Marketing Study Guide

SECTION 1 POOL ITEMS

Chapter 1—An Overview of Marketing

MULTIPLE CHOICE

1. The term marketing refers to:a. new product concepts and improvementsb. sellingc. advertising and promotion activitiesd. a philosophy that stresses customer satisfactione. planning sales campaigns

ANS: D PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

2. A business is concerned with many day-to-day activities. Some of the most important of these activities are the planning and development of a product, its pricing policy, and the distribution strategy. These activities are all a part of:a. a control systemb. marketingc. accountingd. productione. human resources

ANS: BThis description contains three of the four main activities included in the marketing function. Many students may mistakenly believe that marketing is only concerned with promotion.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Distribution

3. _____ is a philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction.a. Planning strategyb. Customer managementc. Marketingd. A control systeme. Reciprocity

ANS: C PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

4. The American Marketing Association's definition of marketing:a. is limited to promotional activitiesb. focuses on the value of empowerment, teamwork, and customer valuec. shows how marketing benefits the marketerd. relies on the synergy created by exchangee. includes the processes marketers use to establish and maintain relationships with

customers


ANS: EAccording to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

5. _____ is a key ingredient in the philosophy of marketing; it occurs when people give up something in order to receive something that they would rather have.a. Exchangeb. Synergyc. Transformationd. Leveraginge. Reciprocity

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

6. In order for exchange to occur:a. a complex societal system must be involvedb. organized marketing activities must also take placec. a profit-oriented organization must be involved in the processd. money or other legal tender is requirede. each party must have something the other party considers to be valuable

ANS: EExchange involves the trade of items of value, but does not necessarily involve formal organizations, profit, or money/legal tender.

PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Product

9. For an exchange to take place:a. there must be at least two parties involvedb. money must be used in the transactionc. each party must feel obligated to accept the offerd. at least one party must have something of value that the other party desirese. neither party must communicate with the other

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

10. Indonesian logging companies harvest the rainforests for timber and assume that a market exists for their products. The typical Indonesian logging company has a(n) _____ orientation.a. exchangeb. productc. productiond. salese. environmental

ANS: CThe logging companies do not focus on the needs and desires of the marketplace.


PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: AppTOP: AACSB Ethics| TB&E Model Product

11. The concept of exchange is important to marketing because:a. if all the conditions for an exchange are in place, then the exchange will be completedb. exchange provides money to marketersc. marketing activities help to create exchanged. marketing activities are a requirement for exchange to take placee. money is the only medium of exchange for business marketers

ANS: CMarketing activities help the exchange to take place, but marketing can occur without an exchange.


14. Which of the following is NOT a marketing management philosophy?a. sales orientationb. societal marketing orientationc. market orientationd. profitability orientatione. production orientation

ANS: D PTS: 1 REF: 4-6 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

15. Firms with a _____ orientation focus on the internal capabilities of the firm rather than on the desires and needs of the marketplace.a. salesb. productionc. marketd. customere. customer-benefit

ANS: B PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

16. A company that sets its goals and strategies based on what its current equipment can produce, what products engineering can design, and what the company itself can do best, has a(n) _____ orientation.a. marketplaceb. salesc. marketd. exchangee. production

ANS: E PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

19. A firm with a production orientation is most likely to survive if:a. there are many small competitors in the marketplace


b. demand for the product it produces exceeds supplyc. the needs of the marketplace are constantly shiftingd. supply for the product it produces exceeds demande. any of the above conditions exist

ANS: BThe production orientation can survive in the short term under a variety of conditions; however, if market needs change, long-term survival is difficult.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

20. A firm that adopts a(n) _____ orientation to marketing will fail to consider whether what the firm produces most efficiently also meets the needs of the marketplace.a. customerb. exchangec. productd. markete. production

ANS: EThe production orientation forces a company to build whatever it builds best, that is, whatever it has the experience and expertise in doing.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

22. The _____ orientation assumes people will buy more if aggressive selling techniques are used.a. marketb. salesc. customerd. productione. exchange

ANS: BThe sales orientation assumes aggressive selling is what is needed to increase demand.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

23. A _____ orientation assumes marketing means selling things and collecting money. It also assumes people will buy more goods and services if aggressive marketing techniques are used.a. salesb. productionc. marketd. customere. marketplace

ANS: A PTS: 1 REF: 5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer


25. If a company uses a sales orientation, consumer complaints would most likely result in:a. a modification of the sales presentationb. product reinventionc. continuous market researchd. philanthropye. attempts to cut production costs

ANS: AThe sales orientation relies on aggressive sales techniques to fuel business.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

29. Companies that rely on the marketing concept and that have implemented a market orientation strategy recognize that:a. price is the most important variable for customersb. sales depend predominantly on an aggressive sales forcec. what the customer thinks he or she is buying is what is importantd. a company has to apply scientific management techniques to survivee. selling and marketing are essentially the same thing

ANS: CThe perceived product and perceived value are what the customer is buying, and the marketing concept and market orientation have endeavored to understand those perceptions.


30. A company that has a market orientation and adheres to the marketing concept does NOT:a. integrate all the activities of the firm to satisfy customer wantsb. focus on consumer needs and wantsc. differentiate the firm's products from its competitor's productsd. fuel sales growth through the application of aggressive sales techniquese. concentrate on long-term goal achievement (such as profits and growth) for the firm

ANS: DAggressive sales techniques are part of the sales orientation and are not needed if a company is meeting needs and wants of its customers.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

31. The statement, "Marketing should be introduced at the beginning rather than the end of the production cycle and integrated into each phase of the business," is consistent with a(n) _____ orientation.a. productionb. marketc. retaild. salese. enterprise

ANS: BUnderstanding the competitive arena and competitors' strengths and weaknesses is a critical component of market orientation.



36. The marketing concept involves:a. focusing on customers' wants so that the organization can distinguish its product (or

products) from the competitors' productsb. satisfying management's needs and wants with the idea of maximizing profits in the short

runc. selling as much product as possible under the assumption people will buy more goods and

services if aggressive selling techniques are usedd. selling as much as possible under the assumption consumers will buy more at lower pricese. focusing on production in order to increase product quality and lower prices

ANS: A PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

37. The marketing concept includes a goal orientation to remind managers that:a. achieving long-term organizational goals is as important as satisfying customersb. customers must be satisfied no matter what the long-term effect on the firmc. the only reason for any business to exist is to make a profitd. the objective is to find a target market that differs from that of the competitione. functional integration of all departments is useful but not essential

ANS: AThe goal orientation refers to the company's goals, such as profit, growth, service, and survival.


38. The marketing concept stresses that the social and economic justification for an organization's existence is the satisfaction of customer needs and wants while:a. producing a good or service at the lowest possible costb. improving the general standard of livingc. constantly increasing sales volumesd. applying scientific management techniques to improve efficiencye. simultaneously meeting organization objectives

ANS: EThe marketing concept holds that the needs and wants of both the customer and the firm be served.


40. An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests.a. sales orientationb. market orientationc. ethical business mission


d. focused target market strategye. societal orientation

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: DefTOP: AACSB Diversity| TB&E Model Customer

45. Which of the following statements about the societal orientation is true?a. Companies that protect the environment by using all-natural materials in their products are

showing a societal marketing orientation.b. Marketers cannot deliver all benefits sought by customers because these benefits may not

be in the long-term best interests of the customers.c. The societal marketing concept is an important refinement of the market concept.d. Organizations have both a social and economic justification for their existence.e. All of these statements about the societal orientation are true.

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer

48. Organizations that sell products that are often unsought (such as life insurance and retirement plans) may find themselves adopting a _____ orientation because the companies are marketing products that most people do not want.a. salesb. productionc. marketingd. producte. customer

ANS: AAggressive selling is sometimes used by companies that sell products their customers do not want to buy.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Promotion

57. _____ gives customers the feeling their concerns are being addressed and at the same time gives employees the feeling their expertise matters to management.a. Management-employee synergyb. Organizational entropyc. Managerial reciprocityd. Empowermente. Delegation

ANS: D PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

58. Market-oriented firms primarily focus their efforts upon:a. improving the technological skills and competitive advantages of the firmb. satisfying the organization's needs for low overheadc. achieving the company’s societal responsibilities inexpensivelyd. distributing goods and servicese. satisfying the wants and needs of their customers


ANS: EMarket-oriented firms are focused outward toward their customers.

PTS: 1 REF: 6 OBJ: 01-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following statements about a typical sales-oriented business is true?a. The company develops its products to meet the needs of specific groups of people.b. The primary goal of the company is profit through customer satisfaction.c. The company invests the majority of its resources in promoting its products and services.d. The company is in business to satisfy customers' wants and needs and deliver superior

value.e. All of these statements about a typical sales-oriented business are true.

ANS: CSee Review Learning Outcome 3.

PTS: 1 REF: 6 | 10 OBJ: 01-3 TYPE: CompTOP: AACSB Analytic| TB&E Model Customer

60. _____ is defined as the relationship between benefits and the sacrifice necessary to obtain those benefits.a. Opportunity costb. Marketing utilityc. Market qualityd. Satisfaction percentagee. Customer value

ANS: E PTS: 1 REF: 6 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

61. Marketers interested in offering customer value can:a. offer products that performb. give the consumer factsc. offer organization-wide commitment to service and after-the-sale supportd. avoid unrealistic pricinge. do all of these

ANS: E PTS: 1 REF: 6-7 OBJ: 01-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer

64. When customer expectations regarding product quality, service quality, and value-based price are met or exceeded, _____ is created.a. a value lineb. a quality riftc. planning excellenced. customer satisfactione. expectation satisfaction

ANS: D PTS: 1 REF: 7 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer


66. _____ is a strategy that entails forging long-term partnerships with customers.a. Commitment sellingb. Relationship marketingc. Transactional marketingd. Market engineeringe. Organization-customer synergy

ANS: B PTS: 1 REF: 8 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

71. Which of the following measures would be the best indicator of whether your organization's personnel have a customer orientation?a. Ask each employee's boss if that person is customer-oriented.b. Assess each employee's impact on the profitability of the firm.c. Survey customers on how oriented the organization's personnel are to customer needs and

desires.d. Assess how well each employee has contributed to the marketing success of the firm by

examining every financial statement created by the organization.e. Test employees on their knowledge of customer service techniques.

ANS: CThe key to assessing how customer-oriented a firm's personnel are is to ask the customer. Only the customer can provide this type of information.


73. Some market-oriented firms give employees expanded authority to solve customer problems on the spot. This is known as:a. trainingb. deregulationc. empowermentd. commissioninge. mediating

ANS: C PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Communication| TB&E Model Customer

76. _____ is the collaborative efforts of people to achieve common objectives.a. Effort trainingb. Teamworkc. Empowermentd. OJT traininge. Mediation

ANS: B PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy


77. Dofasco, Inc. is a Canadian steel manufacturer. According to its CEO, "People can make a phenomenal difference if you stop telling them to come to work, put their brains in a box, and do whatever the supervisor says. We let our employees work in teams." This quote implies that by using teamwork, Dofasco:a. operates successfully using a production orientationb. provides its customer with a high level of satisfactionc. has a high employee turnover rated. does not deliver superior customer servicee. has a sales orientation

ANS: BTeamwork is one way a company with a market orientation creates customer satisfaction.

PTS: 1 REF: 9 OBJ: 01-3 TYPE: AppTOP: AACSB Analytic| TB&E Model Customer

78. Dofasco, Inc. is a Canadian steel manufacturer. According to its CEO, "People can make a phenomenal difference if you stop telling them to come to work, put their brains in a box, and do whatever the supervisor says. We let our employees work in teams." Teamwork would benefit Dofasco by:a. enhancing employee performanceb. doing away with the need for empowermentc. creating managerial entropyd. refining the definition of customer valuee. doing all of these

ANS: AEnhanced employee performance leads to improved customer satisfaction.

