Which of the following is a product adoption force affecting new product penetration?
A) felt need
B) personal risk
C) ease of use
D) trialability
E) observability
Which of the following is a favorable condition for implementing penetration pricing?
A) quality-sensitive customers
B) less competitors
C) less substitutes
D) high sustainable advantage
E) easy competitor entry
Which of the following is true of skim pricing?
A) Skim pricing is most profitably used in the decline stage of the product life-cycle.
B) Skim pricing is most useful to a business when there are many competitors in the
market offering equivalent products.
C) Skim pricing is most effective when product differentiation is diminishing, potential
customers are price sensitive, and many competitors or substitutes exist.
D) In skim pricing, a company tries to keep its costs as low as possible and to offer a
low price that no competitor can beat.
E) Skim pricing is viable when a business has a sustainable differentiation advantage in
a quality-sensitive market with few competitors.
An ad campaign buys a constant amount of GRPs throughout the year, and increases the
GRP total during the weeks leading up to the most extensive purchasing period of the
year is using a ________ message reinforcement strategy.
A) distributed
B) random
C) deep line-up
D) pulsing
E) heavy-up
Which of the following statements is true about reverse innovation?
A) It involves learning what customers want but cannot get from existing products.
B) It refers to a new product that fails to address customers’ needs.
C) It refers to gradual product improvements that come from technological
developments.
D) It starts by encouraging intrapreneurs.
E) It refers to innovative ideas generated by employees within an organization.
Maher and Russell Inc. is a firm that manufactures home alarm systems Maher and
Russell Inc. has an overall perceived performance score of 85. This indicates that
Maher and Russell home alarm systems ________.
A) have a relative advantage of 85% due to the brand reputation
B) have a relative market share of 15%
C) have a relative cost of purchase index of 85
D) are 15 percent behind the competition
E) are 85% above the average relative performance
________ pricing allows buyers of a product to select the performance configurations
that best fit their needs and price budgets.
A) Customerization value
B) Performance-based
C) Perceived-value
D) Life-cycle value
E) Value-in-use
Which of the following is an offensive strategic market plan?
A) a protect position strategy
B) an optimize position strategy
C) a monetize strategy
D) a new market entry strategy
E) a divest strategy
Milton-Normand Inc. obtains a return of 13.5% from total invested capital of $790.6
million. Calculate the net profit it generates.
A) $325.3 million
B) $159 million
C) $84.7 million
D) $233.5 million
E) $106.7 million
When assessing the current situation in the first step of a marketing plan, it is
recommended that one ________.
A) avoids making assumptions of any kind
B) eliminates areas that lack factual data from the purview of the plan
C) utilizes only concrete facts about the future projections and performance gaps
D) generates estimates based on knowledge and experience to be modified in the future
E) substitutes the data of current performance by that of the projected performance in
the plan
________ market metrics include customer retention and revenue per customer.
A) Competitiveness
B) Forward-looking
C) Backward-looking
D) Digital-media
E) Ongoing
Which of the following is an offensive strategic market plan?
A) a protect position strategy
B) an optimize position strategy
C) a monetize strategy
D) a new market entry strategy
E) a divest strategy
Under a defensive strategic market plan, a particular product generates sales revenue of
$32 million at a market share of 15 percent. If the business generates a gross profit of
$7 million, calculate the percent margin on sales realized by the business.
A) 21.8%
B) 46.8%
C) 10.5%
D) 38.6%
E) 15%
A business’s market share is 6% and it has a share development index of 72. Calculate
its share potential index.
A) 14.6%
B) 22.8%
C) 36%
D) 18.5%
E) 8.3%
Defensive strategic market plans are strategies that ________.
A) have a 3- to 5-year time horizon
B) require investment in order to produce sales growth
C) are not particularly effective at growing sales revenue
D) limit short-run profit performance
E) improve the long-run share position
Zitko Inc. is a manufacturer of consumer goods products. It has 75 million shares in the
market and generates a net profit of $125 million. Its stock price is $60 and it has a
capital cost of 10% for $850 million of capital invested. Its other expenses, including
interest and taxes, amount to $240 million.
Mini-Case Question. What is Zitko’s PE ratio?
