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The president of a major airline makes telephone calls to the top executives of several
other airlines asking them to "hold the line" and refrain from offering discounts on fares
for several key routes in order to improve profit margins. This practice could easily be
considered:
A. Dumping.
B. Price discrimination.
C. Price fixing.
D. Zone pricing.
E. None of these is a good answer.
A fast-food chain is redesigning its restaurants. One of the main questions facing the
chain's management is, "Should the new restaurant design include a salad bar?" A
researcher in the company finds an article in a restaurant trade magazine containing the
results of a study about salad bars. The results indicate that salad bars are costly to
maintain and are not a major attraction to consumers. Based on this information,
management decides that it will not have a salad bar as part of the new restaurant
design. This example illustrates the point that:
A. Situation analysis sometimes eliminates the need for conducting further research in a
problem area.
B. Situation analysis is very costly in terms of time and money.
C. Secondary data from sources outside the company is always better than secondary
data from sources inside the company.
D. Secondary data from private sources is always better than secondary data from
government sources.
E. Collecting primary data is always necessary in order to make good decisions.
Which of the following statements about "new products" is FALSE?
A. In order for it to be advertised as new, there should be a functionally significant
change in the productaccording to the FTC.
B. A product should be considered "new" by a particular firm if it is new in any way for
that company.
C. The FTC considers six months as the maximum time that a product should be called
"new."
D. According to the FTC, a product may be called "new" (for example, in advertising)
as long as the firm has made at least some minor change in the package or product.
E. A marketing manager should consider a product new if it is aimed at new markets.
Which of the following is an operational decision--rather than a strategy decision?
A. A decision to seek distribution only through the best retailers.
B. Selection of a specific target market.
C. A decision to maintain a "one price" policy.
D. Selection of a specific cable TV channel on which to advertise.
E. All of these are good examples of operational decisions.
Which of the following statements about branding is TRUE?
A. Customers are willing to buy by brand only when it assures "top quality."
B. Branding provides product identification for sellers but usually is not important to
consumers.
C. What brand is familiar often varies from one country to another.
D. Achieving brand familiarity is easy.
E. None of these statements about branding is TRUE.
Identify the INCORRECT observation about Asian Americans.
A. Asian Americans are the largest and fastest-growing ethnic group in the United
States.
B. The number of Asian Americans has more than tripled since 1980.
C. Asian Americans have the highest median family income of the major ethnic groups.
D. In 2010 they spent over $500 billion.
E. Because of their income, a lot of companies are targeting these consumers.
Indirect distribution typically requires less capital than direct distribution because:
A. agent wholesalers may take on much of the selling effort and not expect any
compensation until the revenue is in on what they've sold.
B. intermediaries may provide the capital required for logistics facilities.
C. merchant wholesalers and retailers usually pay for products when they purchase
them and then take over the costs of carrying inventory.
D. All of these.
E. None of theseindirect distribution usually requires more capital.
Macro-marketing:
A. is a social process.
B. tries to encourage "discrepancies of quantity" and "discrepancies of assortment."
C. tries to disrupt supply and demand.
D. tries to foster the many separations between producers and consumers.
_______ refers to producers holding title to goods and services that they themselves do
not want to consume and consumers wanting goods and services that they do not have.
A. Discrepancies of assortment
B. Separation of ownership
C. Discrepancies of quantity
D. Spatial separation
E. Separation in time
____ are educated guesses about the relationships between things or about what will
happen in the future.
A. Data insights
B. Observations
C. Situation analyses
D. Hypotheses
E. Marketing models
A firm may use all of the following methods for beating the competition except:
A. apply for patents.
B. seek a monopoly.
C. develop a sustainable competitive advantage.
D. conduct a competitor analysis.
E. utilize advanced technology.
Educated guesses about the relationships between things or about what will happen in
the future are:
A. theories.
B. laws.
C. facts.
D. hypotheses.
E. None of these is a good choice.
Discretionary income is the portion of a person's income that pays for:
A. rent.
B. food.
C. luxuries.
D. taxes.
E. insurance.
Watson's Bakery found five different market segments among customers for its bakery
goods. When developing a market-oriented strategy, the marketing manager used a
____ approach, putting two target markets together and developing a single marketing
mix that would meet the needs of the new larger segment.
A. particular target market
B. multiple target market
C. combined target market
D. product-market target market
E. specialty targeting
When Apple first introduced its iPhone in the U.S. market, it priced it at $600. Several
months later, Apple reduced the price to $400. And several months after that, it reduced
the price again to $200. What pricing policy was Apple using in its initial price
strategy?
A. Introductory price
B. Skimming price
C. Cash discount price
D. Penetration price
E. Everyday low price
A manager with a "production orientation" is likely to think that:
A. customers exist to buy the firm's output.
B. customers' needs should guide decisions about what the firm produces.
C. the company should find out what product customers want to buy, and then produce
that product.
D. production managers should handle all marketing activities.
E. people in the production department should work closely with people from all the
firm's other departments.
Which of the following is a status quo pricing objective?
A. Growth in sales
B. Maximize profits
C. Growth in market share
D. Satisfactory profits
E. Meeting competition
The _____ says that new types of retailers enter the market as low-status, low-margin,
low-price operators and then, if successful, evolve into more conventional retailers
offering more services with higher operating costs and higher prices.
A. production concept
B. wheel of retailing theory
C. mass-merchandising concept
D. sales concept
E. break-even analysis
Modern warehouses typically do NOT have:
A. power-operated lift trucks.
B. electric hoists.
C. battery-operated motor scooters.
D. roller-skating order pickers.
E. freight elevators.
According to your text, which of the following is an example of a "new product"?
