Chapter 6 The Marketing Program
MULTIPLE CHOICE
1. __________ refers to the strategic combination of the four basic marketing mix elements.
a.
The marketing plan
d.
The strategic mix
b.
The marketing program
e.
Implementation
c.
Strategic control
2. Most firms today compete in mature markets characterized by commoditization. In these cases, the
__________ typically becomes incapable of differentiating the product offering from those of the
competition.
a.
extended product
d.
experiential products
b.
core product
e.
tangible products
c.
supplemental products
3. Although the product is at the heart of the marketing program, it is important to remember that product
offerings in and of themselves have little value to customers. An offering’s real value comes from:
a.
its superiority to competing products.
b.
its ability to further the image of the organization.
c.
its value (good quality at a low price).
d.
its ability to deliver benefits that solve a customer’s problems.
e.
its easy of use and convenience.
4. Mallory is an avid collector of antiques. In fact, she spends practically every weekend traveling to
small towns and antique shops in search of unique antique treasures. For Mallory, antiques are a
perfect example of a:
a.
convenience product.
d.
influential product.
b.
shopping product.
e.
specialty product.
c.
supplemental product.
5. Which of the following is the best example of an unsought product?
a.
gasoline
d.
luxury products
b.
clothing
e.
insurance
c.
antiques
6. For laptop computers, processor chips, memory chips, and hard drives are examples of __________
because they are finished items that become a part of the computer after assembly.
a.
raw materials
d.
component parts
b.
process materials
e.
specialty products
c.
installations
7. Firestone carefully watches the automotive market to ascertain the demand for cars, SUVs, and trucks.
Firestone does this because the demand for its products is dependent on the demand for automobiles.
This situation describes __________.
a.
synergistic demand
d.
product line demand
b.
shopping demand
e.
price elasticity
c.
derived demand
8. Why would a firm offer a deep assortment of products in its product portfolio?
a.
To attract a wide range of customers and market segments.
b.
To capitalize on the firm’s reputation.
c.
To diversify its risk.
d.
To maximize differentiation across its product lines.
e.
None of the above.
9. Why would a firm offer a wide variety of products in its product portfolio?
a.
To attract a wide range of customers and market segments.
b.
To capitalize on the firm’s reputation.
c.
To diversify its risk.
d.
To maximize differentiation across its product lines.
e.
None of the above.
10. Why is the demand for most services—such as popular restaurants—extremely time-and-place
dependent?
a.
Because popular services typically lack sufficient capacity.
b.
Because services cannot be stored for future use.
c.
Because customers must be present for service to be delivered.
d.
Because service customers are typically unsure of their needs.
e.
Because competing services force customers to make tradeoffs between quality and time.
11. Which of the following IS NOT an important benefit of offering a large product portfolio?
a.
package differentiation
d.
standardization
b.
economies of scale
e.
equivalent quality beliefs
c.
sales and distribution efficiency
12. Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality.
Why is this so?
a.
Because services depend on people for their delivery.
b.
Because services cannot be managed due to their intangibility.
c.
Because services are extremely time-and-place dependent.
d.
Because service marketers cut corners to reduce expenses.
e.
Because service marketers make unrealistic promises to customers.
13. The phrase “Unused service capacity is lost forever” refers to which major challenge associated with
the marketing of services?
a.
client-based relationships
b.
limited standardization
c.
simultaneous production and consumption
d.
perishability
e.
heterogeneity
14. To compete in the fast-growing hybrid segment, Honda introduced the Civic Hybrid with unique
styling and great fuel economy. The Civic Hybrid was based on the traditional Honda Civic. Which
product development strategy has Honda implemented?
a.
repositioning
d.
product improvement
b.
new product line
e.
product line extension
c.
product innovation
15. Assume Kia has developed a new product idea to launch a midsize pickup. Currently, Kia is
developing a prototype and working on projected costs, revenues, and profit potential. Kia is currently
at what stage of the new product development process?
a.
idea generation
d.
test marketing
b.
development
e.
commercialization
c.
screening and evaluation
16. Why are firms so obsessed with the pricing element of the marketing mix?
a.
Because pricing is the most difficult element of the marketing mix to change.
b.
Because the firm’s pricing has a direct bearing on its ability to increase revenue.
c.
Because pricing is the only marketing element that matters to customers.
d.
