RELEVANT MIDTERM QUESTIONS FROM PRIOR … · The research is done with a paper and pencil survey....

University of Southern California Marshall School of Business

BUAD 307 Lars Perner, Ph.D., Instructor

Marketing Fundamentals Spring, 2018

RELEVANT MIDTERM QUESTIONS

FROM PRIOR EXAMS WITH ANSWERS AND ANNOTATIONS

1. For which of the following purposes would a focus group be most useful? a. Wal-Mart would like to know what percentage of customers would buy prefer to have a

McDonald’s, as opposed to a Taco Bell, restaurant in stores. b. General Foods would like to know if they would be better off spending their money on

advertising or on cents off coupons. c. Von’s would like to know what types of concerns consumers may have about genetically

modified crops. d. Admissions officials at USC would like to know how many siblings students have on the

average. e. Determining whether the majority of fraternity members prefer Coke or Pepsi.

2. Assuming that selling software online—with the programs being downloaded by the customer—

is considerably less costly than selling through traditional distribution channels, firms that sell software online

a. Are likely to have a very profitable future ahead of them due to their competitive advantage.

b. Are likely to be highly profitable, but only after the “growth” phase of the product life cycle has ended.

c. Will tend to rely on network economies. d. Both (a) and (c). e. None of the above.

3. The Central Advertising Agency is interested in assessing the effectiveness of a thirty second

advertising spot. Two areas of concern are (1) how much attention viewers seem to give to the ad and (2) where the viewer looks at various times during the ad. Of the following research methods, which would be most suited for this purpose?

a. Conditional branching. b. Focus groups. c. Physiological measures. d. Projective techniques. e. Scanner data.

4. Scanner panel data:

a. Is usually only available for grocery products. b. Is usually the most effective way to determine the influence of consumer attitudes on

purchase patterns. c. Has most of the same benefits as projective research methods. d. Both (a) and (b). e. None of the above.

5. Under which of the following circumstances would conditional branching be most likely to be

useful in market research? a. The survey has a low response rate. b. The survey asks about something that many respondents may find embarrassing. c. Different questions should be asked to people who have and have not redeemed a

coupon over the last twelve months. d. The research is done with a paper and pencil survey. e. It is important that the respondent be able to see a picture of the product.

6. In market research:

a. “Open-ended” questions tend to be more likely to be skipped by respondents than are “closed ended” questions.

b. One problem associated with focus groups is that the total sample size involved tends to be limited.

c. If both surveys and focus groups are done, the surveys should usually be done before the focus groups.

d. Both (a) and (b). e. Both (a) and (c).

7. A charity is interested in finding out which of the following colors of jackets worn by solicitors

will result in higher donations: Red, blue, green, or pink. Of the following research methods, which would be most appropriate for addressing this question?

a. Scanner data. b. Phone surveys. c. Internet surveys. d. Experimentation. e. Focus groups.

8. Levi’s is interested in how consumers shop for jeans. Of interest are the amount of time spent,

what consumers look at while shopping, the extent to which individuals other than the buyer participate in the process, and how likely the consumers are to actually try on the jeans before buying them. Of the following, which would be the most appropriate research method?

a. Scanner data. b. Experimentation. c. Observation. d. Focus groups. e. Online surveys.

9. A likely effective way for an elementary school teacher to get some time off pending a thorough

psychiatric examination is to: a. Text “I used 2B sane” to all the parents.

10. Gerber is looking to design the bottle for a new formulation of baby food that is not currently

available in retail stores. Market researchers would like to determine whether a picture of a baby girl with a blue bib, a baby girl with a pink bib, a baby boy with a blue bib, or a baby boy with a pink bib will sell best. Of the following, which would be the most appropriate research method?

a. Focus groups. b. Online surveys. c. Scanner data. d. Experimentation. e. Click-stream analysis.

11. In online survey research, it is generally beneficial to:

a. Increase efficiency through the use of “two-in-one” questions. b. Use continuum rather than binary questions. c. Avoid the use of open-ended questions. d. Take precautions to avoid conditional branching. e. Maximize the use of leading questions.

12. In order to plan for the layout of new stores, Target would like to know how senior citizens shop

for non-prescription pharmacy products—e.g., how many different brands do they examine before making a choice, how long do they spend in the process, and to what extent do they read text on packaging. The most appropriate research method for this question is:

a. Scanner data. b. Focus groups. c. Physiological measures. d. Observation. e. Experimentation.

13. According to the author of Contagious, in the New York City Department of Health “fat blob”

advertisement, ______ was intended to become a trigger. a. Lunch. b. Soda. c. A fat blob. d. A pile of refined sugar. e. Water.

14. The model for making ethical decision making discussed in class includes assessment of:

a. The extent to which there may be a redeeming purpose that may justify manipulation. b. The extent to which a practice is sufficiently profitable that it is worthwhile to engage in

ethically questionable behavior. c. The likelihood that the consumers and public policy makers will become aware of the

ethical problems in question. d. Both (a) and (c). e. Both (b) and (c).

15. SWOT analysis:

a. Is an alternative to strategic planning. b. Is intended primarily to implement “gorillarization.” c. Is based on the building blocks Solvency, Warehousing, Output, and Transactions. d. Can be used to examine the best use of a firm’s resources in accomplishing objectives. e. Both (b) and (c).

16. According to the author of Contagious:

a. BMW ran an online series called You’re Hired! in order to create feelings of contentment (and thus positive associations with its brand) among viewers.

b. Budweiser’s “drinking buddies” advertising series was intended to make people more comfortable with being seen drunk in public.

c. A study found that, in choosing between two potential jobs, people seemed to be influenced more by how the salary compared to those of others in the firm than by the actual dollar they would make.



a. Because jogging in place tends to trigger certain memories, this activity resulted in an increase in the number of articles being shared by study participants.

b. Information about Disney World is more likely to be shared than information about Cheerios.

c. McDonald’s McRib sandwich became more popular when its availability was reduced. d. Both (a) and (b). e. Both (b) and (c).