PTS: 1 REF: 9 OBJ: 01-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Strategy

79. Redefining the business mission of a mattress manufacturer as "a good night's sleep," rather than stating the mission as "the manufacture of high-quality mattresses," will:a. not stimulate an awareness of changes in consumer desiresb. be too broad a statement to be of any real use in serving customersc. stifle creativity in discovering opportunities to serve customersd. help ensure the firm retains its focus on consumers and does not become preoccupied with

its products and internal needse. ensure the core products will be retained

ANS: DThe broader business mission of "a good night sleep" will stimulate innovation and creativity because not all sleep aids are mattresses. It will lead the company to further growth.

PTS: 1 REF: 9 OBJ: 01-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer

80. One of the reasons given for the decline of the passenger rail industry in the United States is that the industry defined its mission as trains and not as transportation sources. The railroad industry failed to:a. define its mission in terms of the benefits its customers seekb. ignore the marketing concept of serving customer needs and wantsc. realize "customers only want what they know"


d. have a sales orientatione. empower the consumer

ANS: AA market-oriented firm defines its business in terms of the benefits its customers seek. Because of the limited way the railroad industry defined its business, it missed an opportunity to define itself in terms of the benefits customers were seeking.

PTS: 1 REF: 9-10 OBJ: 01-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer

81. When light bulbs were first introduced, manufacturers offered one size for all light fixtures. Today you can buy light bulbs in different shapes, different wattages, and different colors. They also differ as to how much electricity they use and how many hours of illumination they will provide before failing. Light bulb manufacturers:a. miss sales by not concentrating on the average customerb. recognize different customer groups have different needs and wantsc. are sales-oriented companiesd. are companies that would state they are in the business of selling bulbse. are aiming at a goal of profit through maximum sales volume

ANS: BOne way to implement the marketing concept is to concentrate on the needs of specific groups of customers.

PTS: 1 REF: 5-6 OBJ: 01-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Product

82. One way to identify the orientation of a firm is to examine its primary goal. If a firm seeks to achieve profitability through sales volume, it would probably be:a. promotion-orientedb. price-orientedc. sales-orientedd. production-orientede. retail-oriented

ANS: C PTS: 1 REF: 5 | 11 OBJ: 01-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

87. _____ is the primary tool used by a sales-oriented organization to achieve its corporate goals.a. Priceb. Promotionc. Product designd. Place (distribution)e. Production

ANS: BA sales-oriented organization seeks to generate sales volume based upon intensive promotional activities.

PTS: 1 REF: 10 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Promotion


88. For a market-oriented organization, the primary tool used to achieve its goals is:a. a blend of product, place, promotion, and pricing decisionsb. pricec. product designd. place (distribution)e. promotion

ANS: AA market-oriented organization seeks to generate sales volume based on serving customer needs and wants, utilizing all of the elements of the marketing mix to do so.

PTS: 1 REF: 10 OBJ: 01-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Distribution| TB&E Model Pricing| TB&E Model Product| TB&E Model Promotion

94. What is the fundamental objective of most businesses?a. employee empowerment, teamwork, and relationship marketingb. satisfied stakeholdersc. low costs and high qualityd. customer loyalty and retentione. survival, profits, and growth

ANS: EThe use of marketing allows businesses to achieve this objective.

PTS: 1 REF: 11 OBJ: 01-4 TYPE: CompTOP: AACSB Analytic| TB&E Model Strategy

95. Which if the following is NOT a good reason to study marketing?a. Marketing teaches businesses how to sell products that people do not need.b. Marketing plays an important role in society, coordinating the huge numbers of

transactions needed to provide goods and services.c. Marketing is a key function in business.d. Marketing offers outstanding career opportunities.e. Marketing affects your day-to-day life as a consumer.

ANS: AThat marketing enables companies to sell even bad and worthless goods is a myth.

PTS: 1 REF: 11-12 OBJ: 01-4 TYPE: CompTOP: AACSB Analytic| TB&E Model Strategy

96. Which of the following statements contains one good reason for studying marketing?a. Marketing teaches businesses how to sell products that people do not need.b. Marketing deals with transactions--not relationships.c. Marketing has little impact on your day-to-day life.d. Marketing offers outstanding career opportunities.e. The study of marketing helps you to better understand why the job market is shrinking.

ANS: DMarketing plays an important role in society, coordinating the huge numbers of transactions needed to provide goods and services. Marketing affects your day-to-day life as a consumer.


PTS: 1 REF: 11-12 OBJ: 01-4 TYPE: CompTOP: AACSB Analytic| TB&E Model Strategy


Chapter 3 MULTIPLE CHOICE

1._____ is the concern of business for the long-range welfare of both the company and its relationships to the society within which it operates.a. Consumerismb. Corporate social responsibilityc. Cultural sensitivityd. Conventional moralitye. Environmental consideration

ANS: B PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

3. Corporate social responsibility is defined as the:a. belief that the legal system defines ethical behaviorb. development of inclusive codes of ethicsc. rules by which social rewards are attainedd. concern for social welfare by businessese. coordination of social programs for publicity purposes

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

4. Corporate social responsibility:a. is mandated by federal lawb. requires companies to sacrifice economic performance for the sake of their stakeholdersc. does not influence competitiond. may not always result in profit and growthe. is unaffected by environmental changes

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

7. _____ is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profit and help the world at the same time.a. Sustainabilityb. Philanthropyc. Cause marketingd. Creative ethicse. International ethics

ANS: A PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

TOP: AACSB Ethics| TB&E Model Strategy

9. The pyramid of corporate social responsibilities contains all of the following components EXCEPT:a. economic responsibilitiesb. ethical responsibilities


c. cultural responsibilitiesd. legal responsibilitiese. philanthropic responsibilities

ANS: CSee Review Learning Outcome 1.

PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

15. The four components of the pyramid of corporate social responsibility are:a. sustainability, creativity, profit, and cultureb. organizational culture, creativity imagery, economic performance, and objectivityc. organizational, financial, social, and cultural responsibilitiesd. sustainability, legality, creativity, and competitione. economic, legal, ethical, and philanthropic responsibilities

ANS: E PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

16. Which of the following statements describes ethics?a. Ethics are the moral principles or values that generally govern the conduct of an

individual.b. Ethics is the standard of behavior by which conduct is judged.c. Morals are a foundation for ethical behavior.d. Ethical values are situation specific and time oriented.e. All of the statements describe ethics.

ANS: E PTS: 1 REF: 30 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

17. Which of the following sayings best describes how people with conventional morality act?a. Don't put all of your eggs in one basket.b. When in Rome, do as the Romans do.c. Be wary of strangers bearing gifts.d. A rolling stone gathers no moss.e. Don't count your chickens before they hatch.

ANS: B PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

20. The use of ethical decision making:a. can be influenced by top managersb. is influenced by the probability of harmful outcomesc. depends on the number of people to be affectedd. depends on the magnitude of possible consequencese. is accurately described by all of the choices

ANS: E PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

22. Which of the following factors does NOT tend to influence ethical decision making and judgments?


a. probability of a harmful outcomeb. length of time between decision and the onset of consequencesc. level of multiculturalismd. number of people to be affectede. potential magnitude of the consequences

ANS: C PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| AACSB Diversity| TB&E Model Strategy

24. A human resources manager is creating a code of ethics for the employees of the retirement home she works for. Which of the following is NOT an ethics principle she should keep in mind as she creates this code?a. The principles should not upset current retirement home workers and future job applicants.b. Any decisions should be fair to all concerned: retirement home nurses, cleaning personnel,

and administrative staff.c. Input on the code should be gained from other knowledgeable individuals or groups.d. Principles can deviate from common practices because of the prestigious nature of the

facility.e. She should not have to pull rank or use coercion to implement her ethics code.

ANS: DAn unethical code would presume that the company is an exception to a common practice in the industry.

PTS: 1 REF: 31-32 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

25. A(n) _____ is a defined group that managers feel is most likely to buy a firm's product.a. target marketb. buying centerc. aggregated unitd. consumer clustere. demographic sample


27. Which of the following statements best describes the typical target market?a. A target market will remain stable over time, with the same group of consumers.b. Target markets change over time as consumers drop in or out of the market, and as tastes

change.c. Target markets are not strongly affected by changes in the external environment.d. Target markets only change when the features and benefits of the product offering change.e. Target markets cannot be specifically defined according to age, income, or location

because these factors are continually changing.

ANS: BTarget markets are defined and described, but they are always changing in response to environmental changes.



29. The external environment:a. can be controlled in much the same manner as the internal marketing mixb. cannot be influenced by marketing managersc. does not change over timed. does not have an impact on Fortune 500 companiese. must be continually monitored by marketing managers

ANS: E PTS: 1 REF: 32 OBJ: 03-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

30. The external environment is a strong influence on a target market and can be a source of _____ for the marketing manager.a. opportunities and threatsb. threats and strengthsc. environmental loopholesd. opportunities and weaknessese. product myopia

ANS: AThe external environment can provide opportunities to serve new and changing needs, as well as warnings about changes that could threaten the current position of the firm. Students will need to remember what a SWOT analysis is to answer this question.


31. Marketing managers cannot control _____, but they can at times influence it.a. where advertising is placedb. the external environmentc. the sales forced. the distribution strategye. how products are priced

ANS: BThe external environment is basically uncontrollable, but the other four answers are part of the marketing mix.


33. What is apparently the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans?a. technologyb. social factorsc. demographyd. competitione. economic conditions

ANS: BSocial factors and changes are difficult to foresee, because they are usually slow and/or small changes. Also, it is very difficult for one company to affect social factors in any appreciable manner.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: Comp


TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

35. When a company engages in _____, it is implementing strategies that attempt to shape the external environment in which it operates.a. synergistic controlb. environmental managementc. transactional managementd. market controle. reactive management


38. _____ factors are the environmental factors concerned with the changes in people's values, lifestyles, and family roles.a. Socialb. Economicc. Politicald. Competitivee. Demographic

ANS: A PTS: 1 REF: 33 OBJ: 03-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

43. Consumer preference for low-carb diets has greatly modified the way food is being marketed. This concern with health issues is an example of a(n) _____ factor.

a. economicb. political and legalc. technologicald. demographice. social

ANS: E PTS: 1 REF: 33 OBJ: 03-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Customer

45. What do self-sufficiency, upward mobility, and conformity have in common?a. These are no longer valued attitudes.b. They are attitudes that can easily be changed.c. These are three perceptions that Americans have of the Asian lifestyle.d. These are three of the core values that have influenced lifestyles in the United States.e. They are the determinants of a component lifestyle.

ANS: DThe fourth value is work ethic.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer


48. A(n) _____ is the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle.a. aggregated lifestyleb. component lifestylec. psychographic mode of livingd. demographically defined lifestylee. targeted lifestyle

ANS: B PTS: 1 REF: 33-34 OBJ: 03-4 TYPE: DefTOP: AACSB Diversity| TB&E Model Product

55. The growth of dual-income families has resulted in:a. burnoutb. a sense of entitlementc. decreased discretionary incomed. decreased GNPe. increased purchasing power


56. Which of the following events has had a greater effect on marketing than any other social change?a. the growing number of one-child familiesb. the increasing number of immigrants from Northern Europec. the growing number of people on the Internetd. the increasing number of working womene. the growing number of people of retirement age who are continuing work

ANS: D PTS: 1 REF: 34 OBJ: 03-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

58. The study of people's vital statistics, such as their ages, births, deaths, and locations, is called:a. cultural sociologyb. psychometricsc. ecologyd. ethnographye. demography

ANS: E PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following is NOT a demographic characteristic of a population?a. income levelb. agec. valuesd. educatione. birthrate

ANS: CValues are a social factor.

PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: CompTOP: AACSB Diversity| TB&E Model Customer


69.A multicultural society is characterized by:a. a population of recent immigrants that are closely related by custom and traditionb. a conglomeration of small and large ethnic groups that have little in commonc. even distribution of all ethnic groups in a geographic regiond. effective mass-marketing techniquese. one large dominating racial or ethnic group in a geographic area

ANS: C PTS: 1 REF: 39 OBJ: 03-6 TYPE: DefTOP: AACSB Diversity| TB&E Model Distribution| TB&E Model Customer

71. A furniture retailer that specializes in selling entire rooms of furniture has hired you to identify 25 geographic target markets that can be described as multicultural societies. What types of locations should you offer this firm?a. cities that have historically had low immigration ratesb. traditional test marketsc. regions that are dominated by one ethnic group and that have multiple smaller ethnic

groupsd. unindustrialized arease. locations in which all major ethnic groups in the area are equally represented

ANS: EMulticultural societies are not defined by geography, history, or products produced, but by the racial and ethnic composition of the population.

PTS: 1 REF: 39 OBJ: 03-6 TYPE: AppTOP: AACSB Diversity| TB&E Model Customer

74. The higher your _____, the higher your purchasing power:a. gross incomeb. social classc. disposable incomed. cost of livinge. inflation index

ANS: CPurchasing power is measured by comparing income to the relative cost of a set standard of goods an services. It is a aligned with net income, or income minus a standard set of expenses. Assuming a constant income, the higher the cost of living (the expenses), the lower the purchasing power.


76. Factors, such as interest rates, inflation, and consumer income that influence the marketing environment, are called _____ factors.a. economicb. socio-demographicc. politicald. governmente. consumption

ANS: A PTS: 1 REF: 39 OBJ: 03-7 TYPE: Def


TOP: AACSB Reflective Thinking| TB&E Model Customer

77. _____ is measured by comparing the relative cost of a standard of goods and services in different geographic areas.a. Gross individual profitb. Purchasing powerc. Net profitd. Relative pricinge. Price escalation

ANS: B PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

78. When income is high relative to the cost of living, consumers _____.a. have more discretionary incomeb. begin anticipating a period of price decelerationc. stop buying luxury goods and servicesd. have significantly less disposable incomee. anticipate price escalation by stockpiling

ANS: A PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

79. _____ is the primary determinant of a person's earnings.a. Multiculturalismb. Lifestylec. Educationd. The aging of the baby boomerse. Global competition

ANS: C PTS: 1 REF: 39 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

80. ____ is measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year.a. Inflationb. Recessionc. Depressiond. Consumer break-evene. Price escalation

ANS: A PTS: 1 REF: 40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

81. When planning marketing strategies during times of inflation, marketers must be aware inflation causes consumers to:a. purchase more goods and services to support their psychological selves, such as

counseling and stress management trainingb. consume more meals away from homec. buy in small quantities until inflation is overd. decrease their brand loyalty to products they have traditionally usede. put more money into savings accounts because prices are too high

ANS: DIn times of inflation, consumers are more price conscious and less brand-loyal.


PTS: 1 REF: 40 OBJ: 03-7 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing

82. A period of economic activity when income, production, and employment tend to fall, reducing overall demand, is called:a. stagnationb. an inflationc. a recessiond. price escalatione. a depression

ANS: C PTS: 1 REF: 40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

85. Which of the following strategies is appropriate for a marketer to use during a time of economic recession?a. Promote product value.b. Maintain and improve customer services.c. Emphasize top-of-the-line products in promotions.d. Offer products that are economical and efficient.e. Do all of these.

ANS: E PTS: 1 REF: 40-41 OBJ: 03-7 TYPE: CompTOP: AACSB Technology| TB&E Model Pricing

86. Which of the following is sometimes an effective weapon for fighting inflation and recession?a. technologyb. line extensionsc. increased capital gains taxesd. introducing product-line extensionse. reducing R&D expenditures

ANS: A PTS: 1 REF: 40-41 OBJ: 03-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

87. Research that attempts to expand the frontiers of knowledge rather than solving a specific, pragmatic problem is called:a. technical diversityb. reactive researchc. applied researchd. experiential researche. basic research

ANS: E PTS: 1 REF: 41 OBJ: 03-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

100. Laws and regulations of various governments and their ongoing development and change are an example of _____ factors and are part of all organizations' external environment.a. economic investmentb. political and legalc. research and developmentd. competitive


e. demographic

ANS: B PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

101. The _____ Act strengthened the Clayton Act to prevent corporate acquisitions that reduce competition.a. Hart-Scott-Rodinob. Lanham-Scottc. Celler-Kefauver Antimergerd. Robinson-Patmane. Sherman

ANS: CSee Exhibit 3.2. The Celler-Kefauver Act bolstered the Clayton Act's provision dealing with interlocking directorates and closed another loophole that had allowed corporate takeovers.

PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

102.The _____ Act requires large companies to notify the government of their intent to merge.a. Hart-Scott-Rodinob. Shermanc. Celler-Kefauver Antimergerd. Robinson-Patmane. Lanham

ANS: ASee Exhibit 3.2.


103. The Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act are both important laws designed to:a. protect the channels of commerceb. restrict alcohol and tobacco advertisingc. eliminate certain products from being advertised on children’s television programsd. protect consumers from identity thefte. penalize marketers selling merchandise with counterfeit brand names

ANS: D PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy


Chapter 2

3. Strategic plans require:a. long-term resource commitmentsb. a change in organizational structurec. the addition of new personneld. new product developmente. changes in prices

ANS: AStrategic plans are long-range plans that involve developing, organizing, and controlling marketing activities.


4. _____ is the managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities.a. Tactical managementb. The market auditc. Functional planningd. Environmental scanninge. Strategic planning

ANS: E PTS: 1 REF: 15 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

7. Which of the following statements about a marketing plan is true?a. Marketing plans can exist as oral traditions.b. The marketing plan should be viewed as a series of sequential steps.c. All marketing plans have basically the same content.d. A marketing plan is created so an organization can meet its marketing objectives.e. All of the statements about a marketing plan are true.

ANS: DBy definition, marketing plans are written. Several steps of the marketing plan can be done at the same time. The content of marketing plans varies.

PTS: 1 REF: 15 OBJ: 02-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

8. _____ is the process of anticipating events and determining strategies to achieve organizational objectives.a. Planningb. Portfolio evaluationc. Forecastingd. Implementatione. Evaluation

ANS: A PTS: 1 REF: 15 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan


10. Marketing plans should be written to do all of the following EXCEPT:a. compare actual and expected performanceb. provide clearly stated activitiesc. create common goals for employees to work towardd. allow managers to enter the marketplace with an awareness of possibilities and problemse. control the elements of the external marketing environment

ANS: EMarketing environment variables cannot be controlled.

PTS: 1 REF: 16 OBJ: 02-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

11. Which of the following is one of the elements of the marketing plan?a. a business mission statementb. a situation analysisc. a target market strategyd. the marketing mixe. all of the choices

ANS: ESee Exhibit 2.1.

PTS: 1 REF: 17 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

13. The _____ answers the question, "What business are we in, and where are we going?"a. mission statementb. financial statementc. situation analysisd. market strategye. strategic plan

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

17. The focus of an organization's mission statement should be on:a. the products it wishes to sellb. the market it wishes to servec. its social responsibilitiesd. the desires of government regulatorse. technologies it understands well

ANS: BThe choice of the market to serve determines the product and technology decisions.


20. _____ occurs when a business is defined in terms of goods and services rather than by the benefits customers seek from it.


a. A circle trapb. A market barrier entryc. A reactive focusd. Unempowermente. Marketing myopia

ANS: E PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

21. A popular technique for managing a large organization with different technologies and markets is to divide it into:a. strategic business unitsb. different technologiesc. strategic target marketsd. design matricese. tactical segments

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

22. The acronym SBU refers to:a. stock in business unitsb. strategic business unitc. standard business utilizationd. strategic barter unitse. samples by units

ANS: B PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

25. An SBU:a. competes with the same companies as the other SBUs in the parent organizationb. shares the same mission with all the other SBUs in the parent organizationc. controls its business independent of other SBUs in the organizationd. usually benefits from the combined corporate raw materials purchasese. still has strategic planning performed back at corporate headquarters

ANS: CSBUs have separate business functions from one another and have their own mission statements, markets, and planning.


27. After management agrees on a mission statement, it must set objectives. Which of the following is NOT a characteristic of a good objective?a. profitableb. realisticc. measurabled. time-specifice. consistent


ANS: AGood objectives are not necessarily stated in terms of profit.

PTS: 1 REF: 18 OBJ: 02-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

28.A _____ is defined as a statement of what is to be accomplished through marketing activities.a. mission statementb. business planc. marketing objectived. goal-driven directivee. marketing criteria

ANS: C PTS: 1 REF: 18 OBJ: 02-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

30. When an organization creates a mission statement that is too narrow, _____ results.a. marketing synergyb. marketing myopiac. directional marketingd. an internal threate. sustainable competitive advantage

ANS: BMarketing myopia defines a business in terms of goods and services rather than in terms of benefits customers seek. See Review Learning Outcome 2.

PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

35. For marketing objectives to be realized, they must meet all of the following criteria EXCEPT:a. be consistent with organization objectivesb. be measurablec. be attainabled. be challenginge. be set within a one-year time frame

ANS: EThere is no one-year time frame restriction for marketing objectives although specifying a particular time frame makes an objective more clear and precise.


37. A _____ is a formal study conducted by an organization to ascertain its current status and capabilities and its future expectations.


a. situation analysisb. marketing auditc. trend analysisd. strategic alternative selectione. competitive advantage audit

ANS: A PTS: 1 REF: 19 OBJ: 02-4 TYPE: DefTOP: AACSB Analytic| TB&E Model Research

39. The SWOT acronym refers to a firm’s analysis of its:a. sales, width of product mix, observations, and technologyb. situations, wealth, organizational strengths, and target marketsc. strengths, weaknesses, opportunities, and threatsd. service levels, willingness to spend, organizational culture, and total revenuese. strategies, willingness to change, objectives, and trends


43. _____ is defined as the collection and interpretation of information about forces, events, and relationships that may affect the organization.a. Market samplingb. An internal auditc. Opportunity analysisd. Environmental scanninge. Stakeholder analysis

ANS: D PTS: 1 REF: 19 OBJ: 02-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

61. _____ show costs declining at a predictable rate as experience with a product increases.a. Liquidity growth curvesb. EOQ graphsc. Breakeven analysesd. Experience curvese. Supply/demand curves

ANS: D PTS: 1 REF: 20 OBJ: 02-5 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Pricing

62. Which of the following is NOT a source of a cost competitive advantage?a. reengineeringb. experience curvesc. break-even analysesd. efficient labore. production innovation

ANS: C PTS: 1 REF: 20-21 OBJ: 02-5 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing


67. Which of the following is a type of strategic alternative that matches products and markets?a. vertical integrationb. product penetrationc. divestmentd. horizontal integratione. market penetration


68. _____ is a strategy of increasing market share for present products in existing markets.a. Market penetrationb. Product developmentc. Market developmentd. Diversificatione. Product penetration

ANS: A PTS: 1 REF: 22 OBJ: 02-6 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

70. _____ is a strategy that attracts new customers to existing products.a. Product developmentb. Market developmentc. Market penetrationd. Product penetratione. Diversification


75. _____ is a strategy that creates new products for present markets.a. Product penetrationb. Market penetrationc. Product developmentd. Market developmente. Diversification


76. _____ is the strategy of increasing sales by introducing new products into new markets.a. Product penetrationb. Product developmentc. Market penetrationd. Market developmente. Diversification

ANS: E PTS: 1 REF: 22 OBJ: 02-6 TYPE: DefTOP: AACSB Diversity| TB&E Model Strategy| TB&E Model International Perspective


102. A(n) _____ describes and estimates the size and sales potential of market segments of interest to the firm and assesses key competitors in these market segments.a. marketing orientationb. environmental scanc. marketing mix auditd. target market strategye. market opportunity analysis


105. The _____ is the unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.a. internal environmental mixb. marketing mixc. product mixd. product linee. market portfolio


106. The starting point of any firm's marketing mix is the:a. analysis of what production equipment is available and owned by the companyb. design of the promotion campaign to be used for the productc. selection of the places through which the good or service will be soldd. determination of the product's price, enabling future revenues and budgets to be estimatede. development of the good or service to be sold

ANS: EThe product is the starting point for any marketing mix. Without it, pricing, distribution, and promotion are irrelevant. The production capacity can be changed to fit the proposed product.


