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Retailers selling a new product that is in hot demandlike the latest DVD release or a
best selling bookwould be unlikely to incur higher costs for faster delivery.
Organizational buyers are also referred to as industrial or intermediate buyers.
It is the responsibility of the marketing manager to make the strategic planning
decisions that concern how a firm is going to use its overall resourcesfrom marketing,
production, finance and other areas.
Publicity allows a firm to avoid media costs.
Segmentation is the process a manager goes through to decide which subgroups of
customers to select.
A supermarket is bound to expect a higher stockturn for fresh fruits and vegetables
compared to soaps and detergents.
Qualitative research seeks structured responses that can be summarized in numbers, like
percentages, averages, or other statistics.
Although the salesperson's job may change constantly, there are three basic sales tasks.
One of the difficult things about segmenting is that not every customer will neatly fit
into some market segment.
"Meeting competition" in "good faith" is allowed as a defense in price discrimination
situations.
Few purchasing managers have been able to turn over any of their order placing to
computers because so few organizational purchases are routine.
Organizations always focus on economic factors when they make purchase decisions
and are never as emotional as final consumers in their buying behavior.
A product which has no brand other than the identification of the contents is a generic
product.
According to the text, Promotion is the most important of the "four Ps."
A salesperson who aggressively seeks out possible buyers with a well-organized sales
presentation designed to sell a product is a missionary sales rep.
The consumer decision process begins when a consumer becomes aware of an unmet
need.
Producers who operate in a competitive environment are more likely to adopt the
marketing concept.
Paying for growth by reinvesting cash generated from operations is usually less
expensive than borrowing money because no interest expense is involved.
Less-developed countries usually experience the slowest population growth.
Relationship-specific adaptations are usually not required when the buying organization
uses outsourcing.
Status quo pricing objectives suggest avoiding price competition, but may lead to very
aggressive competition with Promotion, Place, or Product.
Electronic shopping, which puts catalogs on cable TV or Internet websites, has not yet
succeeded.
Because publicity is "free," it is usually far less effective than advertising if the firm has
a new message.
Micro-marketing is a social process that directs an economy's flow of goods and
services from producers to consumers in a way that effectively matches supply and
demand and accomplishes society's objectives.
In the new-product development process discussed in the text, the burden is on the
new-product idea to prove itself or be rejected.
The three basic ideas in the marketing concept are 1) putting the marketing manager in
charge of the whole firm, 2) a competitive orientation, and 3) an emphasis on profit.
The stage of the product life cycle in which competitors are most likely to introduce
product improvements is the market growth stage.
More money is spent on media costs for publicity each year than is spent on media
costs for advertising.
Traditional channel systems are growing faster than vertical marketing systems.
The VALS approach to understanding consumer behavior considers values, attitudes,
and lifestyles.
A marketing audit is a systematic, critical, and unbiased review and appraisal of the
basic objectives and policies of the marketing function.
The American Marketing Association has adopted a statement of ethics that sets
specific ethical standards for many aspects of the management job in marketing.
In the political environment, an emphasis on a single country's interests before
everything else is called:
A. Elitism.
B. Socialism.
C. Extremism.
D. Regionalism.
E. Nationalism.
In _____ channel systems, the channel members agree by contract to cooperate with
each other.
A. contractual
B. traditional
C. selective
D. corporate
E. administered
Indirect channels are probably a better choice than direct channels when:
A. the firm has limited financial resources.
B. the product is a consumer product instead of a business product.
C. target customers already have established buying patterns for where to search for the
product.
D. retailers are already conveniently located where consumers shop.
E. All of these make indirect channels a better choice.
The current status of the "battle of the brands" is that:
A. dealer brands will seek narrower distribution in the future.
B. retailers now control the marketplace.
C. the vast majority of consumers clearly prefer manufacturer brands over dealer
brands.
D. manufacturers are gaining on intermediaries.
E. competition has reduced the gap in prices.
_____ involves borrowing money based on a promise to repay the loan.
A. Plough-back
B. Profit reinvestment
C. Sale of stock
D. Debt financing
E. Stock buyback
Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his
friends, he took a job in sales and really enjoys it. A description of Wilson's job and
those of some of his friends are noted below.
Wilson Alvaro loves biking and has his dream job. He works for a wholesale company
that sells mountain bikes for a manufacturer. He works with a small group of people
who call on the buying offices for two large retail chains, Wal-Mart and Toys R Us. The
group includes a finance person and a production person, and they all work together to
meet the specific needs of these two big accounts; for example, sometimes they
recommend a model of bike that will be available from only that retailer's stores.
