Chapter 1—An Overview of Marketing
TRUE/FALSE
1. Marketing is defined as producing, promoting, and selling products.
2. According to the American Marketing Association, marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
3. An exchange cannot take place unless each party in the exchange has something that the other party
values.
4. Sara Lee Industries spent considerable money and time developing a crustless bread. Prior to the
introduction, the company had not conducted market research among its customers, but it was
confident that its science and technology department had produced a successful new product. Based on
this example, Sara Lee is a good example of a production-oriented company.
5. The focus of a production-oriented firm is on what it can make or do best.
6. Unlike a production orientated firm, a firm embracing a sales orientation focuses on customer wants
and needs so it can develop the best product at the lowest cost that will require very little selling effort.
7. The marketing concept states that the social and economic justification for an organization’s existence
is the satisfaction of customers’ wants and needs while meeting organizational objectives.
8. The societal marketing concept considers society’s long-term best interests along with the satisfaction
of customers’ wants and needs.
9. Personnel in sales-oriented firms tend to be “outward looking,” focusing on selling what the market
wants.
10. Customer value is the relationship between company profits and company costs.
11. The way to achieve customer satisfaction and value is to offer the lowest price.
12. 3D Systems is a company that uses computers to generate new product prototypes. It has generated
loyal business clients by providing the best customer support in the industry. The company also
provides direct sales consultations that gives its salespeople intimate knowledge about what exactly its
customers want. This partnership between 3D Systems and its customers entails relationship
marketing.
13. Only a firm’s salespeople need to be customer-oriented.
14. Retailers who give their sales clerks the authority to handle customer complaints without having to get
approval from a supervisor are using empowerment.
15. In the early 1920s, Ford promised its customers any color vehicle they wanted as long as it was black.
Ford’s management assumed anyone buying a car would accept the color black, so it made products
affordable by offering only one variety in large quantities. Ford is an example of a market-oriented
firm.
16. The ultimate goal of most market-oriented firms is profitability that results from satisfying the wants
and needs of its consumers.
17. While most marketing organizations rely on various forms of promotion to succeed, sales-oriented
organizations make the most effective use of their entire marketing mix.
18. Salespeople who work for market-oriented organizations are generally perceived by their customers as
problem solvers and important links to supply sources and new products.
19. Marketing is important to business, so marketing should be part of the job of everyone in the
organization, not just those in marketing.
20. Approximately 50 percent of the U.S. civilian work force performs marketing activities.
MULTIPLE CHOICE
1. One facet of marketing is that it is:
a.
an approach that focuses on maximizing sales
b.
a short-term oriented approach to profit maximization
c.
an approach that requires diversity
d.
a philosophy that stresses customer satisfaction
e.
independent of value creation
2. A business is concerned with many day-to-day activities. Some of the most important of these
activities are the planning and development of a product, its pricing policy, and the distribution
strategy. These activities are all a part of:
a.
a control system
b.
marketing
c.
accounting
d.
production
e.
human resources
3. _____ is a set of activities used to implement a management orientation that stresses customer
satisfaction.
a.
Planning strategy
b.
Customer management
c.
Marketing
d.
A control system
e.
Reciprocity
4. The American Marketing Association’s definition of marketing:
a.
is limited to promotional activities
b.
focuses on the value of empowerment, teamwork, and customer value
c.
shows how marketing benefits the marketer
d.
relies on the synergy created by exchange
e.
includes creating, communicating, delivering and exchanging offerings that have value for
customers, clients, partners, and society at large.
5. Which of the following occurs when people give up something in order to receive something that they
would rather have?
a.
Exchange
b.
Synergy
c.
Transformation
d.
Leveraging
e.
Reciprocity
6. All of the following are necessary for exchange to occur EXCEPT:
a.
each party is capable of communication and delivery
b.
each party signs a contract before exchange occurs
c.
each party believes it is appropriate or desirable to deal with the others
d.
each party is free to accept or reject the exchange offer
e.
each party must have something the other party considers to be valuable
7. A problem facing the timber industry is the absence of any effective way to prove that rain forest
timber was legally harvested. In places like Indonesia as much as 80 percent of timber available for
sale was illegally cut. Companies like The Home Depot do not want to sell timber from illegally
logged forests even though the demand is great for timber from rain forests. Which of the following
conditions required for an exchange to occur is missing when a company tries to sell illegally acquired
logs to The Home Depot?
a.