Because pricing is the best part of the marketing mix in which to make an educated guess
about the most appropriate strategy.
e.
Because pricing is directly responsible for demand.
17. Although break-even analysis and cost-plus pricing are important tools in setting prices based on the
firm’s cost structure, they should never be the driving force behind pricing strategy. Why?
a.
Because firms want to make a profit, not just break even.
b.
Because customer expectations are far more important in setting prices.
c.
Because prices should be based on demand, not costs.
d.
Because different firms have different cost structures.
e.
Because competitor’s prices are far more important in setting prices.
18. __________ is defined as a customer’s subjective evaluation of benefits relative to costs to determine
the worth of a firm’s product offering relative to other product offerings.
a.
Quality
d.
Breakeven cost
b.
Value
e.
Opportunity cost
c.
Price
19. Which of the following statements is TRUE with respect to the relationship between price and
revenue?
a.
When business is good, a price increase will increase revenue.
b.
When business is bad, a price increase will increase revenue.
c.
Price cuts must be offset by an increase in sales volume to keep the same level of revenue.
d.
In highly differentiated markets, price cuts will capture greater market share.
e.
In highly commoditized markets, price cuts will increase revenue.
20. Which pricing objective is associated with the phrase “charging what the market will bear”?
a.
volume-oriented
d.
market demand
b.
profit-oriented
e.
status quo
c.
cash flow
21. Price elasticity is defined as:
a.
a situation where prices routinely move up and down in a short period of time.
b.
customers’ responsiveness or sensitivity to changes in price.
c.
the impact on a product’s demand when customers are in unique buying situations.
d.
the relative ease with which prices can be changed.
e.
price flexibility—a pricing strategy used by startup firms.
22. Which of the following IS NOT a situation that can cause customers to be less sensitive to price
increases?
a.
When customers have few product choices.
b.
When products are highly differentiated.
c.
When the product is a real or a perceived necessity.
d.
When the total expenditure is high.
e.
When the product is considered to be “worth it”.
23. The inherent goal of product differentiation is to make the demand curve for a product more inelastic.
This happens because increased differentiation:
a.
reduces the number of perceived substitutes for a product.
b.
makes the product more expensive than its competitors.
c.
increases the quality of the product making it worth the expense.
d.
reduces the time and effort required to obtain the product.
e.
increases the just noticeable differences among competing products.
24. Because service capacity is perishable and service demand is highly time dependent, service firms
employ yield management strategies in an effort to:
a.
control costs.
b.
control demand through effective advertising strategies.
c.
establish fair guidelines for overbooking capacity.
d.
shift customer demand to other firms that can handle the excess business.
e.
balance price and revenue considerations with their need to fill unused capacity.
25. The goal of __________ is to maximize sales, gain widespread market acceptance, and capture a large
market share quickly by setting a relatively low initial price.
a.
price skimming
d.
first-mover pricing
b.
odd pricing
e.
market acceptance pricing
c.
penetration pricing
26. The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not
surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is
the Fairmont using?
a.
exclusive pricing
d.
prestige pricing
b.
image pricing
e.
service-based pricing
c.
psychological pricing
27. Firms such as IKEA and The Home Depot are known for their use of __________ because they set
reasonably low prices but still offer high-quality products and adequate customer services.
a.
penetration pricing
d.
relational pricing
b.
market equity pricing
e.
value-based pricing
c.
prestige pricing
28. The Club is a local hair salon and day spa that caters to an upper-middle class clientele. Although price
competition in the local area has been increasing, the owners of The Club have decided to focus their
marketing efforts on quality, service, and value, and to resist the temptation to compete on price. In
pursuing this non-price strategy, managers of The Club are ascribing to which of the following
assumptions?
a.
Customers see all salons as being about the same.
b.
The market for salon services is very price sensitive.
c.
Customers of The Club are so loyal that price competition is not necessary.
d.
It is difficult for competitors to copy The Club’s differentiating characteristics.
e.
The managers are ascribing to all of these assumptions.
29. Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular
prices, such as when Best Buy promotes a DVD player as “Regularly $99, Now $49.”
a.
reference pricing
d.
value-based pricing
b.
EDLP
e.
sale pricing
c.
odd pricing
30. In business markets, __________ is used to quote prices in terms of reductions or increases based on
transportation costs or the actual physical distance between the buyer and the seller.
a.
transfer pricing
d.
logistics pricing
b.
countertrade
e.