A) 42.6
B) 35.3
C) 26.5
D) 15.5
E) 7.8
AVB Inc. is a business that produces automobile parts. The plan and the actual
performance of the business are shown in the table.
Mini-Case Question. Calculate the volume variance of the business.
A) -$72,000
B) $72,000
C) $80,000
D) -$80,000
E) $64,000
M.L. Manufacturers Inc. is an American clothes manufacturing firm that sells women’s
fashion apparel under the brand name DressChic. After extensive market research, the
firm introduces a line of children’s clothes under the brand name Mischief and a line of
affordable work wear for women under the brand name DressSmart. In this example,
M.L. Manufacturers Inc. uses which of the following strategies?
A) a vertical brand-line extension strategy
B) a horizontal brand-line extension strategy
C) a new product-market brand extension strategy
D) a cobranding strategy
E) a product bundling strategy
In the context of market segmentation, interests, opinions, and leisure pursuits of
consumers are related to ________ segmentation.
A) demographic
B) psychographic
C) usage behavior
D) firmographic
E) geographic
Suppose the benchmark competitive product has a price of $300, costs $200 to install,
and averages $500 in usage and maintenance costs. Your product is priced at $400,
costs $100 to install, and averages $400 in usage and maintenance costs. In this
situation, the economic value of your product over the benchmark competitive product
is ________.
A) -$200
B) -$100
C) $0
D) $100
E) $200
The overall goal of compensation tied to market metrics is to immediately create
________.
A) motivation and responsibility
B) satisfaction
C) accountability
D) persistence
E) harmony
________ are most likely to recommend a company’s product to others.
A) Loyal customers
B) Captive customers
C) New customers
D) Repeat customers
E) Customer terrorists
A recent Consumer Reports study analyzed flat-screen TVs and found that the average
performance rating for all TVs tested was 80 with an average price of $340. Clarence
flat-screen TV has a perceived customer value of 30, and relative performance of 112.
What is the relative cost of purchase for a Clarence flat-screen TV?
A) 11.34
B) 340
C) 33.6
D) 82
E) 120
The ________ is equal to current market demand divided by market potential.
A) share development index (SDI)
B) market development index (MDI)
C) business share index (BSI)
D) market share index (MSI)
E) sales growth index (SGI)
Calculate the return on sales for Matt-Brine Inc., which has a net marketing
contribution of $450 million and total sales of $800 million. The other expenses,
including interest and taxes, amount to $250 million.
A) 25%
B) 20%
C) 30%
D) 10%
E) 45%
Which of the following is most likely to occur when price is inelastic?
A) A price decrease increases unit margin.
B) A price decrease increases gross profit.
C) A price increase reduces gross profit.
D) A price decrease hurts sales.
E) A price decrease reduces unit volume.
Reduce-focus pricing is most likely to occur in the ________ stage of the product life
cycle.
A) early
B) growth
C) mature
D) extinction
E) decline
Coller Inc. is an American firm that manufactures flat panel LCD computer monitors.
The firm has a 5% share of a 2 million unit market. The firm’s marketing department
calculates that its acquisition cost is $13 million and retention costs is $5 million. The
market for flat panel LCD computer monitors is in the late growth stage of the product
life cycle, and Coller currently sells its product for $2,000 and experiences variable
costs per unit of $1,600.
Mini-Case Question. Coller Inc., because of a weak competitive advantage, is unable to
produce desired levels of performance, and considers using a strategic market plan that
allows it to exit the market slowly. The firm decides to improve its short-run
performance by reducing marketing and sales expenses and systematically raising
prices. In this example, Coller Inc. is most likely to be using which of the following
defensive core strategies?
A) a decentralization strategy
B) a disintermediation strategy
C) a harvest for cash flow strategy
D) a divest for cash flow strategy
E) a reduce market focus strategy
What is the current market demand for Valiant running shoes if its market development
index is 64 and its market potential is 480 million?
A) 1333.3 million
B) 307.2 million
C) 750 million
D) 172.8 million
E) 721.8 million
Calculate the total volume of units sold by a business if there is a market demand of
550,000 units and the business has a market share of 25%.
A) 292,560
B) 440,650
C) 137,500
D) 325,000
E) 110,190