A. An existing product that has been modified in some way.
B. An existing product for which new uses have been found in other product-markets.
C. A wholly new product idea.
D. An existing product being offered to new markets.
E. All of these are examples of a "new product."
Identify the incorrect statement pertaining to the stages of the product life cycle.
A. The market introduction stage can be seen as investing in the future.
B. In the market growth stage profits keep rising steadily with no sign of decline.
C. Sales level off and profits continue down in the market maturity stage.
D. The sales decline stage can be seen as a time of replacement.
E. Industry profits go down throughout the market maturity stage.
Secondary data from federal government sources
A. is readily available, but there is usually not much information at state and local
levels.
B. focuses mostly on agriculture.
C. is often very helpful for estimating the size of a market.
D. is only available from the Commerce Department in Washington.
E. None of these alternatives is correct.
Which of the following laws focuses on price discrimination on goods of "like grade
and quality" without a cost justification?
A. The Fair Prices Act
B. The Robinson-Patman Act
C. The Federal Trade Commission Act
D. The Magnuson-Moss Act
E. There are no laws regulating price discrimination.
A product assortment is:
A. something offered by manufacturers but not by retailers.
B. a particular product within a product line.
C. a set of products that are closely related.
D. the set of all product lines and individual products that a firm sells.
E. None of these alternatives is correct.
Which of the 4Ps in the marketing mix is most directly related to the recruiting of
wholesalers and retailers for a new product introduction?
A. Product
B. Place
C. Promotion
D. Price
Which of the following criteria should a marketing manager use when segmenting a
broad product-market?
A. The segments should be substantialbig enough to be profitableand operationaluseful
for identifying customers and deciding on marketing mix variables.
B. The people within a market segment should be as homogeneous as possible with
respect to the segmenting dimensions and their likely response to marketing mix
variables.
C. The people in different market segments should be as heterogeneous as possible with
respect to the segmenting dimensions and their likely response to marketing mix
variables.
D. All of these criteria would be useful.
Premier Bank considers population an effective measure of sales potential for its safe
deposit boxes. It has broken down the population of the U.S. by region and assigned 30
percent of the total population to the Northeastern region. If Premier has a planned sales
goal of $2.5 million nationwide, and actual sales in the Northeastern region last year
were $650,000, what was the Northeastern region's performance index (to the nearest
whole number percent)?
A. 33 percent
B. 50 percent
C. 66 percent
D. 75 percent
E. 87 percent
Of the following objectives, the LAST objective(s) that a firm should specify is its
______________ objective(s).
A. marketing
B. sales promotion
C. price
D. company
E. promotion
Allstate Insurance promotes its auto and home insurance by telling consumers, "You're
in good hands with Allstate." Which of the following types of needs is Allstate trying to
satisfy?
A. Personal needs.
B. Social needs.
C. Physiological needs.
D. Safety needs.
E. Behavioral needs.
Customer service is part of:
A. Product.
B. Place.
C. Promotion.
D. Price.
E. None of these is a good answer.
As a project for her marketing class, Emily Washington is researching how five local
businesses price their products. The following are brief sketches of what she has learned
about each company.
At Bella Computers, Emily has discovered that the company earned a 6 percent return
on investment this year and wants to increase it to 9 percent next year. To its retailer
customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives
retailers a 3% reduction on the invoice amount for advertising Bella products locally.
Bella gives retailers' salespeople 2% of the sale price for each Bella Computer they sell.
At Ross Pharmaceuticals, she learned that the company has invested heavily in
developing a new product that recently received a patent. Because cash is tight, the
company wants to achieve a rapid return on its investment. The new patented product is
badly needed in the market, so a very inelastic demand curve is expected.
Digital Imaging makes photographic prints for wedding photographers. It is very
concerned about competitor reactions to its pricing, so it has selected prices that will not
draw the attention of the competition and not start a price war. Digital Imaging offers
customers an 8% discount if their purchases exceed $20,000 a year.
Jack's One Hour Cleaners recently opened for business. The company invested a lot of
money in new equipment, and feels that it has to quickly get "at least 10% market share
to stay in the game." This need obviously influences the company's pricing decisions.
Jack's also plans to offer customers 20% discounts on any order over $20.
National Printing Equipment (NPE) produces equipment that helps to print newspapers
and magazines. The company sells directly to printers and through wholesalers. Its
salespeople negotiate prices with individual customers and often have to match
competitors' prices. NPE has a new product, the Gutenberg NP201, with some
competitive advantages now, but competitors are expected to follow quickly with
similar products. The new product is being introduced into a market with elastic
demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller
pays the cost of loading equipment onto a common carrier. At the point of loading, title
to such products passes to the buyer, who assumes responsibility for damage in transit,
except as covered by the transportation agency."
If one of Bella Computers' retail customers did not pay the invoice for 30 days, the
customer would-in effect-be borrowing at what annual interest rate?
A. 9 percent
B. 18 percent
C. 27 percent
D. 36 percent
E. 72 percent
Which of the following countries have the LOWEST GNI PER CAPITA?
A. Japan and Switzerland
B. Mexico and Spain
C. Ethiopia and Kenya
D. India and Pakistan
E. Germany and the United States
The percentage of U.S. families with incomes above $49,445 in 2010 was:
A. about 50.
B. about 75.
C. 20.
D. 10.
E. less than 5.
When developing a marketing plan for a new product that is about to enter the market
introduction stage of its product life cycle, a marketing manager should:
A. plan to change the marketing strategy every six months.
B. choose the best possible marketing strategy and stay with it throughout its product
life cycle.
C. plan to sell the product until its whole life cycle is over.
D. plan to change the marketing strategy as the product moves through its life cycle.
E. change the marketing strategy only when the market environment changes.