18. Within the context of strategy: a. Objectives should be stated in dollar amounts so that each objective can be readily

compared to others. b. SWOT analysis focuses on using surplus and width to manage outlook and transition. c. Certain objectives may need to be reached before certain others can be attempted. d. Both (a) and (b). e. Both (a) and (c).

19. Based on the text’s discussion of show-rooming, which of the following firms would be most

likely to benefit from this phenomenon? a. Toyota. b. Amazon.com. c. Nordstrom’s. d. Home Depot. e. Louis Vuitton.

20. Within the context of a product’s value-to-bulk ratio, bulk refers to factors such as:

a. Weight. b. Size. c. Fragility. d. Both (a) and (b). e. All of the above.

21. When in Rome, one should attempt to:

a. Make a profit on the Romans.1

22. Within the context of electronic commerce, absolute margins are expressed in terms of: a. The impact of promotional spending on sales volumes. b. Dollar amounts. c. Value co-creation. d. Value-to-bulk ratios. e. Shipping and handling fees.

23. According to the author of Contagious, in spreading ideas virally:

a. The message is more important than the messenger. b. To be successful, one must have the support of “exceptional people.” c. The speed at which an idea spreads is calculated by the formula V=ln(βγ2-λ)/2π. d. It is important to have a strong social media presence. e. Both (b) and (d).

1 This is a “single choice” question intended to reduce the stress of taking an exam. You will receive credit for choosing option (a).

24. According to the text, a sustainable competitive advantage:

a. Requires the use of the “bricks-and-clicks” model. b. Is generally based on having a lower cost structure and greater percentage of revenues

coming from micro-payments. c. Will be difficult for competitors to match. d. Both (a) and (b). e. Both (b) and (c).

25. The marketing environment:

a. Is largely beyond the control of the firm. b. May result in “opportunities” and “threats” within SWOT analysis. c. Makes meaningful strategic planning meaningless under most circumstances. d. Both (a) and (b). e. All of the above.

26. Within the context of SWOT analysis:

a. Large and successful firms such as Apple tend not to have significant weaknesses. b. For most firms, weaknesses are much more important than strengths. c. For most firms, opportunities and threats tend to roughly cancel out each other. d. Both (a) and (b). e. None of the above.

27. A certificate of inauthenticity:

a. Would probably add little if any value to a work of art.

28. Strategic plans: a. Must state all objectives in terms of profit targets desired. b. May differ between firms that have different objectives. c. May be stated in terms of factors such as market share and unit sales. d. Both (a) and (b). e. Both (b) and (c).

29. The purpose of a SWOT analysis is to:

a. Discuss a firm’s strengths and weaknesses for its annual report. b. Identify strategic opportunities for a firm based on its strengths and weaknesses and the

opportunities and threats it faces. c. Assemble a team to assist in law enforcement activities. d. Both (a) and (b). e. None of the above.

30. In marketing, value:

a. Focuses on getting a product in a particular market to customers at prices lower than those charged by competitors.

b. Depends on the utility gained by consumers relative to the amount of money paid or other sacrifices made.

c. Will occur only imbalanced markets. d. Is no longer a meaningful concept due to the rise of “component lifestyles.” e. None of the above.

31. Based on our conceptualization of customer value, it can be concluded that:

a. A particular offering may represent good value to one segment but poor value to another.

b. A high price, high quality product is likely to represent poor value. c. A low price, low quality product is likely to represent good value to most consumers. d. Both (a) and (b). e. All of the above.

32. There appear to be considerable cost savings in selling airline tickets online as opposed to

through a “brick-and-mortar” travel agency. With this in mind: a. Entering this market is one of the safest investments that one can make. b. It is unlikely that online vendors of airline tickets will make exceptionally large profits in

the long run. c. Firms that sell electronics online should switch to selling airline tickets instead. d. Online vendors of airline tickets will tend, in the long run, to experience very high profit

levels. e. It is unnecessary for firms in this industry to perform SWOT analyses.

33. The City of Pandaville, Pennsylvania, features a number of restaurants offering different types of cuisines and the following Chinese restaurants:

Restaurant Offerings Prices Puny Panda Very small portions of fancy Chinese food Extremely

high Mongolian Panda

Emphasis on the Mongolian regional cuisine Moderate

Authentic Panda Authentic Chinese food as eaten by people in China

High

Inauthentic Panda

Chinese food adapted for the tastes of Westerners

Moderate

Porky Panda Large portions of calorie rich Chinese food Moderate to low

Garden Panda Vegetarian Chinese food Moderate to high

Sissy Panda Very bland Chinese food with limited spices and seasoning

High

Szechuan Panda Very hot and spicy Moderate to high

Based on this information:

a. This market appears to be relatively well balanced. b. Price competition is likely to be intense since none of the restaurants appear to focus on

core customer value. c. Most of these restaurants appear to be focused on a strategy of value co-creation. d. Both (b) and (c). e. None of the above.

34. Which of the following are likely to contribute to the profitability of Amazon.com compared to

traditional bookstores? a. Lower labor and distribution costs. b. Opportunities to use collaborative filtering. c. The ability to charge higher prices for bestselling novels. d. Both (a) and (b). e. Both (a) and (c).

35. The value-to-bulk ratio of a product:

a. Determines the extent to which collaborative filtering can be effectively used. b. Is one of the factors affecting its suitability for being sold online. c. Is derived by dividing the weight of the product by the square root of its wholesale

price. d. Both (a) and (b). e. All of the above.

