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The rate of sales decline during the decline stage of the product life cycle is largely
governed by:
a. the amount of money spent on advertising.
b. the number of competitors in the market.
c. the intensity of the competition's marketing efforts.
d. the amount of shelf space allotted to the product.
e. how rapidly consumer tastes change or substitute products are adopted.
Answer:
A(n) _____allows for price increases based on the cost-of-living index or some other
formula.
a. consumer penalty
b. price shade
c. price allowance
d. escalator price clause
e. elasticity quotient
Answer:
Mercedes-Benz
Daimler AG, the maker of Mercedes-Benz automobiles, is planning to launch a new
line of downsized luxury vehicles in the United States by 2012. Daimler has
experienced a recent drop in global sales attributed to its product mix that focuses on
larger luxury automobiles. With increasing fuel prices and stricter U.S. fuel-economy
standards coming down the pipeline, Daimler doesn"t want to be left behind. Daimler is
behind its competition, though. Its German rivals, Audi and BMW, have been relatively
successful in the United States. BMW's Mini Cooper, demanding as much as $34,000,
has already driven away with some of Daimler's potential sales. While Daimler already
offers the Smart car in the United States, the new offerings will not be going after the
same consumers.
Refer to MercedesBenz. One potential problem is that some of the purchasers of
Daimler's downsized luxury vehicles could be consumers who would have purchased a
larger, higher-priced Mercedes-Benz. This situation is called:
a. subjugation
b. cannibalization
c. sabotage
d. benefit transference
e. marginal sales
Answer:
At the beginning of the maturity stage of the product life cycle, sales typically:
a. become flat and do not change
b. increase at an increasing rate
c. decrease at a decreasing rate
d. decrease at an increasing rate
e. increase at a decreasing rate
Answer:
When Castrol Syntec, a premium motor oil, sought a new way to reach its young,
car-passionate audience, the brand found its mark with video games. In its first-ever
attempt at in-game advertising, Castrol Syntec found a way to show consumers (in a
virtual world) the brand's power and performance. In the communication process, the
game served as a(n) ____ for transmitting the message.
a. sender
b. decoder
c. encoder
d. channel
e. receiver
Answer:
Virtual Bellhop is a company that ships awkward sporting goods to vacation
destinations so its customers do not have to worry about lugging them through airports
or having them damaged in transit. Thus far, its record for getting the sporting
equipment to the correct destination for the vacationer is perfect. This indicates that the
company excels at which component of service quality?
a. Tangibles
b. Empathy
c. Reliability
d. Flexibility
e. Assurance
Answer:
A group of brands resulting from an information search, from which a buyer can choose
is referred to as the buyer's:
a. evoked set
b. primary set
c. inert set
d. complete set
e. justifiable set
Answer:
Marketers interested in offering customer value can:
a. offer products that it is skilled at making.
b. sell to customers using facts and other sales pitches.
c. offer organization-wide commitment to service and after-the-sale support.
d. price as high as the market will bear.
e. offer a large sales team to make cold calls.
Answer:
Tide laundry detergent is the market leader, but overall industry growth is low in this
market. Tide would be classified as a in the portfolio matrix.
a. star
b. cash cow
c. problem child
d. question mark
e. dog
Answer:
Walmart realizes a _____ using its relationships with suppliers to give customers low
prices and good customer service.
a. brand name strategy
b. niche competitive advantage
c. cost competitive advantage
d. marketing competitive advantage
e. synergistic competitive advantage
Answer:
All of the following are potential disadvantages of a flexible pricing policy EXCEPT:
a. it causes inconsistent profit margins.
b. it enables a seller to close a sale with a price-conscious customer.
c. it causes ill will among customers if they discover that other customers are paying
lower prices.
d. it enables salespeople to automatically lower the price to make a sale.
e. it can spark a price war with competitors.
Answer:
Manufacturers can do all of the following to regain some control over the price their
products are sold for at the retail level EXCEPT:
a. require resellers to maintain prices in line with competitors' prices.
b. developing brand loyalty in consumers by delivering quality and value.
c. avoiding doing business with price-cutting discounters.
d. franchising.
e. using an exclusive distribution system.
Answer:
Very few firms follow a formal new-product development process.
a. True
b. False
Answer:
Because social responsibility has proven to have a limited return on investment, the
number of businesses opting to act socially responsible is declining.
a. True
b. False
Answer:
After listening to a group of middle-aged women discuss their biggest concerns about
the jeans they wore, a company designed a new line of comfortable women's jeans and
touted them as "not your daughter's jeans." This is an example of research conducted to:
a. improve the quality of company decision making.
b. find out why a marketing plan failed.
c. learn how to more efficiently retain customers.
d. understand the ever-changing marketplace.
e. conduct business analysis.
Answer:
All of the following are reasons for dumping EXCEPT:
a. lowering unit costs by exploiting large-scale productions
b. attempting to avoid costly tariffs in the country to which the product is exported
c. attempting to maintain stable prices during periods of exchange rate fluctuations
d. temporarily distributing products in overseas markets to offset slack demand in the
home market
e. trying to increase an overseas market share
Answer:
Habitat for Humanity renovates vacant houses and sells them at no-interest mortgage
rates to low-income home buyers. The organization relies on volunteers to provide the
labor and funding for its renovations. Habitat for Humanity is best described as a(n):
a. image-oriented organization
b. for-profit organization
c. nonprofit organization
d. service branch
e. source-based organization
Answer:
Licensing agreements reduce the risk for manufacturers and sometimes even remove
the requirement for a manufacturer to produce its own product.
a. True
b. False
Answer:
Champion Lyte is a sugar-free sports drink. In developing the product, its manufacturer
thoroughly studied the legal restrictions on the drink's ingredients, packaging,
manufacturing, and labeling and has abided by all such restrictions. In this way, the
manufacturer of Champion Lyte drinks conducted its examination of all political and
legal factors that might affect the product's marketing.
a. True
b. False
Answer:
CallawayGolfCo.