There are more than two parties involved.
b.
Each party has something of value to bring to the exchange.
c.
One party is free to accept the exchange offer.
d.
Each party believes it is appropriate to deal with the other party.
e.
Nobody sees the exchange as producing value.
8. Kellogg’s is offering free DVDs to consumers who collect 5 official Collection certificates from the
back panels of specially marked packages of Kellogg’s cereals and mail them with the official order
form. Within 90 days, these consumers will receive the movie of their choice. A(n) _____ will occur
when a movie fan mails in his or her certificates for a movie.
a.
synergy
b.
sublimation
c.
exchange
d.
entropy
e.
reciprocity
9. For an exchange to take place:
a.
there must be at least two parties involved
b.
money must be used in the transaction
c.
each party must feel obligated to accept the offer
d.
at least one party must have something of value that the other party desires
e.
neither party must communicate with the other
10. The concept of exchange is important to marketing because:
a.
if all the conditions for an exchange are in place, then the exchange will be completed
b.
exchange provides money to marketers
c.
marketing activities help to create exchange
d.
marketing activities are a requirement for exchange to take place
e.
money is the only medium of exchange for business marketers
11. Barry collects antique watches and decided to sell a few of them on eBay. Some of the watches he
wants to sell are rare and very valuable. What condition is necessary for an exchange to occur
between Barry and a buyer?
a.
His watch should have a certificate of authenticity.
b.
The opening bid must be lower than other watches being sold on the site.
c.
Buyers must provide payment before the item is shipped.
d.
Delivery must take place within 2 days of the purchase.
e.
Potential buyers must be able to see the watch and understand its qualities.
12. All of the following are marketing management philosophies EXCEPT:
a.
sales orientation
b.
societal marketing orientation
c.
market orientation
d.
profitability orientation
e.
production orientation
13. Indonesian logging companies harvest the rain forests for timber and assume that a market exists for
their products. The typical Indonesian logging company has a(n) _____ orientation.
a.
exchange
b.
product
c.
production
d.
sales
e.
environmental
14. Firms with a _____ orientation focus on the internal capabilities of the firm rather than on the desires
and needs of the marketplace.
a.
sales
b.
production
c.
market
d.
customer
e.
customer-benefit
15. A company that sets its goals and strategies based on what its current equipment can produce, what
products engineering can design, and what the company itself can do best, has a(n) _____ orientation.
a.
marketplace
b.
sales
c.
market
d.
exchange
e.
production
16. Researchers at PPG Industries spent considerable time, effort, and money developing a bluish
windshield that would let in filtered sunlight but block out the heat. Little market research was done,
but the scientists were convinced this new product would be significantly better than existing
windshields even though it was more expensive and of a different color than the current models on the
market. This scenario suggests PPG most likely has a(n) _____ orientation.
a.
exchange
b.
production
c.
sales
d.
promotion
e.
customer
17. A newspaper ad for a hospital that states, “We have the most modern delivery rooms and state-of-the
art medical equipment,” is an indication of which marketing management philosophy?
a.
sales
b.
customer
c.
market
d.
societal
e.
production
18. A firm with a production orientation is most likely to survive if:
a.
there are many small competitors in the marketplace
b.
demand for the product it produces exceeds supply
c.
the needs of the marketplace are constantly shifting
d.
supply for the product it produces exceeds demand
e.
any of these conditions exist
19. A firm that adopts a(n) _____ orientation to marketing will fail to consider whether what the firm
produces most efficiently also meets the needs of the marketplace.
a.
customer
b.
exchange
c.
product
d.
market
e.
production
20. Toyota found that consumers wanted cars to last longer and be more environmentally friendly. GM,
however, enjoyed being the top U.S. car producer, and focused more on how many cars and trucks it
could manufacture and not on what customers wanted from a vehicle. GM had more of a _____
orientation.
a.
sales
b.
production
c.
market
d.
product
e.
customer
21. The _____ orientation assumes people will buy more if aggressive selling techniques are used.
a.
market
b.
sales
c.
customer
d.
production
e.
exchange
22. Which marketing orientation assumes people will buy more goods and services if aggressive
marketing techniques are used?