109. Making sure products are available when and where customers want them is the job of which element of the marketing mix?a. advertising strategiesb. production strategiesc. product strategiesd. promotion strategiese. distribution strategies

ANS: EDistribution strategies make products available when and where customers want them.PTS: 1 REF: 25-26 OBJ: 02-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Distribution| TB&E Model Product


Chapter 4MULTIPLE CHOICE

1.Individuals and organizations utilizing a global vision to effectively market goods and services across national boundaries are engaged in:a. developing international selling schemesb. implementing standard international marketingc. implementing global marketing standardizationd. supplementing their foreign visione. practicing global marketing

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

3. Which of the following statements about global marketing is true?a. Marketing to target markets throughout the world has become an imperative for business.b. Often a U.S. firm's toughest domestic competition comes from foreign companies.c. Marketing managers must develop a global vision not only to recognize and react to

international marketing opportunities but also to remain competitive at home.d. Adopting a global vision can be lucrative for a company, and global marketing can offset

weak domestic performance.e. All of these statements about global marketing are true.

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

6. Which of the following statements about multinational firms is true?a. Multinationals typically do not change their methods of reaching their global markets if

they are successful with their initial strategy.b. Multinationals are defined as companies heavily engaged in exporting and importing.c. All multinationals must enter the fourth stage of globalization before they are fully

internationalized.d. Multinationals often develop their global businesses in stages.e. The five stages of globalization closely mirror the five stages of the product life cycle.

ANS: DMultinationals can go through up to four stages in their quest to globalize their business. Generally, only high-tech firms ever reach the fourth stage. Multinationals are companies that heavily engage in international trade, beyond exporting and importing.

PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

7. A(n) _____ is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries.a. international facilitatorb. global traderc. multinational corporationd. exporting companye. international merchant


ANS: C PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Distribution

10. Which of the following describes a common criticism of multinational companies?a. the transference of the wrong kind of technology to a developing nationb. excessive employment informationc. countertradingd. the transference of labor-intensive technologye. dumping

ANS: ATypically, the technology needed to run operations in developing nations is capital-intensive and thus does not substantially increase employment.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

11. A company that is capital-intensive:a. has an altered fiscal strategy for overseas operationsb. spends more on equipment than on laborc. makes better use of benchmarking than other types of businessd. creates employment monopoliese. must engage in countertrading due to restrictive foreign legislature

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective

13. With a _____, a firm produces standardized products to be sold the same way all over the world.a. traditional marketing strategyb. global marketing standardization approachc. product extension approachd. culturally based marketing strategye. synergistic approach to marketing

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

14. Global marketing standardization:a. is becoming less popular with the large multinationalsb. encourages product, packaging, and advertising variations for each nation or local marketc. actually raises production costsd. presumes markets throughout the world are becoming more alikee. is more popular with consumer products than with industrial goods

ANS: DWith a global marketing standardization approach, a firm produces standardized products to be sold the same way worldwide. This approach assumes all customers have the same needs and wants.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective


16. A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:a. cultureb. political structure and actionsc. its marketing mixd. natural resourcese. demographic makeup

ANS: CThe marketing mix is the keystone of a company's internal environment.

PTS: 1 REF: 50 OBJ: 04-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Strategy


17.Central to any society is a common set of values shared by its citizens that determines what is socially acceptable. Marketers refer to these values collectively as a country's:a. ethical systemb. culturec. ethnocentricityd. national personalitye. socialization

ANS: B PTS: 1 REF: 50-51 OBJ: 04-3 TYPE: DefTOP: AACSB Diversity| TB&E Model Customer

24. Which of the following is an important cultural factor that should be considered by global marketers?a. competitive synergyb. languagec. natural resourcesd. technology sensitivitye. level of economic development

ANS: B PTS: 1 REF: 51 OBJ: 04-3 TYPE: CompTOP: AACSB Diversity| TB&E Model Strategy

26. Which of the following statements about the political environment is true?a. A recession is part of the political environment.b. A country is either socialistic or capitalistic, but never both.c. The countries with the least across-the-board regulations and political structures foster the

strongest economies.d. The European Union is purely an economic arrangement and has no political impact on

marketing.e. All of these statements about the political environment are true.

ANS: CRecession is an economic factor. Countries are a combination of socialism and capitalism. The European Union is a means for the member nations to pursue an economic, monetary, and political union.


31. A tax levied on the goods entering a country is called a(n):a. licenseb. quotac. boycottd. exchange controle. tariff

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product

33. A(n) _____ is a limit on the amount of a specific product that can enter a country.a. quotab. tariff


c. boycottd. exchange controle. transfer limit

ANS: A PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

36. An exclusion of all products from certain countries or companies by a government or group is called a(n):a. expropriationb. quotac. tariffd. exchange controle. boycott

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

39. A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.a. tariffb. quotac. fiscal prerequisited. exchange controle. transfer barrier

ANS: D PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

40. _____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.a. Boycottsb. Regional unificationsc. Market groupingsd. Free trade nationse. Expropriation members


41. Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate global exchange and remove barriers are called _____ agreements.a. tradeb. joint venturec. CRMd. exchangee. licensing


42. _____ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay. This agreement eliminated the tariffs among these trading partners.


a. NAFTAb. Maastrichtc. WTOd. GATTe. Mercosur


43. The latest round of World Trade Organization (WTO) talks has been contentious. A major goal of this _____ is to bolster the developing economies of Africa, Asia, and Latin America where up to two-thirds of the population works in agriculture.a. Mercosur covenantb. CAFTA Alliancec. Doha Roundd. Uruguay Rounde. WTO Round

ANS: C PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective

44. The _____ of trade negotiations created the _____, which replaces GATT. This trade agreement dramatically lowers trade barriers worldwide.a. Uruguay Round; World Trade Organizationb. Doha Round; European Unionc. Doha Round; NAFTAd. Paraguay Round; South American Free Trade Agreemente. Mercosur; European Union

ANS: AThe Uruguay Round created the WTO.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

45. The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.a. Uruguay Roundb. Mercosurc. GATTd. NAFTAe. Maastricht Treaty

ANS: A PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

46. The North American Free Trade Agreement (NAFTA) did NOT:a. create the world's largest free-trade zone including Canada, the United States, and Mexicob. substantially reduce economic growth in Mexicoc. allow U.S. and Canadian financial-services companies to own subsidiaries in Mexicod. remove many tariffs and duties so that Mexico, Canada, and the United States can trade

more freelye. expand opportunities for U.S. businesses in Mexico

ANS: B


Over the years, Mexico has made economic gains due to NAFTA.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Distribution

48. The goal of the Central America Free Trade Agreement (CAFTA) is to:a. create free-trade agreements between the United States and other industrialized nationsb. eliminate all protectionismc. raise prosperity levels in all industrializing nationsd. establish a free trade agreement between the United States and certain Latin American

countriese. make sure all nations achieve the economic and technological development of a takeover

economy or better

ANS: D PTS: 1 REF: 53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy


49. Which of the following statements about the European Union (EU) is true?a. The EU creates a single Europroduct for a generic Euroconsumer.b. The EU removes all internal trade barriers and standardizes regulations in European

countries for easier trade.c. The EU can correctly be called the "United States of Europe" because all European voters

have agreed to these changes.d. The existence of the EU eliminates protectionist movements by United Europe against the

Japanese and the United States.

e. None of these statements about the EU is true.

ANS: EBecause of diverse languages and cultures, no "United States of Europe" or a generic Euroconsumer results from United Europe. There exists the possibility of a protectionist movement and increased competition. It does not eliminate all trade barriers.


51. A multinational company that makes a labor-intensive product would be interested in the _____ makeup of countries. Factors such as median age, gender, and literacy rates would determine the success of its global expansion.a. demographicb. lifestylec. naturald. culturale. economic

ANS: ADemographics include age and educational levels as well as ethnicity and gender.

PTS: 1 REF: 54-55 OBJ: 04-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model International Perspective


54. Vast differences in natural resources create all of the following EXCEPT:a. potential for military interventionb. shifts in wealth between nationsc. inflation and recessiond. global dependenciese. export opportunities for countries with no natural resources

ANS: EWhile differences do create shifts in wealth, dependencies, inflation, recession, and the potential for conflict, they only hinder opportunities for the countries that do not have resources.


55. Which method of entering the global marketplace would be LEAST risky?a. exportingb. licensingc. contract manufacturingd. joint venturese. direct investment

ANS: ASee Exhibit 4.1.


63. A(n) _____ is a global intermediary that operates primarily in agriculture and raw materials by bringing the buyer and seller together.a. buyer for exportb. export agentc. license agentd. import agente. export broker


64. A cooperative of egg producers believes a profitable market for eggs exists overseas where people are not as concerned about cholesterol. If the cooperative decides to export, it will most likely use a(n):a. commission merchantb. drop shipperc. export brokerd. import agente. export agent

ANS: CExport brokers typically handle agriculture and raw materials.

PTS: 1 REF: 56 OBJ: 04-4 TYPE: AppTOP: AACSB Analytic| TB&E Model Product


65. _____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations. They perform the same functions as domestic manufacturers' agents who help with financing and shipping.a. Export agentsb. Export brokersc. Import brokerd. Buyers for exporte. Licensing agents


66. The _____ is an intermediary in the global market who assumes all risks and sells globally for its own account. The domestic manufacturer usually treats it like a domestic customer.a. buyer for exportb. export agentc. joint venturerd. contract manufacturere. market group




1. A(n) _____ is an interactive, flexible information system that enables managers to obtain and manipulate information as they are making decisions.a. expert systemb. marketing information systemc. artificial intelligence systemd. marketing decision support systeme. database marketing system

ANS: D PTS: 1 REF: 113 OBJ: 08-1 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

2. _____ is the creation of a large computerized file of customers' and potential customers' names, profiles, and purchase patterns.a. Electronic targetingb. Sampling procedure specificationc. Database marketingd. Competitive data mininge. Consumer behavior marketing

ANS: C PTS: 1 REF: 113 OBJ: 08-1 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

3. A true marketing decision support systems (DSS) should be:a. flexibleb. discovery-orientedc. interactived. accessiblee. All of the choices describe true marketing decision support systems.

ANS: E PTS: 1 REF: 113 OBJ: 08-1 TYPE: CompTOP: AACSB Technology| TB&E Model Strategy

4. According to the text, a true marketing decision support system should be:a. reactiveb. customer-orientedc. interactived. rigorouse. descriptive

ANS: CA true DSS should be flexible, interactive, discovery-oriented, and accessible.

PTS: 1 REF: 113 OBJ: 08-1 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

5. To help understand why attendance at the team’s games was so poor, the Atlanta Falcons used marketing research to gather factual information. The organization used in-game surveys and end-of-season surveys of ticket holders. The gathering of factual statements is an example of marketing research in its _____ role.a. historicalb. descriptive


c. predictived. normativee. objective

ANS: BThe data were gathered and presented as factual statements.