36. Customer value involves:

a. Getting the lowest price possible on a product in a given category. b. Eliminating intermediaries in distribution. c. The ratio of benefits received to sacrifices made. d. All of the above. e. None of the above.


a. When Jupiter is at its closest to Earth, sales of Mars bars decline dramatically since Jupiter cancels out the gravitational effect of Mars on Earth.

b. The consumption of Kit Kat bars tends to result in loss of social currency. c. The New York City Department of Health’s anti-soda campaign involved a trigger. d. Both (b) and (c). e. None of the above.

38. In a well balanced market:

a. All sellers carefully trade off the costs of features against benefits so that nobody offers expensive products that will only be of interest to a small part of the market

b. Different sellers focus on different parts of the market. c. Sellers provide economies of scale by standardizing the product they offer so that

customers know they can get high quality merchandise from all sellers. d. Both (a) and (b). e. Both (a) and (c).

39. In general:

a. Elements of the environment are usually beyond the control of the firm. b. SWOT analysis is based on the elements of service, warrantation, observation, and

targeting. c. Value co-creation occurs mostly in self-service stores. d. Both (a) and (b). e. Both (b) and (c).


a. In the voting study, individuals who cast their votes at a school were more likely than those who voted in a library to vote for ballot measures that would restrict the sale of alcoholic beverages.

b. In the retail study, consumers exposed to German music tended to purchase French or Italian wines as a means of balancing their experience.

c. Sales of McDonald’s McRib sandwich increased when its availability was decreased. d. Both (a) and (b). e. All of the above.


a. An increase in sales taxes will tend to result in an increase in perceived social currency among shoppers.

b. In the Carla game, participants who were told that Carla drove a fast sports car tended to conclude that she had an exceptionally high IQ.

c. The main purpose of the New York City Department of Public Health “fat blob” advertisements was to encourage consumers to eat more fruits and vegetables instead of French Fries.

d. Both (a) and (b). e. None of the above.


a. In the University of Illinois cooking study, a number of students chose to eat cockroaches rather than conventional food in order to gain social currency.

b. Howard Wein’s strategy for launching the Prime Barclay Steak House was based on the idea of triggers.

c. Research found that some participants were willing to receive less money in return for being able to share information about themselves.

d. Both (b) and (c). e. None of the above.

43. Our discussion of reasons why Tony the Tiger wears a scarf included (but may not have been limited to):

a. The desire to gain reverse social currency by means of exclusivity avoidance. b. Results of testing of various designs of Tony with consumers. c. Government requirements that any individual featured in television advertising

consuming milk must be attired this way. d. Payoffs from fashion designers wanting to sell scarves. e. Implementation of value co-creation by way of market balance.

44. Within the context of customer value:

a. A low priced product usually represents very high value for customers. b. A product with a high sticker price may still represent good value to some customers. c. In order for a product to represent value to at least some segment of customers, it must

feature ease of use and high levels of durability. d. Both (b) and (c). e. All of the above.


a. On Pluto, sales of Earth bars increased significantly when its residents were excitedly anticipating the fly-by of NASA’s New Horizons probe.

b. Participants in the University of Illinois cooking study tended to exaggerate more when they thought they were talking to a fellow student than when they thought they were talking with an experimenter.

c. McDonald’s was able to dramatically increase the sales of its McRib sandwiches by extensive advertising which created triggers that would cause customers to think of the sandwich.

d. The “Friday” song would likely have become a major hit if it had had another title, but ended up enjoying limited success because it was only triggered one day of the week.

e. Both (b) and (c).

46. According to the author of Contagious: a. Disappointed consumers greatly decreased their consumption of Neptune bars after

NASA announced that the planet actually had fewer moons than had previously been believed.

b. The Boston Markets ads were intended to have the thought of “dinner” trigger the restaurant chain.

c. Whereas a negative review tended to result in higher book sales for well known authors, negative reviews decreased sales of books by unknown authors.


47. Which of the following are strategic objectives that the management of Uber might set for the

coming twelve months? a. Increasing profitability by 13%. b. Increasing the number of customers who use Uber for the first time by 15%. c. Increasing the number of trips taken by the average customer by 3.2%. d. Both (a) and (c). e. All of the above.

48. The top management at Greedy Giraffe—a designer jeans label—is reviewing its strategic plans

and is looking to set objectives it hopes to accomplish within the next twelve months. Which of the following could be potential objectives?

a. Increasing unit sales by 30%. b. Increasing brand awareness among buyers of designer from its current 22% to 35%. c. Increasing gross revenue by 27%. d. Both (a) and (c). e. All of the above.


a. For books written by well known authors, a negative review tended to cause a decrease in sales.

b. In-N-Out Burgers has been particularly successful in India c. The “Friday” song only became successful once it was renamed “Friday the Thirteenth”

since this triggered a well known superstition. d. Both (a) and (c). e. None of the above.

50. Which of the following organizations would be unlikely to use marketing techniques?

a. Walmart b. The California Department of Motor Vehicles. c. The American Red Cross. d. Both (b) and (c). e. None of the above.

51. The author of Contagious would probably believe that:

a. People are more likely to spread information about JetBlue Airlines than about Starbucks.

b. People share more product information in person than online. c. Starting a letter inviting the recipient to join the American Airlines frequent flier

program with the words “This is your opportunity to share in the benefits enjoyed by 939 million people across the world!” is likely to dramatically increase the number of people who join. Both (a) and (b).

d. Both (a) and (c).

52. According to the author of Contagious, in the University of Illinois cooking study: a. Participants who had been exposed to cockroaches tended to imagine that dog food

would taste better than those who had been exposed to greasy French fries. b. Participants exposed to cockroaches tended to exaggerate the number seen when

talking to members of the same gender but to understate when talking to the opposite gender in order to reduce the embarrassment experienced.

c. Participants tended to exaggerate more when another member of their group was present to back up their claims.