a.
sales
b.
production
c.
market
d.
customer
e.
marketplace
23. Colorado Silversmith creates and markets silver and turquoise jewelry, which it sells to retailers in the
western United States. The company’s management believes its retail customers will stock more
jewelry if its salespeople use aggressive marketing techniques, so the company provides strong
incentives for salespeople and promotional allowances to resellers to get distribution for its jewelry. In
other words, the company has a _____ orientation.
a.
promotion
b.
production
c.
sales
d.
market
e.
customer
24. Mimi Couturier is a design company that specializes in formalwear for women. The company is
known for challenging fashion mores. The company’s fashion designers use computer-assisted design
software to create what it thinks women should wear. The company regularly hires industry experts to
examine its factories to find waste and inefficiencies that can be eliminated. The company has
expanded the number of products it offers for sale many times. However, for the last two years Mimi
Couturier has lost money, and it has had to lay off some of its work force. To avoid this occurrence in
the future, Mimi Couturier should:
a.
hire more retail efficiency experts to trace down any production problems
b.
increase its sales force to find more potential customers for the firm
c.
have someone study its target market to see what needs and wants should be met by Mimi
Couturier
d.
cut prices so that its prices will be at least 10 percent below those of its competitors
e.
design more sophisticated products that use the latest computer-aided techniques
25. Which marketing management philosophy is often adopted by organizations that sell unsought
products such as life insurance, retirement plans, and pre-planned funeral services?
a.
sales orientation
b.
production orientation
c.
marketing orientation
d.
product orientation
e.
customer orientation
26. If a company uses a sales orientation, consumer complaints would most likely result in:
a.
a modification of the sales presentation
b.
product reinvention
c.
continuous market research
d.
philanthropy
e.
attempts to cut production costs
27. Fujifilm Computer Products has improved the efficiency and productivity of its plant, which
manufactures printing technology. For the new fiscal year, the company projects a production increase
of 25 percent. It has instructed its sales force to aggressively distribute and promote its printers. The
CEO is sure the market will absorb more product if the sales force is determined and assertive.
Fujifilm appears to have a _____ orientation.
a.
market
b.
production
c.
sales
d.
customer
e.
marketplace
28. Which marketing management philosophy assumes that a sale does not depend on an aggressive sales
force but rather on a customer’s decision to purchase a product?
a.
sales
b.
production
c.
product
d.
market
e.
exchange
29. Best Buy has become the nation’s largest specialty retailer by focusing on the customer’s needs and
wants. This philosophy is at the heart of a(n) _____ orientation.
a.
sales
b.
market
c.
retail
d.
production
e.
exchange
30. At www.mystarbucksidea.com customers are encouraged to share their ideas and thoughts about how
Starbucks can better serve their customers. Starbucks customers told management that they wanted to
be recognized for choosing Starbucks coffee. So Starbucks instituted the Starbucks Reward program
with money saving benefits to their Starbuck card-holders. Starbucks is an example of a company with
a _____ oriented philosophy.
a.
transactional
b.
sales
c.
product
d.
societal
e.
market
31. Companies that rely on the marketing concept and that have implemented a market orientation strategy
recognize that:
a.
price is the most important variable for customers
b.
sales depend predominantly on an aggressive sales force
c.
what the customer thinks he or she is buying is what is important
d.
a company has to apply scientific management techniques to survive
e.
selling and marketing are essentially the same thing
32. A company that has a market orientation and adheres to the marketing concept does NOT:
a.
integrate all the activities of the firm to satisfy customer wants
b.
focus on consumer needs and wants
c.
differentiate the firm’s products from its competitor’s products
d.
fuel sales growth through the application of aggressive sales techniques
e.
concentrate on long-term goal achievement (such as profits and growth) for the firm
33. Minor League Baseball (MiLB) suffers from sluggish attendance. To attract more fans to MiLB
games, owners often resort to gimmicks—free hot dog nights, events designed to get into the Guinness
Book of Records, and celebrity visits. Since baseball fans are seldom asked what would make them
want to attend more games, this suggests most MiLB teams do not have a(n) _____ orientation.
a.
sales
b.
empowerment
c.
community
d.
societal
e.