GPS pricing
c.
geographic pricing
31. A __________ is an organized system of marketing institutions through which products, resources,
information, funds and/or product ownership flow from the point of production to the final user.
a.
marketing network
d.
marketing channel
b.
distribution hub
e.
product network
c.
supply chain
32. Ensuring the availability of products in the right place in the right quantities at the right time in a cost
efficient manner is the main focus of:
a.
physical distribution.
d.
channel management.
b.
marketing networks.
e.
network management.
c.
supply chain management.
33. The creation of an extended enterprise in the supply chain depends heavily on the ability of channel
members to integrate their operations. Which of the following IS NOT a key factor in successful
supply chain integration?
a.
trust
d.
mutual benefit
b.
interdependence
e.
coercive power
c.
cooperation
34. The most basic benefit of marketing channels is __________ where channels reduce the number of
contacts necessary to exchange products.
a.
contraction
d.
contact creation
b.
time efficiency
e.
accumulation
c.
contact efficiency
35. In terms of marketing channel functions, which of the following statements describes the concept of
discrepancy of quantity?
a.
Manufacturers make one or a few product(s)—customers need variety and assortment.
b.
Channels must make products available in convenient locations.
c.
Channels add value to products by standardizing the exchange process.
d.
Channels must provide for the storage of products for future purchase and use.
e.
Manufacturers produce large quantities; customers usually want only one item.
36. Which member of the marketing channel has the primary responsibility of fulfilling the channel’s main
functions?
a.
manufacturers
d.
customers
b.
wholesalers
e.
It does not matter.
c.
retailers
37. In the Mercedes dealer network, individual dealers are given the sole right to sell Mercedes vehicles
within a defined geographic area. What type of distribution does Mercedes employ?
a.
exclusive distribution
d.
limited distribution
b.
intensive distribution
e.
prestige-based distribution
c.
selective distribution
38. What is the most appropriate type of distribution to use when customers need the opportunity to
comparison shop, or when after-sale services are important?
a.
exclusive distribution
d.
comparative distribution
b.
service-based distribution
e.
selective distribution
c.
intensive distribution
39. Many products, such as candy, soft drinks, and gum are sold via intensive distribution. However, this
strategy has a major drawback. What is it?
a.
It maximizes profit margin rather than sales volume.
b.
It encourages customers to shop around for the lowest price.
c.
It promotes a very high degree of brand switching.
d.
The manufacturer must give up a good degree of control over pricing and product display.
e.
It gives customers fewer opportunities to find the product.
40. Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow
down deliveries and postpone product availability to these resellers. What type of power is Acme
wielding in the channel?
a.
legitimate power
d.
reward power
b.
coercive power
e.
logistical power
c.
referent power
41. Which of the following statements best describes the term “slotting allowances”?
a.
The amount of shelf space that a retailer grants to a specific brand or product.
b.
The amount of product from a specific manufacturer that a wholesaler agrees to carry.
c.
A fee, paid by manufacturers to retailers, to get a product placed on retail shelves.
d.
A fee, paid by retailers to wholesalers, to get them to carry the retailer’s private label
brand.
e.
The amount of product from a specific manufacturer that a retailer agrees to carry.
42. In most marketing channels for consumer products, the balance of power has shifted to __________
due to their size and buying power.
a.
consumers
d.
brokers and distributors
b.
mass merchandise retailers
e.
manufacturers
c.
wholesalers
43. Today, though cutting expenses is still a main factor, the desire of many firms to focus on core
competencies is a driving force behind the increase in:
a.
category management.
d.
product differentiation.
b.
channel integration.
e.
outsourcing.
c.
referent power.
44. Hallmark is a good example of a company that uses __________ distribution as a means of offering
two or more lines of the same merchandise through two or more channels
a.
direct
d.
dual
b.
secondary
e.
complementary
c.
split
45. Overall, the trends occurring in marketing channels today (growth in e-commerce, outsourcing, growth
of nontraditional channels) have one major theme in common. What is that theme?
a.
Enhancing the reputation of the supply chain.
b.
Reducing the risk of legal action in the supply chain.
c.
Increasing channel efficiency by reducing waste, overhead, and other costs.
d.
Securing more power and control for manufacturers.
e.
All of the above are common themes.
46. Which of the following statements about integrated marketing communications (IMC) is FALSE?
a.
