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Within the dimensions of service quality, which of the following is a "quality
enhancer"?
A) service reliability
B) performance
C) customer empathy
D) appearance
E) reputation
A large-segment strategy differs from a mass-market strategy in that a large-segment
strategy ________.
A) addresses one set of core customer needs
B) has no segment focus
C) is used when demographics are not distinctive
D) is used when differences in customer needs are small
E) allows customers to build their own products
Unilever has over 10 personal care brands, each with a unique focus and product
positioning strategy. Buyers would not know that Unilever is the manufacturer of a
specific brand unless they looked closely at the small print on the package. This is an
example of using a ________ branding strategy.
A) company name only
B) brand name only
C) company and brand name
D) brand and subbrand name
E) company, brand, and product name
Norton has determined that along the share-development path, his business should
perform at an 85% level of product awareness, 76% in product preference, 68% in
product availability, and 92% in rate of purchase. If the share potential index for
Norton's business is 25%, at what level of purchase intentions should his business
perform?
A) 55%
B) 97%
C) 83%
D) 74%
E) 62%
The primary purpose of company metrics is ________.
A) to achieve maximum customer satisfaction
B) to make optimal use of the organization's resources
C) to maintain an ongoing measure of marketing performance
D) to maximize the organization's return on assets
E) to minimize the defects in the organization's products
Church & Dwight, Co. is a U.S. manufacturer of household products. The firm owns a
line of toothpastes under the brand name Arm & Hammer Peroxicare. The firm also
sells other products under the brand name Arm & Hammer. Arm & Hammer Peroxicare
is an example of which of the following encoding strategies?
A) company name
B) company and brand name
C) brand and subbrand name
D) company and product name
E) brand name only
Organic Harvest Inc. is an American manufacturing firm based in California. The firm
manufactures and sells a line of organic fruit juices under the brand name
OrganicDrinks. The firm also markets a line of medicinal health drinks, under the brand
name HerbalDrinks.
Mini-Case Question. Organic Harvest Inc. introduces a new line of personal care
products, including soaps and shampoos that are made from natural ingredients. The
firm markets these products under brand name NaturalCare. In this example, Organic
Harvest Inc. uses which of the following product-line extension strategies?
A) vertical brand-line extension
B) horizontal brand-line extension
C) new product-market brand extension
D) cobranding
E) product bundling
Kate has determined that along the share-development path, her business should
perform at a 85% level of product awareness, 75% in product preference, 60% in
intentions to purchase, 90% in product availability, and 70% in rate of purchase. Kate's
share development index is 50. What is the market share index for Kate's business?
A) 12%
B) 6%
C) 18%
D) 22%
E) 28%
Vincent & Rankine is a company that spends billions of dollars annually on marketing
communications, primarily because they have many brand offerings in several product
categories. Some of these expenditures are used on marketing communications targeted
at end-user consumers of their brand, and other expenditures are used on marketing
communications targeted at intermediaries in the channel of distribution.
Mini-Case Question. If Vincent & Rankine realizes a sales increase of 1.2% and an
increase of 4.8% in ad expenses in that period of time, what is the advertising elasticity
for the brand?
A) 0.025
B) 0.25
C) 2.5
D) 25
E) 250
A business could elect to pursue a large-segment strategy when ________.
A) it wants to provide customized products
B) a market is segmented and marketing resources are limited
C) demographics are not distinctive
D) differences in customer needs are small
E) it wants to carve out a niche within a segment using a highly refined marketing effort
directed at an overlooked group of customers
Which of the following benefits with respect to a customer's service needs and
expectations must a business consider to determine if a channel system is viable?
A) product quality
B) product assortment
C) availability/delivery
D) product form
E) image benefits
Ace Motors recently introduced a hybrid automobile named Opus. Since its
introduction, this offering has achieved a 1.2% market share in this market. Ace Motors
has conducted research in an effort to assess its opportunity for market share
development. The table below indicates consumers' current response at each step along
the share performance path for Ace Motors' Opus hybrid automobile as well as the
potential performance for each of the share performance metrics:
Mini-Case Question. What is Opus's current market share index?
A) -14%
B) 1.2%
C) 5.9%
D) 6.2%
E) 20.2%
Which of the following addresses emotional benefits tied to the customer's personal
psychological needs?
A) cost of purchase
B) maintenance cost
C) product availability
D) brand personality
E) disposal cost
Which of the following is a component of the marketing strategy step of building a
marketing plan?
A) situation analysis
B) SWOT analysis
C) break-even analysis
D) communications strategy
E) marketing profitability strategy
A recent Consumer Reports study analyzed consumer ovens and found that the average
performance rating for all ovens tested was 70 with an average price of $110.
QuickBake oven, a consumer oven, has a relative performance of 130 based on a
weighted average of product performance, service quality, and brand reputation. It has a
relative cost of purchase of 90. What is the perceived customer value of QuickBake
oven?
A) 60
B) 77.7
C) 40
D) 130
E) 120
The marketing and sales budget of Toby Inc. is estimated to be $450 million. It has
retained 800,000 customers and has acquired 350,000 new customers. The marketing
administration cost of the company is $150 million. If the acquisition cost per customer
is $350, calculate the approximate retention cost per customer.