53. Based on the textbook discussion, which of the following would represent value co-creation?

a. Starbucks hires scientists to find ways to improve the flavor of its coffee by adding electrolytes to the hot water before it is filtered through the coffee grinds.

b. Apple advertises that it has engaged in extensive research and development (R&D) to make the batteries of its iPads last longer. Nike holds a contest in which people are invited to submit shoe designs, with the five designs rated highest by their experts being selected for production.

c. Both (a) and (b). d. Both (a) and (c).


a. Thomas Jefferson lobbied unsuccessfully for a constitutional prohibition of the use of triggers by the judicial branch of government.

b. People who briefly jogged in place before making a decision on whether to share an article with others were considerably less likely to do so since jogging tends to trigger the idea of exclusivity.

c. In the study comparing the effectiveness of different slogans to encourage healthy eating, a less elegant sounding one was found more effective.


55. In addition to high labor costs, Hostess (the maker of Twinkies) faced:

a. A large increase in the costs of ingredients. b. Increasing bargaining powers of increasingly larger retail chains. c. Loss of customers who had switched to lower priced brands during the recession who

failed to return to buying the more expensive brands after the economy got better. d. Both (b) and (c). e. All of the above.


a. The triggering effects of the Great Wall of China are estimated to increase World-wide demand for bananas by 4.25%.

b. The strategy behind the Please Don’t Tell bar was exclusivity. c. A pleasant emotion such as contentment is likely to have a greater impact on

information sharing than an unpleasant one such as anger. d. The “Friday” song was played most frequently on Mondays since the start of the week

marks the point at which people face the greatest need for a morale boost in order to get through the rest of the week.

e. Anthony Cafaro based the idea of the “Parisian Love” advertisement on statistical analysis of search queries involving the words “love.”

57. According to the author of Contagious: a. When Jupiter is at its closest to Earth, sales of Mars bars decline dramatically since

Jupiter cancels out the gravitational effect of Mars on Earth. b. The consumption of Kit Kat bars tends to result in loss of social currency. c. The New York City Department of Health’s anti-soda campaign involved a trigger. d. Both (b) and (c). e. None of the above.

58. In a well balanced market:

a. All sellers carefully trade off the costs of features against benefits so that nobody offers expensive products that will only be of interest to a small part of the market.

b. Different sellers focus on different parts of the market. c. Sellers provide economies of scale by standardizing the product they offer so that

customers know they can get high quality merchandise from all sellers. d. Both (a) and (b). e. Both (a) and (c).

59. In general:

a. Elements of the environment are usually beyond the control of the firm. b. SWOT analysis is based on the elements of service, warrantation, observation, and

targeting. c. Value co-creation occurs mostly in self-service stores. d. Both (a) and (b). e. Both (b) and (c).


a. In the voting study, individuals who cast their votes at a school were more likely than those who voted in a library to vote for ballot measures that would restrict the sale of alcoholic beverages.

b. In the retail study, consumers exposed to German music tended to purchase French or Italian wines as a means of balancing their experience.

c. Sales of McDonald’s McRib sandwich increased when its availability was decreased. d. Both (a) and (b). e. All of the above.

61. Compared to graduates of all other business schools, Marshall School of Business alumni are

considerably more likely to: a. Maintain higher standards of ethics. b. Show superior judgment. c. Excel in complex analysis. d. Demonstrate exceptional intellectual sophistication. e. All of the above.2


a. In the University of Illinois cooking study, a number of students chose to eat cockroaches rather than conventional food in order to gain social currency.

b. Howard Wein’s strategy for launching the Prime Barclay Steak House was based on the idea of triggers.

c. Research found that some participants were willing to receive less money in return for being able to share information about themselves.


63. A channel of distribution wherein products are sold directly from the manufacturer to the end

customer: a. Tends to rely very heavily on the effects of triggers to produce market balance. b. Will usually save a great deal of money for most products since it is no longer necessary

to pay intermediaries. c. Is likely to be more suited for a product requiring customization. d. Tends to raise serious ethical questions since this structure vastly increases the

opportunities to mislead and deceive customers. e. Is likely to be highly cost effective under conditions of high bounce rates.

64. Our discussion of reasons why Tony the Tiger wears a scarf included (but may not have been

limited to): a. The desire to gain reverse social currency by means of exclusivity avoidance. b. Results of testing of various designs of Tony with consumers. c. Government requirements that any individual featured in television advertising

consuming milk must be attired this way. d. Payoffs from fashion designers wanting to sell scarves. e. Implementation of value co-creation by way of market balance.

2 The correct answer to this question is “e.”

65. According to the text, market development:

a. Is generally the most effective way to bring about diversification. b. Is a strategic objective that all effective organizations must prioritize. c. Involves a focus on the firm’s current types of customers. d. Can only be done during the maturity phase of the product life cycle. e. Is considered unethical under most circumstances.


a. A great appeal of shopping on Rue La La is that they award social currency which can be traded in for frequent flyer miles.

b. When introducing a deluxe pork rib sandwich selling for a little more than $100 at its Shanghai restaurants, McDonald’s bought advertising space on the Great Wall of China.

c. More product information is shared in person than online. d. The Please Don’t Tell Bar was intended as a hangout for undercover covert operatives. e. None of the above.

67. Within the context of customer value:

a. A low priced product usually represents very high value for customers. b. A product with a high sticker price may still represent good value to some customers. c. In order for a product to represent value to at least some segment of customers, it must

feature ease of use and high levels of durability. d. Both (b) and (c). e. All of the above.