However, Wilson's main job focuses on building relationships and solving customer
problems. Only occasionally is he expected to try to persuade the retailers to buy more
bikes.
Amy Bowden sells life insurance. She calls on new parents and persuades them to buy
insurance products. It is difficult for a manager to control Amy's work, but she has
incentive to work hard because her job security and income depend on getting sales.
She is a confident self-starter, so she likes it that way.
Ben Peterson works for a fashionable men's clothing store. He enjoys spending time
with customers who come in, learning about their fashion needs, and helping them pick
clothes that really work for them. While the store manager can easily observe and direct
Ben's activities, the manager wants Ben to have the incentive to increase customer
purchases and satisfaction.
Emily Winters handles inside sales for a major industrial distributor. She deals with a
regular set of established customers, most of whom know what they want. Emily talks
to them on the phone and answers questions about products, delivery time, and pricing.
She sometimes works with outside sales reps who visit customers and help introduce
new products. Emily is the first person her customers call when there's a problem with a
purchase, so she spends a lot of time dealing with customer problems. As an inside
salesperson, Emily's work is easily supervised by a sales manager-and she has little
influence on how much her customers buy.
Melissa Tran works for a company that sells paper products (like napkins, paper towels,
and paper plates) primarily through small independent grocers. Most of the grocers are
regular customers, but sometimes she makes cold calls to new grocery stores. Melissa's
job is to develop goodwill and try to increase sales. For example, she often sets up
special promotional displays in stores. Her compensation plan gives her income
security, but she also can receive a bonus for sales growth in her territory.
Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list
provided by his firm and tries to sign them up for Internet service. Charlie relies heavily
on a presentation he learned during his training. Charlie is very good at what he does
and loves that the more success he has the more he earns.
Which salesperson has a job that requires NO training in sales?
A. Charlie Riggs.
B. Melissa Tran.
C. Emily Winters.
D. Ben Peterson.
E. All of these jobs require some training in sales.
Which of the following is NOT one of the selective processes?
A. Selective perception.
B. Selective distribution.
C. Selective exposure.
D. Selective retention.
E. All of these are selective processes.
Top executives of a health maintenance organization (HMO) were discussing a proposal
to start providing each patient with a short customer satisfaction survey that would be
on a card given to the patient when he/she left one of the HMO's clinics. All the patient
had to do was to complete the survey items and drop the card in a mailbox; the HMO
would pay the return postage. After several minutes, one of the executives said, "I don't
like this idea at all, because the only people who will respond to the survey are people
who want to complain about something." Apparently, this executive doesn't understand
that:
A. Most companies don't pay any attention to customer surveys anyway.
B. Complaints can bring implementation problems to light so that the company can fix
them.
C. No one answers surveys that are sent through the mail.
D. Implementation problems that are unresolved often result in dissatisfied patients who
may choose other health care providers.
E. Both Complaints can bring implementation problems to light so that the company
can fix them; and Implementation problems that are unresolved often result in
dissatisfied patients who may choose other health care providers.
"Scrambled merchandising" refers to:
A. retailers shifting from one product-market to another (e.g., a food retailer shifting to
clothing).
B. limited-line retailers carrying wide assortments.
C. retailers carrying any product lines they can sell profitably.
D. displays of impulse products in supermarkets.
E. incompatible price and promotion policies.
A good marketing plan helps managers make strategic planning decisions and provides
a framework for effective implementation and _________________.
A. analysis
B. control
C. organization
D. research
E. supervision
A marketing auditor for a firm will most likely:
A. develop marketing plans for the firm based on the current plans being implemented.
B. interview employees of the firm to determine the level of job satisfaction.
C. evaluate the marketing plans being implemented by the firm to see if they are still
the best plans the firm can offer.
D. set company-wide objectives and targets in line with the marketing plan.
E. compare the firm's current marketing plans to older plans in order to determine the
progress made by the firm.
All of the following statements about manufacturers are accurate except:
A. large manufacturers are few in number yet produce the highest percentage of value
added within the manufacturing industry.
