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Which of the following is most consistent with the scientific method approach to
marketing research discussed in the text?
A. "We continually survey our customers because the results give us good ideas for
hypotheses."
B. "Once we interpret the data, we can define our problem."
C. "Our research is as precise as possiblebecause we want to be 100 percent accurate."
D. "Sometimes the answers from the early stages of the research process are good
enough so we stop the research and make our decisions."
E. None of these alternatives is correct.
Which of the following would be a determining dimension for a customer who needs to
buy a marketing textbook for school?
A. Avid reader
B. Status as college student
C. Income level
D. Traveler
E. Age
A S.W.O.T. analysis
A. focuses on what a firm plans to do to "Satisfy Wishes Of a Target" customer.
B. summarizes a firm's 'strategy, wishes (of its customers), outlook, and tactics."
C. helps defend against potential competitors by developing a set of competitive
'safeguards, weapons, offensives, and tactics."
D. identifies a firm's 'strengths, weaknesses, opportunities, and threats."
E. seeks to reduce the risk of competitive surprises by scanning the market for 'signals,
warnings, omens, and tips."
Break-even analysis usually:
A. makes it appear that any quantity can be sold at the assumed price.
B. suggests that profits will decrease rapidly as sales volume increases beyond the
break-even point.
C. is quite accurate in maximizing profit.
D. assumes a U-shaped average variable cost curve.
E. None of these alternatives is correct.
The Bijou Classic Movie House changes ticket prices as demand for a movie increases
or decreases. Prices can change every hour as ticket sales go up or down for particular
shows. Bijou Classic Movie House appears to be using:
A. penetration pricing.
B. dynamic pricing.
C. cumulative discounting.
D. seasonal discounts.
E. status quo objectives.
A channel system in which the various members agree by contract to cooperate with
each other is called a(an) ______________ system.
A. multichannel distribution
B. contractual channel
C. traditional channel
D. administered channel
E. vertically integrated channel
There are a number of different possible sources of capital, but:
A. the sale of stock or bonds is considered to be an internal source of capital.
B. debt financing is now illegal in the U.S.
C. they are all likely to have the same effect when it comes to the time horizon within
which a marketing manager's plan is expected to be profitable.
D. a firm that is not yet profitable is likely to need to use external sources.
E. a firm isn't likely to be able to sell stock unless its marketing plan is a sure thing.
Which of the following costs decrease with increase in output?
A. Total variable cost
B. Total fixed cost
C. Total cost
D. Average fixed cost per unit
E. Sales commissions
Which of the following is most likely to be the order of roles that a sales person might
hold as he or she continues to work for a company?
A. Customer service rep, sales clerk
B. Missionary salesperson, order getter
C. Technical specialist, order taker
D. Missionary salesperson, technical specialist
E. Order getter, missionary salesperson
Institutional advertising:
A. may try to improve a firm's image with shareholders.
B. may seek to inform, persuade, or remind.
C. may try to improve a firm's image with the general public.
D. focuses on the name and prestige of a company or industry.
E. All of these alternatives are correct.
Cooperative advertising is:
A. advertising by several producers of the same product typeto stimulate primary
demand.
B. encouraged by the Federal Trade Commission.
C. the opposite of competitive advertising.
D. a way for a producer to get more promotion for its advertising dollar.
E. None of these alternatives is correct.
Identify the INCORRECT statement about approaches to market-oriented strategy
planning.
A. It's usually safer to be a combiner.
B. Cost considerations encourage aggregating.
C. Demand considerations encourage less aggregating.
D. The approach a firm uses depends in part on the firm's resources.
E. Generally, it is better to try and satisfy some customers very well instead of many
just fairly well.
Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's
logistics manager. They work together to make decisions about how to get United's
hand and power tools to its customersa mix of manufacturing plants and final
consumers (who buy United tools at a hardware store). United Tools does not own its
own transport facilities and it works with wholesalers to reach its business customers.
Together, Harter and O'Reilly try to coordinate transporting, storing, and product
handling activities to minimize cost while still achieving the customer service level
their customers and intermediaries want. This usually requires that United keep an
inventory of most of its products on hand, but demand for its products is fairly
consistent over time so inventory is easy to manage.
Harter has identified four options for physical distribution systems she could use to
reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost
for each optionand the distribution service levels that can be achievedare as follows:
Ralston Supply expects a very high level (90 percent) of distribution customer service.
Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that
means some products will occasionally be out of stock, if it gets products at a lower
price.
For its large retail hardware customers (like Home Depot), United regularly ships
smaller orders directly to individual stores or in some cases to the retail chain's
warehouses. Cross-country shipments usually go by rail while regional shipments
usually go by truck.
