Principles of Marketing, 15e (Kotler/Armstrong)
Chapter 1 Marketing: Creating and Capturing Customer Value
1) Which of the following is NOT an accurate description of modern marketing?
A) Marketing is the creation of value for customers.
B) Marketing involves managing profitable customer relationships.
C) Marketing emphasizes selling and advertising exclusively.
D) Marketing involves satisfying customers’ needs.
E) Marketing is building value-laden exchange relationships with customers.
2) According to management guru Peter Drucker, “The aim of marketing is to ________.”
A) maximize profits of the company
B) emphasize customer wants and not customer needs
C) make selling unnecessary
D) fulfill unrealistic customer expectations
E) sell products
3) ________ is defined as a social and managerial process by which individuals and
organizations obtain what they need and want through value creation and exchange.
A) Research
B) Innovation
C) Manufacturing
D) Marketing
E) Production
4) According to the five-step model of the marketing process, which of the following is the final
step in creating value for customers?
A) designing a customer-driven marketing strategy
B) understanding the marketplace and customer needs
C) constructing an integrated marketing program that delivers superior value
D) building profitable relationships and creating customer delight
E) capturing value from customers to create profit and customer equity
5) According to the five-step model of the marketing process, a company should ________
before designing a customer-driven marketing strategy.
A) determine how to deliver superior value to customers
B) build profitable relationships with customers
C) use customer relationship management to create full partnerships with key customers
D) understand the marketplace and customer needs and wants
E) construct an integrated marketing program
6) ________ are human needs that are shaped by culture and individual personality.
A) Necessities
B) Wants
C) Demands
D) Values
E) Exchanges
7) When backed by buying power, wants become ________.
A) social needs
B) demands
C) physical needs
D) self-esteem needs
E) exchanges
8) A ________ is some combination of products, services, information, or experiences provided
to consumers to satisfy a need or want.
A) market offering
B) value proposition
C) brand positioning
D) market segment
E) market mix
9) Which of the following terms refers to sellers being preoccupied with their own products and
losing sight of underlying consumer needs?
A) vendor lock-in
B) social loafing
C) value proposition
D) marketing myopia
E) conspicuous consumption
10) When marketers set low expectations for a market offering, they run the risk of ________.
A) disappointing loyal customers
B) having to use an outside-in rather than an inside-out perspective
C) failing to attract enough customers
D) failing to understand their customers’ needs
E) incorrectly identifying a target market
11) ________ is the act of obtaining a desired object from someone by offering something in
return.
A) Valuation
B) Exchange
C) Market offering
D) Confiscation
E) Donation
12) A(n) ________ is the set of actual and potential buyers of a product or service.
A) market
B) control group
C) subsidiary
D) focus group
E) audience
13) Consumer research, product development, communication, distribution, pricing, and service
are all core ________ activities.
A) positioning
B) marketing
C) outsourcing
D) production
E) logistics
14) The art and science of choosing target markets and building profitable relationships with
them is called ________.
A) marketing management
B) positioning
C) marketing mix
D) market offering
E) differentiation
15) Selecting which segments of a population to serve is called ________.
A) market segmentation
B) positioning
C) customization
D) target marketing
E) differentiation
16) Which of the following refers to a set of benefits that a company promises to deliver to
customers to satisfy their needs?
A) customer lock-in
B) a cartel
C) marketing mix
D) value proposition
E) market segmentation
17) Which of the following customer questions is answered by a company’s value proposition?
A) “Why should I buy your brand rather than a competitor’s?”
B) “What is your company’s estimated customer equity?”
C) “What are the costs involved in the production of your brand?”
D) “What is the budget allocated by your company for research and development?”
E) “What is the financial stability of your company?”
18) Which of the following marketing management orientations focuses primarily on improving
efficiencies along the supply chain?
A) production concept
B) product concept
C) selling concept
D) marketing concept
E) societal marketing concept
19) Which of the following marketing management concepts is most likely to lead to marketing
myopia?
A) customer-driven marketing concept
B) customer-driving marketing concept
C) societal marketing concept
D) marketing concept
E) product concept
20) Which of the following statements is true of the production concept?
A) It considers customer focus and value to be the paths to sales and profits.
B) It follows the customer-centered sense-and-respond philosophy.
C) It takes an outside-in perspective.
D) It calls for sustainable marketing.
E) It leads to companies focusing too narrowly on their own operations.
21) The ________ concept is aligned with the philosophy of continuous product improvement
and the belief that customers will choose products that offer the most in quality, performance,
and innovative features.
A) product
B) production
C) societal marketing
D) marketing
E) selling
22) Which of the following is the aim of the product concept?
