Marketing Chapter 1-7

When managers at Logistics Pro are developing their strategic plan, they use a marketing
orientation as a guide to ensure that ________ is an integral part of the process.
customer satisfaction
Managers at the Littlefield Corporation are engaged in a complex process of revising their
organization’s mission and goals and developing corporate strategy, marketing objectives,
marketing strategy, and, eventually, a marketing plan. This process is called
strategic planning
Identifying and analyzing a target market and developing a marketing mix to satisfy
individuals in that market are essential elements of which of the following parts of strategic
planning?
developing a marketing strategy
Safeway Food Stores is involved in identifying and analyzing a target market. The firm then
develops a marketing mix to satisfy individuals in that market to gain long-term competitive
advantages. Based on this example, Safeway is creating a
marketing strategy
To formulate a marketing strategy, one must
identify and analyze a target market and develop a marketing mix to satisfy
individuals in that market.
The marketing plan is
a written document detailing activities to be performed to implement and control
marketing actions.
CyberCycle Inc., is preparing a written document specifying the activities to be performed to
implement and control its marketing activities. This document is called the
marketing plan
The strategic planning process begins with
analysis of the marketing environment.
A __________ is something that an organization does extremely well and may give a company an advantage over its competition.
core competency
A market opportunity results from
the right combination of circumstances and timing that permit an organization
to take action to reach a particular target market.
When the right combination of circumstances occurs at the right time to allow an organization
to take action toward a target market, the firm is faced with a
market opportunity
In response to the increase in demand for organic foods, Wegmans, Inc., a regional
supermarket, recently created organic food departments within their large stores. The
creation of these departments was a result of
a market opportunity
Realizing that consumers have begun to seek vehicles that use less gasoline, Toyota heavily
promotes its hybrid automobiles to capitalize on this __________ while the strategic window
is open.
market opportunity
After determining that consumers had concerns about fat and carbohydrates, Sardino’s Pizza
began offering a low-fat, low-carb pizza product. The creation of this new product was the
result of
a market opportunity
A strategic window is
a temporary period of optimum fit between the key requirements of a market
and the particular capabilities of a firm competing in that market.
A competitive advantage exists when a
firm matches a core competency to opportunities it has discovered in the
marketplace.
A __________ is created when a company matches its core competency to opportunities it
has discovered in the marketplace.
competitive advantage
Microsoft’s marketing, technical skills, and continuing investment in improving its software
systems give it a(n) ___________ because it makes computers easier to use.
competitive advantage
An analysis of ___________ examines internal factors that give the organization certain
advantages and disadvantages in meeting the needs of its target markets.
strengths and weaknesses
John Deere’s strong name recognition and solid customer demand for its farm and garden
equipment are two elements of the firm’s
strengths.
Favorable conditions in the marketplace environment that could produce business rewards
for the organization if acted upon properly are called
opportunities
Successful business organizations should take actions to convert internal weaknesses into
___________ and external threats into ___________.
strengths; opportunities
When Opryland Hotel wants to have at least 90 percent of its customers indicating they had
a memorable and satisfying experience at the hotel, this is an example of
a marketing objective
A long-term view, or vision, of what an organization wants to become is called a
mission statement
The questions “Who are our customers?” and “What is our core competency?” are answered
in the firm’s
mission statement
A firm’s unique symbols, personalities, and philosophies comprise its
corporate identity
Which of the following is not a characteristic of a marketing objective?
It clearly identifies how marketing strategy will be implemented.
Which of the following statements is incorrect?
Strategic planning begins at the marketing level and proceeds through business-unit and corporate levels.
Resource deployment and coordination of functional areas of business are determined by
corporate strategy
___________ strategy determines the means for utilizing resources in the functional areas of
marketing, production, finance, research and development, and human resources to achieve
the organization’s goals.
corporate
Within a business organization, a profit center that is self-supporting in terms of sales,
markets, production, and other resources is known as a
strategic business unit
Kraft purchased the Duracell Battery Company and now operates this division as a separate
profit center within the firm. In this example, Duracell is a(n) ___________ unit of Kraft.
strategic business
A group that has the willingness, ability, and authority to buy a product is a
market
According to the text, a market is defined as
a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase these products.
Jason, a 17-year old high school student, wants to buy a pack of Marlboro Lights. He has the
money to purchase them, but he is still not considered to be a market for the product due to
his lack of _____ to buy
authority
The Boston Consulting Group’s matrix is based on the
philosophy that a product’s market growth rate and its market share are important determinants of its marketing strategy.
According to the Boston Consulting Group, marketers may classify their products as all of the following except
cash contributors.
Based on the work by the Boston Consulting Group, products with a dominant share of the
market and good prospects for growth are
stars
The Boston Consulting Group classifies products that have a dominant market share but low
prospects for growth and that generate more cash than is required to maintain market share
as
cash cows
The director of marketing for 3M tapes tells the rest of the management team, “When it
comes to our transparent packaging tape unit, our strategy will be to use funds generated
here to support our venture in the industrial bonding market.” This strategy indicates that the
packaging tape unit falls into which one of the following classifications?
cash cow
Products that have a relatively low market share and low prospects for growth are
considered by the Boston Consulting Group to be
dogs
According to the Boston Consulting Group, question marks are characterized as products
having a small share of a growing market and requiring large amounts of cash to build market share.
Which of the following is the most specific and detailed type of business strategy?
marketing
High Gliding Air Academy is developing its marketing mix for the coming year. Its managers know that they must first select _________, which may be the most important decision they
make in the planning process.
a target market
Which of the following statements about the marketing mix is incorrect?
Once a marketing mix has been created for a particular target market, it cannot be changed until a new strategic window opens.
Business decisions made in creating a marketing mix
are only as good as the organization’s understanding of the needs of the target market.
All marketing mix decisions must have two characteristics: ___________ and ___________.
consistency; flexibility
Gucci Group, a marketer of high-fashion products, achieved a company turnaround by
ensuring that its brand had the same image and proper display around the world. It also
lowered prices on some items, like handbags, to be more competitive. This illustrates a
company working to develop a marketing mix that is both _______ and _______.
consistent; flexible
A competitive advantage that cannot be readily copied by the competition is referred to as a
(n) __________ advantage
sustainable
Harley-Davidson’s Harley Owner’s Group (HOG) helps to foster strong relationships between
riders and their motorcycles, giving it a(n) _____ over other motorcycle manufacturers.
sustainable competitive advantage
Because of its highly efficient and low-cost distribution system, Wal-Mart has a _________
advantage over Kmart.
sustainable competitive
A marketing plan
provides a framework for implementing and controlling marketing activities.
Starbucks is presently involved in a process of assessing marketing opportunities and
resources, determining marketing objectives, re-defining marketing strategies, and
developing guidelines for implementation and control. Thus, Starbucks is involved in
marketing planning
Which of the following is not a purpose of the marketing plan?
Serve as a contract with the customer
Hallaway’s Corp.’s new shampoo, VS2, is faltering badly in the market. Hallaway’s marketing
personnel are unsure who is responsible for various marketing tasks, when these tasks are
to be completed, or what resources have been allocated. Hallaway Marketing Director
Carolyn Willis said that the problem is that VS2 has the most poorly written ___________
she has ever seen.
marketing plan
The Texas Pitt Barbecuem Corporation has conducted a SWOT analysis of its competition,
and sees a marketing opportunity for its new Texas Pit Barbecue restaurant. It has
developed its marketing plan to include the type of products it will sell, the location for the
restaurant, and the pricing it will use. Their plan includes a marketing objective to make a
profit of 5% the first year of operation. So far, the owners of the restaurant have eliminated a
key piece of the marketing plan, which is ______.
specifying how they will achieve their marketing objective
Which of the following is not a component of a marketing plan?
product
A marketing plan usually begins with a(n)
executive summary
The process of putting marketing strategies into action is called
marketing implementation.
In essence, all organizations have two types of strategy: ___________ is the strategy that
the organization decides on during the planning phase, and ___________ is the strategy that
actually takes place.
intended strategy; realized strategy
The _________ strategy in an organization often does not live up to marketing planners’
expectations.
realized
Sayid’s employer is currently developing a new marketing strategy. The top managers have
developed the marketing strategy and have given it to Sayid so that he can now develop an
implementation plan. Sayid’s company will most likely end up with which type of strategy?
realized
For marketing implementation to be successful, the needs of _________ customers must be
met.
both internal and external
___________ refers to the coordination of internal exchanges between the organization and
its employees to better achieve successful external exchanges between the organization and
its customers.
internal marketing
Using information about customers to create marketing strategies that develop and sustain
desirable long-term customer relationships is known as
Customer relationship management
Electronic marketing has greatly improved the ability of marketers to target individual
customers. As a result, many feel that marketing’s emphasis is shifting from share of market
to share of
customer
Borders Books uses technology to help them identify specific customers, establish interactive
dialogues with them to learn about their needs, and combine this information with their
purchase histories to customize products to meet those needs. Borders Books is using the
_____ approach.
customer relationship management
Which of the following is false with regard to customer lifetime value?
All customers have equal value to a firm.
According to the text, the 80/20 rule suggests that
80 percent of profits come from 20 percent of customers.
Customer relationship management is facilitated by gathering useful data from
all customer-contact points.
Customer relationship management systems cannot be effective unless they are developed
as
relationship-building tools.
The most important component of customer relationship management is
relationships with customers
Meredith knows that whether she decides to interact with her customers in person, on the
telephone, online, or by fax, that ________ should ultimately drive the marketing strategy.
her customers
The employees of Zingerman’s Deli are its ______ customers.
internal
Which of the following statements best describes total quality management?
The coordination of efforts directed at improving customer satisfaction, increasing employee participation, forming and strengthening supplier partnerships, and facilitating continuous quality improvements
Stratford Manufacturing is interested in total quality management and wants to learn more
about its principles. Which of the following elements will Stratford not address in its
investigation of TQM?
Purchasing lowest-cost materials
If Apple measured and evaluated the quality of its goods, services, and processes as
compared with those of the best-performing companies in the computer industry, it would be
employing
benchmarking
The term “______” describes measuring and evaluating a firm’s quality in products and
processes against industry leaders.
benchmarking
A server ein a fine restaurant has the authority to give a complimentary dessert to a
dissatisfied customer when the customer complains about the meal or service. This is an
example of
empowerment
___________ involves giving customer-contact employees the authority and responsibility to
make marketing decisions without seeking the approval of a supervisor.
empowerment
Kate is upset because the bank did not credit her account with a deposit, which resulted in a
returned check to Kate’s landlord. When she was told the branch manager was on vacation,
Kate resigned herself to waiting two weeks to have the matter resolved. To her surprise,
though, the receptionist apologized for the error and drafted a letter to Kate’s landlord while
Kate waited. The bank was engaging in which type of decision-making strategy?
Employee empowerment
In a traditional organization, marketing decisions are likely to be
centralized at the top levels of the organization.
At Mrs. Fill’s Cookie Co., top-level managers delegate very little authority to lower-level
employees. Mrs. Fill’s is a(n) ___________ organization.
centralized
The Acme Corporation is expanding operations into countries outside the United States. To
improve local managers’ responsiveness to local conditions, Acme’s senior management has
decided to delegate decision-making authority further down the chain of command. Acme is
decentralized
A marketing unit can be organized according to functions, products, regions, and
types of customers
Key factors in determining the best organizational structure for a marketing unit are the
diversity of the firm’s products and the characteristics and needs of the people in the target market.
According to the textbook, which of the following statements is most accurate?
There is no single approach to organizing a marketing unit that works well in all businesses.
If you were a marketing manager, under which type of organizational structure would you
most likely be working if your firm were a large business with centralized marketing
operations?
Organization by function
A disadvantage of organizing a firm’s marketing unit by products is that
it can be rather expensive.
A firm that markets diverse products would most likely base the organization of its marketing
department on
products
Procter & Gamble, like many firms in the consumer packaged-goods industry, is organized
by
product
Ford has centralized marketing operations with personnel who direct marketing research,
distribution, sales, advertising, and so forth reporting directly to the top-level marketing
executive. Ford’s marketing department is organized by
function
Organizing a marketing unit by regions works well for a company that
markets products throughout the nation.
Suppose a customer calls Ann’s office at Frito-Lay in Atlanta. The customer has a friend in
Seattle who was just telling her about a new snack Frito-Lay has introduced that is selling
rapidly. Ann’s office does not market this product, and at the present knows very little about
it. Based on this information, this firm is most likely organized according to which of the
following?
region
A firm that wants to put more senior management personnel into the field, to get closer to
customers, and to enable the company to respond more quickly and efficiently to competitors
would probably organize its marketing unit on the basis of
regions
An appliance manufacturer that sells to large retail stores, wholesalers, and institutions would
probably organize its marketing unit on the basis of
types of customers
The marketing control process consists of
establishing performance standards, evaluating performance, and reducing the differences between desired and actual performance.
Marketing managers at Consolidated Equipment Corporation are involved in establishing
marketing performance standards, evaluating performance, and reducing the differences
between actual and desired performance. These marketing managers are engaged in
the marketing control process
The first step in the marketing control process is to
establish performance standards.
An expected level of performance against which actual performance can be compared is a
performance standard
Morris Business Products Co. has established a monthly sales quota of $150,000. This is a (n)
performance standard
One way that Saturn evaluates its product and service level is by how well it ranks on the J.
D. Power & Associates Sales Satisfaction Survey. In doing so, Saturn is
evaluating actual performance
Marketing managers can take each of the following corrective actions for reducing a
discrepancy between established performance standards and actual performance except
coordinating a new step in performance analysis.
When an organization attempts to control its marketing activities, it may find it difficult to
obtain the necessary information.
The time lag between the performance of marketing activities and their results
limits the marketing manager’s ability to measure the effectiveness of marketing activities.
Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in “games” with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights.

Maintaining the current culture of “fun” for Southwest Airlines’ employees is most likely a(n)

overall organizational objective.
Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in “games” with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights.

The fact that Southwest Airlines has a history of being able to retain its employees is a ___ in
its SWOT analysis.

strength
Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in “games” with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights.

In Southwest Airlines’ SWOT analysis, the rising gas prices are a(n) ____, while the fact that
other airlines are charging for all checked baggage may create a(n) ________,

threat; opportunity
Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in “games” with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights.

Southwest’s low fares, dependability, and its on-time flights represent its

competitive advantage
EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited’s owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn’t sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company.

According to the BCG matrix, the hang-gliding and bungee jumping tours have been a ____
for EXperience Limited, while the skydiving and motocross tours represent a_____________.

cash cow; question mark
EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited’s owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn’t sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company.

The fact that college enrollments have been increasing at a fast rate the past few years is an
example of _____ and creates a _______ for EXperience Limited.

an environmental factor; marketing opportunity
EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited’s owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn’t sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company.

The information in EXperience Limited’s database could be best used to develop

a CRM program
EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited’s owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn’t sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company.

The college-aged student represents EXperience Limited’s _____, and the tours its operates
represent the ______ element of the marketing mix.

target market; product
1. Understand the Marketplace and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value: Use the four P’s
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity
Five Step Marketing Process
When you want something and can afford it
i. Also called buying power
ii. Adjust price to adjust size of market
When is demand created
Find needs, wants, demand and market offering
Conduct market research to:
Market myopia
Paying more attention to products instead of the benefits produced
Exchange
Receiving cash or word of mouth for your product
Product Concept
Customers favor products with quality, performance and innovated features
Selling Concept
Customers won’t buy enough product unless properly promoted
Marketing Concept
Achieving goals depends on knowing needs and wants/satisfying customers better than competitors
Societal marketing Concept
i. Relationships with everyone
ii. Key is long term relationships and benefits
Construct an integrated marketing program that delivers superior value: Use the four P’s
Product, Price, Promotion and Place
a. Customer Satisfaction
b. Perceived value
c. Customer relations
How do you build profitable relationships and create customer delight?
Perceived value
Give customers an experience they believe is worth the price
Types of capture-able customer value
a. Cash
b. Loyalty and Retention
c. Grow market share
d. Customer Equity (Good will)
1. Harness Technology
2. Manage global markets
3. Ensure ethics and social responsibility
How to achieve the 5 steps
Value Chain
1. Design
2. Produce
3. Market
4. Deliver
5. Support
1. Internal: Strengths and Weaknesses
2. External: Opportunities and Threats
SWOT
Threats
Competitors, Regulators and Customers
Microenvironment
1. The company itself
2. Suppliers
3. Marketing intermediaries
a. Companies helping to sell
4. Competitors
5. Publics
a. Any group with actual or potential impact
6. Customers
Macro environment
1. Demographic – Age, gender, race, people moving/shifts, education
2. Economic
3. Natural – Shortages of raw materials
4. Technological – Things we use to produce product
5. Political/Social – Laws, regulations, pressure groups
a. Anti-trust law: Fight fair or don’t lie about your product
Cultural
Common set of beliefs
Secondary values
Example: when to get married
1. Assess information needs
2. Internal Databases
3. Marketing Intelligence
4. Marketing research
5. Types of data
MIS
Ask what to know to make a good decision
Assess information needs
Internal Databases
Use info from company – cheap/available
Marketing Intelligence
Activities that go into marketing plan
a. Publicly available information
Marketing research
a. Stuff you have to get – Exploratory, Descriptive (Most common) and Casual
b. Marketing research plan
i. Define problem and what to accomplish
ii. Develop plan to get data
iii. Implementation of plan
iv. Analyze data, and report information
Marketing Research Plan
a. Secondary Data/Already existing
b. Primary Data – Relevant but costs a lot
c. Commercial/online data
d. Megadata – Already know what trends are
e. Focus group – Intimate, you can ask questions about product
f. Relative sample – Take one because you can’t ask the whole world
Types of Data
i. Advantage – Cheap and quick
ii. Disadvantage – May not be relevant
Secondary Data/Already existing
Relevant but costs a lot
i. Observe, Questionnaire and Experiment
ii. Contact methods – Mail, telephone, personal and online
Primary Data
Line
Laborers
Staff
Everybody else
Perfect Price
Everything sells
Marketing
A process by which companies create value for customers and build strong customer relationships in order to capture value from consumers in return
Strategic planning
Align organization’s goals and capabilities with a changing market conditions
Mission statement
Statement of the organization’s purpose (Always from the view of the customers)
ROI
Used to prove you deserve the company investment
Affinity Marketing
Programs that leverage customers’ ties to institutions and concepts they hold dear, designed to move customers toward that deep sense of loyalty.
Behavioral Segmentation
Market segmentation based on differences in motivations and attitudes, including reasons for purchases and quantities consumed, of different groups of consumers.
Buyer’s Remorse
A feeling of guilt associated with doubts about the wisdom of a purchase decision experienced after making an expensive purchase or one requiring extended problem solving.
Churn
Attrition or turnover of customers of a business or users of a service.
Cognitive Dissonance
Psychological tension produced by incompatibility among a person’s attitudes, behavior, and/or beliefs, or when a choice has to be made between equally attractive or repulsive alternatives.
Cohort
A group whose members share a significant experience at a certain period of time or have similar characteristics.
Customer Relationship Management (CRM)
A management philosophy centered on identification and satisfaction of customers’ needs and wants, supported by a data warehouse and analytic processes for identifying, targeting, acquiring, and retaining the best mix of customers.
Data Cleansing
The act of detecting and correcting (or removing) corrupt or inaccurate records from a record set.
Demographic Segmentation
Market segmentation based on differences in demographic factors of different groups of consumers.
Foundation Segment
Market segmentation based on customer/transaction records already in a company’s database.
Frequency Marketing
A program that encourages multiple transactions, designed to move customers toward that deep sense of loyalty.
Geodemographic Segmentation
Market segmentation based on combining data about demographic and location-based factors of different groups of consumers.
Geographic Segmentation
Market segmentation based on differences in location-based factors of different groups of consumers.
Hedonic Needs
Motivation toward purchase activity that requires the consumer achieves pleasure from the purchase; often associated with emotions or fantasies relating to consuming a product. See also utilitarian needs.
Market Segment
A subdivision of a market or population sharing a similar set of needs and wants, usually because they share other traits, such as geography, age, income, and/or lifestyle.
Marketing Customer Information File (MCIF)
A synonym for data warehouse; a computerized file storing all pertinent information about an organization’s customers.
Marketing Dashboard
A software interface that presents the most critical diagnostic and predictive metrics, organized in a way that facilitates recognition of significant patterns, like a car’s instrument panel.
Marketing Information System (MIS)
A software tool designed to gather, store, analyze, and distribute access to timely,accurate information to support managers’ decision-making.
Modified Rebuy
A business-to-business purchase decisions process involving goods or services purchased previously by the firm, but which requires a new consideration set to meet changes sought in specifications, prices, terms, or suppliers.
Motivation
The inner drive that moves consumers toward fulfillment of a perceived desire or need.
New Task
Business-to-business (B2B) purchase decisions process involving a full purchase decision process.
North American Industry Classification System (NAICS)
A system grouping industries into 20 broad sectors identified by a 6-digit code based on the type of the establishment. Developed jointly by NAFTA member countries Canada, Mexico, and the United States to replace the obsolete Standard Industrial Classification (SIC) code.
Perceptual Maps
A marketing research technique in which consumers’ views about a product are traced or plotted (mapped) on a chart, typically in two dimensions.
Predictive Models
Analytic routines that attempt to guess the probability of an outcome given a set of input data.
Psychographic Segmentation
Market segmentation based on analysis of consumer lifestyles to create a detailed customer profile.
RFM Score
Abbreviation of Recency, Frequency, and Monetary Volume; a means to quantify the value of a customer relationship; useful as a basis for segmentation.
Reference Groups
Groups of individuals whose attitudes, behavior, beliefs, opinions, preferences, and values an individual uses as the basis for judgment.
Straight Rebuy
Business-to-business purchase decisions process involving a routine reorder, requiring little thought or process.
Trigger Marketing
A one-to-one communication technique in which action by a consumer automatically triggers a marketing action.
Undifferentiated Strategy
Sales-growth strategy that ignores market segment differences and attempts to appeal to all prospective customers with a single, basic product line through mass advertising and distribution. Also called mass marketing.
Utilitarian Needs
Motivation toward purchase behavior that seeks to achieve some practical benefit from a product; normally associated with product attributes that define performance. See also hedonic needs.
An example of a psychographic characteristic as applied to businesses is
(A) industry classification
(B) whether a company sponsors cultural or sporting events
(C) company size
(D) whether a company is publicly or privately held
(E) number of employees
Company sponsorship of cultural or sports events is one aspect of the lifestyle subcategory of psychographic characteristics that are used in profiling businesses, so choice B is correct.
Position bias is a problem in
(A) product placement in a retail store
(B) selecting where to target a new product for the marketplace
(C) choosing a market segment
(D) conducting surveys
(E) determining the outlets for new products
Position bias is the tendency of survey respondents to select the first answer in
a multiple-choice question, so choice D is correct.
A SWOT analysis might look at all of the following external conditions EXCEPT the
(A) bargaining power of suppliers
(B) amount of competition
(C) cost to enter a market
(D) loyalty of customers to the market leader
(E) company’s ability to move quickly into a market
SWOT stands for strengths, weaknesses, opportunities, and threats. The company’s ability to move quickly into a market is an internal issue, either a strength or a weakness, depending on the company. Choice E is the correct answer to this EXCEPT question.
In which of the following forms of pricing does a manufacturer pay no shipping costs on goods being
sent to distributors?
(A) FOB
(B) Freight absorption pricing
(C) Allowance
(D) UDP
(E) Zone pricing
FOB stands for free on board; the manufacturer pays no shipping costs to
transport product to distributors who pay the shipping charges, so choice A is correct.
An actor is cooking dinner and talking about how easy it is to put together the ingredients in the package and whip up dinner in 15 minutes. This style of ad is known as
(A) dramatization
(B) cheerleading
(C) testimonial
(D) demonstration
(E) scientific
In a demonstration ad, an actor(s) shows how a product works and speaks
directly to the viewer, so choice D is correct.
All of the following are metrics for measuring online ad effectiveness EXCEPT
(A) click-through rate
(B) cost per click
(C) page view
(D) pay per click
(E) pop-under
The correct answer is E. A pop-under is an online ad that opens behind the Web browser window that is open, but doesn’t show up until after all other windows have been closed. A pop-under ad is not a measurement tool, so it is the correct answer to the question.
A nonprofit that wants to find sponsors for its golf event should do all of the following EXCEPT
(A) communicate its target market to potential sponsors
(B) analyze who potential sponsors might be based on the target audience
(C) explain to potential sponsors how much the sponsorship will add to the sponsor’s revenue
(D) decide on sponsorship levels and the benefits attached to each level
(E) explain how being affiliated with the nonprofit will benefit the potential sponsor’s brand
It is very difficult to make a correlation between a sponsorship and an increase
in revenue, so choice C is not something a nonprofit should do, so it is the correct answer to the question.
To get a consumer to go from ignorance about a product to motivated, the marketer must move the consumer through which of the following stages?
(A) Intentionality
(B) Action
(C) Interest and action
(D) Awareness and interest
(E) Awareness
This question is based on the hierarchy of advertising effects; advertising
should take the consumer from ignorance to awareness to interest to motivated, so choice D is the correct answer.
A family in the Full Nest stage of the family life cycle would most likely be shopping for
(A) a smaller home
(B) a sports car
(C) a kitchen appliances
(D) living room set
(E) a used car for a teenage driver
A family in the full nest stage of the family life cycle would be shopping for a
used car for a teenage driver, choice E.
A manufacturer of which of the following products would adopt an undifferentiated marketing strategy
for its launch?
(A) DVR
(B) Low-end children’s clothing
(C) E-reader
(D) Cookies made with organic products
(E) Bread
A manufacturer of bread, choice E, is most likely to adopt an undifferentiated
marketing strategy to launch its new product.
Which of the following is NOT an example of why people switch brands?
(A) A mail coupon offers a discount on a competitor’s product.
(B) The store is out of the brand the consumer normally buys.
(C) Consumers prefer domestic product over foreign product once a domestic version becomes available.
(D) A consumer is having her in-laws for dinner and buys real butter instead of margarine.
(E) A consumer is used to buying one brand of sandals, but decides to buy another brand for a change.
There is no evidence to support the idea that people will buy a domestic over a foreign brand once a domestic version becomes available. In fact, some people for whom status and prestige are important will buy a foreign brand over a domestic brand. Choice C is the not true, and is therefore the
correct answer to the question.
Internal records that provide information for marketing intelligence systems (MIS) include
(A) cash flow, competitors’ data, and inventories
(B) cash flow, inventories, and suppliers’ data
(C) competitors’ data, customers’ needs, and cash flow
(D) cash flow, suppliers’ data, and sales orders
(E) sales orders, inventories, and cash flow
Internal records are sales orders, inventories, and cash flow, so choice E is correct.
The cartridge and paper kit that is sold with a photo printer is called what kind of product?
(A) Alternate
(B) Ancillary
(C) Substitute
(D) Reserve
(E) Customized
An ancillary product is one that is sold with the core product, so choice B is
correct.
The microenvironment in which companies operate consists of all of the following EXCEPT
(A) customers of the company
(B) the company itself
(C) suppliers
(D) competitors
(E) marketing intermediaries
Competitors are part of the macroenvironment, so choice D is the correct answer.
Cereal makers advertise heavily on children’s TV/cable programs. The result is that many children ask—
even nag—their parents to buy a particular cereal. This is an example of
(A) demand promotion strategy
(B) an indirect strategy
(C) push-and-pull promotion strategy
(D) pull promotion strategy
(E) push promotion strategy
The pull promotion strategy uses heavy advertising to build demand for a
product, so choice D is the correct answer.
Jack represents a textbook publisher and has known Sal since he was a teacher. Now he is a department chair. If Sal has a problem with an order, he calls Jack directly who handles it with customer service and gets Sal whatever he needs within 48 hours. This is an example of what kind of marketing philosophy?
(A) Production
(B) Sales
(C) Relationship
(D) Marketing
(E) Direct Selling
The relationship philosophy of marketing, choice C, stresses long-term
relationships with customers and customer satisfaction because, in the long-term, companies have found that
it is cheaper to retain customers and increase their business than prospect for new customers.
A major manufacturer of software launched an e-reader, but withdrew it after 180 days of lackluster sales. Demand for the product can be classified as