Callaway Golf Co. has long been a leader in women's golf equipment, but it wanted to
expand its lead in this growing sector of the market. While Callaway's technical people
knew what could be done with design, they did not know exactly what women wanted
in their clubs. Callaway management decided what it needed to do was to bring the
technicians and women golfers together. Beginning about three years ago, Callaway
sent a team of researchers, designers, and golf pros out to visit with 40 women golfers
of various abilities in locations from California to Florida. In selecting the golfers to
study, Callaway decided to focus on women who were just beginning to play, as well as,
experienced, competitive golfers who wanted to own the latest equipment. Callaway
management felt that these two extreme groups of golfers had been overlooked by golf
club manufacturers. Further, Callaway felt that if enough could be learned about these
two groups, then the company would also learn enough to serve the rest of the women
golfer market. Basically, the research team observed the women playing golf and
listened to their comments and concerns. The information gathered by this research
team was built into every aspect of the design of a new golf club, including the feel of
the club, the length of the club shaft and size of the club head, and the weight of the
club. When prototypes of the new clubs were completed, they were sent to the women
golfers to get their feedback. That feedback was then used to refine the club design.
This process went on until the women said the new clubs greatly enhanced their game.
The entire process from original prototype to final product took a little less than one
year.
Refer to Callaway Golf Co. The type of research gathered by the Callaway Golf
research team would be called:
a. secondary
b. developmental
c. descriptive
d. subjective
e. focus group
Answer:
Which of the following describes a disadvantage associated with water transportation?
a. Cannot be used for international trade
b. High cost
c. Capability
d. Lack of speed
e. Product weight restrictions
Answer:
An Internet picture frame manufacturer offers retailers reduced prices on any
combination of size or style frames purchased. The discount is shown as they shop and
adjusted as the quantity of frames purchased increases. What common form of purchase
discount is the frame manufacturer using?
a. Rebate
b. Cash discount
c. Quantity discount
d. Promotional allowance
e. Functional discount
Answer:
During a recent recession, many manufacturers determined that their suppliers were an
excellent source of cost savings. Specific cost reduction strategies manufacturers have
used with their suppliers include:
a. offering help in boosting productivity of suppliers.
b. renegotiating contracts.
c. setting annual across-the-board cost reduction targets for suppliers.
d. improving economies of scale by cutting number of suppliers.
e. all of the choices.
Answer:
All of the following are examples of nonprofit organizations EXCEPT:
a. GEICO, an insurance company.
b. the Muscular Dystrophy Association.
c. the Make-a-Wish Foundation.
d. Kiwanis International, a service organization.
e. the United Auto Workers, a labor union.
Answer:
Abbeville Press published a book by Armin Brott and Jennifer Ash entitled
The Expectant Father: Facts,Tips, and Advice for Dads-to-Be. It is an advice book for
men whose partners are expecting a baby. What demographic variables have been used
to define the market for this book?
a. Benefit desired and lifestyle
b. Gender and family life cycle stage
c. Age, gender, and personality
d. Benefit desired and gender
e. Usage-rate and lifestyle
Answer:
Mai Lin is checking out at the grocery store when she notices the candy display right
next to the cash register. "I haven"t had a Mounds bar in years," she thinks. "That looks
good! I think I"ll grab one." So she hands the candy to cashier and says, "I"ll take this
too." Mai Lin has just made a(n):
a. partially planned purchase
b. unplanned purchase
c. unwise purchase
d. fully planned purchase
e. frivolous purchase
Answer:
An elementary school teacher purchased a ream of art paper, a box of crayons, and
some modeling clay. The teacher intends to use these products in her classroom, so they
would be classified as business products.
a. True
b. False
Answer:
Which of the following is the latest round of World Trade Organization?
a. Mercosur covenant
b. CAFTA Alliance
c. Doha Round
d. Uruguay Round
e. WTO Round
Answer:
The North American Free Trade Agreement did all of the following EXCEPT:
a. created the world's largest free trade zone, which includes Canada, the United States,
and Mexico
b. substantially reduced economic growth in Mexico
c. allowed U.S. and Canadian financial-services companies to own subsidiaries in
Mexico
d. removed many tariffs and duties so that Mexico, Canada, and the United States can
trade more freely
e. expanded opportunities for U.S. businesses in Mexico
Answer:
The first step in the selling process is approaching the customer and probing needs.
a. True
b. False
Answer:
A Target store is an example of a(n):
a. merchant wholesaler
b. retailer
c. broker
d. agent
e. exporter
Answer:
Almost all cell phones sold in the United States are black or gray. Almost all cell
phones sold in Europe are colorful, and very few black phones are sold. A cell phone
manufacturer knowing this information could use segmentation when selling its phones
internationally.
a. geographic
b. economic
c. demographic
d. benefit
e. multipositioning
Answer:
Many nonprofit organizations are pressured or required to serve the maximum number
of people by targeting the average user, which pressures them to adopt which type of
targeting strategy?
a. Niche
b. Undifferentiated
c. Multisegmented
d. Uniform
e. Unidimensional
Answer:
