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 margin variance of the business.
A) -$72,000
B) $72,000
C) $80,000
D) -$80,000
E) $64,000
Which of the following allows a company to isolate the components of marketing
performance to understand better how each component contributes to the actual net
marketing contribution?
A) a SWOT analysis
B) a situation analysis
C) a performance analysis
D) a post-hoc analysis
E) a variance analysis
A market-based business looks at customers as ________.
A) lifetime partners
B) individual purchase transactions
C) conquests
D) short-term relationships
E) extraneous variables
The net and economic profits generated by Hoddle Inc. are $320 million and $16
million, respectively, at 8% cost of capital. Calculate the total capital invested.
A) $3.8 billion
B) $5.6 billion
C) $1.25 billion
D) $8.8 billion
E) $840 million
________ programs allow a business to test price-performance preferences and to
evaluate its product’s value on the basis of the business’s competitive position.
A) Harvest technique
B) TURF analysis
C) Discourse analysis
D) Conjoint analysis
E) SWOT analysis
Calculate the total volume of units produced if there is a market demand of 50,000 units
at a market share of 10%.
A) 292,560
B) 440,650
C) 500,000
D) 325,000
E) 100,000
Which of the following is an example of an indirect B2C marketing channel?
A) Wellspring Cosmetics sells its products exclusively through its monthly catalogs,
mailed to a subscriber list.
B) GTB Computers uses its own sales force to initiate sales contacts, but uses external
local dealers to provide products and after-sales services.
C) Radix Inc., a manufacturer of automotive parts, sells its products to a number of
automobile companies.
D) More4Less.com buys products from manufacturers and sells them to consumers
through its Web site.
E) Apparel retailer UrbanScene elected to close all its brick-and-mortar stores and sell
products only through its online storefront.
Which of the following is true regarding an inside-the-box strategy?
A) It is an overreaction to customer demands due to limited competitor knowledge.
B) It leverages a knowledge advantage with respect to customers and competitors.
C) It is an overreaction to competitor moves due to limited customer knowledge.
D) It is based on minimal customer and competitor knowledge.
E) It is based on extensive competitor knowledge, but little or no customer knowledge.
________ are tools that marketing managers use to assess the merits of a proposed
marketing communication and the strategy behind it.
A) Touch points
B) Value propositions
C) Storyboards
D) Strategy functions
E) Remote segments
Which of the following marketing channels has the most potential for expanding
customer reach at the lowest cost?
A) telemarketing
B) personal selling
C) trade shows
D) catalog marketing
E) digital marketing
The marketing and sales budget of Fisk Inc. is estimated to be $500 million and its
marketing administration cost is estimated to be $120 million. The acquisition cost per
customer is $400 and it is 10 times more than the retention cost per customer. If
320,000 customers are retained, what is the total number of new customers acquired by
Fisk Inc.?
A) 145,000 customers
B) 350,000 customers
C) 918,000 customers
D) 642,000 customers
E) 786,500 customers
The growth in the gaming console market led to the emergence of a gaming consoles
segment for products priced under $1,000. Though its current product line-up begin at
$3,000, Sentinel Inc., an American gaming equipment manufacturer, responded to this
need by launching a product, the Cerebro Console, priced at $920, designed for the
price-performance needs of the segment. Which of the following offensive strategies
did Sentinel Inc. use?
A) improve customer retention
B) improve customer loyalty
C) enter new market segments
D) harvest for cash flow
E) divest for cash flow
Calculate the percentage cost of goods sold by a business if the cost advantage index of
the business is 150 and the average percentage cost of goods sold by its top three
competitors are 40%, 50%, and 30%, respectively.
A) 150
B) 40
C) 60
D) 126
E) 70
The operating income of Carbon Footwear is $10 million. Its net marketing contribution
is derived from sales of $80 million and the marketing and sales expenses amount to
$15 million. The general and administrative expenses and other operating expenses
amount to $20 million.
Mini-Case Question. If the total sales revenue generated was $100 million, the
marketing ROS would be equal to the ________.
A) marketing and sales expenses
B) marketing ROI
C) operating income
D) net marketing contribution
E) general and administrative expenses
Modern Shades, a firm that manufactures cosmetic products for women, should have
had a market share of 8% in the cosmetics market, but owing to a variety of other
factors, its actual market share was only 5%. Furthermore, it was estimated that the
business’ market share index potential would be 15% if the business achieved the
desired level of customer response along the share development path. What is Modern
Lip’s share development index (SDI)?
A) 20
B) 33.3
C) 53.3
D) 67.5
E) 86.7
Which of the following statements is true?