(A) no demand
(B) falling demand
(C) negative demand
(D) latent demand
(E) unwholesome demand
No demand means that consumers show little or no demand for a product, so choice A is correct.
Which of the following is the first step in developing a strategic marketing plan?
(A) Development of goals
(B) Analysis of the environment
(C) Development of marketing strategies
(D) Development of the business mission
(E) Feedback on marketing acceptance
The first step in developing a strategic marketing plan is to develop the
business mission, choice D.
The Cherry Company decides that it needs to get its customers to buy more of its existing candy products. The company is adopting what kind of growth strategy?
(A) Penetration
(B) Diversification
(C) Market development
(D) Product development
(E) Flank attack
One aspect of penetration strategy is to get existing customers to buy more
product, so choice A is correct.
A famous designer agrees to the use of his name on a men’s cologne in exchange for a royalty. What kind of business arrangement is this?
(A) Licensing
(B) Franchise
(C) Strategic alliance
(D) Joint ownership
(E) Patent
A licensing agreement involves one business entity granting another the right
to the use of a patent, trademark, or other right such as the right to use a name in exchange for a royalty,
choice A.
Economic factors that affect buying and purchasing patterns include all of the following EXCEPT
(A) social status
(B) business cycle
(C) unemployment
(D) inflation
(E) income distribution
The correct answer is A. Social status is not an economic factor, so it is the correct answer to the question.
Based on lifestyle research, which group of consumers would be most likely to buy a hybrid automobile?
(A) Strugglers
(B) Believers
(C) Experiencers
(D) Strivers
(E) Actualizers
The lifestyle orientations listed in this question are five of the eight
orientations that resulted from the Stanford Research Institute’s refining of its earlier values and lifestyle research. The eight are actualizers, fullfilleds, believers, achievers, strivers, experiencers, makers, and strugglers. A hybrid auto is typically a social responsible purchase, so choice E is correct because actualizers are socially conscious and have the education and resources to act on their convictions.
Federal laws that regulate businesses generally fall into four categories. Which of the following is NOT one of those four categories?
(A) Regulation of competition
(B) Consumer protection
(C) Maintenance of the competitive environment
(D) Environment protection
(E) Deregulation of certain industries
Environmental protection laws are not one of the four categories of laws that
regulate business, so choice D is the correct answer to the question.
A limit on the amount of a product that can be exported is known as
(A) an export quota
(B) risk reduction
(C) an embargo
(D) an export control
(E) a tariff
A limit that is imposed on exports by a government is known as an export
quota, choice A.
When a retailer removes one company’s product and replaces it with product from another company, the first company is said to have lost
(A) retail space
(B) shelf space
(C) product visibility
(D) shelf life
(E) retail visibility
The amount of space that a company’s product receives in a retail situation is
shelf space, so choice B is correct.
Which of the following is NOT an objective when companies set prices for their products?
(A) Take market leadership
(B) Indicate product quality
(C) Recoup research and development costs
(D) Discourage potential competitors from entering the market
(E) Encourage competitors to cut prices
A pricing objective is to discourage competitors from cutting their prices on
similar product, so choice E is not true, but is the correct answer to the question.
A concentrated marketing strategy would be best for a company that sells
(A) processed foods
(B) automobiles
(C) cosmetics
(D) software programs for both office and home use
(E) timeshares in vacation properties
A concentrated marketing strategy is one that focuses its efforts on a particular market segment such as people interested in buying timeshares, choice E.
Two of the basic facilitating functions of a marketing manager are
(A) transportation and storage
(B) financing and risk taking
(C) buying and selling
(D) developing marketing information and inventory control
(E) buying and selling and transportation and storage
The four facilitating functions of marketing managers are grading, financing, risk taking, and developing market information. Choice B includes two of these functions, financing and risk
taking, so choice B is correct.
Alex is conducting market research to determine ways to extend a product line. After defining the
research problem, his next step is to
(A) design the survey instrument
(B) conduct a situation analysis
(C) gather data
(D) decide on the metrics to be measured
(E) decide on the research sample
Before any research can be collected, the type of research that must be
gathered has to be determined. This is part of developing an approach to the research problem, also known as
conducting a situation analysis, choice B.
All of the following are reasons that companies decide to export products EXCEPT to
(A) benefit from financial incentives offered by host countries
(B) extend product life
(C) exploit comparative advantage
(D) increase sales
(E) avoid license requirements
Licensing requirements are one of the tactics that host countries impose on
foreign companies to limit imports, so choice E is not one of the reasons that companies decide to export products and the correct answer to the question.
People who volunteer to answer surveys may introduce which type of bias into the results?
(A) Halo effect
(B) Interviewer bias
(C) Response bias
(D) Self-selection bias
(E) Unrestricted sample
Self-selection bias is bias for or against something that may be introduced into
a survey as a result of people volunteering to answer the survey, choice D.
A nonprofit’s customers are
(A) its funders
(B) the users of its services
(C) the government agencies that regulate it
(D) the public
(E) its board of directors
A nonprofit’s customers are its users, choice B.
A store advertises that for one day only a particular brand of refrigerator is 70 percent off. When
customers get to the store, they find that the refrigerator is half-sized. This is an example of
(A) upselling
(B) cross selling
(C) false advertising
(D) bait and switch
(E) trade promotion
Bait and switch, choice D, occurs when retailers offer a product at a very low
price, in a very limited quantity, or of inferior quality to get customers into the store with the intention of selling them a higher priced product. Besides being unethical, it is illegal.
In marketing products, companies want to maximize
(A) revenue, profits, and costs
(B) profits, revenue, and return on investment
(C) return on investment, customer satisfaction, and brand acceptance
(D) brand acceptance, profits, and return on investment
(E) brand acceptance, revenue, and profits
In marketing products, companies want to maximize profits, return on
investment (ROI), and revenue, so only choice B is correct.
In a microenvironmental marketing analysis, banks belong to which sector?
(A) Implementors
(B) Suppliers
(C) Publics
(D) Marketing intermediaries
(E) Customers
Bankers along with insurance companies and credit companies are part of financial intermediaries, a subcategory of marketing intermediaries, choice D.
The increase in online social influence marketing has resulted in a decrease in
(A) promotions
(B) direct mail
(C) virtual gifting
(D) display ads
(E) blogs
The volume of direct mail pieces has decreased as social influence marketing
(SIM) has increased, so choice B is the correct answer.
The Sunshine Company wants to measure the influence that its brand has in the blogosphere. What
metric should it use?
(A) How many unique visitors come to the Sunshine blog
(B) How many page views take place
(C) How many click-throughs there are
(D) How often visitors post comments on the brand’s blog
(E) How many times visitors make comments on competitors’ blogs
One metric that can be used to determine the influence that a brand has in the blogosphere is how often visitors post comments on the brand’s blog, choice D.
38. Larry designed a research project to analyze the market for a new dish detergent. The budget was cut and he needs to use research conducted for another product. All of the following are disadvantages of secondary research EXCEPT the
(A) lack of applicability to the current research project
(B) high cost of secondary research
(C) datedness of the data
(D) lack of accuracy and reliability of the data
(E) lack of sufficient data
Secondary research has little cost in relation to primary research; the
person/department that ordered the primary research project paid for it. High cost is not a disadvantage of
secondary research, so choice B is the correct answer.
Which of the following products is considered a component product?
(A) Computer chip
(B) Paint
(C) Broom
(D) Margarine
(E) Lubricating oil
Choice A, a computer chip, is a considered a component part because it is used in manufacturing another product.
In defining a market segment, marketers look for segments that are
(A) substantial and homogeneous within
(B) substantial and well defined
(C) heterogeneous in relation to other segments and well defined
(D) operational and at a certain income level
(E) well defined and operational
(A) substantial and homogeneous within… The five factors that marketers look for in determining whether a market
segmentation is worthwhile pursuing are whether it is substantial, homogeneous within, heterogeneous in
relation to other segments, accessible, and operational.
The societal approach to marketing
(A) puts social responsibility before company goals
(B) considers company goals, customer needs and wants, and society’s interests
(C) uses social responsibility as the determining factor in product decisions
(D) is the same as social media marketing
(E) is another name for “green” marketing
While sociographics, the analysis of social networks, may be useful in
marketing by nonprofits, global marketing, and mass marketing using the Internet, the best answer is social
influence marketing (SIM), choice D, because it’s the most precise.
Which of the following is an example of a typical industrial distribution channel?
(A) Manufacturer to manufacturer’s sales force to retailer to industrial customer
(B) Manufacturer to wholesaler to jobber to retailer to industrial customer
(C) Manufacturer to wholesaler’s representative to industrial customer
(D) Manufacturer to wholesaler to industrial customer
(E) Manufacturer to manufacturer’s representative to industrial distributor to industrial
customer
There are several possible channels for industrial products, but choice E is the
only correct one listed in the answers. (Others are manufacturer to industrial customer; manufacturer to
industrial distributor to industrial customer; manufacturer to manufacturer’s sales force to industrial
distributor to industrial customer.)
Most precisely, sociographics has become an important tool in
(A) marketing by nonprofits
(B) business-to-business marketing
(C) global marketing
(D) social influence marketing
(E) mass marketing
While sociographics, the analysis of social networks, may be useful in
marketing by nonprofits, global marketing, and mass marketing using the Internet, the best answer is social
influence marketing (SIM), choice D, because it’s the most precise.
The characteristics of package labels include all of the following EXCEPT that
(A) they attract customer attention
(B) depending on the product, they include the product’s ingredients
(C) they make the product easier to use
(D) they provide product information
(E) they need to be in multiple languages if a company sells in multiple countries
Choice C describes the functionality of the package—its structure and
design—not its label, so choice C is the correct answer
The BIG Shoe Company maintains a Web site that sells a variety of shoe brands for big and tall men. The company acts as an intermediary, sending orders to shoe manufacturers that send the shoes to BIG Shoe’s customers. BIG Shoe is a
(A) selling agent
(B) full-service wholesaler
(C) purchasing agent
(D) drop shipper
(E) rack jobber
A drop shipper, choice D, receives orders from customers, passes the orders to manufacturers to fill, and receives a percentage of the sales as compensation.
A company advertises it high-end foreign cars with a campaign that shows people turning around and
staring as the car drives by. This campaign might be derived from which of Maslow’s levels of basic
needs?
(A) Physiological
(B) Love, affection, and belongingness
(C) Safety
(D) Self-actualization
(E) Esteem
Advertising an expensive foreign-made car with a campaign based on turning
people’s heads could be built on Maslow’s fourth level, esteem or prestige, choice E.
ISIC stands for
(A) International Standards for Internet Classification
(B) International Standard Industrial Classification
(C) Internet Standardization Interglobal Categories
(D) Industrial Standards Internet Categories
(E) International Standardization Industrial Categories
ISIC stands for International Standard Industrial Classification, choice B. It is
the international version of the North American Industry Classification System (NAICS) that replaced the
Standard Industrial Classification (SIC) in 1997.
Which of the following would be classified as a public service ad?
(A) An ad explaining the benefits of a particular antidepressant
(B) An ad announcing an upcoming family night at a baseball game
(C) An election ad by an incumbent reminding constituents of what she has done for the district
(D) An ad raising awareness of breast cancer
(E) A testimonial by a patient who underwent heart surgery at a local hospital
The goal of a public service ad is to raise awareness of an issue that will
benefit the public in some way. An ad to raise breast cancer awareness classifies as a public service ad, so choice D is correct.
Identifying potential markets is called
(A) segmentation
(B) positioning
(C) forecasting
(D) targeting
(E) environmental audit
Identifying potential markets is market segmentation, choice A.
All of the following are a host country’s governmental influences on foreign trade EXCEPT the
(A) multiplicity of languages spoken
(B) stability of the political system
(C) amount of competition allowed
(D) tax system
(E) legal system
The number of languages in a nation is a cultural influence, not a government political influence, so choice A is the correct answer
Qualitative research is
(A) objective
(B) machine tabulated
(C) not systematic in its design
(D) deductive
(E) not open to generalizations
Choice E is correct because qualitative research is not used for developing
generalizations about the market.
Which of the following can be branded?
(A) Person, product, service, and value
(B) Person, product, place, and service
(C) Product, place, and service
(D) Value, product, place, and service
(E) Quality, value, product, and service
A brand may be a person (celebrity), product (autos), place (theme park), or
service (accounting company) that buyers perceive as having unique added values that match their needs
more than competitors, so choice B is correct.
Highlighting how much better the company’s product is over the competitors’ is an advertising strategy for which stage of the product life cycle?
(A) Development
(B) Introduction
(C) Growth
(D) Maturity
(E) Decline
Competitive advertising is typically a feature of the maturity stage of the
product life cycle, choice D.
An example of the perishable nature of services is
(A) the difficulty in achieving economies of scale
(B) the quality of an Internet marketing campaign
(C) a cancelled concert tour by a band
(D) the interconnectedness of the provider of the services with the service
(E) the seasonal nature of ski instruction
A cancelled concert tour is an example of the perishable nature of services, so
choice C is the correct answer.
In a pure competitive environment, a firm has
(A) complete control over pricing
(B) no control over pricing
(C) some control over pricing
(D) a great deal of control over pricing
(E) from no control to a great deal of control over pricing, depending on the product
In a pure competitive environment, companies have no control over pricing, so choice B is correct.
The Jefferson Manufacturing Company buys sheet metal from the same supplier each month. In January, it changes its order to aluminum tubing. This is an example of a
(A) straight buy
(B) straight rebuy
(C) new task buying
(D) modified rebuy
(E) modified buy
A modified rebuy is buying new products from a current supplier, so choice D is correct
Which of the following is NOT a step in the consumer adoption process model?
(A) Trial
(B) Awareness
(C) Evaluation
(D) User recommendations
(E) Interest
A recommendation from a friend or family who uses a product is not a step in the consumer adoption process, although user recommendations may be part of building awareness. Because
it is not a step, choice D is not true, but the correct answer.
To enter the Asian market, The Lion Company changed its formula for hot sauce, but kept its slogan and promotional materials, based on market research. This is an example of
(A) product adaptation and promotion extension
(B) product extension and promotion adaptation
(C) product extension and promotion extension
(D) product adaptation and promotion adaptation
(E) development of a new product and promotion
Modifying a product to meet consumer needs in a foreign market while
keeping the same promotion is called product adaptation and promotion extension, choice A.
The production aspect of product development includes
(A) product design and manufacturing
(B) purchasing, manufacturing, and warehousing
(C) quality control and test marketing
(D) manufacturing, quality control, and test marketing
(E) manufacturing, warehousing, and distribution
The production of product includes purchasing, manufacturing, quality
control, warehousing, and shipping. Choice B includes three correct elements: purchasing, manufacturing,
and warehousing, so choice B is correct.
Loss leader pricing is
(A) pricing a product just below its main competitor
(B) pricing a product at or below cost to get customers into a store with the hope of selling them other more profitable product
(C) based on keeping all costs involved, such as manufacturing, as low as possible
(D) based on the value that customers perceive the product holds
(E) pricing a product as part of a bundle to get rid of unwanted inventory
Loss leader pricing is a sales promotion technique that is used to get people
into a store with the hope that they will buy more expensive products, so choice B is correct.
During the maturity stage of the product life cycle, the number of competitors
(A) explodes
(B) declines
(C) increases incrementally
(D) remains the same
(E) rises and falls with economic conditions
There is a shakeout of competitors as sales increase at a decreasing rate and
price begins to decrease during the maturity stage of the product life cycle, so choice B is correct.
Market research tasks include all of the following EXCEPT
(A) identifying market segments
(B) test marketing
(C) conducting focus groups
(D) selecting distribution channels
(E) measuring brand loyalty
Selecting distribution channels is not a market research task, so choice D is
the correct answer to the question
The diffusion process in marketing refers to
(A) the innovation process within a company
(B) the rate of adoption of new product by consumers
(C) the spread of information in the marketplace about new product
(D) a promotion campaign
(E) a direct mail campaign
The rate of adoption of new products in the marketplace is called the diffusion
process, so choice B is correct.
Karen is buying a new winter coat. She has heard that the manufacturer of the last coat that she bought uses sweatshop labor, so she buys another coat brand. By doing this, Karen exhibits
(A) brand preference
(B) brand recognition
(C) brand indifference
(D) brand rejection
(E) brand disinterest
Karen recognizes the brand and refuses to buy it, so she exhibits brand rejection, choice D.
All of the following are behavioristic criteria used for segmenting markets EXCEPT
(A) user rate
(B) occupational status
(C) buyer readiness
(D) product loyalty
(E) desired benefits
User rate, buyer readiness, product loyalty, and desired benefits are all
behavioristic criteria, so choices A, C, D, and E are incorrect answers to the question. Choice B, occupational
status, is a demographic criterion, so it is the correct answer to the question.
The Peters Manufacturing Company has a number of locations around the country where goods are warehoused, orders are taken and processed, and products are shipped to customers. These locations are
(A) customer service centers
(B) distribution centers
(C) call centers
(D) intermodal transportation centers
(E) merchant wholesaler centers
Distribution centers, choice B, warehouse goods, take and process orders, and ship the filled orders to customers in specific areas.
A manufacturer that employs intermediaries in its distribution channel is using
(A) a corporate channel
(B) vertical integration
(C) horizontal integration
(D) an indirect channel
(E) a direct channel
Using intermediaries in the distribution channel indicates that a company is
using an indirect channel approach, choice D.
A cosmetics ad that highlights the wrinkle erasing and skin brightening powers of the product is using
what kind of appeal?
(A) Scarcity
(B) Youth
(C) Snob
(D) Humor
(E) Social
Erasing wrinkles and brightening skin are both qualities that promise a
youthful appearance, so choice B is correct.
Which of the following is NOT a form of media marketing?
(A) Infomercials
(B) Internet shopping
(C) Home shopping channels
(D) Catalogue shopping
(E) Mobile Web apps
Catalogue shopping is not a form of media marketing, so choice D is the
correct answer to the question.
Cookies are important to online advertisers because they enable advertisers to
(A) identify social networks
(B) count page views
(C) customize content for visitors
(D) track visitors to find out where they go after they leave their Websites
(E) identify unique versus repeat visitors
Choice C is correct because cookies enable advertisers to customize content to repeat visitors.
In online marketing, CPM stands for
(A) Cost Per Mille
(B) Cost Per Million
(C) Customer Performance Measure
(D) Customer Preference Metric
(E) Cost Performance Metric
CPM stands for cost per mille, “mille” meaning thousand in Latin, so choice B
is correct. CPM is a standard measure of online advertising costs, such as $100 per 1,000 appearances on a Web site.
The ability to “name your own price” online for airline tickets and hotel rooms is an example of
(A) supply pricing
(B) price-setting power
(C) condition pricing
(D) dynamic pricing
(E) situational pricing
The use of dynamic, or variable, pricing is a characteristic of e-commerce, so
choice D is the correct answer.
Influencers are important to marketers for all of the following reasons EXCEPT that influencers
(A) are early adopters and trendsetters
(B) have large social networks
(C) have money
(D) are respected
(E) are socially active in their communities and various movements and organizations
Influencers do not necessarily have money, so choice C is correct.
In conducting a situation analysis, a company would look at what factors related to the retail customer
environment?
(A) Market size, benefits customers are looking for, and frequency of purchase
(B) Product line, market size, and frequency of purchase
(C) Buying process, suppliers, and distributors
(D) Market size, competitors’ products, and buying process
(E) Trends, company’s image in the marketplace, and market segments
A situation analysis deals with the three C’s: company, customers, and
competitors. Market size, the benefits that customers are looking for, and the frequency of purchase are three
elements of the customer environment that a company would analyze in considering new product development, so choice A is correct.
Decision support systems can aid market research by
(A) analyzing inventory needs at various times of the year
(B) identifying target markets
(C) developing sales forecasts
(D) developing simulations to estimate the value of long-term customers
(E) applying the regression method to survey results
The decision support system (DSS) aids market research in a number of ways including identifying target markets, so choice B is correct.
Which of the following is a purchase that typically is a high-involvement decision?
(A) Buying a week’s worth of groceries
(B) Renting a vacation unit for a month
(C) Buying a tuxedo
(D) Buying a SUV
(E) Outfitting a student dorm room
High-involvement decision-making behavior comes into play when a purchase is important to the person making the purchase and is relatively expensive, the purchaser expects to receive a great deal of benefit from the purchase, and there is risk involved. The purchaser also lacks information about the intended purchase and expends time and energy conducting research. Only choice D satisfies all criteria for a high-involvement decision, so choice D is correct.
Offering a 60-day money back guarantee as a sales promotion is one way to deal with post-purchase
behavior known as
(A) delay
(B) satisfaction dissonance
(C) loyalty dissonance
(D) cognitive dissonance
(E) bounce back
Cognitive dissonance, in some circumstances referred to as buyer’s remorse, is post-purchase behavior in which a purchaser has second thoughts about the wisdom of the purchase, so
choice D is correct.
Which of the following is NOT an example of “green” marketing?
(A) Using post-consumer waste in manufacturing new product
(B) Reducing the use of product packaging
(C) Sponsoring a community-wide clean-up day
(D) Allowing consumers to opt out of receiving direct mail catalogues
(E) Sending recycled electronics abroad for disposal
Accepting recycled electronics at home and then sending them abroad for
disposal may reduce harm to the home country’s environment, but does nothing for the other country or the environment in general, so choice E is not “green” marketing.
Stickiness of a Web site is measured in terms of the
(A) money spent on the site
(B) click-throughs generated
(C) ease of searching the site
(D) number of repeat visits
(E) average minutes per month that visitors spend on the site
The correct answer is E. Stickiness can be measured by the average minutes per month that visitors spend on a Web site, a combination of the number of repeat visits and time spent per visit.
Which of the following is NOT an advantage that a multibrand strategy offers the PT Soap Company?
(A) A multibrand strategy creates internal competition among PT’s brand managers.
(B) By using a multibrand strategy, PT’s brands take sales away from one another.
(C) A multibrand strategy means that PT’s competitors have limited shelf space for their products.
(D) By having a number of brands, PT has brands for a variety of price and quality levels.
(E) By having multibrands, PT will attract or keep more consumers who like to try different products.
The downside to a multibrand strategy is that some brands eat into the sales
for a company’s other brands, so choice B is the correct answer.
Customer stability in the maturity phase of the product life cycle is
(A) low
(B) very stable
(C) characterized by well-established buying patterns and customer loyalty
(D) characterized by some loyalty
(E) characterized by a declining customer loyalty
Choice C is correct because the customer stability factor in the maturity stage
of the product life cycle is characterized by customer loyalty and well-established buying patterns.
The most important step in the marketing process for a nonprofit is
(A) identifying its target market
(B) developing promotional materials
(C) keeping its database of donors up to date
(D) implementing a social media marketing program
(E) creating a Web site
Like a for-profit organization, a nonprofit first has to define its target market for promotion, so choice A is correct.
When a pharmaceutical maker brings out a low-cost version of one of its drugs, it is manufacturing a
(A) product line extension
(B) brand extension
(C) brand generic
(D) generic brand
(E) brand choice
A generic brand is a low-priced item that has no individual brand, so choice D
is correct.
A company selling Internet, phone, and cable service together is an example of
(A) a cross promotion
(B) a product bundle
(C) product integration
(D) a discount program
(E) a complementary product
Marketing several items together creates a product bundle, or package, choice B.
Which of the following is NOT within the control of a company?
(A) Price
(B) Economic conditions
(C) Advertising
(D) Distribution
(E) Personal selling
A company can’t control economic conditions, so choice B is the correct
answer to the question.
Individuals or groups within an organization who affect the decision-making process include
(A) buyers, users, and marketers
(B) users, influencers, marketers, and goaltenders
(C) buyers, users, influencers, and goaltenders
(D) users, influencers, marketers, and gatekeepers
(E) buyers, users, influencers, and gatekeepers
In addition to deciders, decision making in an organization include buyers,
users, influencers, and gatekeepers, so choice E is the most complete and only correct answer.
The Internet has facilitated the place function of the marketing mix by
(A) reducing costs involved in customer service
(B) speeding the automated delivery of orders and invoicing
(C) providing information on customer needs and wants without using costly research methods
(D) offering coupons and other discounts
(E) continually updating advertising information and online catalogues
Speeding the automated delivery of orders and invoices, choice B, typically
facilitates the place function for companies.
Exchange trading companies can help importers with all of the following functions EXCEPT
(A) arranging for financing
(B) conducting research on new products to satisfy foreign market needs
(C) providing promotional activities at foreign trade shows
(D) arranging for packaging for the foreign market
(E) negotiating for the cancellation of export duties
Choice E is incorrect because export duties don’t affect importers and
exchange trading companies (ETC) have no control over export duties, which are set by governments.
The purpose of a SWOT analysis is to identify
(A) a company’s strengths and weaknesses as well as the threats to its success in the marketplace
(B) the strengths and weaknesses of competitors and a company’s own opportunities and threats in the marketplace
(C) the strengths and weaknesses of competitors and their opportunities and threats in
the marketplace
(D) a company’s external strengths and weaknesses and internal opportunities and threats to its success
(E) a company’s internal strengths and weaknesses and its opportunities and threats in
the marketplace
A SWOT analysis identifies a company’s own strengths and weaknesses and
the opportunities and threats to it in the marketplace, so choice E is correct.
Which of the following demonstrates customer goodwill toward a company?
(A) Sponsorship of events hosted by nonprofit organizations
(B) A strong brand name
(C) Proactive post-purchase customer relations
(D) Promotional activities that offer price reductions
(E) A loyal-customer program
A strong brand name, choice B, is an indicator of customer goodwill toward a
company.
People who buy toothpaste for its whitening properties make up a market segment based on
(A) demographics
(B) usage rate
(C) buyer readiness
(D) lifestyle
(E) benefits sought
Benefits sought is a subcategory of behavioristic criteria used in determining
market segmentation; the subcategory is based on attracting a market segment interested in certain benefits of a product, so choice E is correct.
In looking for secondary information online, market researchers may look at all of the following EXCEPT
(A) search directories
(B) intranets
(C) social media sites
(D) discussion groups
(E) periodical and newspaper archives
An intranet, choice B, is a private computer network maintained by a company
or an organization that limits access to it to employees of the company or organization. The only way
unauthorized people can view it is by hacking it, which is illegal.
The best use of focus groups in new product development is
(A) to extrapolate from them how many people will buy the product
(B) in identifying a price point for the product
(C) in determining the issues that consumers are concerned about in a particular product category
(D) to gain ideas for refining a sales presentation
(E) to gain data for inventory management
Focus groups are best used in new product development to find out the issues
that are important to consumers, choice C.
Charging passengers to check bags on airlines is changing prices
(A) by changing the terms of sale
(B) by changing the quality of products
(C) by changing the amount or size
(D) based on the laws of supply and demand
(E) based on full demand
When something that was free is now charged for, the terms of sale have been
changed, choice A.
A furniture chain begins as a discounter. Then it adds lamps and other home accessories. It then offers an interior decorating service while also upgrading its furniture lines. Over time the store adds more
departments and services. This describes the
(A) retail life cycle
(B) retail model
(C) retail cycle
(D) wheel of retailing
(E) superstore evolution
The phenomenon described in the question is known as the wheel of retailing theory, choice D.
Marketing materials for nonprofits should include all of the following EXCEPT
(A) the organization’s services
(B) the resume of the executive director
(C) opportunities for donations
(D) testimonials from users
(E) the organization’s mission
Including the resume of the executive director is not appropriate, so choice B
is the correct answer to the question. However, noting a former affiliation of the executive director may be
useful if there is a connection to the current organization, for example, noting that the executive director of an
opera company was once an opera star.
Which of the following commercials uses a lifestyle approach in its creative execution?
(A) Animated characters talk about the benefits of a particular window cleaner.
(B) A couple thinks about going on a cruise and then finds themselves on the cruise boat.
(C) A movie star endorses skin care products.
(D) An actor spills some liquid and then uses two brands of paper towel to soak it up; the sponsor’s towel does a better job.
(E) A family of five is packing camping equipment into a new SUV and talking about how roomy it is and how it fits not just camping equipment, but all their everyday
sports equipment, grocery bags, etc.
An ad that uses a lifestyle creative approach shows how easily the product fits
into a certain lifestyle, so choice E is the best answer.
Which of the following is an example of how integrated marketing communications affects advertising?
(A) Advertising is based on customer needs and wants as determined through market
research.
(B) Advertising is aimed at broad markets rather than narrower segments.
(C) Loyalty programs have become more important.
(D) More emphasis is placed on traditional media advertising than on online and mobile marketing.
(E) Building relationships with customers is no longer seen as the essential message
The focus of integrated marketing communications (IMC) is to connect all
facets of internal and external marketing to communicate a single sales-related message to stakeholders, so choice A is correct.
All of the following comprise services that can be added to enhance a product EXCEPT
(A) warranty
(B) delivery
(C) financing
(D) brand name
(E) add-ons
The brand name is an intangible aspect of a product and isn’t one of the services that can be used to enhance a product, so choice D is the correct answer to this EXCEPT question.
Churn rate is the
(A) number of unique visitors to a site
(B) number of customers who stop doing business with a company
(C) number of purchases an individual makes on a particular site
(D) another name for click throughs
(E) number of calls a call center operator can handle in a day
Churn rate is the number of customers who stop doing business with a company, also known as the attrition rate, so choice B is correct.
Seven Functions of Marketing
The seven functions of marketing include:
1. Pricing
2. Promotion
3. Product and Service Management
4. Place (Process of Origin and Distribution)
5. Selling
6. Marketing-Information Management
7. Financing
Marketing Process or Marketing Mix
Includes the following:
1. Pricing
2. Promotion
3. Product and Service Management
4. Place (Process of Origin and Distribution)
Marketing Research
Involves customers in order to find solutions to problems through carefully designed studies.

Steps in Marketing Research:
1. Define the Marketing Problem.
2. Study the Situation.
3. Develop a Data Collection Procedure.
4. Gather and Analyze Information.
5. Propose a Solution.

Four Types of Research Studies
They include:
-Surveys
-Focus Groups
-Observations
-Experiments
Authenticity
The quality of being authentic, reliable, trustworthy.
Bottom Line
Net income after tax; a purely profit-based view of the effects of a company’s actions and policies on its sustainability as an organization.
Buyer’s Market
A market condition in which more goods and services are available than people wanting to buy them.
Cause-Related Marketing
Use of tie-ins with causes motivated by the pursuit of profits for the company’s bottom line.
Co-Creation of Value
A business strategy focusing on interactive relationships with customers that allow them to create a value-rich experience.
Competitive Differentiation
Result of efforts to create perceptible differences in or between goods or services; making a product or brand stand out as of unique value to customers when compared with competing offerings.
Consideration Set
Group of alternatives that meet purchase criteria.
Consumers
Purchasers of a good or service or end users who are not necessarily the purchasers.
Consumer Orientation
A business philosophy emphasizing the importance of first determining the unmet needs of a consumer before designing goods and services to satisfy them.
Consumer-Centric
Philip Kotler’s term for the business philosophy of consumer orientation, with its emphasis on segmentation of markets and taking inspiration for the development and promotion of products from the people who will purchase or use them.
Customer
The person who acquires, or agrees to acquire, the goods or benefits of usage conveyed by ownership, in exchange for money or other consideration under a contract of sale; the person who has the ability to choose between different products and suppliers. Also known as the buyer or purchaser.
Customer Lifetime Value
The total profit (or loss) estimated to result from an ongoing business relationship with a customer over the life of relationship.
Customer Value
The value a customer (buyer) places on a specific exchange, as opposed to the value placed on the exchange by the company (seller).
Customer Value Equation
The relationship between the value given (usually money) and the value the received in exchange (goods or services) as perceived by a customer.
Demand
Desire for certain goods or services supported by the capacity to purchase them.
Desires
Longings or cravings, as for something that brings satisfaction or enjoyment; expressed wishes (as opposed to needs).
Ease of Possession
One of the four utilities of customer value, the attribute that makes it possible to transfer title to an offering from the seller to the buyer—price, payment plan, and any warranties or guarantees.
Exchange
The trading of things of value between buyer and seller so that each perceives him or herself as better off after the trade.
Exchange Process
An action in which two or more parties give something of value to each other to satisfy perceived wants or needs.
Form
One of the four utilities of customer value, the attribute that makes an offering useful to customers, created as the company converts raw materials and components into deliverable products and services.
Four P’s
Product, price, place, and promotion make up the marketing mix, the controllable elements of a product’s marketing plan.
Four Utilities of Customer Value
Form, Time, Place, and Ease of Possession; aspects of a company’s offerings that are useful (provide utility, hence the name) to customers. Buyers think of these aspects as purchase criteria that a product or service must meet in order to deliver value.
Globalization Paradox
Recognition that on one hand, globalization is creating a more uniform culture worldwide, and at the same time it is creating a more diverse culture as a counterbalance; this causes anxiety for individuals who are feeling the pressure to be global as well as local citizens.
Humanity-Centric
The concept of marketing that focuses attention on the fulfillment of higher human needs, such as the need for community, as opposed to product-centric or consumer-centric marketing.
Market Research
The pursuit of knowledge of a specific market by using scientific methods to measure its size and other characteristics.
Market System
The social system for supplying a society’s material needs governed by economic forces such as supply and demand, rather than treaties or administrative decisions.
Marketing
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.
Marketing 3.0
According to Philip Kotler, the evolution of marketing practice to a third generation that focuses on fulfillment of higher human needs, such as the need for community.
Marketing Concept
Management philosophy according to which a firm’s goals can be best achieved through identification and satisfaction of the customers’ stated and unstated needs and wants.
Marketing Management
The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing Mix
A planned mix of the controllable elements of a product’s marketing plan, which is made up of the four p’s of product, price, place, and promotion.
Needs
A motivating force that compels action, ranging from basic survival to cultural, intellectual, and social needs. Needs require satisfaction (as opposed to desires, which can go unmet).
Place
One of the four utilities of customer value, the location or means by which the buyer/consumer takes ownership of the offering.
Positioning
The practice of creating an image or identity in the minds of prospective customers that allows one offering to stand out among many.
Product-Centric
The concept of marketing that focuses attention on the development and promotion of products, as opposed to focusing on the consumers who will purchase or use them.
Relationship Marketing
Development and maintenance of long-term relationships with individual customers, suppliers, and other partners for the benefit of all.
Segmentation
The practice of subdividing a population into groups (segments) with similar characteristics, such as geography, income, age, education, or lifestyle.
Seller’s Market
A market condition in which buyers outnumber the goods and services they want to buy.
Service-Dominant Logic
An understanding of the purpose and nature of marketing based on the proposition that organizations, markets, and society are fundamentally concerned with the exchange of services, for the benefits of all parties.
Target Market
A segment of the population at which a marketing campaign is focused, based on the likelihood that people in the segment are likely to have a need or desire for a company’s offerings and can be profitably served.
Target Marketing
Identifying a segment of the population through detailed research, and developing specific marketing campaigns focused on it.
Time
One of the four utilities of customer value, the availability of offerings when customers want them.
Trade
Exchange carried out in the absence of markets, involving price equivalencies determined by treaties or administrative decisions, rather than behavior of a marketplace.
Triple Bottom Line
The financial, social, and environmental effects of a company’s actions and policies that determine its sustainability as an organization.
Value
In a marketing context (as opposed to a sociological one), the monetary or material worth for which an offering may be exchanged; the perceived trade-off between benefits and the sacrifice required to take possession of those benefits.
Value-In-Use
The service rendered or benefits that an asset generates for a specific owner under a specific use.
Advertainment
Term coined for advertising that entertains, usually by relating a dramatic narrative or by engaging consumers in an interaction, such as a game.
Advertising Media
Traditional paid vehicles by which promotional messages are communicated to the public, such as newspaper, radio, and television.
AIDA Formula
A structure that describes four states required to sell a product or service: Attention, Interest, Desire, and Action; the name is an acronym.
Behavioral Targeting
Marketers’ recording of consumers’ online communication behaviors, in order to market to them based on those observations.
Best Available Screen Theory
Consumers’ tendency in a media-convergent world to choose the best available screen for their location at the moment as they move through a day’s activities.
Brand
The combination of a unique design, sign, symbol, and/or words, strategically deployed to create an image that identifies a product, service, organization, or idea and differentiates it from its competitors.
Brand Ambassadors
Individuals who serve as the face of their client company at promotional events.
Brand Narrative
The ongoing dialogue connecting company and customer that encodes in story the values and experiences that compose the brand’s meaning.
Buzz
Anything that creates excitement or stimulus; a marketing technique that leverages consumers’ interest to generate marketing messages.
Creative Brief
A document created by marketing planners and followed by creative professionals to guide development of creative deliverables such as advertising, websites, etc.
Customer Analytics
The process by which customer data are used to inform key business decisions, influencing market segmentation and predictive analytics.
Data Mining
Using sophisticated data search capabilities and statistical algorithms to discover patterns and correlations in large preexisting databases; a way to discover new meaning in existing data.
Direct Response Advertising
A form of marketing designed to solicit a direct response that is specific and quantifiable.
Engagement
The state of being attracted and interested; devoting mental resources to a task; in marketing usage, the degree and depth of consumer interaction with a marketer’s message.
Field of Experience
The attitudes, knowledge, perceptions, and values that individuals or members of a group bring to a situation.
Guerilla Marketing
Unconventional marketing intended to get maximum results from minimal resources by being unexpected or unconventional; frequently includes consumer interactivity. The term “Guerilla Marketing” is a registered trademark of author Jay Levinson who popularized it through his several “Guerilla” books.
Image Advertising
A form of marketing designed to create generalized goodwill for a product, service, idea, or organization in the minds of consumers. This image aims to associate the advertised product and/or firm with certain lifestyles or values.
In-Store Marketing
Marketing dollars spent inside a retail store in the form of store design, merchandising, visual displays, or promotions.
Integrated Marketing Communications (IMC)
An organizational focus on managing customer relationships over time by linking all management initiatives related to brand communications so that audiences encounter a consistent message across all channels; increasingly seen as necessary to achieve desired results from promotional activity.
Media Convergence
The process in which several media channels come together to operate synergistically; for example, reducing the line between televisions, computers, and mobile devices.
Media Coverage
Information presented in mass media about a company by reporters; may result from public relations activity.
Noise
In communication theory, extraneous factors that distort or block a message as it is sent or received, such as background sounds or printing errors.
Nonpersonal Selling
Promotional technique featuring communications through non-person-to-person channels.
Personal Selling
Promotional technique featuring personal contact by members of a company’s sales force (which can be face-to-face or via technology) intended to make sales or build customer relationships.
POES Model
(Derived from “Paid, Owned, Earned, Shared”) A framework that assigns message channels to one of four quadrants based on ownership and control.
Predictive Analytics
A variety of techniques from statistics, data mining, and game theory that analyze current and historical facts to make predictions about future events.
Primary Demand
One possible objective of promotional communications, designed to stimulate desire for a general product category.
Product Placement
An advertising technique used to subtly promote products through appearances in film, television, or other media, or prominent display at consumer events.
Promotion
The function of informing, persuading, and influencing consumers’ purchase decisions through the use of message channels such as publicity and/or advertising; the advancement of a product, idea, or point of view through message channels.
Public Relations
Communication management that seeks to make use of publicity and other nonpaid forms of promotion to influence feelings, opinions, or beliefs held by buyers, prospects, or other stakeholders about the company, its products or services, and its activities.
Selective Demand
One possible objective of promotional communications, designed to stimulate desire for a specific brand within a product category created through differentiation. Also called secondary demand.
Sponsorships
Cash and/or in-kind fee paid to a property (typically a celebrity) in return for endorsements and other exploit- able commercial potential associated with that property.
Touchpoint
The moment in which a consumer experiences an interaction with a brand, the quality of which will influence relationships, perceptions, and actions.
Transactional Communication Model
A model that sees communication as a negotiation of meaning in which two or more parties respond to their environment and each other.
Word of Mouth
Recommendation by a satisfied customer to prospective customers of a good or service, considered one of the most effective forms of promotion.
Bonuses
A consumer-oriented promotional strategy involving payment or gift added to what is expected.
Breakeven Analysis
The point where total revenue received equals the total of fixed and variable costs associated with the sale of the product.
Buying Center
Within a business, a functional unit charged with evaluating and purchasing goods and services. Initiators, users, buyers, gatekeepers, and deciders may all be involved in the buying center.
Cash Rebates
A consumer-oriented promotional strategy involving money returned on what has already been paid for an offering.
Co-Creation Model
Buyers may bundle options to design products that suit their individual ideas of value.
Competition-Based
A pricing approach focused on setting prices based on competitors’ prices for similar offerings.
Contests
A consumer-oriented promotional strategy involving prizes given to winners who are drawn from a pool of entrants who have completed a required task.
Cost-Plus
A pricing approach focused on adding a standard markup to the cost of the product that accommodates fixed and variable costs of production.
Coupons
A consumer-oriented promotional strategy involving documents that can be exchanged for a financial discount.
Dynamic Pricing Model
Buyers and sellers collaborate to establish a price, accepting trade-offs in deliverables for favorable pricing.
Economic Value
The reference price that a buyer assigns to the features that differentiate an offering from the alternatives available at the reference price.
Elasticity of Demand
The degree to which demand for an offering varies with its price. Demand is highly elastic when a small change in price brings about a large change in sales, highly inelastic if a large price change has little effect on sales (demand).
Equilibrium Point
The position of a market price that generates an equal amount of demand and supply for a product or service.
Fixed Costs
Costs associated with normal operations of the business, such as rent or insurance, that do not change with changes in production volume.
Fixed Pricing Strategy
A strategy in which the same price is charged to all customers, as opposed to a variable pricing strategy.
Flash Sales
A trend beginning in 2007 of members-only websites selling designer brands at bargain prices for very limited time periods while collecting consumer data by tracking online behavior.
High-Low Pricing
A strategy in which a company intentionally sets its regular prices higher and then reduces the price structure during frequent sales promotions.
List Price
A manufacturer’s, distributor’s, or retailer’s quoted, published, or displayed price on which discounts are computed. Also called manufacturer’s suggested retail price (MSRP).
Markup
Adding a constant percentage to the cost paid for an item to arrive at its selling price.
Manufacturer’s Suggested Retail Price (MSRP)
See list price.
Neutral Pricing
A strategy calling for matching prices of the general market.
Opaque Exchanges
Buying exchanges in which sellers strategically withhold information from customers who may not know the exact features of their purchase at the point of payment, a feature of the Name Your Own Price approach.
Peak-Load Pricing
Charging higher prices during periods of rising demand (viable only when few competitors exist).
Penetration Pricing
A strategy calling for keeping prices low in comparison to competitors’ and widely promoting an offering, to quickly achieve the most sales to the most buyers possible.
Pocket Price
The price collected by a seller in a particular transaction after accounting for all relevant discounts given to channel partners or the end consumer.
Premiums
A consumer-oriented promotional strategy involving items given free or at reduced cost with purchases of other items.
Price
The money or other consideration exchanged for the ownership or use of a good or service, representing a quantifiable way to measure the value customers place on that offering.
Price Discrimination
The practice of charging different prices to different buyers for goods of like grade or quality, prohibited under the Clayton Act as amended by the Robinson-Patman Act.
Price Sensitivity
The amount by which changes in a product’s cost tend to affect consumer demand for that product.
Price Waterfall Analysis
A tool used to calculate how much revenue companies keep from each sale after transactional costs have been subtracted.
Profit Maximization
A strategic approach with the objective of generating the highest possible net income over time.
Reference Pricing
In buyer psychology, an amount representing a fair price in the consumer’s mind that is remembered, researched, or inferred from the buying situation.
Refunds
A consumer-oriented promotional strategy involving money returned on presentation of proof of purchase of an offering.
Sales Incentives
A promotional strategy involving programs that reward intermediaries for superior performance.
Sales Promotions
A short-term marketing strategy intended to stimulate purchases over a specific time period, by offering a reason to buy in addition to the service rendered by the offering regardless of price.
Samples
A consumer-oriented promotional strategy involving free products distributed in hopes of obtaining future sales.
Segmented Pricing
Selling a product or service at more than one price, where the difference in prices is based on differences other than costs of production.
Signposts
In buyer psychology, the tendency of reference prices on certain items to signal a store’s pricing in general.
Skim Pricing
A strategy calling for setting prices high to attract higher income groups for luxury or status goods, or to extract maximum returns from a market before competitors emerge.
Supply and Demand
The amount of a product sellers make available (supply) and the amount buyers want to purchase (demand).
Sweepstakes
A consumer-oriented promotional strategy involving prizes given to winners selected by chance from a pool of entrants.
Switching Costs
The costs associated with switching suppliers when the purchase will require buyers to spend on additional goods or services to gain its full value.
Target Profit
A pricing approach focused on calculating breakeven costs of making and marketing a product, and selecting a price to make a target profit above that cost.
Trade Allowances
A promotional strategy involving financial incentives to channel partners to purchase or promote specific offerings.
Value-Based
A pricing approach focused on using buyers’ perception of value to design an offering that can be sold profitably.
Variable Cost
A cost that fluctuates with production volume; for example, process materials or sales commissions.
Variable Pricing Strategy
A strategy in which different prices are charged to different customers or at different times.
Volume Maximization
A strategic approach in which a company’s primary objective is to generate as much sales volume (and revenue) as possible over a short time frame.
Yield Management
Strategic control of inventory to maximize yield or profits from a fixed, perishable resource.
Bonuses
A consumer-oriented promotional strategy involving payment or gift added to what is expected.
Breakeven Analysis
The point where total revenue received equals the total of fixed and variable costs associated with the sale of the product.
Buying Center
Within a business, a functional unit charged with evaluating and purchasing goods and services. Initiators, users, buyers, gatekeepers, and deciders may all be involved in the buying center.
Cash Rebates
A consumer-oriented promotional strategy involving money returned on what has already been paid for an offering.
Co-Creation Model
Buyers may bundle options to design products that suit their individual ideas of value.
Competition-Based
A pricing approach focused on setting prices based on competitors’ prices for similar offerings.
Contests
A consumer-oriented promotional strategy involving prizes given to winners who are drawn from a pool of entrants who have completed a required task.
Cost-Plus
A pricing approach focused on adding a standard markup to the cost of the product that accommodates fixed and variable costs of production.
Coupons
A consumer-oriented promotional strategy involving documents that can be exchanged for a financial discount.
Dynamic Pricing Model
Buyers and sellers collaborate to establish a price, accepting trade-offs in deliverables for favorable pricing.
Economic Value
The reference price that a buyer assigns to the features that differentiate an offering from the alternatives available at the reference price.
Elasticity of Demand
The degree to which demand for an offering varies with its price. Demand is highly elastic when a small change in price brings about a large change in sales, highly inelastic if a large price change has little effect on sales (demand).
Equilibrium Point
The position of a market price that generates an equal amount of demand and supply for a product or service.
Fixed Costs
Costs associated with normal operations of the business, such as rent or insurance, that do not change with changes in production volume.
Fixed Pricing Strategy
A strategy in which the same price is charged to all customers, as opposed to a variable pricing strategy.
Flash Sales
A trend beginning in 2007 of members-only websites selling designer brands at bargain prices for very limited time periods while collecting consumer data by tracking online behavior.
High-Low Pricing
A strategy in which a company intentionally sets its regular prices higher and then reduces the price structure during frequent sales promotions.
List Price
A manufacturer’s, distributor’s, or retailer’s quoted, published, or displayed price on which discounts are computed. Also called manufacturer’s suggested retail price (MSRP).
Markup
Adding a constant percentage to the cost paid for an item to arrive at its selling price.
Manufacturer’s Suggested Retail Price (MSRP)
See list price.
Neutral Pricing
A strategy calling for matching prices of the general market.
Opaque Exchanges
Buying exchanges in which sellers strategically withhold information from customers who may not know the exact features of their purchase at the point of payment, a feature of the Name Your Own Price approach.
Peak-Load Pricing
Charging higher prices during periods of rising demand (viable only when few competitors exist).
Penetration Pricing
A strategy calling for keeping prices low in comparison to competitors’ and widely promoting an offering, to quickly achieve the most sales to the most buyers possible.
Pocket Price
The price collected by a seller in a particular transaction after accounting for all relevant discounts given to channel partners or the end consumer.
Premiums
A consumer-oriented promotional strategy involving items given free or at reduced cost with purchases of other items.
Price
The money or other consideration exchanged for the ownership or use of a good or service, representing a quantifiable way to measure the value customers place on that offering.
Price Discrimination
The practice of charging different prices to different buyers for goods of like grade or quality, prohibited under the Clayton Act as amended by the Robinson-Patman Act.
Price Sensitivity
The amount by which changes in a product’s cost tend to affect consumer demand for that product.
Price Waterfall Analysis
A tool used to calculate how much revenue companies keep from each sale after transactional costs have been subtracted.
Profit Maximization
A strategic approach with the objective of generating the highest possible net income over time.
Reference Pricing
In buyer psychology, an amount representing a fair price in the consumer’s mind that is remembered, researched, or inferred from the buying situation.
Refunds
A consumer-oriented promotional strategy involving money returned on presentation of proof of purchase of an offering.
Sales Incentives
A promotional strategy involving programs that reward intermediaries for superior performance.
Sales Promotions
A short-term marketing strategy intended to stimulate purchases over a specific time period, by offering a reason to buy in addition to the service rendered by the offering regardless of price.
Samples
A consumer-oriented promotional strategy involving free products distributed in hopes of obtaining future sales.
Segmented Pricing
Selling a product or service at more than one price, where the difference in prices is based on differences other than costs of production.
Signposts
In buyer psychology, the tendency of reference prices on certain items to signal a store’s pricing in general.
Skim Pricing
A strategy calling for setting prices high to attract higher income groups for luxury or status goods, or to extract maximum returns from a market before competitors emerge.
Supply and Demand
The amount of a product sellers make available (supply) and the amount buyers want to purchase (demand).
Sweepstakes
A consumer-oriented promotional strategy involving prizes given to winners selected by chance from a pool of entrants.
Switching Costs
The costs associated with switching suppliers when the purchase will require buyers to spend on additional goods or services to gain its full value.
Target Profit
A pricing approach focused on calculating breakeven costs of making and marketing a product, and selecting a price to make a target profit above that cost.
Trade Allowances
A promotional strategy involving financial incentives to channel partners to purchase or promote specific offerings.
Value-Based
A pricing approach focused on using buyers’ perception of value to design an offering that can be sold profitably.
Variable Cost
A cost that fluctuates with production volume; for example, process materials or sales commissions.
Variable Pricing Strategy
A strategy in which different prices are charged to different customers or at different times.
Volume Maximization
A strategic approach in which a company’s primary objective is to generate as much sales volume (and revenue) as possible over a short time frame.
Yield Management
Strategic control of inventory to maximize yield or profits from a fixed, perishable resource.
1. Which function of marketing determines how much gross profit a business will make on a good or service?
A. Pricing
B. Distribution
C. Promotion
D. Risk management
A. Pricing
2. What marketing function helps marketers decide to whom to sell?

A. Pricing
B. Product/Service management
C. Financing
D. Marketing-information management

D. Marketing-information management
3. Which of the following statements is true about marketing functions:

A. The marketing functions are important to producers but not to consumers.
B. Some of the marketing functions are much more important than others.
C. Marketing functions work together to get products from producers to consumers.
D. Each of the marketing functions is independent of the others.

C. Marketing functions work together to get products from producers to consumers.
4. Businesses often use promotional campaigns to create or improve their

A. image.
B. credit.
C. safety.
D. displays.

A. image.
5. A business that sends discount coupons to potential customers is using the __________ function of marketing.

A. product/service management
B. financing
C. selling
D. promotion

D. promotion
6. Which of the following is an example of marketing information that a business could gather by surveying its customers:

A. Location of the company’s market
B. The company’s current market share
C. Planned product improvements
D. Financial status of competitors

A. Location of the company’s market
7. Which of the following would be the marketing information most likely to be gathered and analyzed by a marketing-information management system:

A. Employee absences
B. Unchanging events
C. Historical data
D. Consumer trends

D. Consumer trends
8. Which of the following is a reason that marketers gather information:

A. Competition in general has decreased.
B. Today’s consumers are easy to please.
C. Marketers are decreasing their geographic scope.
D. The marketing environment is constantly changing.

D. The marketing environment is constantly changing.
9. What function of a marketing-information management system involves the distribution of marketing information to those who make marketing decisions?

A. Data gathering
B. Information reporting
C. Marketing research
D. Data processing

B. Information reporting
10. One basic requirement of a marketing-information management system is that it should be able to

A. operate only when needed.
B. be used by all personnel.
C. gather, access, and evaluate data.
D. discard data after they are analyzed.