PTS: 1 REF: 114 OBJ: 08-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research

6. Through marketing research, the Boston Symphony Orchestra (BSO) learned it has an older market and is not attracting younger concertgoers. It next conducted marketing research to determine if an integrated advertising campaign targeted to the younger market would be successful. In its second use of research, BSO employed _____ marketing research.a. historicalb. descriptivec. predictived. normativee. objective

ANS: CThe BSO used previously gathered data to predict the success of an advertising campaign.


7. _____ is the process of planning, collecting, and analyzing data relevant to marketing decision making. The results of this analysis are then communicated to management.a. Data collectionb. Artificial intelligencec. Decision supportd. Marketing researche. Single-source research

ANS: D PTS: 1 REF: 114 OBJ: 08-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research

8. A bowling alley operator could use _____ to determine why customers do not seem to like his bowling alley's new location.a. transactional marketingb. public relationsc. an EDI systemd. market synergye. marketing research

ANS: EMarketing research can be used by management to trace problems and their causes.


9. Soon after the Harriet Tubman Museum expanded its hours and began charging a small fee to pay for the extra help needed to keep it open longer, attendance decreased. To determine why this decrease in attendance occurred, the museum staff could rely on:a. a production audit


b. database marketingc. marketing researchd. an internal marketing audite. secondary data

ANS: CMarketing research could be used to find out why attendance declined.


10. The publisher of a Canadian business magazine wanted to make several major changes in the magazine's content and format. To determine what changes would be supported by its subscribers and what changes would not be welcomed, the publisher should engage in:a. advertisingb. database marketingc. marketing researchd. a data retrieval systeme. secondary data

ANS: CMarketing research would be appropriate to use to determine how the publisher could provide greater customer satisfaction.


11. Marketing managers can use marketing research to:a. improve the quality of their decision makingb. find out why a marketing plan failedc. learn how to more efficiently retain customersd. understand the ever-changing marketplacee. do all of these

ANS: E PTS: 1 REF: 114-116 OBJ: 08-2 | 08-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research

12. Marketing managers would typically use marketing research to:a. eliminate any guesswork in decision makingb. implement a sales promotionc. handle an individual customer's complaintd. determine why a new product failede. do all of these

ANS: DMarketing research is used to determine why marketing plans failed.

PTS: 1 REF: 114 OBJ: 08-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research

13. Marketing research has three functional roles. These roles are:a. normative, descriptive, and explanatoryb. predictive, normative, and persuasivec. descriptive, diagnostic, and predictived. flexible, interactive, and discovery-oriented


e. descriptive, explanatory, and predictive

ANS: C PTS: 1 REF: 114 OBJ: 08-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

14. A manufacturer of an all-natural fruit and veggie bar targeted to people who want nutritious snacks has asked for marketing research to explain the reasons for the recent failure of its Apple-Broccoli bar. This type of research is described as:a. descriptiveb. predictivec. diagnosticd. normativee. historical

ANS: COne of the roles of marketing research is to be diagnostic and to explain what happened.


15. Volkswagen developed an 18-month-long project to gain a better understanding of the American culture so it could develop cars more appealing to this market. The research project was called Moonraker. Moonraker was intended to play a(n) _____ role in Volkswagen's marketing research.a. diagnosticb. descriptivec. predictived. heuristicale. demonstrative

ANS: BOne of the roles of marketing research is the gathering of descriptive data, which includes reporting consumers’ attitude toward products.

PTS: 1 REF: 114 OBJ: 08-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer

16. The first step in the marketing research process is to:a. specify the sampling planb. collect the datac. analyze the marketplaced. plan the research designe. identify and formulate the problem/opportunity to be studied

ANS: E PTS: 1 REF: 114 OBJ: 08-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

17. There are five Major League Baseball markets with more than one team. So far this season, the average combined attendance for the Chicago Cubs and the Chicago White Sox ranks lowest. Before conducting any marketing research to explain low attendance figures, the teams will need to:a. determine who will be most likely to respond to a surveyb. select a market sample from everyone in the populationc. define the problem to be researchedd. develop a survey to find out exactly what's wronge. enumerate the decision factors


ANS: CTo respond to a symptom, one should find out what the underlying problem is. See Exhibit 8.1.

PTS: 1 REF: 114-115 OBJ: 08-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research

18. A small confectionary company has noticed a 20 percent decrease in the sale of its milk chocolate candy over the last three years. The company’s owner wants to determine why the decline has occurred and how to reverse the trend. Once the owner has identified the problem as a consumer perception that dark chocolate provides more health benefits, its next step in the marketing research process should be to:a. collect the datab. recognize the marketing problemc. analyze the marketplaced. plan the research designe. specify the sampling plan

ANS: DSee Exhibit 8.1.


19. Volkswagen lost more than $1 billion in its U.S. operations in two recent years. In which step of the marketing research project, would the Volkswagen engineers (who were raised in the no-nonsense cockpits of German cars) realize the problem was that they were not designing cars for Americans who use their cars like a second office?a. the research design stepb. the data collection stepc. the data analysis stepd. the problem formulation stepe. none of the choices

ANS: DDefining (or in this case realizing) the problem is the first step of the marketing research process. The research will not produce usable results if this step is not done correctly. See Exhibit 8.1.


20. Research by Morgan Stanley revealed that 72 percent of the U.S. residents are willing to try flavored colas. Since the cola industry is stagnant in most areas of the country, this is important information. Marketing research on how best to use this information will begin with the:a. collection of the datab. specification of the sampling planc. implementation of employee empowermentd. research designe. recognition of the marketing opportunity

ANS: EMarketing research can hone in and clarify where the best opportunities lie. See Exhibit 8.1.

PTS: 1 REF: 114 | 115 OBJ: 08-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research


21. The marketing research problem:a. is information orientedb. involves determining what resources will be used in research effortsc. is action drivend. does not rely on managerial experiencee. is accurately described by none of these choices

ANS: A PTS: 1 REF: 114 OBJ: 08-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

22. In contrast to marketing research problems, management decision problems are:a. action orientedb. pervasivec. narrower in scoped. synergistice. information oriented


23. Managers must combine specific pieces of information needed to identify the marketing research problem. Their _____ is to provide insightful decision-making information.a. company-correlated goalb. autonomous taskc. dichotomous goald. marketing research objectivee. field service objective

ANS: D PTS: 1 REF: 114 | 115 OBJ: 08-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

24. Post Properties is a company that manages apartments in various communities. It is concerned with a glut of apartments in Atlanta, Orlando, and Dallas Its market researcher begins by examining the rental markets in the Southeast, the history of apartment buildings, local economies, competitive rents, and ownership--all information that was on hand and did not require any new research to locate. The market researcher looked at:a. a closed studyb. secondary datac. primary datad. a statistical analysise. priority databases

ANS: B PTS: 1 REF: 115 OBJ: 08-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research

25. Data previously collected for purposes other than the one at hand are an important source of information as the researcher defines the problem. These data are called _____ data.a. single-sourceb. secondaryc. primaryd. consensuale. convenience

ANS: B PTS: 1 REF: 115 OBJ: 08-3 TYPE: Def


TOP: AACSB Reflective Thinking| TB&E Model Research

26. Market research firms, commercial publications, and government data can be used as sources of:a. secondary datab. consensual informationc. primary datad. artificial intelligencee. marketing audits

ANS: AData previously collected for purposes other than the one at hand are an important source of information known as secondary data.


27. So far this season, the average combined attendance for the Washington Nationals and Baltimore Orioles ranks fourth of the five major league markets with more than one team. Research done by the Washington Post shows attendance in the Baltimore-Washington region trails Los Angeles, New York and San Francisco-Oakland but is slightly ahead of Chicago. Major League Baseball would be using _____ data if it used this research to determine how competition affects attendance figures.a. convenienceb. primaryc. dichotomousd. secondarye. observation

ANS: DData previously collected for purposes other than the one at hand are an important source of information known as secondary data.


28. A few years ago, TNT cable channel began using the slogan "TNT knows drama" to reflect a change in its programming focus. Now it wants to determine how its viewership has changed since it changed its focus. It has decided to use secondary data to determine if its viewers' demographics have changed. A potential disadvantage of this research plan is:a. the difficulty of holding certain variables constant while varying one factor of interestb. the high cost of collecting secondary datac. the length of time it takes to collect secondary datad. interviewer bias during the collection processe. the information not fitting the needs of the research problem

ANS: ESecondary data have been previously collected for some other purpose and may not fit the current research problem.

PTS: 1 REF: 115 OBJ: 08-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Marketing Plan

29. When assessing the quality of secondary data, it is:a. not necessary to know why the data were collected in the first placeb. important to be able to have easy access to the data


c. important to know the purpose for which the data were originally collectedd. not important to know when the data were collectede. imperative to use the same methods and procedures when primary data are collected

ANS: CTo assess the quality of the data, it is important to know when, where, why, and how the data were originally collected.


30. Research done by Morgan Stanley revealed that 72 percent of the U.S. residents are willing to try flavored colas. The research also showed which flavors were most desired. Cola producers using this information provided to them by Morgan Stanley would be using _____ data.a. primaryb. secondaryc. dichotomousd. observatione. convenience

ANS: BIt is secondary data, which have been previously collected for some other purpose and may not fit the current research problem.


31. A(n) _____ is a company that acquires, catalogs, reformats, segments, and resells reports already published by marketing research firms.a. information vendorb. subject directoryc. market research aggregatord. search enginee. Internet directory

ANS: C PTS: 1 REF: 116 OBJ: 08-3 TYPE: DefTOP: AACSB Technology| TB&E Model Online/Computer

32. _____ specifies the research questions to be answered, how and when the data will be gathered, and how the data will be analyzed.a. A secondary data use planb. The research collaborative planc. An autonomous directord. The research designe. The sampling plan

ANS: D PTS: 1 REF: 116 OBJ: 08-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

33. The research design specifies:a. follow-up procedures for the researchb. the information that will be foundc. how the final report will be writtend. how the information gathered will be used to predict external environmental changese. the research questions to be answered


ANS: E PTS: 1 REF: 116-117 OBJ: 08-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research

34. Pulte Homes, a national home builder, needs to control costs. Research done by Pulte Homes determined that 80 percent of its homebuyers selected the same countertops, floors, carpets, and toilets. Pulte Homes used these _____ data to cut its costs by reducing the variety of options offered without having any effect on the majority of its buyers.a. primaryb. secondaryc. dichotomousd. conveniencee. ethnographic

ANS: APrimary data are information that is gathered for the first time for solving a particular problem.


35. An engineer of Volkswagen America spent three and a half hours on a Greyhound bus to experience the vast distances Americans travel in their automobiles and to try to understand why Americans treat their automobiles as rolling extensions of their living rooms. What kind of data did the engineer collect?a. heuristicb. primaryc. cohesived. randome. secondary

ANS: BPrimary data are information that is gathered for the first time for solving a particular problem.


36. Information collected for the first time for the purpose of solving a particular problem under investigation is called _____ data.a. primaryb. secondaryc. dichotomousd. observatione. convenience


37. To determine new product opportunities, British Colombia's Sun-Rype Products conducted focus groups in which it learned Canadians are having trouble getting their required servings of fruits and vegetables each day--especially the vegetables. It gathered _____ data.a. heuristicb. primaryc. consensuald. randome. collaborative


ANS: B PTS: 1 REF: 117 OBJ: 08-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Research

38. Stair Specialist, Inc. builds customized circular staircases for homes in southern California. Its sales have plateaued. Nothing it does seems to change its sales picture. Its owner has asked you to advise the company on what it should do to increase its sales. Which of the following is an example of primary data that could be used for examining this marketing research problem?a. data from a study of new home start-ups in southern Californiab. an article in a construction trade journal predicting fewer housing starts during the next

decadec. industry predictions that the number of new homes built in the Southwest will increase by

15 percentd. information from the Los Angeles Yellow Pages showing the number of building

contractors has declined over the past five yearse. none of the choices

ANS: EInformation collected for the first time for the purpose of solving a particular problem under investigation is called primary data. All of these data are examples of secondary data.