As marketing manager, United's Terry Harter should realize that:
A. transporting costs may limit her choice of target markets.
B. a supply chain can only consist of one distribution channel.
C. the lowest cost distribution system is the best alternative.
D. None of these alternatives is correct.
A marketing manager should
A. know that most consumer complaints do not require a response because the
consumer's dissatisfaction is beyond the control of the firm.
B. recognize that many consumers who complain are trouble makers and that not much
can or should be done about their complaints.
C. assume that most customers who are dissatisfied will complain, but that people who
are satisfied will be silent.
D. be concerned that many of the complaints that are reported are never resolved.
E. recognize that a "complaint" box isn't needed if the firm is really market-oriented in
the first place.
A company has total fixed cost of $120,000. Its variable cost per unit is $2.00 and its
price per unit is $3.50. The break-even point in units is:
A. 60,000.
B. 80,000.
C. 34,286.
D. 21,818.
E. Cannot be determined from the information provided.
Which of the following U.S. antimonopoly laws deals with "tying contracts" where the
sale of one product is contingent on the business customer purchasing other products
from the same supplier?
A. Sherman Act (1890)
B. Robinson-Patman Act (1936)
C. Antimerger Act (1950)
D. Wheeler-Lea Amendment (1938)
E. Clayton Act (1914)
During the market maturity stage of the product life cycle:
A. some competitors drop out of the marketand no new firms enter.
B. persuasive promotion becomes more important.
C. promotion emphasizes the advantages of the basic product concept.
D. total industry sales and profits reach their maximum levels.
E. None of these alternatives are correct.
The basic objectives of implementation are to do things:
A. better.
B. faster.
C. at lower cost.
D. All of these are true.
Which of the following is a SALES-ORIENTED pricing objective?
A. Growth in market share
B. Target return
C. Nonprice competition
D. Satisfactory profits
E. Meeting competition
Which of the following questions is likely to be MOST important to a customer
concerning a company's physical distribution practices?
A. How much does the company spend to deliver the product?
B. How dependably does the company deliver the product?
C. How is the product stored before being delivered?
D. What mode of transportation is being used?
E. How is the product moved to its final destination?
The transporting cost as a percentage of selling price is highest for:
A. Factory machinery.
B. Electronic equipment.
C. Cabbage.
D. Manufactured food.
E. Sand and gravel.
_____ are merchant wholesalers that provide all the wholesaling functions.
A. Cash-and-carry wholesalers
B. Service wholesalers
C. Limited-function wholesalers
D. Drop-shippers
E. Catalog wholesalers
Which of the following is the primary difference between introductory price dealing
and low penetration price policy?
A. Introductory price dealing targets the top of the demand curve while low penetration
price policy targets the bottom of the demand curve.
B. Low penetration price policy targets the top of the demand curve while introductory
price dealing targets the bottom of the demand curve.
C. In introductory price dealing the price continuously moves down the demand curve
while it is static in low penetration price policy.
D. In the low penetration price policy the price is fixed as opposed to introductory price
dealing where the price varies according to the customer's ability to pay.
E. In introductory price dealing the price rises after the introductory offer while it
remains unchanged in low penetration price policy.
Sierra Plumbing, Inc. buys plumbing supplies, pipes, and tools from different
manufacturers and resells them to construction companies. Sierra is MOST LIKELY:
A. a rack jobber.
B. a service (merchant) wholesaler.
C. a drop-shipper.
D. an agent wholesaler.
E. a manufacturers' agent.
Which of the following is the BEST example of the micro-macro dilemma?
A. Pepsi Blue sales went up, but total sales of all soft drinks went down.
B. A small group of loyal consumers really like RC Cola best, but most consumers don't
like it at all.
C. The deposit on returnable soft drink bottles is about equal to the cost of the bottle.
D. Paper cups for soft-drinks are convenient, but they often end up as litter along the
highway.
E. Snapple beverages are more popular in Texas than in the rest of the U.S.
______ means moving into totally different lines of business, perhaps entirely
unfamiliar products, markets, or even levels in the production-marketing system.
A. Diversification
B. Market development
C. Product development
D. Differentiation
E. Market penetration
Which of the following reached market maturity over a 15-year period starting in 1970?
A. Catalog showrooms
B. Fast-food outlets
C. Single-line mass merchandisers
D. Mass-merchandisers
E. Supercenters
Regarding advertising, the Federal Trade Commission:
A. can require firms to run corrective ads.
B. can regulate deceptive advertising.
C. can require firms to support ad claims.
D. can require firms to provide affirmative disclosures.
E. All of these alternatives are correct.
The major function of auction companies is to:
A. deliver the products they handle.
B. help finance by owning products.
C. take title to the products they sell.
D. provide a place where buyers and sellers can complete a transaction.
E. All of these are major functions of auction companies.
Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about
how changes taking place among retailers in his channel might impact his strategy.