C. gather, access, and evaluate data.
11. Which of the following is the correct sequence of steps in the development of new products:

A. Idea generation, product screening, concept testing, test marketing, commercialization
B. Concept testing, idea generation, product screening, test marketing, commercialization
C. Commercialization, test marketing, idea generation, product screening, concept testing
D. Product screening, idea generation, concept testing, commercialization, test marketing

A. Idea generation, product screening, concept testing, test marketing, commercialization
12. Which of the following controls such new-product considerations as warranties and safety standards:
A. Stages in product life cycles
B. Product characteristics
C. Market-research studies
D. Government regulations
D. Government regulations
13. One way that product/service management benefits marketing is by helping to decrease
A. business risk.
B. profits.
C. sales.
D. financial success.
A. business risk.
14. One way that some businesses obtain new products to add to their product line is by
A. consolidation.
B. implementation.
C. acquisition.
D. syndication.
C. acquisition.
15. Costs and available resources are especially important factors for product/service managers to examine during which phase of product/service management?
A. New-product development
B. Elimination of weak products
C. Idea generation
D. Monitoring of existing products
A. New-product development
16. A short channel of distribution will probably be used by a producer that

A. lacks sufficient funding.
B. wants to share the costs of distribution.
C. wants channel control.
D. does not have its own sales force.

C. wants channel control.
17. Channels of distribution are necessary for the sale of goods and services to ultimate

A. wholesalers.
B. consumers.
C. retailers.
D. sales agents.

B. consumers.
18. Indirect channels of distribution are the only channels that involve

A. industrial consumers.
B. intermediaries.
C. producers.
D. ultimate consumers.

B. intermediaries.
19. Wal-Mart, Domino’s Pizza, and Avis Rent-a-Car are examples of

A. industrial distributors.
B. retailers.
C. agents.
D. wholesalers.

B. retailers.
20. Where does a channel of distribution begin?

A. With the industrial user
B. With the ultimate consumer
C. With the producer
D. With the intermediary

C. With the producer
21. Can prices be set too low?

A. Yes; customers may feel quality is too high.
B. No; the lower the price, the more willing the customer is to buy.
C. Yes; customers may feel quality is too low.
D. No; the lower the price, the greater the product’s appeal.

C. Yes; customers may feel quality is too low.
22. In which of the following businesses would a separate department most likely be responsible for establishing prices:

A. Small boutique
B. Local clothing store
C. Hair salon
D. Chain store

D. Chain store
23. When companies increase the quality of materials used in the production of their products, their prices will tend to be

A. the same.
B. higher.
C. lower.
D. reduced.

B. higher.
24. A characteristic of effective prices is that they must be

A. inflexible.
B. competitive.
C. high.
D. low.

B. competitive.
25. Which of the following costs do businesses usually include in the price of their products:

A. Orientation
B. Inflation
C. Regulations
D. Transportation

D. Transportation
26. A long-range benefit that a business may derive from promoting its company image is

A. reduced expenses.
B. new customers.
C. immediate sales.
D. customer loyalty.

D. customer loyalty.
27. The way in which the promotional message is communicated should be

A. selected by the market.
B. suited to the product.
C. different each time.
D. the same in each case.

B. suited to the product.
28. One of the reasons for using promotion is to __________ goods and services.

A. guarantee
B. deliver
C. help sell
D. display old

C. help sell
29. Consumers may be hesitant to believe information in ads for a good or service because advertising

A. is directed toward a mass audience.
B. is intended to be misleading.
C. raises the price of the product.
D. is necessarily biased.

D. is necessarily biased.
30. Promotion is thought of as being at the heart of marketing because it allows sellers to

A. bypass middlemen such as retailers.
B. distribute products to a larger market.
C. bring new products to market.
D. communicate the benefits of products to buyers.

D. communicate the benefits of products to buyers.
31. Selling that meets customers’/clients’ needs contributes to the

A. relative price of products.
B. national debt.
C. size of the target market.
D. success of the business.

D. success of the business.
32. Products that are sold to the individual(s) who will make personal use of them are being sold for

A. ultimate consumption.
B. eventual resale.
C. industrial purposes.
D. promotional purposes.

A. ultimate consumption.
33. A salesperson who explains to a customer the features and benefits of several types of 35mm cameras in stock is demonstrating good

A. creativity.
B. probing.
C. product knowledge.
D. ethical standards.

C. product knowledge.
34. Which of the following is an example of a product’s being sold to an organization for use in producing other goods:

A. A retailer sells office furniture to an advertising firm.
B. A retailer sells a sewing machine to a professional seamstress.
C. A teenager mows his neighbor’s lawn for $20.
D. A distributor sells hundreds of comics to a comic-book store.

B. A retailer sells a sewing machine to a professional seamstress.
35. Which of the following is an example of a product’s being sold without the use of an intermediary:

A. A tanning salon
B. A Mary Kay cosmetics party
C. A construction-supply distributor
D. A car-rental agency

B. A Mary Kay cosmetics party
36. Business goals are accomplished by means of marketing

A. budgets.
B. strategies.
C. profit.
D. salespeople.

B. strategies.
37. Which of the following is a consideration in the place element of marketing:

A. Offering warranties or guarantees
B. Choosing distribution channels
C. Using sales promotion
D. Extending credit to customers

B. Choosing distribution channels
38. A marketer who changes the product element in the marketing mix should re-evaluate the other marketing elements because the elements are

A. detached.
B. independent.
C. unique.
D. interrelated.

D. interrelated.
39. What product factor should a business consider when selecting a good or service to offer its customers?

A. Channels of distribution
B. Level of quality
C. Availability of credit
D. Types of inventory control

B. Level of quality
40. Which of the following elements of the marketing mix are businesses considering when they answer the question of how much of a product to order:

A. Place
B. Price
C. Product
D. Promotion

A. Place
41. Scuba diving gear is an example of a product that would be marketed to a(n) __________ market.

A. specific
B. general
C. mass
D. unlimited

A. specific
42. Customers in cold climates who need warm clothes are an example of which of the following market segments:

A. Occupational
B. Psychographic
C. Behavioral
D. Geographic

D. Geographic
43. In order for a market to exist, consumers must have an unfulfilled desire for a product and

A. have financial resources.
B. know where the product is sold.
C. know who makes the product.
D. have a specific brand preference.

A. have financial resources.
44. A home-improvement supply company targets its advertising to plumbers, carpenters, mechanics, and electricians. This business has segmented the market based on

A. income.
B. age.
C. occupation.
D. gender.

C. occupation.
45. ABC Inc. sells very expensive products that the average consumer cannot afford. Which form of demographic segmentation would be the most appropriate to use when directing promotional efforts to the target market?
A. Age
B. Income
C. Occupation
D. Life stage
B. Income
46. What type of information do businesses include in their marketing plans?

A. Pricing strategies
B. Billing methods
C. Payroll systems
D. Accounting procedures

A. Pricing strategies
47. One of the main reasons for developing a marketing plan is to identify the strategies necessary to achieve the marketing

A. objectives.
B. functions.
C. mix.
D. share.

A. objectives.
48. Why do businesses develop marketing plans?

A. To provide quality service
B. To expand the distribution system
C. To attract the target customer
D. To prepare a revenue statement

C. To attract the target customer
49. Which component of the marketing plan summarizes the environmental conditions that can affect a business’s marketing activities:

A. Conditional assessment
B. Diagnostic summary
C. Situational analysis
D. Environmental synopsis

C. Situational analysis
50. The Radnor Company outlined the specific activities and timelines it plans to use to accomplish its marketing goals. In which section of the marketing plan is this information placed?

A. Situation analysis
B. Implementation
C. Objectives
D. Executive summary

B. Implementation
Strategic Planning
The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and the changing marketing opportunities.
Mission Statement
A statement of the organization’s purpose—what it wants to accomplish in the larger environment.
Business Portfolio
The collection of businesses and products that make up the company.
Portfolio analysis
the process by which management evaluates the products and businesses that make up the company.
Strategic Business Unit (SBU)
the key businesses that make up the company; a company division, a product line within a division, or sometimes a single product or brand.
Growth-share Matrix
a portfolio-planning method that evaluates a company’s strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs.
Stars
high-growth, high-share businesses or products. Need Heavy investments to finance rapid growth. Eventually slow growth until they turn into cash cows.
Cash Cows
low-growth, high-share businesses or products. Need less investment to hold their market share. Produce a lot of cash that the company uses to pay bills and support other SBUs needing investment.
Question Marks
Low-share business units in high-growth markets. Require a lot of cash to hold their share/increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out.
Dogs
Low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash.
Product/Market expansion Grid
A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification.
Market Penetration
A strategy for company growth by increasing sales of current products to current market segments without changing the product.
Market Development
A strategy for company growth by identifying and developing new market segments for current company products.
Product Development
A strategy for company growth by offering modified or new products to current market segments.
Diversification
A strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets.
Downsizing
Reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company’s overall strategy.
Value Chain
The series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.
Value Delivery Network
The network made up of the company, suppliers, distributors, and, ultimately, customers who “partner” with each other to improve the performance of the entire system.
Marketing Strategy
The marketing logic by which the business unit hopes to create customer value and achieve profitable customer relationships.
Market Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.
Market Segment
A group of customers who respond in a similar way to a given set of marketing efforts.
Market targeting
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Positioning
Arranging for a product to occupy a clear, distinctive, and desireable place relative to competing products in the minds of target customers.
Differentiation
Actually differentiating the market offering to create superior customer value.
Marketing Mix
The set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.
Product
the goods-and-services combination the company offers to the target market. (i.e., Ford Escape and car parts)
Price
the amount of money customers must pay to obtain the product.( i.e., retail price, discounts, negotiation, trade-ins)
Place
company activities that make the product available to target consumers. (i.e., Dealerships)
Promotion
Activities that communicate the merits of the product and persuade target customers to buy it. (i.e., advertisements, assistance from dealers..etc…)
SWOT analysis
an overall evaluation of the company’s Strengths (S), weaknesses (W), opportunities(O), and threats (T).
Strengths
Internal capabilities that may help a company reach its objectives.
Weaknesses
Internal limitations that may interfere with a company’s ability to achieve its objectives.
Opportunities
External factors that the company may be able to exploit to its advantage.
Threats
Current and emerging external factors that may challenge the company’s performance.
Marketing strategy
outlines how the company intends to create value for target customers in order to capture value in return.
Marketing Implementation
The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.
Marketing Control
The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved.
Return on Marketing Investment (ROI)
The net return from a marketing investment divided by the costs of the marketing investment.
ethics
moral principle and values that govern the actions and decisions of an individual or group
laws
society’s values and standards that are enforceable in the courts
culture
set of values, ideas, and attitudes that are learned and shared among the members of a group
business cultures
comprise the effective rules of the game, the boundaries between competitive and unethical behavior, [and] the codes of conduct in business dealings
caveat emptor
let the buyer beware
Consumer Bill of Rights
A law that codified the ethics of exchange between buyers and sellers, including the rights:
to safety
to be informed
to choose
to be heard.
right to safety
industry and federal safety standards for most products sold in the United States.
right to be informed
-marketers have an obligation to give consumers complete and accurate information about products and services.
-also applies to the solicitation of personal information over the Internet and its subsequent use by marketers
right to choose
don’t limit the number of new products available to consumers
right to be heard
consumers should have access to public-policy makers regarding complaints about products and services
2 kinds of unethical behavior in competition
economic espionage
bribery
Economic espionage
the clandestine collection of trade secrets or proprietary information about a company’s competitors.
Corporate culture
the set of values, ideas, and attitudes that is learned and shared among the members of an organization
code of ethics
a formal statement of ethical principles and rules of conduct.
whistle-blowers
employees who report unethical or illegal actions of their employers.
moral philosophy
comes from:
friends/family
formal education
influenced by:
societal, business, and corporate culture
Moral idealism
a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome
utilitarianism
a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior
Social responsibility
organizations are part of a larger society and are accountable to that society for their actions
3 concepts of social responsibility
profit
stakeholder
societal
Profit responsibility
companies have a simple duty: to maximize profits for their owners or stockholders
Stakeholder responsibility
the obligations an organization has to those who can affect achievement of its objectives. These constituencies include consumers, employees, suppliers, and distributors.
Societal responsibility
obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public
triple-bottom line
The recognition of the need for organizations to improve the state of PEOPLE, the PLANET, and PROFIT simultaneously if they are to achieve sustainable, long-term growth
Green marketing
marketing efforts to produce, promote, and reclaim environmentally sensitive products
cause marketing
occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products
social audit
A systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility
Sustainable development
conducting business in a way that protects the natural environment while making economic progress.
greenwashing
the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology, or company practice
market research
The systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing a company
marketing information systems
Consists of people and processes for assessing the information needs of management, developing needed information through customer surveys, point-of-purchase data, and other data sources and help decision makers use the information for customers
customer relationship management (CRM)
Consists of sophisticated software and analytical tools that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships
marketing research process
Define problem, develop research plan, collect information, analyze information, present findings, make decision
observational research
Involves gathering primary data by observing relevant people, actions, and situations
ethnographic research
Involves sending trained observers to watch and interact with consumers in their natural environment
survey research
The most widely used method, best for descriptive information – knowledge, attitudes, preferences, and buying behavior
experimental research
Best for gathering causal information – cause-and-effect relationships
sample
Segment of the population selected for marketing research to represent the population as a whole
simple random sample
Every member of the population has a known and equal chance of selection
stratified random sample
The population is divided into mutually exclusive groups and random samples are drawn from each group
cluster (area) sample
The population is divided into mutually exclusive groups and the researched draws a sample
convenience sample
The researcher selects the easiest population members
judgement sample
The researcher uses their judgement to select population members
quota sample
The researcher finds and interviews a prescribed number of people in each of several categories
To formulate a marketing strategy, one must

a) identify and analyze a target market and develop a marketing mix to satisfy individuals in that market.
b)develop a statement of what is to be accomplished through marketing activities.
c) develop plans for implementation and control.
d) develop an adequate marketing control process.

