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Almost every business transaction in our modern economy involves an exchange of
money.
Personal selling is important for new unsought products, but it tends not to be important
for regularly unsought products.
A product-market segment is "operational" if it is big enough to be profitable to the
firm.
Industry profits usually decline steadily during the market maturity stage of the product
life cycle.
If demand is irregular, a firm's production flexibility is likely to influence the severity
of stock-out problems in the channel of distribution.
The publicity method called "pass-along" is rarely successful because people don't trust
other people.
Sales and profits usually move together over time during the product life cycle.
Both GDP and GNI measures of national income.
Capital requirements are likely to be less when intermediaries take on much of the
responsibility for promotion in the channel.
"Supercenters" are very large stores that specialize in selling a big variety of
infrequently purchased products that would otherwise be hard for consumers to find.
All large organizations have secure information technology security systems that
prevent them from being hacked.
More than half of all agent wholesalers are manufacturers' agents.
Market segmentation says that target marketers should develop one good marketing mix
aimed at a fairly large market.
Sales promotion problems are likely to be greater when an advertising or sales manager,
instead of a sales promotion manager, has responsibility for sales promotion.
A weakness of the canned approach is that it treats all potential customers differently.
Sales growth is faster when the product can be used on a trial basis.
The Japanese success showed that one of the biggest costs of poor quality is lost
customers.
Because the cultural and social environment tends to change slowly, firms should try to
identify and work with cultural attitudes rather than trying to encourage big changes in
the short run.
Branding is more likely to be successful if the product is the best value for the price,
and quality can be consistently maintained.
Meeting the competitive price often makes sense for a firm in an oligopoly situation,
because setting a price above the market will usually result in a large loss of sales it
might have gotten at the competitive price.
It is the job of a sales promotion specialist to come up with an effective promotion
blend.
Of the four types of opportunities firms can pursue, diversification is the easiest to
evaluate and involves the least risk.
A sales promotion can cost more than it adds in sales.
When a firm is a virtual corporation, it acts primarily as a producerand leaves it to
another firm to coordinate functions such as marketing, finance, and human resources.
The 'supply chain" concept refers to the idea that distribution can usually be reduced if
the firm that is the "weakest link" in the channel of distribution is eliminated.
Government is one of the smallest groups (in sales volume) of customers in the United
States.
The legal environment sets the maximum standards of ethical behavior in a society.
The adoption curve concept suggests that some groups within a market tend to be
leaders in accepting new ideas.
One of the big problems with using an advertising agency is that the advertiser must
stick with the agency for a long timeat least two yearseven if the agency's work is not
satisfactory.
Wholesalers are adapting their marketing strategies and changes are under way even
though they may be invisible to consumers.
Firms that use direct marketing promotion may or may not use direct distribution.
Reference groups are more important when others will be able to 'see" which product or
brand we're using.
The objectives of a firm should direct the operation of the marketing department, but
aren't important to the rest of the business.
The effectiveness of advertising is best measured by relying on the judgment of creative
people and advertising "experts."
Outsourcing reduces coordination and logistics problems if several firms are involved
in different parts of production.
Indirect competitive advertising aims for immediate buying action while direct
competitive advertising aims for future buying action.
Agent wholesalers do not own the products they sell, but they usually perform even
more functions than a service wholesaler.
VoiceSys, Inc. produces voice-mail switchboard systems used in large office buildings,
hotels, and other facilities. VoiceSys is short of cash, but its products are so profitable
and are selling so well that it has decided to buy more production equipment from one
of the many suppliers that serve its industry. This example illustrates:
A. how installations are a boom-or-bust industry.
B. why installations may have to be leased or rented.
C. derived demand.
D. All of these alternatives are correct.
Which of the following statements concerning social class is FALSE?
A. Income by itself is usually a good measure of social class.
B. In most countries, social class is closely related to a person's occupation.
C. In most countries, there is a general relationship between income level and social
class.
D. Almost every society has some social class structure.
E. The U.S. class system is far less rigid than those in most countries.
The text discusses a four-level hierarchy of needs. Which of the following is NOT
included in that model?
A. Social needs.
B. Psychological needs.
C. Safety needs.
D. Physiological needs.
E. Personal needs.
Regarding the use of funds generated within the firm:
A. Reinvesting cash generated from operations is usually more expensive than
borrowing money.
B. A company with a product that has significant growth potential should invest the
earnings from that product to salvage declining products.
C. Indirect distribution usually requires more investment capital for a producer than
does direct distribution.
D. When finances are tight, companies should look for strategy alternatives that help
get a better return on money already invested.
E. All of these.
The president of a financial services company says that her new marketing manager has
changed things a lotmaking long-range plans about where the firm should focus its
effort, and coordinating the decisions about what services to offer and how they should
be promoted and priced. It seems that this company is just moving into the:
A. marketing company era.
B. sales era.
C. production era.
D. marketing department era.
E. simple trade era.
Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories
(SGCA), is reviewing her company's plans for the coming year.
