C. Allocate the entries in the functional accounts to specific customers.
D. Reclassify the dollar cost entries in the natural accounts into functional cost
accounts.
E. None of these.
Which of the following advertising objectives is the BEST example of a specific
advertising objective?
A. To increase a firm's market share by 20 percentthis year.
B. To increase consumer awareness of the product.
C. To help attract new retailers on the West Coast.
D. To sell the company "image" to senior citizens.
E. To increase store traffic.
Routinized response behavior probably would be used by many consumers in the
purchase of:
A. soap.
B. canned fruit.
C. salt.
D. milk.
E. All of these are correct.
Which of the following products probably would result in the lowest involvement
purchase for most consumers?
A. Paper towels
B. Summer vacation
C. CD player
D. Sweater
E. Cough syrup
Ideally, product-markets should be described in terms of:
A. behavioral needs, attitudes, and how present and potential goods or services fit into
customers' consumption patterns.
B. urgency to get needs satisfied and desire and willingness to compare and shop.
C. geographic location and other demographic characteristics of potential customers.
D. All of these are true.
A manufacturer of computer printers has decided to add scanners to its line. Which kind
of advertising should it stress if it wants to persuade consumers to buy its brand of more
or less similar scanners?
A. Reminder
B. Cooperative
C. Pioneering
D. Institutional
E. Indirect competitive
Compared to U.S. averages, the median age of Hispanic Americans is:
A. slightly higher.
B. much higher.
C. much lower.
D. about the same.
Which of the following statements about retailing on the Internet is true?
A. More product information is readily available.
B. Product assortments available are not limited by the customer's location.
C. Price comparisons are easy.
D. Product inspection is available through photos and videos.
E. All of these statements about retailing on the Internet are true.
Which of the following is true of product liability?
A. Product liability is a consideration, but it's not important until the development stage
of the new-product development process.
B. Relative to most other countries, U.S. courts enforce a very strict product liability
standard.
C. Sellers are usually not held responsible for injuries related to their products
especially when the items are well designed.
D. None of these statements is true.
Which of the following would help prevent marketing mistakes in evaluating
international market opportunities?
A. Assume that all cultures around the world are the same.
B. Do not "think locally."
C. Use machine translators.
D. Include local citizens in the evaluation process.
E. Save money by cutting research into foreign markets.
A marketing information system (MIS) includes all of the following except:
A. Data warehouses.
B. Decision support systems.
C. Internet support systems.
D. Marketing models.
E. Information technology specialists.
In a market-directed economy:
A. profit, survival, and growth are all guaranteed for producers.
B. consumers have little freedom of choice.
C. consumers decide what is to be produced and by whom through their dollar votes.
D. prices usually do not change according to supply and demand.
E. only the needs of the majority are served.
The first and most important question to ask when evaluating product-market
opportunities is:
A. "How does it fit with our objectives and resources?"
B. "What is the sales forecast for this product?"
C. "How much profit will we make this year?"
D. "How much do we need to invest in this product?"
E. "How far along is our research and development effort in this area?"
Which of the following statements about company objectives is true?
A. Company objectives should be stated in vague terms to provide flexibility to
lower-level managers.
B. Company objectives should be set by top management with no input from marketing
managers.
C. A good mission statement can substitute for more specific company objectives.
D. Company objectives should be compatible with each other.
E. All of these statements about company objectives are true.
Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about
how changes taking place among retailers in his channel might impact his strategy.
SPI sells the products it produces through wholesalers and retailers. For example, SPI
sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent
markup and most of its 'sport shop" retailer customers, like Robinson's Sporting Goods,
use a 33 percent markup to arrive at the price they charge final consumers. However,
one fast growing retail chain, Sports Depot, only uses a 20 percent markup for
basketballs, even though it pays Wholesale Supply the same price as other retailers.
Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them
at costto draw customers into its stores and stimulate sales of its pricey basketball
shoes.
