67) The sales goal set for a product line, company division, or sales representative of an
organization is called ________.
A) sales budget
B) company sales forecast
C) sales quota
D) company sales potential
E) market potential
68) A ________ is a conservative estimate of the expected volume of sales, primarily for making
current purchasing, production, and cash flow decisions.
A) sales budget
B) company sales forecast
C) sales quota
D) company sales potential
E) market potential
69) ________ is the limit approached by market demand as industry marketing expenditures
approach infinity for a given marketing environment.
A) Sales budget
B) Company sales forecast
C) Sales quota
D) Company sales potential
E) Market potential
70) ________ is the company’s estimated share of market demand at alternative levels of
company marketing effort in a given time period.
A) Sales budget
B) Market demand
C) Company demand
D) Company sales potential
E) Market potential
71) ________ is the sales limit approached by company demand as company marketing effort
increases relative to that of competitors.
A) Sales budget
B) Market demand
C) Company demand
D) Company sales potential
E) Market potential
72) A company’s sales potential would be equal to market potential if ________.
A) the marketing expenditure of the company is reduced to zero
B) industry marketing expenditures approach infinity for a given marketing environment
C) the market is non-expandable
D) market minimum is equal to market potential
E) the company gets 100 percent share of the market
73) ________ is the maximum sales available to all firms in an industry during a given period,
under a given level of industry marketing effort and environmental conditions.
A) Company demand
B) Market demand
C) Company sales potential
D) Sales quota
E) Total market potential
74) Suppose an individual buyer purchases three pairs of shoes each year at $50 each pair and
that there are 50 million such consumers in the economy. Compute the total market potential for
shoes.
A) $6,500 million
B) $5,000 million
C) $75 billion
D) $7,500 million
E) $10,000 million
75) The ________ method of determining area market potential calls for identifying all the
potential buyers in each market and estimating their potential purchases.
A) group-discussion
B) market-test
C) market-buildup
D) brand development index
E) multiple-factor index
76) An efficient method of estimating area market potentials makes use of the ________,
developed by the U.S. Bureau of the Census in conjunction with the Canadian and Mexican
governments. It classifies all manufacturing into 20 major industry sectors and further breaks
each sector into a six-digit, hierarchical structure.
A) Thomson Reuters Business Classification
B) Global Industrial Classification Standard
C) North American Product Classification System
D) Industry Classification Benchmark
E) North American Industry Classification System
77) Which of the following organizations is likely to use the multiple-factor index method to
estimate the market potential?
A) a firm that manufactures auto parts
B) a firm that provides facility management services to large offices
C) a company that provides Web site development services for small businesses
D) a company that manufactures diagnostic machines for hospitals
E) a firm that manufactures fashionable clothes for teenagers
78) Which of the following is true of the various elements of the multi-factor index method of
estimating area market potentials?
A) Zip+4 code centers generally have stable boundaries and a population of about 4000.
B) The weights in the buying-power index are somewhat arbitrary.
C) Normally, the lower the BDI, the less room there is to grow the brand.
D) Census tracts are a little larger than neighborhoods.
E) This method is primarily used by business marketers.
79) Suppose Concrete Express, a cement manufacturing firm, finds that its sales have increased
by 3 percent this year, while industry sales have increased by 5 percent. This implies that
________.
A) Concrete Express has acquired additional market share in relation to the cement industry
B) Concrete Express is losing its relative standing in the cement industry
C) other players in the industry are losing market share
D) the absolute market share of Concrete Express has declined
E) Concrete Express’s position in relation to the industry has remain unchanged
80) For which of the following categories of products will demand forecasting be easiest?
A) commodities which are in the initial stage of their product life cycles
B) products which have many close substitutes in the market
C) goods which are produced in an oligopoly market
D) products whose sales fluctuate widely
E) products whose consumers are highly sensitive to change in price
81) Novamalt Inc., a manufacturer of health drinks, plans to introduce its new range of woman
health drinks into the market. It involves a specialized marketing research firm to forecast the
sales of this product. The research firm analyzes past buying behavior of customers and uses
time-series analysis for making the sales forecasts. Which of the following information bases is
being used by the research firm in this scenario?
A) what people say
B) what people do
C) what people have done
D) what people will do
E) what people speculate
82) Timeseries analysis method of forecasting sales breaks past time series into four
components- trend, cycle, seasonal, and ________.