SGCA sells its products through retail computer dealers and some specialty gaming
stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide,
but in California is carried in only 10 percent of stores. So, Kayla has set an objective of
being in 25% of all retail computer stores in California within one year.
SGCA plans to introduce a new SuperDuperGamer model with special features that fits
its target market of teen and young adult gamers. The SuperDuperGamer uses a new
technology and is expected to be a breakthrough product, but it will be important to
build awareness for it to succeed. So, the advertising objective is for 40% of SGCA's
target market to be aware of the new SuperDuperGamer model within 3 months. SGCA
also wants to help its retailers reduce their current stock of SuperGamer computers
before the new model comes out in a month. The SuperGamer has been on the market
for two years and has been a top seller in the category. SGCA's advertising objective for
the SuperGamer computer is to reduce current dealer stock by 80% within the next
month.
SGCA is also introducing a SuperEnhancer sound card, which is designed to
significantly enhance the game-playing experience with older computers. Research with
gamers show that it is very well received, so the advertising objective for the
SuperEnhancer sound card is to gain 40% market share among all gaming-specific
sound cards in the next year. To help achieve that objective, Jurgenson is planning to
use an ad that shows the sound card and a game player being knocked off his chair by
the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the
SuperEnhancer Sound Beats All Others!"
If Jurgenson turns to an advertising agency for help, SGCA
A. will probably be required to sign a long-term contract.
B. find that most agencies would prefer to work with retailers rather than producers of
consumer products.
C. can expect the agency to be a specialist in planning and handling mass selling
details.
D. should not expect the agency to do much more than sell media time or space.
E. should allow the experts at the agency to refine the advertising objectives so that
they reflect the creativity of the ads.
Which of the following observations is true?
A. In an organization, opportunities rarely compete for capital.
B. A dividend refers to the money invested in a firm.
C. The chief operations officer usually handles money matters in a firm.
D. Marketing plans that are funded usually must work within a budget constraint.
E. There's no reason for a firm's marketing manager and financial manager to work
together since they are in different functional areas.
"Don't-rock-the-boat" thinking is most common when
A. a product is in the introduction stage.
B. the total market is not growing.
C. there is threat of intense competition.
D. a firm moves into international markets for the first time.
E. a product is in the growth stage.
Discrepancy of quantity is
A. the difference between the lines a typical producer makes and the assortment final
consumers or users want.
B. adjusting the quantities of products handled at each level in a channel of distribution.
C. collecting products from many small producers.
D. the difference between the quantities of products that it is economical for a producer
to make and the quantity final users or consumers normally want.
E. usually seen with producers who specialize by product.
Consumer product classes are based on ______________, while business product
classes are based on ______________.
A. how the product is to be used, the price for the product
B. how consumers shop for the product, how the product is to be used
C. the price of the product, the quality of the product
D. how the product is produced, how the product is sold
E. how the product is sold, how the product is produced
Which of the following statements about limited-function wholesalers is TRUE?
A. Cash-and-carry wholesalers serve small retailers but don't provide credit.
B. Truck wholesalers sell perishable products which other wholesalers prefer not to
carry.
C. Rack jobbers specialize in nonfood products that sell in small quantities.
D. Catalog wholesalers sell hardware, jewelry, sporting goods, and general
merchandiseoften catering to small industrial or retailer customers.
E. All of these statements about limited-function wholesalers are TRUE.
Evaluating opportunities in international markets is uniquely challenging for managers
because:
A. international variables are confusing and unfamiliar to outsiders.
B. there are so many opportunities from which to choose.
C. marketing in other countries is entirely different from marketing in a domestic
setting.
D. international consumers rarely share the same needs.
E. other nations do not welcome foreign businesses.
Which of the following pricing policies involves entering a market with a single low
price and not significantly increasing the price even upon gaining a major market share?
A. Introductory price dealing
B. Temporary price cut policy
C. Skimming price policy
D. Penetration price policy
E. Zone pricing policy
Data which have already been collected in a previous study are called __________ data,
while data that are generated by a phone survey this month of key customers are called
_______ data.
A. primary; secondary
B. primary; intranet
C. secondary; primary
D. secondary; experimental
E. intranet; sample
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.
SPI pays its salespeople a commission on each product they sell. The commission is:
A. part of the total cost but not specifically a fixed or a variable cost.
B. part of the total fixed cost.
C. not included in figuring average cost.
D. a variable cost.
E. none of these alternatives is correct.
Which of the following orderings suggests the amount of effort (from little to much)
that consumers are willing to spend in searching for the "right" product?