SPI sells the products it produces through wholesalers and retailers. For example, SPI
sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent
markup and most of its 'sport shop" retailer customers, like Robinson's Sporting Goods,
use a 33 percent markup to arrive at the price they charge final consumers. However,
one fast growing retail chain, Sports Depot, only uses a 20 percent markup for
basketballs, even though it pays Wholesale Supply the same price as other retailers.
Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them
at costto draw customers into its stores and stimulate sales of its pricey basketball
shoes.
Sports Depot is also using other pricing approaches that are different from the sports
shops that usually handle SPI products. For example, Sports Depot prices all of its
baseball gloves at $20, $40, or $60with no prices in between. There are three big bins -
one for each price point.
Todd is also curious about how Sports Depot's new strategy to increase sales of tennis
balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit
groups who resell the balls to raise money. For example, a service organization at a
local college bought 2,000 tennis balls printed with the college logo. Sports Depot
charged $.50 each for the tennis balls-plus a $500 one-time charge for the stamp to print
the logo. The service group plans to resell the tennis balls for $2.50 each and contribute
the profits to a shelter for the homeless.
Todd is not certain if Sports Depot ideas will affect SPI's plans. For example, SPI is
considering adding tennis racquets to the lines it produces. This would require a
$500,000 addition to its factory as well as the purchase of new equipment that costs
$1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd
thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow
most retailers to add their normal markup and make a profit. However, if Sports Depot
sells the racquet at a lower than normal price other retailers might decide to carry it.
How many of the printed tennis balls must the service organization sell to cover the
$500 fixed printing charge?
A. 250
B. 400
C. 500
D. 1000
E. 2000
Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about
how changes taking place among retailers in his channel might impact his strategy.
SPI sells the products it produces through wholesalers and retailers. For example, SPI
sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent
markup and most of its 'sport shop" retailer customers, like Robinson's Sporting Goods,
use a 33 percent markup to arrive at the price they charge final consumers. However,
one fast growing retail chain, Sports Depot, only uses a 20 percent markup for
basketballs, even though it pays Wholesale Supply the same price as other retailers.
Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them
at costto draw customers into its stores and stimulate sales of its pricey basketball
shoes.
Sports Depot is also using other pricing approaches that are different from the sports
shops that usually handle SPI products. For example, Sports Depot prices all of its
baseball gloves at $20, $40, or $60with no prices in between. There are three big bins -
one for each price point.
Todd is also curious about how Sports Depot's new strategy to increase sales of tennis
balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit
groups who resell the balls to raise money. For example, a service organization at a
local college bought 2,000 tennis balls printed with the college logo. Sports Depot
charged $.50 each for the tennis balls-plus a $500 one-time charge for the stamp to print
the logo. The service group plans to resell the tennis balls for $2.50 each and contribute
the profits to a shelter for the homeless.
Todd is not certain if Sports Depot ideas will affect SPI's plans. For example, SPI is
considering adding tennis racquets to the lines it produces. This would require a
$500,000 addition to its factory as well as the purchase of new equipment that costs
$1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd
thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow
most retailers to add their normal markup and make a profit. However, if Sports Depot
sells the racquet at a lower than normal price other retailers might decide to carry it.
If SPI uses average-cost pricing, a big problem will be:
A. it ignores the demand curve for its products.
B. fixed costs are too hard to estimate.
C. the effects of variable costs are ignored.
D. the desired profit cannot be included.
Considering weight, which one of the following transporting modes usually has the
LOWEST cost?
A. Waterways
B. Airways
C. Trucks
D. Railroads
E. Pipelines
Average-cost pricing may lead to losses because there are a variety of costsand each
changes
A. in a similar fashion.
B. in a different way as output changes.
C. in a similar fashion with time.
D. in an exponential manner.
E. in a highly predictable and similar manner.
Which of the following statements is MOST characteristic of the "production era"?
A. "If we sell harder, we will sell more."
B. "We need to cater to the diverse needs of consumers."
C. "There is no limit on what we can sell if we produce efficiently."
D. "The more options we offer consumers, the better."
E. "Advertising is the key to our success."
Considering the universal functions of marketing,
A. they may not be required in all macro-marketing systems.
B. not every firm must perform all of the marketing functions.
C. responsibility for performing them cannot be shifted or shared.
D. all goods and services require all the functions at every level of their production.