39. Mel and Mimi is the name of an upscale boutique that has outgrown the building it has been located in for the last two decades. Its owners want to know how its customers will react to a move and if the addition of new product lines will make the new location more attractive to its loyal customers. The store's owners have surveyed several of their customers to gauge their reaction to various potential locations and changes in product lines. The survey results are an example of _____ data.a. primaryb. secondaryc. dichotomousd. observatione. collaborative

ANS: AInformation that is collected for the first time for the purpose of solving a particular problem under investigation is called primary data.


40. What is the chief advantage of primary data?a. low cost compared to secondary datab. relevance to the problem at handc. availability to any interested party for used. accessibility through computerized databasese. avoiding interviewer biases

ANS: BPrimary data are information collected for the first time for the purpose of solving a particular problem under investigation.




1. A _____ is a group of people or organizations that has wants and needs that can be satisfied by particular product categories, has the ability to purchase these products, and is willing to exchange resources for the products.a. firmb. buyerc. marketd. consumere. target

ANS: C PTS: 1 REF: 97 OBJ: 07-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

2. A group of middle school students stop by a sporting goods store. The store has just received a new shipment of high-end racing bicycles. The bicycles range in price from $1,200 to $3,000. All of the students want one of these new bikes, but none has the means to buy one. Is this group of consumers a potential market for the expensive bikes?a. Yes, they are a potential market since they are all about the same age.b. No, they do not have the ability to purchase at this time.c. No, to qualify as a market, they must need the product.d. Yes, they are a market because this product could satisfy their consumer wants and

desires.e. Yes, they are a market because this group shares relatively similar product needs and

purchasing characteristics.

ANS: BA market is a group of people or organizations that has wants and needs that can be satisfied by particular product categories, has the ability to purchase these products, and is willing to exchange resources for the products. There is no suggestion of ability in this case.


3. A market is people or organizations that have:a. the ability, willingness, and power to buyb. a medium of exchange and products they desirec. needs and wants and an ability and willingness to buyd. unmet needs or wants and products or services that satisfy those unmet needs or wantse. communication, financial, and capital resources

ANS: CA market is defined as having four imperative characteristics: people or organizations, needs and wants, ability, and willingness to buy.


4. A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have relatively similar product needs.a. market universeb. market segmentc. aggregated market


d. segmentation basee. population sample


5. _____ is the process of dividing a market into meaningful groups that are relatively similar and identifiable.a. Perceptual mappingb. Positioningc. Micromarketingd. Market samplinge. Market segmentation


6. E&V Bridal Studios is a wedding consulting business designed to appeal to East Asians. At one time it used the same marketing mix for all of its customers, but it has discovered that it needs a different marketing mix to appeal to its ethnic customers. For example, Chinese brides want elaborate red gowns, and Vietnamese brides wear a brocaded gown with long sleeves and a Mandarin collar. E&V Bridal Studios uses a procedure called _____ to divide its large market.a. micromarketingb. positioningc. market segmentationd. cannibalizatione. perceptual mapping

ANS: CDividing one large market into divisions based on a variable such as size is called market segmentation.


7. The purpose of market segmentation is to:a. reduce the market down to a specific size that the firm can handleb. divide the market into equal size and profit regions for sales territoriesc. group a large number of markets together enabling a company to serve them

simultaneouslyd. develop a generalized definition of the market as a wholee. enable the marketer to tailor marketing mixes to meet the needs of one or more specific

groups

ANS: EThe purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix.


8. Hildy Webb and LaTishe Brown own Creative Catering and would like to improve customer satisfaction and increase repeat business. When you ask them to describe a typical customer, they say it is impossible and explain that with corporate functions, family affairs, and fund-raisers, they do not have a typical customer. You suggest it is time for market segmentation because:


a. it will enable them to build an accurate description of customer needs by group and to design a marketing mix to fit each segment

b. Creative Catering needs to reduce the size of the market it servesc. Creative Catering needs to learn how to group these markets together into one market to

serve all of them adequatelyd. it will help develop a generalized definition of the market as a whole and reveal the

optimal marketing mix for this markete. this will position the company in the minds of its consumers as compared to its

competitors

ANS: AThe purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix.


9. Market segmentation can assist marketers to do all of the following EXCEPT:a. develop more precise definitions of customer needs and wantsb. identify which variable base should be used for segmentingc. more accurately define marketing objectivesd. improve resource allocatione. evaluate performance

ANS: BMarket segmentation itself does not signal which base should be used, but it will define needs and wants, and help marketers define marketing objectives, improve resource allocation, and evaluate performance.


10. The process of market segmentation involves breaking down a heterogeneous market into homogeneous and identifiable segments. If this process is carried to its extreme, then one could say that:a. this is the reason segmentation cannot be used by small firmsb. all individuals have the same needs in spite of cultural differencesc. everyone belongs to the same segmentd. segmentation controls the demand for productse. every individual in the world is a market segment

ANS: EThe ultimate segmentation would have each individual occupying his or her own segment, because everyone has somewhat different needs.


11. ProtecTV is a product that selectively mutes words and phrases some people find objectionable. It can be connected to a television, VCR, DVD player, or a satellite TV system. The manufacturer of ProtecTV targeted parents who did not want their children exposed to what they consider to be offensive language. The primary market segment for ProtecTV is:a. all parentsb. educators


c. children under the age of 12d. parents with preteens in their householdse. all those interested in screening out offensive language

ANS: D PTS: 1 REF: 97 OBJ: 07-1 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer

12. Market segmentation helps businesses to:a. define customer needs and wants more preciselyb. more accurately define marketing objectivesc. more efficiently allocate resourcesd. better evaluate their performancese. do all of these things

ANS: E PTS: 1 REF: 97-98 OBJ: 07-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

13. Which of the following is NOT one of the four criteria identified in the text for successful market segmentation?a. substantialityb. identifiability and measurabilityc. accountabilityd. accessibilitye. responsiveness

ANS: CThe four criteria are substantiality, identifiability and measurability, accessibility, and responsiveness.

PTS: 1 REF: 98 OBJ: 07-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

14. To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria are:a. segmentable, targetable, reliable, and homogeneousb. tangibility, flexibility, causality, and accessibilityc. substantiality, identifiability and measurability, accessibility, and responsivenessd. reliability, flexibility, tangibility, and accessibilitye. responsiveness, reliability, homogeneity, and causality

ANS: C PTS: 1 REF: 98 OBJ: 07-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

15. A manufacturer of lenses used in microscopes, binoculars, and telescopes has segmented its market into scientific equipment manufacturers, sporting equipment manufacturers, and retailers who sell replacement lenses. In order for this segmentation scheme to be successful, all of the following criteria must be met EXCEPT:a. substantialityb. accessibilityc. identifiability and measurabilityd. complexitye. responsiveness

ANS: DComplexity is not a criterion; simplicity would be preferred.



16. According to the criterion of _____ a selected segment must be large enough to warrant developing and maintaining a special marketing mix. Serving the specific needs of this segment must be commercially viable, even if the number of potential customers is small.a. causalityb. accountabilityc. responsivenessd. accessibilitye. substantiality


17. The marketing researcher for Chickadee, a manufacturer of designer clothing for infants and toddlers, has submitted a report on potential segments for expansion of its marketing efforts. She noted an increase of professional women over the age of 35 who are leaving their jobs to have their first babies. She described this segment as having substantiality. This means it:a. has enough special stores, magazines, and other outlets that it will be possible to direct

advertisements at this groupb. is large enough to permit a profitable market effort toward its membersc. exhibits a response rate to marketing variables different from the rates of other segmentsd. is too large and needs to be reduced to a more easily identifiable and measurable sizee. will be difficult to develop a product to match this group of buyers

ANS: BSubstantiality means the selected segment will be large enough to warrant developing and maintaining a special marketing mix. Serving the specific needs of this segment must be commercially viable, even if the number of potential customers is small.


18. DCS Corporation makes barbecue grills. It has expanded into high-priced, multi-purpose grills for people who want to be able to cook all their food outside. Facing little competition, DCS designed an excellent line of specialty grills, had good distribution, used effective promotion with this market, and within four years had a respectable market share. Yet financial losses every year have caused DCS to decide to drop this line. The reason could be that this market segment, relative to the resources devoted to it, lacked:a. reliabilityb. identifiability and measurabilityc. substantialityd. accessibilitye. causality

ANS: CSubstantiality means the selected segment is large enough to warrant developing and maintaining a special marketing mix. Serving the specific needs of this segment must be commercially viable. Based on four years of losses, this one apparently was not.

PTS: 1 REF: 98 OBJ: 07-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Product


19. United Social Service Agency wants to identify segments by their readiness to participate in a drug and alcohol program or in prenatal care. The agency will need to gauge whether there are enough people to justify setting up the service. The FIRST segmentation criterion problem that would greet this proposal is:a. responsivenessb. identifiability and measurabilityc. accessibilityd. substantialitye. responsibility

ANS: BIdentifiability and measurability is the first problem: how many people who are willing, indifferent, or unwilling to participate are there? The agency needs this number to gauge if there are enough of them. If there were enough of them, they would probably be responsive to a special program.


20. The city of Blossom Valley has a job training program for the homeless but has had a difficult time reaching this group with information about the program even though radio and television stations have provided public service advertisements free of charge. This illustrates a segmentation problem with:a. substantialityb. identifiability and measurabilityc. responsivenessd. accessibilitye. accountability

ANS: DAccessibility is the ability to communicate information about the product offering to the segment.

PTS: 1 REF: 98 OBJ: 07-3 TYPE: AppTOP: AACSB Reflective Thinking| AACSB Communication| TB&E Model Promotion

21. Market researchers estimate thousands of Americans have high blood pressure and do not know it because they do not have annual medical exams. A pharmaceutical company that has developed a medicine to reduce blood pressure should not count on this group to be a good target market because the group lacks:a. both accessibility and responsivenessb. accountabilityc. both accessibility and substantialityd. substantiality, identifiability, and measurabilitye. reliability and responsiveness

ANS: AMarketers cannot reach someone who does not know he or she has a problem and if he or she is reached, there will be no response.



22. SRD Research Firm has conducted marketing research on the market for concrete siding for homes. The research firm has determined there are thousands of homeowners who want the security, safety, warmth, and stability provided by concrete siding. These homeowners are generally married and between 25 and 54 years of age. They tend to live in suburban neighborhoods and most subscribe to lifestyle magazines. If you were interpreting these results, you might suggest that SRD:a. conduct additional research because it has no idea about the measurability of its segmentsb. examine the research report again to see if it can determine segment accessibilityc. conduct a follow-up analysis to determine if the segments it might choose would respond

differently from other segments to its marketing strategyd. not segment the concrete siding market because the only market for siding is contractors

who build the homese. segment the concrete siding market based on the information provided and concentrate its

efforts on suburban homeowners between 25 and 54 who read lifestyle magazines

ANS: CThe only criterion SRD has not determined is market responsiveness.


23. Every six months or so, some manufacturer introduces a new shape or color for the boxes that house the hardware to run PCs. These companies contend beige is boring, and people are ready for "something fun." These manufacturers ignore the fact most Americans like their technology in plain wrappers. These bright colors and odd shapes have failed because the market segment to which they are targeted lacks:a. substantialityb. identifiability and measurabilityc. responsivenessd. reliabilitye. accessibility

ANS: CIt is not difficult to locate the large market for PCs—they are readily identifiable and accessible for other computer products. They are just not responsive to the oddball designs and colors.


