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Service quality affects customer retention and profit in the numerator and ________ in
the denominator of the return on assets equation.
A) total income generated
B) return on sales
C) customer satisfaction
D) accounts receivable
E) accounts payable
Calculate the customer loyalty index if the customer history is 12, the purchase amount
is 38, the desire to repurchase is 50, the product preference is 20, and there is no
customer recommendation.
A) 30
B) 24
C) 50
D) 65
E) 92
Ford sells the Ford Fiesta automobile. This is an example of using a ________ branding
strategy.
A) company name
B) company and brand name
C) brand and subbrand name
D) company and product name
E) company, brand, and product name
Dow Corning has been a market leader in silicon technology applications for over 50
years. Its products span many market applications in electronics, construction, health
care, and a multitude of industrial applications. However, as some of its product-market
applications reached the mature stage of the product life cycle, they became less
competitive. Dow Corning's full service consultative engineering approach did not work
in more mature, price-sensitive market applications. It was also unprofitable for Dow to
pursue these customers as they represented a majority of target customers but only
represented 20% of the revenue potential for the total market for their products.
Mini-Case Question. In which of the following situations is Dow using a mixed channel
system?
A) Instead of using salespeople, Dow uses manufacturer's representatives and brokers,
and pays them a commission on every product sold.
B) Retailers take over Dow's sales and point-of-purchase distribution in consumer
markets, but distributors or dealers assume this responsibility in B2B markets.
C) Dow uses primarily direct mail and catalog sales to market its products, but also uses
telemarketing to target large customers.
D) Dow distributes its products directly to customers in the innovation/technology
segment but finds that use of wholesale distributors and dealers are more efficient in
reaching the service quality segment.
E) Dow uses manufacturers’ representatives, sales agents, and brokers who assume the
selling responsibility for the business and receive a commission when a sale occurs, but
do not take title to the products.
Victor has determined that along the share-development path, his business should
perform at a 90% level of product awareness, 75% in intentions to purchase, 75% in
product availability, and 65% in rate of purchase. If the share potential index for
Victor's business is 30%, at what level of product preference should his business
perform?
A) 52%
B) 60%
C) 73%
D) 91%
E) 82%
Businesses that lack both customer knowledge and competitor knowledge, and make
competitive moves from an internal perspective with no real market knowledge are said
to be working with a(n) ________ strategy.
A) oblique
B) inside-the-box
C) reactive
D) decentralization
E) disintermediation
Which of the following is considered to be a marketing performance metric rather than
a financial performance metric for a company?
A) gross profit
B) customer retention
C) sales-to-assets ratio
D) accounts receivable
E) earnings per share
Which of the following defensive strategies allows a business to exit the market
rapidly?
A) a monetize market strategy
B) a disintermediation market strategy
C) a divest market strategy
D) a harvest market strategy
E) an optimize market strategy
Which of the following is true of penetration pricing?
A) Penetration pricing is a variation of a premium pricing strategy.
B) Penetration pricing is a mass-market strategy rather than a niche strategy.
C) Penetration pricing is best used when there are no competitors in the market and
entry is difficult.
D) Penetration pricing is used in a market where product differentiation is high.
E) Penetration pricing is most effective when potential customers are quality-sensitive
rather than price-sensitive.
Which of the following is true of businesses with a strong customer focus?
A) A customer-focused business lacks a long-term perspective.
B) A customer-focused business realizes higher profits over the short-term.
C) In a customer-focused business, shareholders are more interested in long-run
survival than immediate earnings.
D) In a customer-focused business, managers are usually judged on the last quarter's
results, and not not on their efforts to ensure the long-run survival of the business.
E) A customer-focused business is in synch with customers' needs and requirements, not
with competitors' strategies.
Calculate a business's return on sales when it makes a net profit of $500,000 from sales
of $3 million.
A) 60%
B) 16.7%
C) 30.5%
D) 50.5%
E) 24.8%
The maximum number of customers who can enter the market given a specific served
market definition is known as ________.
A) market penetration
B) market potential
C) rate of entry
D) current market demand
E) market diversification
If a business produces 800,000 units and the market demand for the product is 4 million
units, what is its percentage of market share?
A) 8%
B) 20%
C) 16%
D) 40%
E) 80%
Which of the following is a product position factor influencing a business's market
share?
A) sales force
B) service quality
C) retailing and merchandising
D) physical distribution
E) media advertising
Which of the following is true about a strategic market plan?
A) It is a short-term marketing strategy.
B) It is referred to as tactical marketing strategy.
C) It lacks specific performance objectives.
D) It has a 1-year time horizon.
E) It has a 3- to 5-year time horizon.
Owning the marketing plan, a force that contributes to the successful implementation
of a marketing plan, involves ________.
A) developing and using detailed action plans
B) using an adaptive rollout
C) using feedback measurements
D) promoting the business-as-usual routine
E) adapting to changing market conditions
Aster Inc. is an American firm that manufactures motorcycles under the brand name
AsterBikes. The firm conducts a market research to identify alternative sources of sales
growth by leveraging its core competencies and competitive advantages. Based on its
market research and analysis, the firm decides to enter the automobile industry, and
introduces a line of Aster ComfortCars. In this example, Aster Inc. is using which of the
following offensive strategies?