A) improve the marketing of a firm’s best products
B) market only those products with high customer appeal
C) focus on the target market and make products that meet those customers’ demands
D) focus on making continuous product improvements
E) ensure that product promotion has the highest priority
23) Which of the following statements is true of the selling concept?
A) It requires minimum promotion efforts.
B) It creates long-term, profitable customer relationships.
C) It takes an outside-in perspective.
D) It is typically practiced with unsought goods.
E) It follows the customer-centered sense-and-respond philosophy.
24) Which of the following marketing orientations calls for aggressive promotional efforts and
focuses on creating transactions rather than long-term customer relationships?
A) the marketing concept
B) the production concept
C) the product concept
D) the selling concept
E) the societal marketing concept
25) Which of the following marketing orientations holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do?
A) the product concept
B) the production concept
C) the selling concept
D) the marketing concept
E) the societal marketing concept
26) Which of the following follows a customer-centered “sense-and-respond” philosophy rather
than a product-centered “make-and-sell” philosophy?
A) market segmentation
B) the production concept
C) the marketing concept
D) the inside-out perspective
E) marketing myopia
27) A firm that uses the selling concept takes a(n) ________ approach.
A) outside-in
B) niche marketing
C) inside-out
D) societal marketing
E) customer-driven
28) The marketing concept that starts with a well-defined market, focuses on customer needs,
and integrates all the marketing activities that affect customers takes a(n) ________.
A) outside-in perspective
B) product-centered make-and-sell philosophy
C) inside-out perspective
D) consumer-generated marketing approach
E) telling-and-selling approach
29) The selling concept is typically practiced ________.
A) to balance consumers’ wants, company’s requirements, and the society’s long-run interests
B) with products that offer the most in terms of quality, performance, and innovative features
C) when the company focuses on building long-term customer relationships
D) with goods that buyers normally do not think of buying
E) by customer-driven companies
30) Which of the following is a characteristic of customer-driven marketing?
A) Companies understand customer needs even better than customers themselves do.
B) Customers are unaware of their needs.
C) Products are created that meet both existing and latent needs, now and in the future.
D) Customers know what they want.
E) Customers don’t know what is possible.
31) An organization that understands and anticipates customer needs even better than customers
themselves do and creates products and services to meet current and future needs is said to
practice ________ marketing.
A) customer-driven
B) customer-driving
C) affinity
D) societal
E) ambush
32) When customers don’t know what they want or don’t even know what’s possible, the most
effective marketing strategy is ________ marketing.
A) customer-driven
B) customer-driving
C) societal
D) ambush
E) affinity
33) The societal marketing concept seeks to establish a balance between ________.
A) customer lifetime value and customer equity
B) an inside-out perspective and an outside-in perspective
C) consumer short-run wants and consumer long-run welfare
D) marketing mixes and market offerings
E) customer-driven marketing and customer-driving marketing
34) ________ refers to socially and environmentally responsible marketing that meets the needs
of consumers and businesses while also preserving or enhancing the ability of future generations
to meet their needs.
A) Ambush marketing
B) Evangelism marketing
C) Sustainable marketing
D) Database marketing
E) Affinity marketing
35) The set of marketing tools a firm uses to implement its marketing strategy is called the
________.
A) promotion mix
B) product mix
C) marketing mix
D) market offering
E) marketing effort
36) Building and maintaining profitable customer relationships by delivering superior customer
value and satisfaction is called ________.
A) customer lifetime value
B) customer-perceived value
C) customer relationship management
D) partner relationship management
E) customer equity
37) Which of the following marketing strategies should marketing managers focus on to manage
detailed information about individual customers and carefully manage customer touchpoints to
maximize customer loyalty?
A) customer divestment
B) customer-managed relationships
C) the societal marketing concept
D) partner relationship management
E) customer relationship management
38) ________ is determined by a customer’s evaluation of the benefits and costs of a market
offering relative to those of competing offers.
A) Customer-perceived value
B) Customer lifetime value
C) Share of customer
D) Customer-managed relationship
E) Brand value proposition
39) It is most accurate to say that when customers purchase products they act on ________ as
they judge values and costs.
A) objective value
B) perceived value
C) customer lifetime value
D) company image
E) society’s interests
40) The primary key to delivering customer satisfaction is to match product performance with
________.
A) the competitor products’ performance
B) competitive prices
C) aggressive advertising
D) limited customer services
E) customer expectations
41) Which of the following terms refer to customers who make repeat purchases and tell others
about their positive experiences with a product or service?
A) barnacles
B) customer evangelists
C) butterflies
D) surrogate customers
E) market mavens
42) Which of the following strategies would a company most likely use to increase customer
satisfaction?