24. The requirement for a market segment to be responsive means:a. over half of the consumers in the identified segment will be actively interested in the

productb. all the segments identified by a marketer should respond to the marketing mixc. all the segments identified by a marketer should not respond to the marketing mixd. the segments identified by a marketer should not differ in the level of their responsiveness

to the marketing mixe. the segment identified by a marketer should differ in how it responds to the marketing mix

when compared to another segment confronted with the same mix

ANS: EThe target segment should respond differently to the market mix compared to other segments.



25. If a market segment is especially motivated by coupons in newspapers, which segmentation success criterion is most influential in the success of this program?a. responsivenessb. identifiability and measurabilityc. substantialityd. accessibilitye. functionality

ANS: AResponsiveness is in force when a target segment responds differently (hopefully more positively) to the marketing mix than other segments.

PTS: 1 REF: 98 OBJ: 07-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Promotion

26. The Middleton Health Club has a new fitness program for expectant mothers. After fliers were placed at the offices of area obstetricians, Middleton's class filled up within two days. Which segmentation success criterion was most influential in the success of this promotion?a. substantialityb. identifiabilityc. measurabilityd. causalitye. responsiveness

ANS: EResponsiveness is in force when a target segment responds differently (hopefully more positively) to the marketing mix than other segments.


27. _____ are characteristics of individuals, groups, or organizations that marketers use to divide a total market into segments.a. Differentiation guidesb. Segmentation basesc. Perceptual mapsd. Responsiveness quotientse. Accessibility quotients


28. E&V Bridal Studios is a wedding consulting business targeted to East Asians. It accommodates the various cultures by providing services to appeal to Koreans, Vietnamese, Chinese, and Japanese customers. E&V Bridal Studios markets its services to its customers by using ethnicity to divide its customers into segments. Ethnicity is its primary:a. perceived imageb. accessibility quotientc. environmental controld. segmentation basee. differentiation guide

ANS: DA segmentation base is the characteristic used to segment the market.



29. Listerine Essential Care toothpaste is designed to reduce plaque and to prevent gingivitis. Its ads state, "After age 35, 3 out of 4 adults have some form of gum disease." The toothpaste is targeted to the market segment over the age of 35. This age variable that has been used to distinguish the market for this toothpaste is an example of a(n):a. perceived variableb. accessibility quotientc. mass marketd. segmentation basee. differentiation guide



30. Military Spouses is the only publication in the world that targets readers who "are married to the military." Its content reflects the unique set of challenges, hardships, and rewards to those whose spouses are in the military. The marital status that has been used to distinguish the market for this magazine is an example of a(n):a. perceived variableb. accessibility quotientc. mass marketd. segmentation basee. differentiation guide





1. The processes individuals use when making a purchase decision are called _____. This is also the reason individuals recognize and respond to the distinctive lettering used on Coca-Cola cans, the shape of the Nike swoosh, and the color of a can of Campbell soup.a. consumer behaviorb. marketingc. consumerismd. perceptual mappinge. database mining

ANS: AConsumer behavior describes how consumers make purchase decisions.

PTS: 1 REF: 63 OBJ: 05-1 TYPE: DefTOP: AACSB Analytic| TB&E Model Customer

2. Marketers often study _____, the processes used and the factors that influence the consumer when making purchase decisions.a. psychographicsb. business buying behaviorc. consumerismd. consumer behaviore. perceptual mapping


3. The steps of the consumer decision-making process in order are:a. need recognition, alternative aggregation, reevaluation, purchase decision, postpurchase

behaviorb. need positioning, stimulus response reactions, evaluation of alternatives, purchase

decision, postpurchase behaviorc. need positioning, alternative aggregation and divestment, purchase decision, postpurchase

evaluationd. information search, need positioning, evaluation of alternatives, product trial, purchase

decision, postpurchase satisfactione. need recognition, information search, evaluation of alternatives, purchase, and

postpurchase evaluation


4. As a result of hearing the adventures of returning soldiers, Monroe decided to enlist in the U.S. Army. These stories he heard from the soldiers acted as:a. affective statesb. external stimulic. internal stimulid. purchase outcomese. a dissonance creator

ANS: BThe adventures he heard were stimuli that were not physiological.


PTS: 1 REF: 64 OBJ: 05-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model International Perspective

5. Hector loves cola and is always on a diet. He will only drink Diet Coke. When offered a Diet Pepsi one afternoon as an alternative, he refused to even consider it as part of his evoked set even though he generally drinks a soft drink about the time of day the offer was made. This illustrates that Hector:a. is satisfying a wantb. is satisfying a needc. is satisfying a beliefd. has a physiological drivee. has a need motivator

ANS: AA want is often brand specific, whereas a need is something an individual depends on to function efficiently. A person may need food but wants specific brands.

PTS: 1 REF: 64 OBJ: 05-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product

6. Which of the following is the BEST example of an internal stimulus that would create need recognition?a. a friend comments on how shabby your coat looksb. a radio station runs an ad for a new video game rental storec. a headached. an invitation to a graduation for which you need a gifte. a billboard promoting a new national Internet service provider

ANS: CAches and pains are generated internally by your body without outside inputs from anything or anyone.


7. After a need or want is recognized, a consumer may be motivated to clarify the options available and generate an evoked set of brands. This occurs during which part of the consumer decision-making process?a. evaluation of alternativesb. information searchc. cognitive dissonanced. consideration stagee. product identification


8. While Martin was looking at the DVDs at Wal-Mart, he was trying to remember the name of the horror movie he saw that starred Bruce Campbell so he could buy the DVD. This is likely to occur during which part of the consumer decision-making process?a. antecedent stateb. need recognitionc. external information searchd. alternative evaluation


e. internal information search

ANS: EAfter a need or want is recognized, a consumer may be motivated to search for information. In this case, the information was already stored in his memory.


9. The types of products people purchase using only an internal search are typically:a. frequently purchased, low-cost itemsb. frequently purchased, high-cost itemsc. infrequently purchased, low-cost itemsd. infrequently purchased, high-cost itemse. all types of items, regardless of price or frequency of purchase

ANS: AInformation about frequently purchased, low-cost items is stored in an individual's memory and is sufficient knowledge for the purchase decision.


10. Which of the following products would most likely require the purchaser to use only an internal information search?a. a veterinarian for a new puppyb. a day-care facility for a two-month-old infantc. a wedding gownd. a tube of toothpastee. an anniversary gift

ANS: DInternal information search is used with frequently purchased, low-cost items; the only item on the list that meets this criterion is the toothpaste.


11. An external information search is especially important when:a. there is a great deal of past experienceb. there are high cost associated with making an incorrect decisionc. the cost of gathering information is highd. buying frequently purchased, low-cost itemse. there is little risk of making an incorrect decision

ANS: BIf a consumer perceives a purchase to involve high risk (financial, social, etc.), an external search will lower the risk by providing more information.


12. For which of the following products is the purchaser most likely to rely on an external information source?a. a toothbrush


b. a copy of People magazinec. a Big Macd. a new prescriptione. a box of tissues

ANS: D PTS: 1 REF: 64-65 OBJ: 05-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Strategy

13. Pregnant Niceae has been shopping for a baby crib. She has visited several sites on the Internet that provide information about cribs and has consulted a book on how to keep her baby safe by a consumer group. Niceae has also asked several new mothers for recommendations. In her decision-making process, Niceae has been using:a. marketing-controlled information sourcesb. demographic information sourcesc. nonmarketing-controlled information sourcesd. secondary data sourcese. internal search sources

ANS: CPublic sources of information, such as Web sites and consumer groups, are known as nonmarketing-controlled information sources.

PTS: 1 REF: 64-65 OBJ: 05-2 TYPE: AppTOP: AACSB Technology| TB&E Model Product| TB&E Model Online/Computer

14. Which of the following is NOT an example of a marketing-controlled information system?a. a television ad for Geico insuranceb. a NASCAR automobile sponsored by the U.S. Armyc. a $1-off coupon for Campbell’s soupd. an article in Bicycling magazine about the newest Shimano brand shoese. a real estate agent

ANS: DThe article in Bicycling would NOT have originated with the Shimano organization.

PTS: 1 REF: 65 OBJ: 05-2 TYPE: AppTOP: AACSB Technology| TB&E Model Online/Computer

15. While Robinson was looking at the CDs at Wal-Mart, he was trying to remember the name of the group that sang the song he liked on last night's episode of Smallville, so he could buy it. Since recording companies pay to have their CDs promoted on television shows that air on the WB, the source of information Robinson is trying to recall is:a. a fortuitously evoked setb. marketing-controlledc. nonmarketing-controlledd. unitary datae. a credible consideration set

ANS: B PTS: 1 REF: 65 OBJ: 05-2 TYPE: AppTOP: AACSB Technology| TB&E Model Customer


16. Warren loves to go to the beach on his vacation but hates to have to worry about the possibility of hurricanes. As Warren looked for where he should go on vacation this summer, he consulted a publication called Smart Money and learned the islands of Aruba, Bonaire and Curacao are not in the hurricane belt. Now he will only consider these island resorts as possible vacation destinations. This group of resort islands is called Warren’s:a. involvement setb. evaluative setc. evolved setd. evoked sete. intuitive set

ANS: DAn evoked set is the set of brands a consumer recalls and would consider as possible purchase choices.


17. Melyssa has been given a horse and needs to buy a new Western saddle. She has narrowed the brands of saddles she is considering down to Dale Chavez, Abetta, and Big Horn. These three brands of Western saddles represent Melyssa's:a. evaluative criteriab. dissonance suppressorsc. discretionary discriminatorsd. discriminatory sete. evoked set

ANS: E PTS: 1 REF: 65 OBJ: 05-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Product

18. Zoran wants to buy a pair of sunglasses he can wear when he is riding his bicycle in competitions. He wants sunglasses with a rubberized nose piece, built-in anti-fogging technology, and the ability to block light from all angles. The criteria for his decision appear to be based on:a. marketing-controlled information sourcesb. evoked set finalistsc. routine response behaviord. attitudes of otherse. product attributes

ANS: EPhysical characteristics and traits used in decision making are called product attributes.


19. Another name for evoked set is:a. called arrayb. reminder assortmentc. induced memoryd. consideration sete. reminder induction


20. People tend to be more satisfied with a purchase if:


a. they obtain additional information that reinforces their decisionb. they feel less competent in their daily livesc. cognitive dissonance developsd. there is inconsistency among opinions and valuese. there is no further contact with the seller

ANS: ANew information that reinforces positive ideas about the purchase tends to reduce cognitive dissonance and increases satisfaction.

PTS: 1 REF: 66 OBJ: 05-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product

21. Cecelia is a receptionist and just spent $347 on a new riding saddle for her boyfriend Claude, a weekend cowboy. When she got home with the saddle, she experienced a high level of anxiety about whether she has made the right purchase decision. Cecelia experienced:a. selective dissatisfactionb. temporal distortionc. perceptual disharmonyd. cognitive dissonancee. self-actualization involvement

ANS: DCognitive dissonance is the term for postpurchase tension and anxiety.

PTS: 1 REF: 66 OBJ: 05-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product

22. Miller has just purchased a new Allez A1 Specialized bicycle for $1,000. Miller realizes that the Allez A1 costs more than most bikes, and even at that price it doesn't come with a set of pedals. Even though other brands of bicycles cost much less than the Allez A1, Miller tells himself that the Allez A1 is more comfortable and has greater durability than most road bikes. As Miller wonders if he made the right purchase decision, he is experiencing:a. attribute remorseb. cognitive dissonancec. evaluation distortiond. consumer cognitione. perceptual disharmony

ANS: BCognitive dissonance involves the realization of the advantages and disadvantages of the purchased product.