A) enter unrelated new markets
B) develop new markets
C) harvest for cash flow
D) divest for cash flow
E) enter related new markets
In the context of SWOT analysis, which of the following would be a strength for a
company already existing in the market?
A) a growing market
B) a local environment that is conducive to growth of the business
C) an openness of the governmental mechanism to foreign investors in the business
D) a low level of barriers to entry in the market
E) a high level of branding that leads to market recognition
Calculate the net marketing contribution if the gross profit generated is $30 million and
the total marketing and sales expenses is $15 million.
A) $15 million
B) $45 million
C) $30 million
D) $500,000
E) $2 million
Dairy Products Inc. is a manufacturing firm that produces and sells a line of butter
packs under the brand name Melt Butter. The firm created Melt Tasty Butter and Melt
Low-Fat Butter so that health-conscious customers can quickly differentiate its benefits.
In this example, Dairy Products Inc. is using which of the following brand encoding
strategies?
A) company name only
B) company and brand name
C) brand and subbrand name
D) brand and product name
E) brand name only
The second step in the situation analysis level of a marketing plan involves ________.
A) conducting a performance review
B) developing a revenue plan
C) performing a SWOT analysis
D) developing a performance plan
E) initiating a share valuation process
Which of the following is true about lead customers?
A) They are more price sensitive.
B) They are benefit driven.
C) They possess less market knowledge.
D) They are more dependent on what others do or think than most people.
E) They do not purchase products that the mainstream market does not buy.
OrganicMeals Inc. is an American firm that manufactures frozen, vegetarian burgers
made from organic ingredients under the brand name VegDelite. The firm markets a
core product, the Chipotle Veg Burger, under the VegDelite brand. After success of its
core product, the firm adds other burgers under the VegDelite brand, such as the
Crunchy Garden burger, the Vegan Special burger, and the Spicy Trip burger. In this
example, OrganicMeals 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
Which of the following statements regarding customer satisfaction is true?
A) Very satisfied customers usually switch back and forth with competitors' products.
B) Over 90 percent of dissatisfied customers lodge complaints.
C) Very satisfied customers often buy higher margin products and extra services.
D) Dissatisfied customers who complain cannot usually be retained.
E) Satisfied customers are very loyal and buy in relatively large amounts.
Which of the following is true about pure product bundling strategy?
A) It is shown to be more profitable than mixed bundling strategies.
B) It takes advantage of the potential synergy of two brands that share a common
market space.
C) It involves entering new product-markets.
D) It creates a base from which to introduce line extensions that enhance market
penetration at a lower cost.
E) It involves the sale of two or more products at an overall price that is cheaper than
purchasing the products separately.
Which of the following is true about a pulsing message reinforcement strategy?
A) It is more expensive than maintaining a high level of awareness with traditional
media.
B) It can be used for products that are purchased more frequently at some times of the
year than at others.
C) It involves maintaining a certain level of base advertising at all times.
D) It reduces copy wear-out due to overexposure to the same messaging.
E) It involves increasing the message frequency just before and during the prime buying
period of a product.
Which of the following statements is true with regard to a percent-of-sales marketing
and sales budget?
A) It works by implementing a harvest strategy that requires more than the normal
percentage of sales to achieve share and sales objectives.
B) An aggressive growth strategy in this budget slowly reduces marketing and sales
expenses as a percentage of sales while market share is harvested over time.
C) The cost of customer acquisition and retention is the primary determinant of the
budget and resource allocation under this approach to budgeting.
D) It focuses on previous experience, but it could vary from past experience depending
on the nature of the strategic market plan.
E) It specifies each marketing task and the amount needed to accomplish it, given a
particular strategic market plan and the task-related marketing mix strategies.
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
George recently purchased a computer from HardDigits Inc., a firm that sells assembled
desktop computers and other electronic products. Included in his purchase were an
inkjet printer, a web camera, and an office software program that included a word
processor, a spreadsheet, and a photo editor. The price he paid for the computer,
software, and accessories was lower than the total price that he would have paid if he
had purchased the products separately. In this example, HardDigits Inc. uses which of
the following product line extension strategies?
A) product diversification
B) umbrella branding
C) product cobranding
D) product bundling
E) disintermediation
Which of the following is true about a marketing cost scope effect?
A) It refers to a reduction in the sales expenditure, to increase profit margins.
B) It refers to production process improvements that are the result of learning.
C) It refers to the use of innovative marketing strategies to increase market share.
D) It refers to cost efficiencies derived from product line extensions.
E) It refers to the cost efficiency achieved by avoiding brand extensions.
Calculate the volume(units) if a firm has a gross profit of $60 million and a margin
price of $300 per unit.
A) 180,000 units
B) 18,000 units
C) 200,000 units
D) 30,000 units
E) 16,000 units
Which of the following statements is true of a "new emerging market"?
A) It refers to a market with very high levels of competition.
B) It refers to a market where the number of current customers is small.
C) It refers to a market that has very low market potential.
D) It refers to a market that is completely saturated, and does not provide much growth
potential.
E) It is characterized by low levels of risk.
Which of the following would be considered as a current performance variable under
the situation analysis level of a marketing plan?
A) channels to the market
B) communications strategy
C) performance gap
D) competition and industry
E) break-even sales figures