A) The average profiles for profitable high-share and profitable low-share businesses
are almost identical.
B) A low-share business with above-average customer value is more profitable than a
high-share business with below-average customer value.
C) A low-share niche business’s prices are slightly above the average relative price
index of 100.
D) Profitable low-share niche businesses tend to have a wide product breadth.
E) Profitable low-share niche businesses tend to spend more on advertising relative to
the competition.
A(n) ________ strategy presents a generic value proposition built around the core
customer need and the business’s generic positioning strategy.
A) mass-market
B) large-segment
C) adjacent-segment
D) multi-segment
E) niche-segment
The three dimensions of competitive position are: a differentiation position, a cost
position, and a ________.
A) marketing position
B) buyer power position
C) price rivalry position
D) revenue position
E) channel access position
Which of the following types of costs is an allocated cost based on the use of the plant,
equipment, and other fixed expenses needed to run the production operation?
A) variable costs
B) manufacturing overhead costs
C) corporate overhead costs
D) research and development expenses
E) marketing sales and expenses
Which of the following metrics would a company most likely evaluate at the end of an
operating period?
A) inventory turnover
B) product defects
C) market share
D) customer satisfaction
E) late deliveries
Gross profit equals ________.
A) unit volume multiplied by margin per unit
B) unit volume divided by unit margin
C) (price minus variable cost) divided by unit volume
D) unit volume multiplied by price
E) market demand multiplied by market share
The objective of a ________ communication strategy is to motivate channel
intermediaries to carry a particular product or brand and, in this way, make it more
available to consumers.
A) push
B) pull
C) pulsing
D) lateral
E) heavy-up
A company has an operating income of $20 million and total fixed expenses of $10
million. 5 million units are produced at a margin of $6 per unit. What should the margin
per unit be if the company needs to achieve a break-even volume for the same number
of units?
A) $1 per unit
B) $2 per unit
C) $3 per unit
D) $4 per unit
E) $5 per unit
Which of the following strategies is referred to as the “workhorse” that has to succeed
in order for the strategic market plan to achieve both short- and long-run performance
objectives?
A) a harvest strategy
B) a marketing mix strategy
C) a defensive strategy
D) an offensive strategy
E) a monetizing strategy
Which of the following approaches to message reinforcement is most effective for
products that are purchased more frequently at some times of the year than at others?
A) an average frequency strategy
B) a gross frequency strategy
C) a pulsing strategy
D) a benchmarking strategy
E) a heavy-up exposure pattern
The process of taking a closer look at the customer ordering process from the
customer’s viewpoint, with the objective of uncovering any potential problems or
sources of frustration in the purchasing process is called ________.
A) lead user analysis
B) the Kano method
C) conjoint analysis
D) acquisition analysis
E) “staple yourself to an order”
Which of the following refers to expenses other than the purchase price that are
associated with the acquisition and use of a product?
A) fixed costs
B) ownership costs
C) variable costs
D) differentiation costs
E) opportunity costs
Which of the following is a form of the emphatic design?
A) creating a database of customers’ demographic details
B) filming customer product use
C) conducting an online survey of customers’ preferences
D) using social media to interact with customers
E) creating a database of customers’ buying habits
Helen has determined that along the share-development path, her business should
perform at a 80% level of product awareness, 50% in product preference, 80% in
intentions to purchase, 90% in product availability, and 70% in rate of purchase. Helen’s
actual market share is equal to 9%. What is the approximate share development index
(SDI) for Helen’s business?
A) 20
B) 37
C) 45
D) 50
E) 74
Calculate the price per unit if the variable cost per customer is $6 and the margin per
unit is $24.
A) $30
B) $4
C) $18
D) $15
E) $9
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. As part of its marketing communications effort, Vincent &
Rankine uses many forms of consumer-directed sales promotions, such as coupons,
rebates, sweepstakes, gifts, and rewards. Which type of communication strategy do
these types of tactics represent?
A) a decentralized communication strategy
B) a pull communication strategy
C) a centralized communication strategy
D) a pulsing communication strategy
E) a heavy-up communication strategy
Which of the following terms refers to an incremental implementation of a marketing
plan that allows for feedback and corrective adjustments early in the implementation
process?
A) adaptive persistence
B) adaptive rollout
C) channel strategy
D) marketing mix
E) benchmarking
A business identifies its key area of competitive weakness and then looks outside its
industry to another company that is recognized as a world-class performer in that area
in an attempt to emulate them. This process is referred to as ________.
A) ideal points mapping
B) product positioning
C) competitive benchmarking
D) perceptual mapping
E) competitive mapping