PTS: 1 REF: 66 OBJ: 05-2 TYPE: AppTOP: AACSB Analytic| TB&E Model Product

23. _____ is the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior.a. Economic valueb. Involvementc. Opportunity costd. Temporal coste. Perceived level of personal risk

ANS: B PTS: 1 REF: 67 OBJ: 05-3 TYPE: Def


TOP: AACSB Reflective Thinking| TB&E Model Strategy

24. When the secretary restocks office supplies each month, he places an order for paper, pens, folders, and printer cartridges. Each month the order is the same. This type of buying behavior is called:a. buyer's harmonyb. situational conveniencec. routine response behaviord. limited decision makinge. consistent decision making

ANS: CThe buying of frequently purchased, low-cost goods is typically routine response behavior.


25. Which of the following activities is most likely to be an example of routine response behavior?a. the purchase of a three-week vacation cruiseb. a homeowner’s purchase of a new grill for $6,000c. the first-time purchase of a copy machine for your home officed. the purchase of toilet papere. the purchase of a infant car seat

ANS: DOnly the toilet paper is an example of a low-involvement purchase.


26. _____ is characterized by low involvement, a short time frame, an internal-only information search, and low costs.a. Limited decision makingb. Routine response behaviorc. Emotional buyingd. Intensive decision makinge. Temporally-limited behavior

ANS: BSee Exhibit 5.2.


27. Jackson has moved to a new community and can no longer attend his old church. He is currently visiting churches to make a decision about which one best serves his needs. In making his decision, Jackson will engage in _____ consumer decision making.a. limitedb. extendedc. habituald. classicale. routine

ANS: AJackson is familiar with churches and the services they provide, but he is unfamiliar with the ones in his new community.



28. The electricity for lighting outdoor billboards is powered by transformers. The operator of a company that installs and manages billboards has purchased many such transformers. Today he plans to buy a replacement for one that was destroyed by a recent hurricane. Before making this purchase, he will look at cost and also see if he can find one that is more weatherproof. He wants to make sure he buys the best transformer for the job and that he does not pay more money than he should. In other words, he will engage in _____ decision making.a. limitedb. extendedc. habituald. classicale. routine

ANS: AThe billboard operator is familiar with the product, but he is not immediately knowledgeable about the products currently on the market.


29. When a consumer is purchasing an unfamiliar or expensive product, the consumer often uses the _____ process.a. extensive decision makingb. cognitive harmonizingc. limited problem solvingd. strategic behaviore. stimulus discrimination

ANS: A PTS: 1 REF: 67-68 OBJ: 05-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product



1._____ is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments.a. Organizational optimizationb. Consumer relationship marketing (CRM)c. Total quality management (TQM)d. Customer relationship management (CRM)e. Market aggregation

ANS: D PTS: 1 REF: 293 OBJ: 19-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

5. Customer relationship management:a. is often described as a closed-loop systemb. only involves personnel in marketing and management departmentsc. organizes the company around functional departmentsd. is a very simplistic method of encouraging customer satisfactione. is only a theory and has not been proven successful in any practical way

ANS: ACRM is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments.

PTS: 1 REF: 293 OBJ: 19-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

6. To initiate the CRM cycle, a company must first:a. establish marketing objectivesb. decide on a segmentation strategyc. establish customer relationships with the organizationd. determine the level of interaction customers have with the organizatione. acquire and capture customer data for product categories

ANS: C PTS: 1 REF: 293 OBJ: 19-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

8. Which of the following statements about the CRM cycle is true?a. The letters CRM are an acronym for consumer relationship marketing.b. The CRM cycle does not affect employees outside the marketing and management

functional areas.c. The CRM cycle is continuous and circular with no predefined start or end point.d. The CRM cycle takes a simplistic perspective on customers.e. All of these statements about the CRM cycle are true.

ANS: CCRM stands for customer relationship management.

PTS: 1 REF: 293 OBJ: 19-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy


9. A company that has a(n) _____ customizes its product offerings based on data generated through interaction between the customer and the company.a. ethnocentric perspectiveb. supply-based focusc. sales orientationd. supply-based focuse. customer-centric focus

ANS: EA customer-centric focus is represented by adherence to the marketing concept.


12. Customer-centric is an internal management philosophy similar to:a. utilitarianismb. Herzberg's theory of motivationc. the equity theoryd. the marketing concepte. consumerism


TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product

14. In a CRM environment, _____ is defined as the informal process of collecting customer information through customer contacts and feedback on product performance.a. corporate modificationb. attitude adjustmentc. organizational perceptiond. stimulus/response researche. learning

ANS: E PTS: 1 REF: 295-296 OBJ: 19-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

15. _____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.a. Knowledge managementb. Learningc. Database marketingd. Interactive marketinge. Information marketing


17. _____ refers to the latitude organizations bestow on their representatives to negotiate mutually satisfying commitments with customers.a. Consumer learningb. Customerizationc. Empowermentd. Autonomy


e. Interaction

ANS: C PTS: 1 REF: 296 OBJ: 19-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer

19. A(n) _____ is the point at which a customer and a company representative exchange information and develop learning relationships.a. social contactb. interactionc. empowering momentd. equilibrium pointe. transactional dyad

ANS: B PTS: 1 REF: 296 OBJ: 19-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Customer

23. Which of the following statements about touch points is true?a. Data gathered at external touch points, once interpreted, provide information that affects

internal touch points.b. A customer applying for a credit card is an example of a touch point.c. Companies are publicizing their Web sites as the first touch point for customer

interactions.d. A customer complaint is an example of an external touch point.e. All of these statements about touch points are true.

ANS: E PTS: 1 REF: 297 OBJ: 19-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

24. In a CRM system, _____ are all areas of the business where customers have contact with the company and data may be gathered and used to guide and direct the decision making within that business unit.a. touch pointsb. focus areasc. data miningd. information search periodse. observational points


TOP: AACSB Technology| AACSB Reflective Thinking| TB&E Model Online/Computer| TB&E Model Customer

28. _____ interactions occur when customers buy products in a store.a. Point-of-saleb. Relationship-basedc. Cost-basedd. Retail-centrice. Distribution-focused



29. Which of the following is a guideline for a successful CRM system?a. Customer information is not retained past the initial contact with the customer.b. Intuition and experience must define the products provided by the organization.c. The product takes center stage in the organization.d. Customer information is kept in a centralized repository.e. All of these are guidelines for a successful CRM system.

ANS: DCustomer information is retained past the initial contact with the customer. Customer data should be accumulated over the customer's entire life span with the organization.Customers must define the products provided by the organization. The customer takes center stage in the organization.

PTS: 1 REF: 298-299 OBJ: 19-5 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

30. The traditional approach for acquiring data from customers is through:a. encoding devicesb. mediac. feedback mechanismsd. channel interactionse. public relations

ANS: D PTS: 1 REF: 298 OBJ: 19-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

31. Which of the following is an example of a channel through which customer data are traditionally gathered?a. store visitsb. conversations with salespeoplec. interactions via the Webd. phone conversationse. all of these

ANS: E PTS: 1 REF: 298 OBJ: 19-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

32. An organization should view every transaction as:a. simply a financial exchangeb. deleterious to customer relationship managementc. the opportunity to collect vast amounts of data about the customerd. the creation of customer-organization multiplicitye. the closing of a channel

ANS: C PTS: 1 REF: 298 OBJ: 19-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

33. When viewed as an interaction between the organization and the customer, a transaction can produce all of the following customer data EXCEPT:a. name, address, and phone numberb. information about the customer's relationship with other customersc. past purchase historyd. information about the customer's relationship with the organizatione. average amount spent on purchases

ANS: B PTS: 1 REF: 298 OBJ: 19-4 TYPE: Comp


TOP: AACSB Reflective Thinking| TB&E Model Customer

34. A(n) _____ is a central repository for data from various functional areas of the organization. These data can be shared by all of the organization's departments.a. information mineb. knowledge distribution centerc. information extraction unitd. information intermediarye. data warehouse

ANS: E PTS: 1 REF: 298-299 OBJ: 19-5 TYPE: DefTOP: AACSB Technology| TB&E Model Online/Computer

37. The core of the data warehouse is:a. empowered employeesb. transaction channels of communicationc. point-of-sale interactionsd. the databasee. a compiled list

ANS: D PTS: 1 REF: 298 OBJ: 19-5 TYPE: DefTOP: AACSB Technology| TB&E Model Online/Computer

40. A _____ is essentially a very large, corporate-wide database, culled from a number of separate systems, such as billing, accounting, order fulfillment, distribution, customer service, and marketing and sales, already in place within an organization.a. data martb. customer information systemc. data warehoused. decision support systeme. data cluster

ANS: C PTS: 1 REF: 298-299 OBJ: 19-5 TYPE: DefTOP: AACSB Technology| TB&E Model Online/Computer

45. A(n) _____ list generally includes names and addresses gleaned from directories or membership rosters.a. predictiveb. compiledc. responsed. actionablee. disintegrated


47. _____ is the addition of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of customers or prospects.a. Information formattingb. Database enhancementc. Data mining


d. Data shadinge. Predictive modeling

ANS: B PTS: 1 REF: 299 OBJ: 19-5 TYPE: DefTOP: AACSB Technology|| TB&E Model Online/Computer


49.Which of the following statements about a CRM system is true?a. A critical component of a CRM system is the use of the appropriate technology to store

and integrate customer data.b. A CRM system operates on the theory that all customers are equally important.c. Due to privacy laws, a CRM system only disseminates customer information to those who

are actually in day-to-day contact with customers.d. A company using a CRM system must view its customers as bits of data.e. All of these statements about a CRM system are true.

ANS: AThe CRM system allows companies to make use of the 80/20 rule. Customers should be viewed comprehensively.PTS: 1 REF: 300 OBJ: 19-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Strategy

50. _____ is the process of finding hidden patterns and relationships in the customer data stored in the data warehouse.a. Customer information management (CIS)b. Data feedbackc. Information retrievald. Information extractione. Data mining

ANS: E PTS: 1 REF: 300 OBJ: 19-6 TYPE: DefTOP: AACSB Technology| TB&E Model Online/Computer

57. Which of the following techniques used to analyze marketing databases considers whether a customer has made a purchase recently as well as how often that customer makes a purchase?a. recency-frequency-monetary analysis (RFM)b. predictive modelingc. customer valuationd. data mininge. lifetime value analysis

ANS: A PTS: 1 REF: 300 OBJ: 19-6 TYPE: DefTOP: AACSB Technology| TB&E Model Customer

58. The basic assumption of _____ is that marketing to repeat customers is more profitable than marketing to first-time buyers.a. customer segmentationb. predictive modelingc. customer valuationd. data manipulatione. lifetime value analysis

ANS: ELifetime value analysis is a data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers.



59. Designer Linens Outlet uses CRM to track visitors to its Web site. This tracking allows the retailer to confidently project the value of its repeat customers through its application of: a. customer segmentationb. predictive modelingc. customer valuationd. data manipulatione. lifetime value analysis

ANS: ELifetime value analysis is a data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers.

PTS: 1 REF: 300 OBJ: 19-6 TYPE: AppTOP: AACSB Technology| TB&E Model Customer| TB&E Model Online/Computer


60._____ uses a past set of occurrences to predict the likelihood that some other occurrence, such as a response or purchase, will take place in the future.a. Customer manipulationb. Predictive modelingc. Data miningd. Lifetime value analysise. Causal research

ANS: B PTS: 1 REF: 301 OBJ: 19-6 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

65. _____ involves developing product offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships.a. Transaction managementb. Campaign managementc. Data miningd. Consumerisme. Knowledge management


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