68. Bobby Bill Bruin has boring parents, boring grandparents, boring children, boring grandchildren,

a boring wife, boring aunts and uncles, boring cousins, boring nieces and nephews, boring in-laws, boring neighbors, boring friends, and a boring psychiatrist. When he was in college, he had boring classmates, boring fraternity brothers, and boring professors. The librarians, security officers, nurses at the health center, and custodians were boring, too. It is quite likely that Bobby Bill’s life is relatively:3

a. Boring.

69. Within the context of the use of physiological measures in market research, tracking eye movements:

a. Is used to determine the extent to which viewers of an advertisement feel uncomfortable.

b. May be used to assess the extent to which viewers are paying attention to what is going on in an advertisement.

c. Depends on the extent of trialability of the product in question for its effectiveness. d. Both (a) and (b). e. None of the above

70. Ralph’s Supermarkets would like to assess differences in amounts spent of candy between

households with and without children. Which of the following research methods would be most appropriate?

a. In depth interviews. b. Focus groups. c. Online surveys. d. Scanner data. e. Observation.

3 This is a “single choice” question. You will receive credit for choosing option (a).

71. A significant obstacle to problem recognition among many students at UCLA is that:

a. They do not know the meaning of the word “ignorant.”

72. A group of waiters is interested in finding out which color jacket—blue, brown, or green—results in the highest tips on the average. Which of the following research methods would be most effective?

a. Focus groups. b. Mail surveys. c. Online surveys. d. Experimentation. e. Scanner data.

73. Procter & Gamble would like to know whether they get a better return on investment by running

an advertisement for Tide or by paying retailers for favorable display space. The most appropriate research method to address this problem is:

a. Focus groups. b. Mail surveys. c. Online surveys. d. Scanner data. e. Experimentation.

74. Based on the criteria for suitable for online sale, which of the following items would be most

suitable for being sold online (assuming that nothing else can be sold to the same customer at the same time)?

a. Paper towels, selling for $15 per bag of twelve rolls. b. Wooden kitchen chairs, selling for $14.99. c. Jeans, selling for $35.99 a pair. d. An iPod selling for $235.95. e. A hunting rifle selling for $265.95.

75. Collaborative filtering:

a. Is the process whereby consumers share information through “wiki” type systems. b. Is a process to obtain chemical purity in the distribution process. c. Identifies additional items that an online repeat customer might find of interest. d. Reduces the amount of “junk” mail that consumers receive. e. None of the above.

76. Customer value involves:

a. Getting the lowest price possible on a product in a given category. b. Eliminating intermediaries in distribution. c. The ratio of benefits received to sacrifices made. d. All of the above. e. None of the above.

77. A manufacturer of men’s shoes would like to determine how much time men spend in the store

shopping of shoes and how likely they are to bring along others for advice on what to buy. Which of the following methods would be most useful for addressing this question?

a. Focus groups. b. Surveys. c. Experiments. d. Observation. e. Projective techniques.

78. Dachshund’s Delight is a brand of dog food specifically optimized for the tastes and nutritional needs of Dachshunds. The manufacturer would like to determine if there should be any changes in the way in which the brand’s promotional budget is split between advertising, in-store displays, and coupons. Which of the following research methods would be most appropriate for this purpose?

a. Focus groups. b. Physiological measures. c. Projective techniques. d. Scanner data. e. Questionnaires.

79. A cereal manufacturer would like to determine which of two package designs—one with a great

deal of nutritional information versus another one featuring a picture of a happy family eating breakfast together—would result in the most sales. Which of the following research methods would likely be most effective?

a. Focus groups. b. Experiments. c. Scanner data. d. Physiological measures. e. Online surveys.

80. Hip Hop Health Nuts, a musical group, has recently released a new exercise music CD entitled

Fanatical Fitness Fun. Lyrics of the songs extol the virtues of Brussels sprouts and the evils of high fat foods and couch potatoism. Since the group’s fans appear to be too zealous to be overly price sensitive, it has been decided to price the CD at $129.99. Which of the following factors would favor Internet sale of this product?

a. The value-bulk ratio. b. The need for customization. c. Reduced labor costs from not having to go through retailers. d. Both (a) and (c). e. All of the above.

81. In market research, scanner data:

a. Is used mostly in assessing opportunities for the repositioning of existing brands. b. Is available only for grocery products. c. Is usually the preferred method for assessing what consumers believe about a brand. d. Both (a) and (c). e. None of the above.

82. A tax on chocolate:

a. Would probably represent an unconstitutional deprivation of substantive due process.

83. In the market research process: a. Focus groups are usually the most effective method to use. b. A benefit of online surveys is that these are especially effective in preventing confounds. c. Experiments are usually more difficult to administer than surveys. d. Both (a) and (b). e. Both (b) and (c).

84. The Central Advertising Agency (CAA) is interested in assessing the effectiveness of a thirty

second advertising spot. Two areas of concern are (1) how much attention viewers seem to give to the ad and (2) where on the screen the viewer looks at various times during the ad. Of the following research methods, which would be most suited for this purpose?

a. Conditional branching. b. Focus groups. c. Physiological measures. d. Projective techniques. e. Scanner data.

85. A manufacturer of vitamin supplements would like to determine if women are more likely to buy

calcium supplements in pink, as opposed to blue, containers. This vitamin supplement is not yet available in the market. Of the following, which research method would be most appropriate?

a. Focus groups. b. Questionnaires. c. Experimentation. d. Scanner data. e. Projective research (techniques).

86. Selling products on the Internet:

a. Will usually save the seller a great deal of money compared to traditional distribution methods, thus raising profitability dramatically.

b. Is more likely to be appropriate for a niche product as opposed to one demanded by a large percentage of consumers.

c. Tends to be highly cost effective in the U.S., but is usually considerably more expensive than traditional distribution methods in most other countries.