A. Heterogeneous shopping products, specialty products, unsought products
B. Convenience products, homogeneous shopping products, specialty products
C. Unsought products, homogeneous shopping products, convenience products
D. Staples, heterogeneous shopping products, unsought products
E. Homogeneous shopping products, heterogeneous shopping products, staples
Logs, fish, cotton, and strawberries can all be:
A. supplies.
B. raw materials.
C. component parts.
D. capital items.
E. accessories.
Sears' Kenmore brand of appliances sold in all Sears stores illustrates two kinds of
brands.
A. dealer and family brands.
B. local and national brands.
C. generic and family brands.
D. licensed and dealer brands.
E. manufacturer and family brands.
When setting salespeople's compensation level,
A. a company should pay everyone at least the going market wage for order getters.
B. salespeople should be the highest-paid employees in the company.
C. order takers should be paid more than order getters.
D. the first step is to write job descriptions.
E. None of these alternatives is correct.
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 Closet"?
A. Market development
B. Sales decline
C. Market maturity
D. Market introduction
E. Market growth
The idea that retailers will start to sell a new product that offers a profit margin higher
than what they achieve on their traditional product line is consistent with the
A. marketing concept.
B. operating philosophy of most limited-line retailers.
C. wheel of retailing concept.
D. scrambled merchandising concept.
E. None of these is a good answer.
Regarding wholesaling, which of the following is(are) true?
A. Merchant wholesalers have higher sales than agent wholesalers, but their costs (as a
percent of sales) are over three times as high.
B. There are many more manufacturers' sales branches than merchant wholesalers.
C. Manufacturers' sales branches have higher costs than agent wholesalers and account
for a smaller percentage of total sales.
D. Good marketing managers select the type of wholesaler with the lowest cost when
planning channels of distribution.
E. All of these alternatives about wholesaling are true.
Which of the following statements about ideal market exposure is true?
A. As a firm goes from exclusive to intensive distribution, it loses progressively more
control over price and service offered by retailers.
B. A producer usually should seek maximum market exposure.
C. Intensive distribution means trying to sell through all retail stores.
D. It is necessary to get almost 100 percent market exposure to justify national
promotion.
E. All of these statements about ideal market exposure are true.
Which of the following is a strategic decision area that is a part of the component of
place in the marketing mix?
A. Product lines
B. Quality level
C. Market exposure
D. Promotion blend
E. Allowances
Which of the following is not an example of price?
A. college tuition.
B. doctor's fee.
C. apartment rent.
D. interest on a loan.
E. All of these are examples of price.
How customers think about the various brands in a market can be graphically
represented and tracked through _____.
A. segmenting
B. positioning
C. targeting
D. researching
E. clustering
The retail life cycle of which of the following took the longest to reach market
maturity?
A. Department stores
B. Mass-merchandisers
C. Supermarkets
D. Variety stores
E. Fast-food outlets
Identify the wholesaler type that carries a very narrow range of products, but offers
more information and service than other service wholesalers.
A. General merchandise
B. Limited-function
C. General-line
D. Specialty
E. Catalog
Since IKEA is known for fashionable modern-style home furnishings, the company
would be likely to screen out business opportunities in:
A. kitchenwares.
B. antique furniture reproductions.
C. bed and bath.
D. rugs.
E. interior lighting.
For six months Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing
manufacturer of organic foods. After graduating college, she worked for four years as a
sales rep for a nationally known food company. But, she jumped at the chance when
SDF contacted her about becoming marketing manager for its breakfast foods division,
which sells dry cereals and a pancake mix.
Kim spent the first few months on the job trying to better understand SDF, its product
line, and marketing strategy. She reviewed the company's past marketing research,
commissioned new research, and talked to both consumers and retailers. Now, the CEO
of the company wants her thoughts on what the company's marketing strategy should be
for the next few years.
Her research indicates that among cereal customers there are at least five segments of
customers who use SDF products.
a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals.
These customers often go out of their way to visit a store with their favorite SDF cereal
and buy only that product at the store.
b) Another segment, the regulars, buys SDF cereals without much thought. For them it
is just part of their routine and, if you ask them why they pick the cereal, they'd say it's
just a habit.
c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They
view all organic cereals as pretty much the same and buy whichever brand seems to
offer the best deal that week.
d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few
years ago the company took a strong stand in a presidential race-and these customers
resented it. Now, they boycott all SDF foods because of that incident.
e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but
who don't have much awareness of particular organic brand names.
In reviewing how SDF currently brands its products, Kim sees that it is using several
different approaches. The Sunny Day Foods brand is used on most products the
company sells. But a few years ago the company brought out an instant organic oatmeal
with the Hot n Healthy name. SDF also makes cereal sold by a health food chain; the
package for that chain uses the store's own name, Nature's Foods, as the brand name for
the cereal.
What best describes the level of brand familiarity that customers in "the politicos"
segment have with SDF?
A. Brand insistence
B. Brand rejection
C. Brand preference
D. Brand nonrecognition
E. Brand recognition