IMC refers to the strategic, coordinated use of promotion to create one consistent message.
b.
IMC takes a 360-degree view of the customer.
c.
The role of mass television advertising is growing more important to IMC strategy.
d.
IMC reduces costs and increases efficiency because it can reduce or eliminate
redundancies and waste.
e.
The key to IMC is consistency and uniformity of message across all elements of
promotion.
47. To be successful, firms must move potential customers beyond mere interest in the product. Good
promotion will stimulate __________ by convincing potential customers of the product’s superiority
and its ability to satisfy specific needs.
a.
dedication
d.
action
b.
investigation
e.
desire
c.
attention
48. In terms of the AIDA model, mass communication elements such as advertising and public relations
tend to be very effective at:
a.
stimulating awareness of and interest in a product.
b.
explaining highly complex and technical products.
c.
stimulating immediate purchase of a product.
d.
marketing high priced products.
e.
closing the sale.
49. When firms use a(n) __________ strategy, they focus their promotional efforts toward stimulating
demand among final customers, who then exert pressure on the supply chain to carry the product.
a.
pressurization
d.
guerilla
b.
IMC
e.
push
c.
pull
50. In launching its new line of power tools, Black and Decker spent a considerable amount of time and
resources to educate, motivate, and compensate members of its supply chain. By investing heavily in
these types of promotions, Black and Decker hopes its __________ strategy will lead to a more
effective product launch.
a.
pull
d.
push
b.
AIDA
e.
placement
c.
institutional
51. Which of the following is perhaps the main advantage associated with the use of advertising?
a.
It takes little time to develop an advertising campaign.
b.
The total dollar layout in advertising is usually low.
c.
It is an extremely cost efficient way to reach a large number of people.
d.
It can quickly convey a large amount of technical information.
e.
It can be quite memorable.
52. In the context of IMC strategy, what is the difference between public relations and publicity?
a.
Public relations deals with positive information; publicity deals with controlling negative
information.
b.
Publicity deals with many stakeholders; public relations deals only with customers.
c.
Publicity is normally done via an in-house staff; public relations is typically outsourced to
a specialist.
d.
Publicity is more narrowly defined and focused on gaining media attention.
e.
There is no difference between public relations and publicity.
53. Overall, what is the major disadvantage associated with the use of public relations and publicity?
a.
It is normally very expensive.
b.
The amount of negative publicity always outweighs the good.
c.
Few, if any, customers pay attention to public relations messages.
d.
Most people find it to be less credible than advertising.
e.
The firm has limited control over how the message will be delivered or interpreted.
54. __________ is paid personal communication that attempts to inform customers about products and
persuade them to purchase those products.
a.
Personal selling
d.
Public relations
b.
Sales promotion
e.
Advertising
c.
Publicity
55. In today’s economy, personal selling has evolved to take on elements of customer service and
marketing research. Why is this the case?
a.
It is less expensive to deliver service and conduct research with the sales staff.
b.
It is more time efficient because salespeople are already interacting with customers.
c.
Personal selling focuses more on developing customer relationships than on generating
transactions.
d.
It allows salespeople to earn higher commissions for doing more work.
e.
None of the above is correct.
56. Which sales force compensation system is best suited to situations where salespeople are responsible
for pre- and post-sale service and sales managers want maximum control over selling expenses?
a.
straight commission
d.
geographic allocation
b.
a combination approach
e.
straight salary
c.
direct compensation
57. Despite conventional thinking, __________ accounts for the bulk of promotional spending in many
firms. This is especially true for firms selling consumer products in grocery stores and
mass-merchandise retailers.
a.
personal selling
d.
sales promotion
b.
advertising
e.
publicity
c.
public relations
58. Which of the following statements best represents the universal goal of all sales promotion activities?
a.
To increase sales volume in the long term.
b.
To stimulate customer interest and attention.
c.
To induce product trial and purchase.
d.
To enhance the image of the firm.
e.
To gain the attention of members of the supply chain.
59. Which of the following sales promotion methods would you recommend to a packaged goods marketer
who wants to stimulate trial of a new product?
a.
a contest or sweepstake
d.
a rebate
b.
a coupon
e.
a point-of-purchase display
c.
a free sample of the product
60. A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a
single time is called a:
a.
merchandise credit.
d.
push money allowance.
b.
buying allowance.
e.
cooperative incentive.
c.
selling incentive.