a
The marketing plan is

a)a plan of all aspects of an organization’s business strategy.
b) written differently for each SBU.
c) a written document detailing activities to be performed to implement and control marketing actions.
d)designed to specify not only marketing, but all other functional areas of business activities as well.
e) updated only periodically.

c
The strategic planning process begins with

a) development of an organizational mission statement.
b) development of marketing strategy.
c) analysis of the marketing environment.
d) analysis of target markets.
e) development of a marketing plan.

c
A __________ is something that an organization does extremely well and may give a company an advantage over its competition.

a) benchmark
b) sustainable competitive advantage
c) core competency
d) strategic vision

c
When the right combination of circumstances occurs at the right time to allow an organization to take action toward a target market, the firm is faced with a

a) market objective.
b) market requirement.
c) strategic market plan.
d) market opportunity.
e) corporate objective.

d
In response to the increase in demand for organic foods, Wegmans, Inc., a regional supermarket, recently created organic food departments within their large stores. The creation of these departments was a result of

a) a core compentency
b) a market opportunity
c) its sales orientations
d) its distribution plan
e) a competitive advantage

b
Realizing that consumers have begun to seek vehicles that use less gasoline, Toyota heavily promotes its hybrid automobiles to capitalize on this __________ while the strategic window is open.

a) marketing mix
b) market opportunity
c) objective
d) requirement

b
A strategic window is

a) The right combination of circumstances and timing that permit an organization to take action to reach a particular target market.
b) what determines the factors that are most important in making a market attractive or strong.
c) customers’ requirements or desired benefits.
d) a temporary period of optimum fit between the key requirements of a market and the particular capabilities of a firm competing in that market.

d
A competitive advantage exists when a

a) firm matches a core competency to opportunities it has discovered in the marketplace.
b) firm does marketing better than its competitors.
c) combination of circumstances and timing allow a firm to reach an attractive target market.

a
A __________ is created when a company matches its core competency to opportunities it has discovered in the marketplace.

a) market opportunity
b) market requirement
c) competitive advantage
d) strategic window

c
Successful business organizations should take actions to convert internal weaknesses into ___________ and external threats into ___________.

a) opportunities; core competencies
b) core competencies; strengths
c) opportunities; strengths
d) strengths; core competencies
e) strengths; opportunities

e
The questions “Who are our customers?” and “What is our core competency?” are answered in the firm’s

a) business plan.
b) strategic window.
c) mission statement.
d) market opportunity statement.
e) marketing plan.

c
A firm’s unique symbols, personalities, and philosophies comprise its

a) corporate persona.
b) corporate identity.
c) corporate character.
d) CEO’s identity.
e) ethics.

b
Resource deployment and coordination of functional areas of business are determined by

a) the mission statement.
b) corporate strategy.
c) business-unit strategy.
d) marketing strategy.
e) the marketing mix.

b
___________ strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization’s goals.

a) corporate
b) business unit
c) Marketing
d) Mission statement
e) Marketing mix

a
Within a business organization, a profit center that is self-supporting in terms of sales, markets, production, and other resources is known as a

a) profit entity.
b) strategic business unit.
c) marketing program.
d) small business.
e) diversified corporation.

b
A group that has the willingness, ability, and authority to buy a product is a

a) market.
b) consumer.
c) strategic business unit.
d) business customer.

a
According to the text, a market is defined as

a) a place to buy products.
b) the buyers of the products that a company develops, promotes, prices, and distributes.
c) the specific group of customers on whom an organization focuses its marketing efforts.
d) a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase these products

d
The director of marketing for 3M tapes tells the rest of the management team, “When it comes to our transparent packaging tape unit, our strategy will be to use funds generated here to support our venture in the industrial bonding market.” This strategy indicates that the packaging tape unit falls into which one of the following classifications?

a) Problem child
b) Star
c) Cash cow
d) Dog
e) Question mark

c
Which of the following is the most specific and detailed type of business strategy?

a) business-unit
b) marketing
c) corporate
d) customer service
e) tactical

b
All marketing mix decisions must have two characteristics: ___________ and ___________.

a) consistency; flexibility
b) consistency; rigidity
c) formality; flexibility
d) variability; flexibility
e) formality; rigidity

a
A competitive advantage that cannot be readily copied by the competition is referred to as a (n) __________ advantage.

a) controllable
b) sustainable
c) noncopyable
d) effective
e) implementable

b
Which of the following is not a purpose of the marketing plan?

a) Communicate internally with employees
b) Assign tasks and responsibilities for implementation
c) Specify the allocation of resources
d) Monitor the performance of a marketing strategy
e) Serve as a contract with the customer

e
Which of the following is not a component of a marketing plan?

a) Environmental analysis
b) Marketing strategies
c) Product
d) Executive summary
e) Marketing implementation

c
A marketing plan usually begins with a(n)

a) executive summary.
b) introduction to the company’s marketing objectives.
c) summary of current performance as compared with past performance.
d) situation analysis.
e) opportunity and threat analysis.

a
The process of putting marketing strategies into action is called

a) marketing implementation.
b) marketing control.
c) marketing action.
d) marketing auditing.
e) the marketing action plan.

a
The _________ strategy in an organization often does not live up to marketing planners’ expectations.

a) intended
b) expected
c) planned
d) control
e) realized

e
For marketing implementation to be successful, the needs of _________ customers must be met.

a) external
b) internal
c) both internal and external
d) planned
e) both planned and realized

c
___________ refers to the coordination of internal exchanges between the organization and its employees to better achieve successful external exchanges between the organization and its customers.

a) Internal management
b) Internal leadership
c) Empowerment
d) Internal marketing
e) Total quality management

d
According to the text, the 80/20 rule suggests that

a)80 percent of profits come from 20 percent of business customers.
b) 20 percent of profits come from 80 percent of business customers.
c) 20 percent of profits come from 80 percent of customers.
d) 80 percent of profits come from 20 percent of customers.
e) 80 percent of profits come from 20 percent of sales.

d
Customer relationship management systems cannot be effective unless they are developed as

a) market-share building tools.
b) profit-boosting tools.
c) selling tools.
d) cost-reduction tools.
e) relationship-building tools.

e
The most important component of customer relationship management is

a) technology.
b) profits.
c) sales.
d) share of an individual customer’s purchases.
e) relationships with customers.

e
The employees of Zingerman’s Deli are its ______ customers.

a) external
b) extended
c) intended
d) internal
e) domestic

d
The term “______” describes measuring and evaluating a firm’s quality in products and processes against industry leaders.

a) total quality management
b) benchmarking
c) internal marketing
d) empowerment
e) implementation

b
___________ involves giving customer-contact employees the authority and responsibility to make marketing decisions without seeking the approval of a supervisor.

a) total quality management
b) benchmarking
c) internal marketing
d) empowerment
e) implementation

d
In a traditional organization, marketing decisions are likely to be

a) very decentralized.
b) centralized at the top levels of the organization.
c) made by frontline employees.
d) made by frontline managers.
e) made only by the CEO.

b
A marketing unit can be organized according to functions, products, regions, and

a) sales.
b) target markets.
c) competitive units.
d) types of customers.
e) product features.

d
Key factors in determining the best organizational structure for a marketing unit are the

a) preferences of top management.
b) fiscal resources of the firm.
c) number of employees.
d) diversity of the firm’s products and the characteristics and needs of the people in the target market.

d
According to the textbook, which of the following statements is most accurate?

a) A small company always should organize by products, and a large organization should organize by regions.
b) There is no single approach to organizing a marketing unit that works well in all businesses.
c)Some organizations, by nature, have no specific internal structure.
d) Organizing by type of customer works best for companies with few groups of customers.
e) Using several bases for organizing leads to uncoordinated marketing management.

b
If you were a marketing manager, under which type of organizational structure would you most likely be working if your firm were a large business with centralized marketing operations?

a) Organization by type of customer
b) Organization by function
c) Organization by regions
d) Organization by products and regions
e) Organization by products

b
A disadvantage of organizing a firm’s marketing unit by products is that

a) product managers do not have adequate control over marketing activities.
b) large firms might experience coordination problems.
c) it can be rather expensive.
d) specialized marketing assistance is less readily available.
e) marketing flexibility is limited.

c
A firm that markets diverse products would most likely base the organization of its marketing department on

a) products.
b) regions.
c) functions.
d) types of customers.
e) marketing objectives.

a
Procter & Gamble, like many firms in the consumer packaged-goods industry, is organized by

a) function.
b) product.
c) region.
d) types of customers.
e) subregion.

b
Suppose a customer calls Ann’s office at Frito-Lay in Atlanta. The customer has a friend in Seattle who was just telling her about a new snack Frito-Lay has introduced that is selling rapidly. Ann’s office does not market this product, and at the present knows very little about it. Based on this information, this firm is most likely organized according to which of the following?

a) Function
b) Product
c) Region
d) Customer
e) Market

c
A firm that wants to put more senior management personnel into the field, to get closer to customers, and to enable the company to respond more quickly and efficiently to competitors would probably organize its marketing unit on the basis of

a) functions.
b) regions.
c) customer types.
d) markets.
e) products.

b
The marketing control process consists of

a) establishing goals, market scanning, and market share analysis.
b) establishing performance standards, evaluating performance, and reducing the differences between desired and actual performance.
c) establishing goals and measuring performance.
d) planning, implementing, and measuring marketing activities.
e) setting objectives, implementing strategies, and reducing the differences between desired and actual performance.

b
The first step in the marketing control process is to

a) take corrective action.
b) reduce the difference between actual and desired standards.
c) evaluate actual performance.
d) compare actual performance and standards.
e) establish performance standards.

e
An expected level of performance against which actual performance can be compared is a

a) standard performance.
b) standard of excellence.
c) step in sales analysis.
d) performance standard.
e) corrective standard.

d
Marketing managers can take each of the following corrective actions for reducing a discrepancy between established performance standards and actual performance except

a) improving actual performance.
b) reducing the performance standard.
c) totally changing the performance standard.
d) changing the marketing strategy.
e) coordinating a new step in performance analysis.

e
When an organization attempts to control its marketing activities, it may find it difficult to

a) determine their effect on sales volume.
b) use the information it collects.
c) obtain the necessary information.
d) get the accounting department to cooperate.
e) develop a marketing plan.

c
The time lag between the performance of marketing activities and their results

a) limits the marketing manager’s ability to measure the effectiveness of marketing activities.
b) facilitates the ability to measure performance.
c) increases the chance of accurate measurement.

a
Favorable conditions in the marketplace environment that could produce business rewards for the organization if acted upon properly are called

a) strengths.
b) market strategies.
c) market niches.
d) threats.
e) opportunities.

e
The Boston Consulting Group’s matrix is based on the

a) idea that a firm’s market share and market attractiveness are the important factors for a marketing strategy.
b) assumption that a firm’s actions have a profitable impact on marketing strategy.
c) business position and market attractiveness of the firm.
d) philosophy that a product’s market growth rate and its market share are important determinants of its marketing strategy.
e) idea that a product’s market growth rate and market attractiveness determine the marketing strategy.

d
According to the Boston Consulting Group, marketers may classify their products as all of the following except

a) dogs.
b) cash contributors.
c) question marks.
d) stars.
e) cash cows.

b
Based on the work by the Boston Consulting Group, products with a dominant share of the market and good prospects for growth are

a) dogs.
b) cash contributors.
c) question marks.
d) stars.
e) cash cows.

d
The Boston Consulting Group classifies products that have a dominant market share but low prospects for growth and that generate more cash than is required to maintain market share as

a) dogs.
b) cash contributors.
c) question marks.
d) stars.
e) cash cows.

e
Products that have a relatively low market share and low prospects for growth are considered by the Boston Consulting Group to be

a) dogs.
b) cash contributors.
c) question marks.
d) stars.
e) cash cows.

a
According to the Boston Consulting Group, question marks are characterized as products

a) having a small share of a growing market and requiring large amounts of cash to build market share.
b) generating more cash than is required to maintain share.
c) encompassing the greatest number of products.
d) existing at a cost disadvantage and revealing few opportunities for growth at a reasonable cost.
e) having substantial reported profits but needing a lot of cash to finance the rate of growth.

a
Which of the following statements best describes total quality management?

a) A process aimed at improving product quality, increasing competition based on quality, and quality improvement among employees
b) The coordination of efforts directed at improving customer satisfaction, increasing employee participation, forming and strengthening supplier partnerships, and facilitating continuous quality improvements
c) A method of increasing overall financial benefits, emphasizing faster development of innovations, and improving customer satisfaction
d) A process directed at controlling marketing activities at a higher level of involvement among the firms’ employees
e) An approach used to emphasize the need for quality among a firm’s hierarchy of employees, beginning with top-level executives

b
At Mrs. Fill’s Cookie Co., top-level managers delegate very little authority to lower-level employees. Mrs. Fill’s is a(n) ___________ organization.

a) centralized
b) decentralized
c) empowered
d) marketing-oriented
e) total quality management

a
An appliance manufacturer that sells to large retail stores, wholesalers, and institutions would probably organize its marketing unit on the basis of

a) subregions.
b) national divisions.
c) types of customers.
d) functions.
e) products.

c