A) regular
B) annual
C) erratic
D) recurring
E) periodic
83) ________ projects the next period’s sales by combining an average of past sales and the most
recent sales, giving more weight to the latter.
A) Timeseries analysis
B) Statistical demand analysis
C) Econometric analysis
D) Cost effectiveness analysis
E) Exponential smoothing
84) ________ measures the impact of a set of causal factors (such as income, marketing
expenditures, and price) on the sales level.
A) Timeseries analysis
B) Statistical demand analysis
C) Econometric analysis
D) Cost effectiveness analysis
E) Exponential smoothing
85) The sales forecasting method of ________ builds sets of equations that describe a system and
statistically derives the different parameters that make up the equations statistically.
A) timeseries analysis
B) statistical demand analysis
C) econometric analysis
D) cost effectiveness analysis
E) exponential smoothing
86) Marketers have little information about how consumption patterns vary across and within
countries.
87) Companies with superior information enjoy a competitive advantage.
88) Many firms use the Internet and extranets to improve the speed, accuracy, and efficiency of
the order-to-payment cycle.
89) Few consumers actually delete cookies frequently. When customers do not delete cookies,
they expect customized marketing appeals and deals.
90) Mailing of a new offer to a handful of selected customers instead of all customers reduces
the response rate to the offer.
91) Competitive intelligence gathering is inherently illegal and unethical.
92) If a company were pursuing a policy of networking externally to gather marketing
intelligence, it might collect competitors’ ads or look up news stories about competitors.
93) One of the ways to find relevant online information on competitors’ strengths and
weaknesses might be to frequent distributor or sales agent feedback sites.
94) The competitive intelligence function works best when it is closely coordinated with the
decision-making process.
95) A fad is more predictable and durable than a trend.
96) A new market opportunity generally guarantees success, if the new product is technically
feasible.
97) Demographic developments are often unpredictable.
98) Population growth is highest in countries and communities that can least afford it.
99) There is a global trend toward an aging population.
100) The basis of cohort segmentation is that the experiences of key defining moments during
the time when an individual becomes an adult can influence his or her values, preferences, and
buying behaviors for the rest of his or her life.
101) Marketing strategies of firms should not consider the ethnic and racial diversity existing in
their markets.
102) Consumers belonging to the same ethnic group have identical tastes and preferences.
103) Of all illiterate adults in the world, two-thirds are women.
104) Households comprising of single, separated, widowed, and divorced individuals generally
demand larger apartments, and expensive appliances, furniture, and furnishings.
105) The available purchasing power in an economy depends on current income, prices, savings,
debt, and credit availability.
106) Industrial economies provide limited marketing opportunities for luxurious goods.
107) Markets with a segment of very wealthy consumers, but high income disparity, present few
opportunities to marketers.
108) Business has responded to increased awareness of nature’s fragility and finiteness by
producing wider varieties of camping, hiking, boating, and fishing gear such as boots, tents,
backpacks, and accessories.
109) Secondary beliefs and values are passed on from parents to children and reinforced by
major social institutions, making them very difficult to change by marketers.
110) Environmental regulations enforced by the government adversely affect automobile and
steel manufacturing companies.
111) Corporate environmentalism recognizes the need to integrate environmental issues into the
firm’s strategic plans.
112) Firms that can develop substitute materials for finite nonrenewable resources have an
excellent opportunity.
113) The time between introduction of products and peak production is shrinking.
114) A growing portion of U.S. R&D expenditures goes to the development as opposed to the
research side.
115) Regulation of technological changes has been relaxed by the U.S. government over recent
years.
116) Environmental laws imposed by the government may at times create new business
opportunities.
117) Demand estimates prepared by companies are based on four different time periods.
118) The penetrated market is the set of consumers who have an interest in a market offer but do
not have the accessibility.
119) Market demand for a product is the total volume that would be bought by a defined
customer group in a defined geographical area in a defined time period in a defined marketing
environment under a defined marketing program.
120) An expansible market is unlikely to be affected by the level of industry marketing
expenditures.
121) The market forecast shows expected market demand, not maximum market demand.
122) Companies assume that the lower the product-penetration percentage, the lower will be the
market potential.
123) In order to estimate future demand, companies commonly prepare a company sales forecast
first, followed by an industry forecast, and finally a macroeconomic forecast.
124) Forecasting is the art of anticipating what buyers are likely to do under a given set of
conditions.
125) Sales reps might have better insight into developing trends than any other group, and
forecasting might give them greater confidence in their sales quotas and more incentive to
achieve them.