market
34. A company adhering to the marketing concept will likely take which of the following steps if it learned
that its customers were dissatisfied with its product?
a.
hire more salespeople
b.
decrease its organizational overhead
c.
increase its advertising to underserved markets
d.
increase the number of outlets in which the product is sold
e.
conduct research to determine if its customers’ needs have changed
35. At the Lands End web site a customer can chat on-line with customer service representatives while
shopping. This live help allows customers to have questions answered before placing an order. This
focus on meeting customer needs illustrate a(n) _____ orientation.
a.
societal
b.
market
c.
sales
d.
production
e.
one-to-one
36. The marketing concept involves:
a.
focusing on customers’ wants and needs so that the organization can distinguish its product
(or products) from competitors’ products
b.
satisfying management’s needs and wants with the idea of maximizing profits in the short
run
c.
selling as much product as possible under the assumption people will buy more goods and
services if aggressive selling techniques are used
d.
selling as much as possible under the assumption consumers will buy more at lower prices
e.
focusing on production in order to increase product quality and lower prices
37. The marketing concept stresses that the social and economic justification for an organization’s
existence is the satisfaction of customer needs and wants while:
a.
producing a good or service at the lowest possible cost
b.
improving the general standard of living
c.
constantly increasing sales volumes
d.
applying scientific management techniques to improve efficiency
e.
simultaneously meeting organization objectives
38. After hearing his company criticized for its failure to respond to consumer needs, the CEO of a bank
realized that his company needs to adhere to the marketing concept and implement a market-oriented
strategy. Which of the following actions would be the best approach to achieving this goal?
a.
reorganize the company and make marketing its most important department
b.
hire new salespeople to find new customers
c.
expand the advertising budget to make potential customers more aware of its product
offerings
d.
create cross-functional teams and instruct them to focus on creating greater customer value
e.
hire a new product development manager
39. Jacques Torres Chocolate is a factory and retail store in Brooklyn. Its owner is willing to try to
produce new products when his customers suggest them—such as chili-pepper-laced chocolate candy.
His only condition is that when he adds new products, his customers have the final say on whether the
product is of any value. According to Torres, “If something doesn’t move, that’s the last time you see
it.” By focusing on customers’ wants, the chocolate company exhibits a(n)_____ orientation.
a.
exchange
b.
product
c.
production
d.
sales
e.
market
40. SAP, the world’s largest business software company, has pledged to put the “customer at the center”
of their universe. SAP has captured the idea of:
a.
the 80/20 rule
b.
Maslow’s hierarchy of needs
c.
the marketing concept
d.
the sales orientation philosophy
e.
the societal concept
41. When a homeowner visited The Home Depot to buy what he thought he needed to fix a leaking toilet,
he gathered up materials totaling almost $70. One his way to checkout, an employee asked him what
was he trying to fix. After some discussion, the employee convinced the homeowner that a $5.99
replacement part would fix the problem better than the materials he thought he needed and with less
trouble. This sort of discussion between employees and customers is commonplace at The Home
Depot and indicates the retail store has a(n) _____ orientation.
a.
sales
b.
market
c.
product
d.
exchange
e.
production
42. At the Container Store every employee is trained to serve customers. Full time salespeople receive 240
hours of training. The Container Store works to hire people who are self-motivated and have a passion
for customer service. The Container Store has a(n) _____ orientation.
a.
sales
b.
market
c.
product
d.
societal
e.
production
43. A company that wants to implement a market orientation would need to:
a.
do research on its customers, competitors, and markets
b.
determine how to deliver superior customer value
c.
establish and maintain mutually satisfying relationships with customers
d.
implement actions that provide value to customers
e.
do all of the activities listed
44. An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs
and to meet organizational objectives but also to preserve or enhance individuals’ and society’s long-
term best interests.
a.
sales orientation
b.
market orientation
c.
ethical business mission
d.
focused target market strategy
e.
societal marketing orientation
45. Most companies become sensitized to community issues after they’ve done enough damage to draw the
locals’ anger. Dofasco, Inc., a highly successful steel company in Ontario, tries to get ahead of business
and community issues by annually bringing together representatives from the local area and deciding
what projects to improve the local environment will be implemented. This annual community-wide
meeting indicates Dofasco has a _____ orientation.
a.