Sports Depot is also using other pricing approaches that are different from the sports
shops that usually handle SPI products. For example, Sports Depot prices all of its
baseball gloves at $20, $40, or $60with no prices in between. There are three big bins -
one for each price point.
Todd is also curious about how Sports Depot's new strategy to increase sales of tennis
balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit
groups who resell the balls to raise money. For example, a service organization at a
local college bought 2,000 tennis balls printed with the college logo. Sports Depot
charged $.50 each for the tennis balls-plus a $500 one-time charge for the stamp to print
the logo. The service group plans to resell the tennis balls for $2.50 each and contribute
the profits to a shelter for the homeless.
Todd is not certain if Sports Depot ideas will affect SPI's plans. For example, SPI is
considering adding tennis racquets to the lines it produces. This would require a
$500,000 addition to its factory as well as the purchase of new equipment that costs
$1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd
thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow
most retailers to add their normal markup and make a profit. However, if Sports Depot
sells the racquet at a lower than normal price other retailers might decide to carry it.
Randy Todd wants to use marginal analysis to price the new tennis racquets, but doesn't
know the exact shape of the firm's demand curve. Under these circumstances marginal
analysis:
A. is useless.
B. may be useful anyway because a profitable region usually surrounds the best price.
C. will suggest the same price as break-even analysis.
D. suggests that the only sensible approach is to follow the market leader.
E. none of these alternatives is correct.
An elite fashion manufacturer distributes apparel products in retail outlets worldwide.
The company chooses to forego coordinating physical distribution functions with other
firms in the distribution channel. Which of the following is most likely to occur as a
result?
A. A competitive advantage for the manufacturing firm
B. Lower product delivery costs
C. Greater harmony across the supply chain
D. Significant gains in global market share
E. Discord concerning issues of physical distribution
Marketers need to foster cooperation with various members of a channel system to
prevent:
A. channel competition.
B. channel confusion.
C. channel conflict.
D. channel changing.
E. channel surfing.
Charles Wood, purchasing manager for a company that makes golf carts, posted the
purchase specifications for the seats on a new golf cart model his firm is building. Four
suppliers submitted _____ that included the terms of sale each had to offer.
A. operational linkages
B. an auction
C. negotiated contracts
D. competitive bids
E. defined sales procedures
The main purpose of a performance analysis is to:
A. see whether or not the 80/20 rule applies in a particular situation.
B. uncover variations in performance that may be hidden in summary information.
C. determine who should receive a performance bonus when profit is greater than
expected.
D. determine if the marketing budget is large enough to achieve the expected sales
performance.
E. provide a detailed breakdown of a company's sales records.
PepsiCo is evaluating an idea for a new "clear cola" by using focus groups made up of
young adults to suggest brand names for the proposed product. This is an example of:
A. empowerment.
B. concept testing.
C. market testing.
D. TQM.
E. EDI.
Macro-marketing:
A. tries to produce discrepancies of quantity and discrepancies of assortment.
B. focuses on the activities of individual organizations.
C. tries to effectively match supply and demand.
D. is a set of activities performed by individual firms.
In a recent Nielsen online survey of over 25,000 Internet consumers from 50 countries,
what percentage of respondents said they trusted recommendations from people they
knew?
A. 50 percent
B. 60 percent
C. 70 percent
D. 80 percent
E. 90 percent
Physical distribution decisions may impact
A. location decisions.
B. target market selection.
C. price decisions.
D. channel of distribution decisions.
E. physical distribution decisions may impact all of these.
Market research firm BestOne sells reports about competitors, products, and other areas
to various clients in the software industry. BestOne performs which universal marketing
function:
A. risk taking.
B. market information.
C. standardization and grading.
D. social responsibility.
E. financing.
______________ is concerned with whether the research data measures what it is
intended to.
A. Cross-tabulation
B. Validity
C. Regularity
D. Dependability
E. Confidence