87. Within the context of online surveys, conditional branching:

a. Helps Internet firms reduce gardening costs by implanting chips into around buildings which ensure that the trees’ branches grow only in desired directions.

b. Is used mainly to reduce the confusion experienced by individuals participating in research.

c. Allows subsequent questions to be based on answers given to earlier questions. d. Will tend to increase the number of questions asked of each respondent by about 50%,

but will usually provide at least three times as much useful information. e. None of the above.

88. Of the following, reference groups, as discussed in the text, would be most likely to influence:

a. The speed with which new innovations are introduced. b. An individual’s fashion choices. c. The likelihood that an attitude will contain a belief component. d. The extent to which a retail chain can effectively be served by distribution centers. e. The effectiveness of web metrics as an analytical tool.

89. Subliminal messages in television advertising:

a. Are unlikely to have any impact on brand choices by consumers. b. Tend to serve as effective triggers for the purchase of prestigious brands. c. Require the use of heuristics to be effective. d. Can serve as an effective substitute for alternatives evaluation for consumers. e. Come about through the evoked set.

90. A consumer would be more likely to use a heuristic for:

a. Assessing his or her feelings to make sure that a purchase decision is based on rational thinking rather than vague feelings.

b. Choosing which of two automobiles to buy. c. Deciding which of two candy bars to buy. d. Reconstructing the Associative Network of Knowledge through the affective component

of attitudes. e. Reducing the number of functional needs that he or she faces.

91. Scanner data:

a. Is usually available only for grocery products. b. Tends to be especially useful in getting a complete picture of consumer attitudes. c. Is only available for goods bought online. d. Is the best method available for experimentation. e. None of the above.

92. Selling things online:

a. Is usually the most cost effective way to go except when products are very bulky. b. Tends to dramatically reduce labor costs. c. Tended to become cost effective when network economies were reached around the

years 2002-2003. d. Both (a) and (b). e. None of the above.

93. Chez le Cochon4 is a new very fancy restaurant despite the limited cleaning performed on the

premises, a pervasive odor, and walls that are all painted pink. Chez le Cochon specializes in very high calorie food. Diners are told that good table manners are completely optional. The management would like to do some research on what motivates people to eat large portions of highly fatty foods but is afraid that most consumers in the target segment would ordinarily tend not to tell the truth about their motives. Which of the following research methods would be most suitable in this situation?

a. Focus groups. b. Surveys. c. Scanner data. d. Projective techniques. e. Experimentation.

94. Scanner data:

a. Involves records of items purchased by consumers in retail stores. b. Includes information about which brands were on sale when a product was purchased. c. Generally does not provide useful information. d. Both (a) and (b). e. Both (b) and (c).

95. The “bricks-and-clicks” model suggests that:

a. There are benefits to operating both a traditional retail chain and an online sales site together under some circumstances.

b. Operators of online sites usually produce poor value for customers because they fail to sufficiently implement means-end chains to allow for adequate Boolean collaboration.

c. Most retail stores will become obsolete over the next ten years. d. Both (a) and (b). e. None of the above.

4 Cochon means “pig” in French. Loosely translated, the name of the establishment means “The Pig’s Place.”

96. Search engine rankings of a site may be influenced at least to some extent by:

a. The number and quality of links pointing to that site. b. The “click-through” rate at which the site is selected when it appears in a search results

listing. c. The presence of relevant key words in the text. d. Both (a) and (b). e. All of the above.


a. Is intended to identify merchandise that a particular customer—but few if any other customers—is likely to find of interest.

b. Involves attempts to work with competitors to assure that the needs of customers are well served rather than competing heavily.

c. Analyzes purchases made by others who have bought many of the same things as the customer in question.

d. Is a powerful tool for increasing the value-to-bulk ratios of frequently purchased items. e. Is used to evaluate the likely profitability of potential new products suggested by

customers.

98. Organizational buyers: a. Almost always use the “limited decision making” approach. b. Usually exhibit low involvement since purchasing agents are spending their

organizations’ money rather than their own. c. Often experience long term relationships with their suppliers. d. Both (a) and (b). e. All of the above.

99. In order to cost effectively sell products online as opposed to going through traditional retailers

and wholesalers: a. The value-to-bulk ratio should be low. b. Absolute margins are usually more critical than percentage margins. c. The seller should receive the majority of its revenue from micro-payments. d. All of the above. e. None of the above.

100. A means-end chain:

a. Has as its main purpose the comparison of a target product with those offered by competitors.

b. Starts with the values that the customer seeks and then identifies the activities that the customer must go through to obtain the desired satisfaction.

c. Assumes that a customer makes compensatory decisions. d. All of the above. e. None of the above.

101. Within the context of electronic commerce:

a. An iPhone features a relatively favorable absolute margin. b. Most products that feature a gross margin of at least 25% will be profitable to sell

online. c. Products which have a large market—i.e., are bought by a large percentage of

consumers—are especially favorable for selling online. d. Both (a) and (b). e. Both (b) and (c).

102. Which of the following factors most strongly favors Dell in selling computers online?

a. Relatively large absolute margins. b. Reduced competition relative to selling in brick-and-mortar stores. c. The ability to customize computers so that customers pay only for the features they

want. d. Reverse tailored explicit price discrimination by way of co-branding. e. The ability to develop procedural knowledge through collaborative filtering.

103. Relative to selling through brick-and-mortar retail stores, selling online:

a. Is likely to be more suitable for specialty products. b. Tends to be especially cost effective for low priced items. c. Tends to significantly reduce costs unless unusually high absolute margins are involved. d. Is more likely to be cost effective for products that have a very large market. e. Tends to greatly reduce labor costs.

104. Procter & Gamble would like to find out how large an impact it has when a competing brand

issues a coupon for cents off its brand of laundry detergent. Of the following, which research method would be most appropriate to use for this purpose?

a. Conditional branching. b. Observation. c. Focus groups. d. Scanner data. e. Questionnaires.

