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Rob Rose sat back to review the portfolio of products his company, Wire Products Inc.
(WPI), has in its product line. The company specializes in making various products for
consumer and industrial uses from hard laminated wirecoated with special paints.
1) WPI's "Wire Closet" products have been on the market for 10 years. Consumers
install the wire shelves and closet rods themselves. The market leader, Closetmaid, has
been selling similar products for more than 20 years, but so far the sales volume and
profits for the market continue to grow. Recently, several new competitors have come
into the market.
2) Three months ago, WPI entered the lawn and garden market with folding fences
made with laminated wire and branded as "Wire Fold-Fence." Previously, WPI had
never made fences or been a player in the lawn and garden market-although other
companies have been making products in this market for years. However, Rob Rose has
discovered that recent sales of wire garden fencing have leveled off and profits are
declining overall. Still, WPI thinks it has some cost advantages and can grow its own
sales and profits in this market.
3) WPI has just developed "Oil Wire," a new concept for the environmental cleanup
market. Oil Wire is coated with a special material that cleans up oil spills. There has
never been a product like this and WPI wants to quickly get the word out about its
benefits. The product is now being rolled out in selective markets.
4) Another business product is "Wire Locker" used for secure storage by gymnasiums
or companies. This style of locker has now gone out of fashion and most customers are
finding better materials to use for lockers. Aggressive selling has helped Wire Locker's
sales stay flat, but the total market for wire style lockers is only half of what it was 10
years ago.
5) WPI's "Wire Window" product is used as a security product to protect glass
windows. It sells to homeowners and retailers looking for additional safety. WPI's sales
of this product have dropped in recent years because competitors have introduced
maintenance-free products. However, the overall market for this type of product
continues to show good growth.
6) WPI is running concept tests of a new wire car-top carrier called "Wire Car Top."
There are other car-top carrier products on the market, but WPI plans to include options
in its carrier that will make it easier to load bikes, skis, and suitcases. "Wire Car Top" is
also very easy to put on and take off of the car because of its light weight and
ease-of-use features. The concept tests are helping WPI analysts develop rough
estimates of costs, sales, and profits.
7) Another new product idea, tentatively called "Wire Tent," is being considered. It
would use laminated wires to create a portable tent frame. This product is currently
being evaluated to determine its fit with the company's objectives and external market
trends.
Rob is thinking about the product life cycle, where each product fits, and what he
should be doing as part of his marketing plan for each of these products.
In which stage of the product life cycle is "Wire Fold-Fence"?
A. Sales decline
B. Market introduction
C. Market maturity
D. Market growth
E. Market development
During the development step of new product development, a firm could develop a ____,
an early sample or model built to test a concept.
A. creation
B. concept test
C. prototype
D. ideatype
E. embryo concept
Vendor analysis
A. ensures objectivity by disregarding whether a supplier has been used in the past.
B. emphasizes the emotional factors in a purchase decision.
C. is used less now that multiple buying influence is more common.
D. None of these alternatives is true.
A report on a seller's website that describes how an organizational buyer can make a
better decision on a particular topic is called a(n):
A. mission statement.
B. white paper.
C. executive summary.
D. online community.
E. outsource.
U.S. teenagers spend about ______ billion per year.
A. $100
B. $150
C. $200
D. $250
E. $300
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.
The pricing approach Sports Depot uses to price its baseball gloves is called:
A. odd-even pricing.
B. value in use pricing.
C. prestige pricing.
D. bait pricing.
E. price lining.
The main difference between merchant wholesalers and other wholesalers is that they:
A. are more aggressive at selling than agent wholesalers.
B. offer fewer wholesaling functions.
C. have the lowest operating expenses as a percent of sales.
D. own (take title to) the products they handle.
E. are willing to perform retailing functions also.
Which of the following is NOT a social influence in consumer buying?
A. Social class
B. Beliefs
C. Family
D. Reference groups
E. Culture
Regarding selling to organizational buyers,
A. the buyer's individual needs can be ignored when there is multiple buying influence.
B. purchasing managers are usually more emotional than final consumers.
C. a purchasing manager's emotional needs should be emphasized as well as his
economic needs.
D. sellers should try to avoid purchasing managers, since they usually can't make the
final buying decision.
E. All of these alternatives are correct.
Which of the following statements about mass customization is true?
A. Anderson's windows, which an architect can order in just about any combination of
size, 3 Hardware, and style, is a good example of mass customization for business
markets.
B. Mass customization avoids the need for working capital.
C. Mass customization requires a firm to give up segmentation thinking to pursue
larger, more heterogeneous markets.
D. The mass-customization approach applies only to services, and they often must be
custom produced anyway.
E. Mass customization reduces production costs but it's less likely to meet a customer's
needs.
Which of the following is NOT an explanation for why MICRO-marketing may cost
too much in some firms?
A. Some managers make decisions as if customers are eagerly awaiting any product
they produce.
B. Production managers focus on designing products that are easy to make.
C. Financial managers reduce finished-product inventories and force "out of stock"
situations.