B. most U.S. factories operate in large metropolitan areas.
C. the greatest growth in manufacturing has occurred in countries where labor is cheap.
D. NAICS codes help marketers classify different types of manufacturing businesses.
E. manufacturing output in the United States is shrinking.
A firm's "relevant market for finding opportunities" should:
A. have no geographic boundaries.
B. be bigger than the firm's present product-marketbut not so big that the firm couldn't
be an important competitor.
C. be no larger than the firm's present product-market.
D. usually be named in product-related terms.
E. have no strong competitors.
If Macy's department store prices its men's ties at $10 intervals between $38 and $68,
this is an example of:
A. Reference pricing
B. Price lining
C. Bundle pricing
D. Leader pricing
E. Bait pricing
Because companies are likely to be most familiar with their own operations,
____________ opportunities are usually the easiest to pursue.
A. market penetration
B. product development
C. market development
D. diversification
E. All of these are equally easy.
In "traditional channel systems," the channel members:
A. consider traditional valueslike cooperation and respectas central to their relationship.
B. have franchise contracts.
C. usually have a common product-market commitment.
D. make little or no effort to cooperate with each other.
E. are integrated.
Offering the same price to all customers who purchase products under essentially the
same conditions and in the same quantities is a ______________ policy.
A. penetration pricing
B. one-price
C. value pricing
D. flexible-price
E. skimming pricing
Which pricing policy is probably "best" for a profit-oriented, low-cost producer who is
introducing a new product into a market with elastic demand and is expecting strong
competition very soon after product introduction?
A. Skimming pricing
B. Introductory price dealing
C. Meeting competition pricing
D. Penetration pricing
E. Status quo pricing
More than 600,000 loyal customers signed up in advance to purchase the iPhone4 in an
Apple store the first day it was available for sale in the U.S. What type of response
behavior were these Apple followers demonstrating?
A. Low-involvement buying
B. Limited problem solving
C. Extensive problem solving
D. Routinized response
E. Dissonance response
Laurie Michaels just bought a cell telephone for her car after spending several weeks
considering all the possibilities. She likes the new phone, but is still wondering if
another brand at a slightly higher price would have been better. This is an example of:
A. the relationship between drives, cues, and reinforcement.
B. dissonance.
C. reference group influence.
D. stimulus-response reaction.
E. routinized response behavior.
If a small U.S. producer with limited financial resources and little marketing know-how
wants to sell its products in international markets, it should use:
A. an export commission house.
B. a factor.
C. an export agent.
D. a combination export manager.
E. an export broker.
Customer equity
A. is of concern to top management, but not very relevant in planning a particular
marketing strategy.
B. takes the perspective of the selling firm.
C. always increases over time, at least as long as a firm can stay in business.
D. is important to marketing managers but of little interest to customers.
E. increases as long as the number of customers that a firm serves increases over time.
A good "channel captain" knows that:
A. direct-to-customer channels usually cost less and perform more efficiently than
indirect channels.
B. marketing functions can be shifted and shared within a channelbut they cannot be
completely eliminated.
C. a traditional channel system works best.
D. some marketing functions can usually be completely eliminated by using short
channels instead of long channels.
E. None of these alternatives is correct.
The social class system in the U.S.
A. does not affect how people spend, but does affect how they save.
B. may put people with the same income level in different social classes.
C. is based on a person's educational level.
D. is much more rigid than in Europe and Asia.
E. does not affect people's attitudes.
As a project for her marketing class, Emily Washington is researching how five local
businesses price their products. The following are brief sketches of what she has learned
about each company.
At Bella Computers, Emily has discovered that the company earned a 6 percent return
on investment this year and wants to increase it to 9 percent next year. To its retailer
customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives
retailers a 3% reduction on the invoice amount for advertising Bella products locally.
Bella gives retailers' salespeople 2% of the sale price for each Bella Computer they sell.
At Ross Pharmaceuticals, she learned that the company has invested heavily in
developing a new product that recently received a patent. Because cash is tight, the
company wants to achieve a rapid return on its investment. The new patented product is
badly needed in the market, so a very inelastic demand curve is expected.
Digital Imaging makes photographic prints for wedding photographers. It is very
concerned about competitor reactions to its pricing, so it has selected prices that will not
draw the attention of the competition and not start a price war. Digital Imaging offers
customers an 8% discount if their purchases exceed $20,000 a year.
Jack's One Hour Cleaners recently opened for business. The company invested a lot of
money in new equipment, and feels that it has to quickly get "at least 10% market share
to stay in the game." This need obviously influences the company's pricing decisions.
Jack's also plans to offer customers 20% discounts on any order over $20.
National Printing Equipment (NPE) produces equipment that helps to print newspapers
and magazines. The company sells directly to printers and through wholesalers. Its
salespeople negotiate prices with individual customers and often have to match
competitors' prices. NPE has a new product, the Gutenberg NP201, with some
competitive advantages now, but competitors are expected to follow quickly with
similar products. The new product is being introduced into a market with elastic
demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller
pays the cost of loading equipment onto a common carrier. At the point of loading, title
to such products passes to the buyer, who assumes responsibility for damage in transit,
except as covered by the transportation agency."
The 2% Bella Computers gives to retailers' salespeople is an example of:
A. value pricing.
B. push money.
C. everyday low pricing.
D. an advertising allowance.
E. a stocking fee.
As a project for her marketing class, Emily Washington is researching how five local
businesses price their products. The following are brief sketches of what she has learned
about each company.
At Bella Computers, Emily has discovered that the company earned a 6 percent return
on investment this year and wants to increase it to 9 percent next year. To its retailer
customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives
retailers a 3% reduction on the invoice amount for advertising Bella products locally.
Bella gives retailers' salespeople 2% of the sale price for each Bella Computer they sell.
At Ross Pharmaceuticals, she learned that the company has invested heavily in
developing a new product that recently received a patent. Because cash is tight, the
company wants to achieve a rapid return on its investment. The new patented product is
badly needed in the market, so a very inelastic demand curve is expected.
Digital Imaging makes photographic prints for wedding photographers. It is very
concerned about competitor reactions to its pricing, so it has selected prices that will not
draw the attention of the competition and not start a price war. Digital Imaging offers
customers an 8% discount if their purchases exceed $20,000 a year.
Jack's One Hour Cleaners recently opened for business. The company invested a lot of
money in new equipment, and feels that it has to quickly get "at least 10% market share
to stay in the game." This need obviously influences the company's pricing decisions.
Jack's also plans to offer customers 20% discounts on any order over $20.
National Printing Equipment (NPE) produces equipment that helps to print newspapers
and magazines. The company sells directly to printers and through wholesalers. Its
salespeople negotiate prices with individual customers and often have to match
competitors' prices. NPE has a new product, the Gutenberg NP201, with some
competitive advantages now, but competitors are expected to follow quickly with
similar products. The new product is being introduced into a market with elastic
demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller
pays the cost of loading equipment onto a common carrier. At the point of loading, title
to such products passes to the buyer, who assumes responsibility for damage in transit,
except as covered by the transportation agency."
Ross Pharmaceuticals' pricing objective is:
A. sales oriented.
B. profit maximization.
C. status quo oriented.
D. to meet competition.
E. None of these is a good answer.
Which of the following is NOT a current trend affecting marketing strategy planning?
A. slower new-product development.
B. growth of value pricing.
C. more multichannel shopping.
D. more attention to profitability, not just sales.
E. international expansion by retailers.
Advertising agencies are:
A. Large organizations employing many creative people.
B. Generalists in planning and handling mass-selling details for advertisers.
C. Independent of the advertiser and have an inside viewpoint.
D. Independent of the advertiser and have an outside viewpoint
E. Under contract to one client at a time.
The "universal functions of marketing":
A. must be performed in all MACRO-marketing systems.
B. are performed the same way in all economies.
C. are performed by the same parties in all economies.
D. are needed to help foster various separations and discrepancies.
Advertising spending as a percent of sales dollars is lowest for:
A. shoes.
B. soap and detergent.
C. plastics.
D. soft drinks.
E. perfume.
Which of the following statements would be most likely to be made by a manager with
a status quo pricing objective?
A. "A price of $10.00 will penetrate the market."
B. "A price of $10.00 will not start a price war with our competitors."
C. "A price of $10.00 should maximize profits."
D. "A price of $10.00 will provide a 30% return on investment."
E. "A price of $10.00 should result in a 9% increase in sales."
Order-getting salespeople would be required for which one of the following jobs?
A. Helping a buyer plan and install a computer and software for use as a website server.
B. Helping drug retailers figure out better ways to display and promote their products.
C. Seeking orders from supermarket buyers for a new brand of high protein diet
supplement that has been added to the company's line.
D. "Helping" an indecisive consumer in a supermarket select the kind of meat she
should buy for dinner.
E. Handling a complaint from a furniture store about a shipment that is late.