105. Conditional branching:

a. Is a method of minimizing the costs of distribution through optimal location of retailers. b. Can be used in online surveys. c. Is used in scanner data research. d. Both (b) and (c). e. None of the above.

106. Which of the following are problems that can reduce the usefulness and/or reliability of survey

questions? a. “Leading” questions. b. “Two-in-one” questions. c. The use of binary as opposed to continuum scales. d. Both (a) and (b). e. All of the above.

107. If it is correct that the costs of selling auto insurance online are much lower than the selling of

auto insurance through traditional agents and/or company offices: a. In the long run, firms that sell auto insurance online are likely to be very profitable. b. Sellers of online insurance would probably be in violation of laws against price

discrimination. c. In the long run, online sellers of auto insurance may be able to make a normal market

profit, but it is unlikely that they would make large profits. d. Existing online sellers of auto insurance are likely to face a “chicken-and-egg” problem. e. None of the above.

108. Campbell’s Soup has hired a number of people to come to a laboratory and taste a new flavor of

soup and then rate on a sheet how good or bad this soup tastes. This can best be described a: a. Observation. b. Experimentation. c. A survey. d. Physiological measures. e. Scanner data.

109. Micro-payments:

a. Make it possible to efficiently collect a great deal of money from each customer while promoting creating the belief among consumers that they are getting a great deal.

b. Eliminate the need to engage in segmentation. c. Are relatively costly to collect. d. Allow exporters to avoid mandatory product adaptations. e. Make it easier for customers to afford products because the cost is broken down into

multiple smaller payments.

110. Which of the following is/are likely to positively affect the profitability of Amazon.com? a. Encouraging customers to buy best selling books rather than specialty books so that

better economies of scale can be maintained. b. The use of collaborative filtering. c. Attempting to generate most of its revenue through micro-payments. d. Both (a) and (b). e. All of the above.

111. In trying to improve the search engine ranking of a web site, which of the following would be

most likely to be effective? a. Repeating important key words numerous times immediately after each other at the

beginning of the index page. b. Pursuing a link exchange with a complementary type organization highly ranked on the

key words of interest. c. Adding several meta-tags. d. Adding graphs and other images. e. E-mailing Google asking to be ranked higher.

112. The “bricks-and-clicks” model suggests that:

a. Conventional retail stores are becoming obsolete when it comes to distributing products that have very large markets.

b. Computer mice tend to work more effectively when moved on top of a brick as opposed to on a traditional pad.

c. Firms which sell only online, as opposed to both in retail stores and online, will tend to have higher sales volumes and thus greater bargaining power.

d. Combined online/offline merchants can take advantage of brand equity. e. Both (a) and (c).

113. Dell Computer:

a. Tends to save its customers a lot of money by allowing them to customize the computers they order, meaning that they only have to pay for the features that they actually want.

b. May be able to preserve the value of the components used in its computers by getting the computer to the customer faster.

c. Experiences higher absolute margins than clothing stores which buy a T-shirt for $10.00 and sell it for $20.00.

d. Both (a) and (b). e. Both (b) and (c).

114. In competing with brick-and-mortar stores and larger online sellers, which of the following

is/are problems for small firms in selling online? a. High labor costs. b. Their inability sell anything that has a high value-to-bulk ratio. c. The tendency of most consumers to use compensatory decision making under some

circumstances when shopping for high involvement products. d. Both (b) and (c). e. None of the above.

115. Which of the following would likely have the greatest impact on the ranking of a web site

featuring reviews of iPhone apps? a. Links on the blogs of each of the twenty members of the Pasadena Association of

iPhone Users which each receive an average of five visits per week. b. A link from the web site of InCider, a magazine about Apple products which has a

circulation of more than 500,000 copies and receives more than 140,000 visits per day. c. Increasing the number of times the phrase “iPhone app” appears from 5 to 54 times. d. E-mailing Google asking for a better ranking. e. Increasing the amount of animation on the site.

116. In online sales markets:

a. Competition is likely to be intense. b. Most firms that started out with retail stores have found it to be more profitable to

gradually phase these out and focus only on online sales. c. It tends to be especially profitable to focus on bulky, low price items bought by a lot of

customers because these take up a lot of precious space in retail stores. d. Both (b) and (c). e. All of the above.

117. Since no tangible product has to be shipped, it is generally more cost effective to sell travel

insurance online than through a brick-and-mortar setting. This means that: a. There will likely be a major chicken-and-egg problem. b. Firms that issue travel insurance online will tend to be highly profitable since they have

a large cost advantage over brick-and-mortar operations. c. The ability of customers to use collaborative filtering will tend to decrease profitability. d. Competition will drive profits down to “normal” levels. e. Both (a) and (b).


a. Can help increase the average amount of money spent by Amazon’s customers in each purchase.

b. Is intended to identify products which have low sales volumes so that these can be discontinued.

c. Makes value-to-bulk ratios irrelevant. d. Both (b) and (c). e. All of the above.

119. Which of the following appear to be directly weighted by Google at least to some extent in

assigning the rank of web sites? a. How professional the site appears to be. b. The percentage of searchers who click on the link for a site when it appears in a search. c. The extent to which relevant key words occur early in the text. d. Both (b) and (c). e. All of the above.

120. Micro-payments:

a. Are helpful in improving value-to-bulk ratios. b. Can be collected efficiently through credit cards. c. Involve the payment of a larger amount through smaller payments made over time. d. Generally involve amounts less than $2.00. e. Come about mostly in markets where competition is limited.

121. Online sales:

a. Tend to be especially cost effective for small firms since economies of scale have a smaller impact in online markets than in brick-and-mortar retail stores.

b. Tend, all other things being equal, to be more cost effective for specialty items than for items sold to a large number of customers.

c. Generally greatly reduce labor costs relative to brick-and-mortar operations. d. Both (a) and (c). e. All of the above.