societal marketing
b.
sales
c.
reciprocal exchange
d.
production
e.
product
46. Life is good ® no longer encloses its apparel in individual poly-bags when shipping to customers
because the management feels it harms the environment. This is an example of a _____ orientation.
a.
societal marketing
b.
sales
c.
reciprocal exchange
d.
production
e.
product
47. Procter & Gamble decided to address the fact that Hispanic women are more likely to die from breast
cancer because they’re reluctant to get mammograms or discuss screening. So P&G brought screening
to the supermarket, parking mobile mammography vehicles in grocery store parking lots in Texas and
inviting shoppers in for free x-rays. Tie-ins with local hospitals assured that women with suspicious
films got follow-up care. P&G adopted a _____ orientation to achieve this goal.
a.
promotional
b.
societal marketing
c.
customer
d.
marketing
e.
product
48. Which of the following statements about the societal orientation is FALSE?
a.
Companies that protect the environment by using all-natural materials in their products are
showing a societal marketing orientation.
b.
Marketers cannot deliver all benefits sought by customers because these benefits may not
be in the long-term best interests of the customers.
c.
The societal marketing concept is an important refinement of the market concept.
d.
Organizations have both a social and economic justification for their existence.
e.
The majority of consumers support environmentally-friendly companies and willingly
paying more for these products.
49. Life is good® developed the “Good Karma” line of environmentally friendly 100% organic cotton
apparel. The production of the Good Karma line is consistent with a _____ orientation.
a.
societal marketing
b.
supplier
c.
sales
d.
production
e.
philanthropic
50. Target shoppers can enroll in the Take Charge of Education® program so that Target will donate one
percent of purchases made with a consumer’s REDcard, a Target credit card. The more money
customers spend, the larger the donation to the consumer’s school of choice. By instituting the Take
Charge of Education® program to help local schools, Target has shown a _____ orientation.
a.
societal marketing
b.
supplier
c.
sales
d.
production
e.
philanthropic
51. Jewelry stores want to provide their customers with the highest quality of diamonds available at the
lowest possible prices. Unfortunately, the lowest priced diamonds these days are sold by African
rebels who use the profits to engage in genocide. Human rights organization have asked jewelers to
buy diamonds that are “conflict-free,” that is from South Africa, Australia, or Canada. LeeBrant is one
retail jewelry store that sells only diamonds that are certified to be from these countries. LeeBrant is
exhibiting which marketing management orientation?
a.
production
b.
sales
c.
societal marketing
d.
direct
e.
omnipotent
52. Which marketing management philosophy focuses on the question, “What can we make or do best?”
a.
production
b.
marketing
c.
sales
d.
societal
e.
internal
53. Which marketing management philosophy focuses on the question, “How can we sell more
aggressively?”
a.
production
b.
marketing
c.
sales
d.
external
e.
internal
54. Which marketing management philosophy focuses on the question, “What do customers want and
need?”
a.
sales
b.
production
c.
product
d.
market
e.
internal
55. Which marketing management philosophy focuses on the question, “What do customers want and
need, and how can we benefit society?”
a.
internal
b.
external
c.
sales
d.
societal marketing
e.
production
56. The sales and market orientations differ on all of the following characteristics EXCEPT:
a.
those to whom the product is directed
b.
firm’s performance
c.
firm’s business
d.
firm’s primary goal
e.
tools to achieve goals
57. Market-oriented firms primarily focus their efforts upon:
a.
improving the technological skills and competitive advantages of the firm
b.
satisfying the organization’s needs for low overhead
c.
achieving the company’s societal responsibilities inexpensively
d.
distributing goods and services
e.
satisfying the wants and needs of their customers
58. Which of the following statements about a typical sales-oriented business is true?
a.
The company develops its products to meet the needs of specific groups of people.
b.
The primary goal of the company is profit through customer satisfaction.
c.
The company invests the majority of its resources in promoting its products and services.
d.
The company is in business to satisfy customers’ wants and needs and deliver superior
value.
e.
All of these statements about a typical sales-oriented business are true.
59. _____ is defined as the relationship between benefits and the sacrifice necessary to obtain those
benefits.
a.
Opportunity cost
b.
Marketing utility
c.
Market quality
d.
Satisfaction percentage
e.
Customer value