A) decreasing the variety of offered services
B) divesting
C) lowering prices
D) “firing” unprofitable customers
E) limiting customer experiences with a brand
43) Hank is an assistant marketing director for a firm in a market with many low-margin
customers. What type of relationship with these customers would be the most profitable for him?
A) full partnerships
B) basic relationships
C) causal relationships
D) club marketing programs
E) inverse relationships
44) A room upgrade offered by a hotel to a guest who often stays in the hotel is an example of
________.
A) a frequency marketing program
B) a basic relationship
C) a club marketing program
D) partner relationship management
E) sustainable marketing
45) The marketing world is most likely embracing ________ because consumers wield greater
power nowadays with a wealth of platforms for airing and sharing their brand views with other
consumers.
A) partner relationship management
B) supply chain management
C) customer-managed relationships
D) market segmentation
E) consumer ethnocentrism
46) Greater consumer control means that companies can no longer rely on ________.
A) promoting brand-consumer interaction
B) marketing by intrusion
C) creating market offerings and messages that involve consumers
D) developing marketing concepts with an outside-in perspective
E) marketing by attraction
47) Through ________, companies today are strengthening their connections with all partners,
from providers of raw materials and components to those involved in the delivery of final goods
and services.
A) supply chain management
B) direct marketing
C) customer relationship marketing
D) customized marketing
E) inventory management
48) The final step in the marketing process is ________.
A) capturing value from customers
B) creating customer delight
C) creating customer lifetime value
D) understanding the marketplace
E) designing a customer-driven marketing strategy
49) “Losing a customer once means losing the entire stream of possible purchases that the
customer would make over an extended period of patronage.” The above statement specifically
indicates loss in terms of ________.
A) customer-perceived value
B) marketing offerings
C) partner relationship management
D) customer lifetime value
E) value proposition
50) The portion of the customer’s purchasing that a company gets in its product categories is
known as ________.
A) customer-perceived value
B) share of customer
C) customer insight
D) consumption function
E) induced consumption
51) Apart from retaining good customers, most marketers want to constantly increase their
“share of customer.” What does this mean in marketing terms?
A) Marketers want to increase their market share.
B) Marketers want to increase the share they get of the customer’s purchasing in their product
categories.
C) Marketers want to diversify their operations and customize their products to cater to the entire
market.
D) Marketers want to continuously increase their customers’ levels of satisfaction.
E) Marketers want to turn satisfied customers into delighted customers.
52) ________ is one of the best ways to increase share of customer.
A) Targeting new customers
B) Using bait and switch
C) Cross-selling
D) Divesting
E) Partnership marketing
53) Keith, a clothing store owner, offers product suggestions to customers based on their current
purchases. Which of the following is Keith targeting to increase?
A) shared value
B) share of customer
C) social responsibility
D) customer-generated marketing
E) customer loyalty
54) Which of the following refers to the total combined customer lifetime value of all of the
company’s current and potential customers?
A) share of customer
B) marketing mix
C) customer equity
D) target market
E) customer-perceived value
55) In the context of customer relationship groups, a potentially profitable and short-term
customer is referred to as a ________.
A) true friend
B) butterfly
C) stranger
D) barnacle
E) market maven
56) Customers can be classified into four relationship groups based on their profitability and
projected loyalty. Which customer type is associated with high profitability and long-term
loyalty?
A) barnacles
B) strangers
C) butterflies
D) true friends
E) cash cows
57) A financial services firm has several loyal customers who conduct business with them
exclusively. However, the company has noticed that this customer group is the least profitable
for the company, and in some cases, it increases their losses when engaging in business with this
group. Which of the following customer groups is being referred to in this scenario?
A) butterflies
B) true friends
C) strangers
D) barnacles
E) cash cows
58) Following the change in consumer values and consumption patterns after the Great
Recession, marketers have changed their marketing strategies to emphasize the ________ of
their products.
A) image
B) value
C) durability
D) safety
E) uniqueness
59) Which of the following statements is true about the recession that began in 2008?
A) The economic crisis caused a short-term change in consumers’ spending habits.
B) The average home value increased after the stock market plunge.
C) Decreasing energy prices provided consumers with unexpected savings.
D) Consumers brought spending more in line with their incomes.
E) Consumers quickly regained confidence in the economy.
60) Which of the following statements about the Internet is most accurate?
A) Companies are relying less on the Internet to build relationships with customers and
marketing partners.
B) After the dot-com meltdown of 2000, fewer consumers are using the Internet to buy products
and services.
C) The Internet makes it easy for consumers to view, respond to, and create marketing content.
D) Consumer e-commerce looks promising, but business-to-business e-commerce is declining.
E) The digital shift means that marketers can always control conversations about their brands.