126) What is a marketing information system (MIS)? From what sources is the MIS developed?
127) What is a marketing intelligence system? How can marketing intelligence data be
collected?
128) What are the various steps a company can take to improve the quality of its marketing
intelligence function?
129) List and briefly describe the five main ways in which marketers can find relevant online
information on competitors’ strengths and weaknesses.
130) How are household patterns anticipated to change over the next few years? What will be the
impact of such changes on the demand for different goods?
131) What are the different income-distribution patterns? How does income distribution in the
economies affect the marketing decision of the firms?
132) Discuss the impact of tougher environmental regulations on businesses, citing examples
whenever possible. Also, point out opportunities, if any, presented by these regulations.
133) What does total market potential mean? How can it be estimated?
134) Suppose a cotton-textile company wants to estimate the area market potential for its high
quality fabrics in Houston. List the possible steps that the marketers will follow to compute the
area market potential.
135) Briefly describe the methods of forecasting future demand on the basis of past sales.
136) What are the two basic advantages that a company’s marketers have in identifying
significant changes in the market?
137) Why is it necessary for firms to execute the steps of the order-to-payment cycle quickly and
accurately?
138) Skyline Motors, an automobile manufacturing firm, is planning to introduce its new range
of sports cars. It decides to offer a zero percent financing to the buyers. Skyline can save its
mailing expenses by sending the offer only to its high-scoring customers instead of sending it to
every customer in its database. Mention the factors according to which it may rank the customers
in its database.
139) List some of the ways in which data mining assists the decision makers of the company.
140) How do the distributors, retailers and other intermediaries help a company to improve the
quantity and quality of its marketing intelligence?
141) Suppose Ornate Inc. and Oracle are the only players in digital camera industry. What can
Ornate do to acquire marketing intelligence?
142) The United States has one of the world’s highest percentages of college-educated citizens.
What can be the possible implications of this observation to the marketing environment of a U.S.
firm?
143) Suppose the people of Greenworld, an island on the southwest Pacific are primarily
involved in the direct procurement of edible plants and animals from the wild, foraging and
hunting without significant recourse to the domestication of either. On the contrary people in
Newland, a country rich in petroleum resources export petroleum to the industrial countries.
Which of the two countries mentioned above is likely to offer greater marketing opportunities for
luxurious goods and why?
144) Why do the companies need to search for practical means to harness renewable sources of
energy like wind and water?
145) Philips Lighting’s first shot at marketing a standalone compact fluorescent light (CFL) bulb
was Earth Light, at $15 each versus 75 cents for incandescent bulbs. The product had difficulty
climbing out of its deep green niche, as such marketing efforts of Philips suffered from the
“green marketing myopia”. Identify the three ways of avoiding this.
146) Organix Internationals LLC is planning to introduce its new range of breakfast cereals. List
the different product levels that it considers while formulating the demand estimates for the new
product.
147) Suppose, the Belgian government prohibits sale of cigarettes to people below 20 years of
age. Who are likely to comprise the qualified available market for Dunhill, a manufacturer of
herbal cigarettes in Belgium?
148) If the ratio between current and potential levels of market demand is close to unity, what
can you infer about the industry’s market-penetration index and the growth potential of the firms
in the industry?
149) How does the marketing environment determine the position of the market demand
function?
150) Suppose 100 million people consume black tea every year, and an average consumer
consumes 8 kgs of tea at an average price of $3 per kg. Compute the total market potential for
tea.
151) Simpsons, a manufacturer of air conditioners, finds that its sales potential is less than its
market potential even when it spends a sufficient amount on advertisements and after sale
services. What is the basic reason behind such an observation by the marketers of Simpsons?
152) Two major methods of computing area market potential are market build-up method and
multiple factor-index method. Which of these methods will Nexus Enterprises, a manufacturer of
auto parts implement to estimate its market potential?
153) Suppose the brand development index of the detergent manufactured by Fasclean in Boston
is 90 and that in Austin is 48. Compare the marketing opportunity of Fasclean detergent in the
two cities.
154) Suppose Redbus, a player in the small car market is planning to launch its new range of
hybrid cars. It decides to estimate the future demand for its new car before launching it in the
market. If interviewing consumers is not practical, what alternative technique might it resort to?
155) Assume that you are a marketing manager for a youth clothing manufacturer that has just
read about the megatrend of the “rising Hispanic influence” in the United States. Explain this
megatrend and indicate why it might be important to your company.