A) $168
B) $222
C) $320
D) $124
E) $85
Calculate the total number of manufacturers, if 15 transactions are made per year with
10,000 retailers. The total number of transactions is 3 million transactions per year.
A) 25
B) 10
C) 20
D) 35
E) 50
To estimate the lifetime value of a customer at a given rate of customer retention, you
need to compute the ________.
A) net present value of the customer's cash flow
B) customer satisfaction index
C) future customer value
D) customer loyalty index
E) gross percent margin of the company
S.K Investment Group is a firm based in Chicago that provides financial services to its
clients. The marketing department of the firm segments its market based on the amount
invested, frequency of transactions, and type of investments purchased. The firm creates
5 meaningful categories for each of the 3 variables. Calculate the possible market
segments for S.K Investment Group.
A) 642
B) 590
C) 324
D) 278
E) 125
VitaMind manufactures a line of vitamins and supplements, and distributes them
through retail health food and organic grocery stores. While this young company is
currently realizing profits, the owners want to plan for future growth and are beginning
the formal market planning process.
Mini-Case Question. In which of the following steps of the market planning process
will VitaMind need to conduct a thorough examination of market forces, competitive
position, and current performance?
A) situation analysis
B) revenue planning
C) performance gap
D) marketing mix strategy
E) performance review
When the management team noted the increased interest in bikes as a mode of
commuting, bicycle manufacturer Sensta introduced utility bikes aimed at the urban
commuter. In which of the following cases is the company following a plus-one pricing
strategy?
A) Sensta entered the market with a bike priced at $2,500, and later, as more
competitors entered the market, reduced the price to $1,000.
B) As the market for bikes in a particular city became saturated, Sensta raised the prices
of its bikes hoping to gain maximum profit before exiting the market.
C) With several competitors with similar product features in the utility bike market,
Sensta concentrated on the sturdiness of its bikes, and raised the price of the basic
model from $500 to $1,000.
D) Sensta manufactures a basic model priced at $500, a bike with more features, priced
at $1,500 and a deluxe model priced at $3,000.
E) When Sensta entered the market, there were already competitors in the
$1,000-$2,000 price range. Sensta introduced three bike models in the $500-$700 price
range in order to capture market share, and later raised the prices of its products.
Which of the following is a part of a company's culture?
A) number of employees
B) years in business
C) innovativeness
D) number of locations
E) sales volume
Which of the following is a customer adoption force?
A) felt need
B) affordability
C) easy of use
D) preferred availability
E) desired performance
The goal of a monetize strategy is to ________.
A) diversify growth
B) develop new markets
C) extract the maximum short-run cash flow from the market
D) slowly withdraw a product from the market
E) quickly withdraw a product from the market
The uptime of database servers is weighed at 80 on relative importance, and your
database server scored 7 out of 10. Your four competitors score 5, 6, 8, and 3. What is
the relative advantage score of your database server with regards to uptime?
A) 60
B) 560
C) 7
D) 80
E) 40
Which of the following strategic market plans are usually growth-oriented and are more
likely to occur in the growth stage of a product-market life cycle?
A) disintermediation strategies
B) defensive strategies
C) centralization strategies
D) decentralization strategies
E) offensive strategies
Which core defensive strategy is appropriate for a business with a very strong
competitive advantage operating in a very attractive market?
A) a harvest strategy
B) a monetize strategy
C) an optimize strategy
D) a protect strategy
E) an invest strategy
Which of the following is true of improving cost efficiency of the marketing process?
A) If a business does not make products available at customers' preferred points of
purchase, it lowers the cost of the transaction.
B) For undifferentiated products, customers' transaction costs are high even when
availability is unrestricted.
C) The more undifferentiated a product is, the greater its perceived value.
D) Customer value can be increased by lowering the cost of reaching customers.
E) The general assumption is that the more intermediaries a channel system has, the
lower the total cost of purchase.
Which of the following would be considered an indirect customer touch point?
A) in-store interactions
B) news articles
C) return counters
D) voice mail systems
E) service calls
What is the marketing return on sales (marketing ROS) for a product line that generates
$40 million in sales revenues with a net marketing contribution of $32 million ?
A) 75%
B) 80%
C) 100%
D) 125%
E) 150%
A television advertisement achieves 200 GRPs over a 4-week exposure period. The
advertisement is run in alternating 4-week periods in which during the intervening
4-week period no messages are run. This is an example of which of the following
approaches to message reinforcement?
A) benchmarking
B) bundling
C) cobranding
D) pulsing
E) brand encoding
The share development index is equal to ________.
A) market share index multiplied by share potential index
B) market share index divided by share potential index
C) market share index divided by the total volume of units sold
D) share potential index divided by the total volume of units sold
E) share potential index multiplied by the total volume of units sold
Which of the following is true of needs-based market segments?
A) Relevant demographics that cause differences in needs include investments, size of
investment portfolio, and portfolio diversification.
B) To make the segments actionable, the observable demographics and behaviors have
to be determined.
C) The main advantage is that individual customers who fall into each segment can be
identified.
D) The main disadvantage is that the segments are not directly based on specific
customer needs.
E) The usage behaviors that cause differences in needs include income and assets.