122. Which of the following is/are correct regarding Amazon.com?

a. Profitability could probably be greatly improved if a larger percentage of books sold were current New York Times bestselling novels.

b. Collaborative filtering gives Amazon.com a large advantage over brick-and-mortar bookstores.

c. Collaborative filtering is really not all that useful for Amazon.com since they sell a lot of different types of merchandise rather than just books.


123. Dell Computer:

a. Maintains high levels of profits because much of its revenue comes in the form of micro-payments.

b. Can save customers a lot money because each computer is custom made such that the customer pays only for what he or she wants.

c. Can preserve value in a computer by getting it to customers faster than it would arrive if sold through traditional retail stores.

d. Both (a) and (b). e. Both (b) and (c).

124. The use of collaborative filtering would likely be most effective for which of the following?

a. McDonald’s b. Walmart.com c. AmericanRedCross.com d. Toyota.com e. Manufacturers of rat poison

125. Conditional branching: a. Is a particularly useful approach for firms that want to expand overseas. b. May be used in online surveys. c. Is used to diagnose the search engine ranking of a web site based on the structure of

incoming links. d. Is an important part of the positioning process. e. None of the above.


a. The population of New Zealand will probably exceed that of the U.S. by the year 2031. b. The case of Jared’s Subway diet illustrated the power of a story—as opposed to plain

information—in getting information passed on. c. The story of the Trojan Horse illustrated how telling stories can backfire when one is not

sure that others will retell the story accurately. d. Both (b) and (c). e. None of the above.


a. A number of men began to grow mustaches as a way to publicize the need for kidneys, inspiring more people to donate.

b. The Hotmail e-mail service grew rapidly, in part because outgoing messages showed others how they, too, could obtain a Hotmail account.

c. The Panda Cheese ads were rather ineffective in India due to strong anti-Chinese sentiment among Indian consumers.

d. The story of the Lands’ End coat suggested that so long as a story is sufficiently entertaining, a reputation for poor customer service is unlikely to significantly reduce sales.

e. None of the above.

128. (An) advantage(s) of projective research methods include(s): a. The ability to readily generalize to a large number of customers. b. Efficiency of administration and low cost. c. The potential to identify issues of which consumers are not consciously aware. d. Both (a) and (b). e. Both (b) and (c).

129. Phillips is trying to determine if first time buyers of big screen TVs prefer a TV with more features

or one that is easier to use. Preliminary research has shown that both of those factors are important to customers. Of the following research methods, which would be most appropriate to address this question?

a. Experimentation. b. Focus groups. c. Scanner data. d. Conjoint analysis. e. Observation.

130. Relative to selling through brick-and-mortar stores, selling online:

a. Will likely significantly reduce labor costs. b. Tends to be more effective for products bought by a lot of people than for niche

products. c. Is more likely to be cost effective for products that have large absolute margins. d. Both (a) and (b). e. Both (b) and (c).

131. As a method of market research, for which of the following purposes would physiological

measures be most useful? a. Assess the likelihood that a coupon will increase sales more than a thirty second TV

advertisement. b. Identify consumer beliefs about different brands of dog food. c. Examine the extent to which an ad will make viewers uncomfortable. d. Determine how long it takes for a consumer to pick a brand of toothpaste in the

supermarket. e. Find out how which variables consumers take into consideration when deciding which

brand of bottled water to buy while on vacation. Part II: Short Answer

1. Please discuss “micro-payments” and their significance within the context of Internet marketing.

What is a major problem faced in accepting micro-payments?

2. How does the system of “Collaborative Filtering”—as used by Amazon.com—work?

3. What does SWOT analysis involve? How is it useful?

4. Please discuss micro payments and the problems and opportunities that these entail.

5. In selling things online, what advantages and disadvantages does Amazon.com have relative to Dell Computer?

6. What are some firm (as opposed to product) level factors that affect the cost effectiveness of selling online?

7. According to the author of Contagious, how did Blendtec (the manufacturer of blenders) get publicity for its product?

8. During the first week of class, we identified two types of reasons why Tony the Tiger wears a scarf. Please discuss.

9. What are some firm level factors that affect suitability for selling online? (Please mention at

least three).

10. The author of Contagious discusses the “Carla” game in which Carla was described as driving a minivan. What was found?

11. According to the text, what does sentiment analysis involve?

12. According to the author of Contagious, what was the strategy behind the new Boston Market

ads?

13. What are some potential advantages of the “bricks-and-clicks” approach? Please discuss at least three.

14. According to the author of Contagious, what was the strategy behind Howard Wein’s steak house?

15. What is a way in which Dreyer’s Ice Cream or Chipotle can engage in value co-creation?

Part III: Very short answer.

1. When firms in an industry all offer the same benefits to their competitors without much differentiation, what is competition likely to focus on?

2. According to the conceptualization discussed in class, what is customer value?

3. According to the text, what does value co-creation involve?

4. Does it make sense to sell a typewriter online rather than in a retail store? Why or why not?

5. In terms of competition, what does it mean that a market is well “balanced?”

6. How does collaborative filtering work?

7. What are absolute margins?

8. What is the most important determinant of search engine rankings?

9. Orbitz.com sells airline tickets online. Its costs are much lower than the costs of “brick-and-mortar” travel agencies. In the long run, how will this cost advantage affect Orbitz’s profit potential?

10. According to the author of Contagious, what is a “trigger?”

11. According to the author of Contagious, what was the strategy used in marketing the Kit Kat bar?

12. According to the author of Contagious, what did the Budweiser “drinking buddies” ad series involve? Why were they predicted to be effective?

13. According to the text, what do conversion rates involve?

14. According to the author of Contagious, what was found in the University of Illinois cooking

study?

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