D. Marketing managers do target marketing.
E. Some managers don't see a business as a "total system" focused on customers.
_________ directs an economy's flow of goods and services from producers to
consumers in a way that effectively matches supply and demand and accomplishes the
society's objectives.
A. Macro-marketing
B. The transporting function
C. Micro-marketing
D. Standardization and grading
E. Social responsibility
Competitive advertising
A. tries to develop primary demand for a product category rather than demand for a
specific brand.
B. tries to keep the product's name before the public.
C. is used to present the company in a favorable light, perhaps to overcome image
problems.
D. may be useful when the product has achieved brand preference or insistence.
E. tries to develop selective demand for a specific brand.
According to the text, marketing means:
A. much more than just selling and advertising.
B. advertising.
C. producing a product that fills a need.
D. selling.
E. making a good product that sells itself.
Which of the following is an example of a JIT system shifting responsibility for PD
activities backward in a distribution channel?
A. A paint supplier is highly efficient at controlling logistics costs. Products are
distributed at a high customer service level.
B. An ice cream chain makes its own ice cream at each of its retail sites. Its customers
are highly pleased with the product.
C. A wholesale appliance distributer is inefficient at controlling logistics costs. It
develops a reputation for low customer service levels.
D. A book retailer is more efficient than its suppliers at controlling PD costs. Products
are distributed at an acceptable customer service level.
E. An automotive parts supplier is less efficient than its retail customers at controlling
logistics costs. Products are distributed at a high customer service level.
An ROI estimate is needed during the ______________ step of the new-product
development process.
A. commercialization
B. development
C. idea evaluation
D. screening
E. All of these steps need an ROI estimate.
Sales promotion activities:
A. Usually have long-term effects.
B. Are aimed at final consumers, but not business customers.
C. Focus more on getting attention than on stimulating action by consumers.
D. May be aimed at a firm's own employees.
E. Usually take longer to achieve sales results than does advertising.
In the seven-step approach to market segmentation
A. apartment buildings in cities with large student populations are the focus of the
example.
B. homogeneous submarkets are immediately identified in Step 1.
C. the submarkets are nicknamed based on their qualifying needs.
D. profit is considered in all seven steps.
E. None of these is true.
Overseas production:
A. generally makes distribution more complicated.
B. may be very economical.
C. sometimes brings concerns about nationalism to the forefront.
D. can apply to services as well as physical goods.
E. All of these.
______ are a boom-or-bust business.
A. Accessories
B. Professional services
C. Installations
D. Specialty
E. Supplies
Which of the following would be a type of advertising used in the awareness stage of
the adoption process?
A. Flash ads
B. Testimonials
C. Teaser campaigns
D. Point-of-purchase ads
E. Persuasive copy
Manuel Acala is a marketing analyst, but made only $28,000 last year because he was
employed only part of the year. He paid $5,000 in taxes, and spent another $10,000 for
food, housing, a car, and other "necessities." Manuel's discretionary income was:
A. $28,000
B. $13,000
C. $23,000
D. $18,000
E. There is not enough information to tell.
Which of the following is not a benefit that an intermediary is likely to provide for
producer-suppliers?
A. reduce credit risk
B. reduce the need to store inventory
C. reduce the need for marketing research
D. reduce the need for working capital
E. All of these are likely benefits provided to suppliers.
Many companies today choose to use ERP systems to manage information. ERP here
stands for:
A. entrepreneurship research program.
B. enterprise resource planning.
C. efficient resource production.
D. economic rate planning.
E. ergonomics research program.
The Foreign Corrupt Practices Act:
A. allows small grease money payments if they are customary in the foreign country in
which a firm is operating.
B. applies to foreign firms or individuals who accept payments while in the U.S.
C. prohibits U.S. firms from paying bribes to foreign officials.
D. All of these alternatives about the Foreign Corrupt Practices Act are correct.
Which of the following statements about the idea evaluation step is false?
A. Companies can often estimate likely costs, revenue, and profitability at this stage.
B. Product planners can compare the cost advantages and limitations of a new product
with those currently being used.
C. Product tests with customers are used to revise the early versions of the product.
D. This step should gather enough information to help decide whether there is an
opportunity.
E. None of these statements is false.
Sellers pay a fee to use the "Sunkist" brand on more than 400 products in 30 countries.
Sunkist is a(n) ___________ brand.
A. manufacturer's
B. individual
C. dealer
D. licensed
E. specialty
What is the best way to ship Spring tulips from Amsterdam, Netherlands, to Rome,
Italy?
A. Water
B. Truck
C. Air
D. Rail
E. Pipeline
When Ariat gave boots away to popular rodeo riders, other riders began asking for the
Ariat brand and Western stores were eager to sell the boots. Ariat used _____________
groups to influence consumer behavior.
A. social
B. family
C. reference
D. cultural
E. opinion
Which of the following is a common cause of new product failures?
A. The product fails to offer the customer a unique benefit.
B. The company tries to follow an organized new-product development processrather
than using a faster and more spontaneous, "race-to-market" approach.
C. The managers worry too much about the competition.
D. The company delays putting the product on the market until it develops a complete
marketing plan.
E. All of these are common causes of new product failures.
