Midterm BA317 Part 2

Which of the following statements about the societal orientation is FALSE?
The majority of consumers support environmentally-friendly companies and willingly paying more for these products.
Circuses

As recently as twenty years ago circuses came to town with tents, animals, clowns, and other performers. An advance man arrived about two weeks before the circus actually arrived, covered the community with posters, and gave out free tickets to schoolchildren. If the advance man had done a good job, when the circus arrived and opened its tent doors, three hundred to six hundred people would fill its seats. When the largest circus organizations merged, the newly formed Ringling Bros. and Barnum & Bailey’s Greatest Show on Earth began performing in 4,000-seat arenas.

Refer to Circuses. To exhibit a societal marketing orientation, circuses could:

Donate a percentage of their profits to local educational institutions.
Life is good ® no longer encloses its apparel in individual poly-bags when shipping to customers because the management feels it harms the environment. This is an example of a _____ orientation.
Societal marketing
Ritz-Carlton Hotels

Cesar Ritz, the founder of the original Ritz-Carlton, Boston, was known as the “king of hoteliers and the hotelier to kings.” Today, there are more than 70 Ritz-Carlton hotels spanning 24 countries with 38,000 employees. These are not typical employees, though. They are described as “Ladies and Gentlemen serving Ladies and Gentlemen.” Each employee participates in an intensive orientation program and recertification programs throughout their careers with the company, and many are allowed $2,000 to fix a guest’s problem on the spot without managerial approval. So renowned is the Ritz way of doing business that the company offers a Leadership Center for executives and managers of other companies to learn and implement the Ritz way of customer service. It doesn’t stop with employees, though. Ritz-Carlton hotels recently launched “Give Back Getaways” in 2008 that allow guests to volunteer in locales where they are vacationing. The hotel also offers “Vow to Help Others” which is a program that donates a portion of a wedding couple’s reception costs to those in need. The chief operating officer’s words sum up Ritz-Carlton’s philosophy best when he stated, “If we really do our job, we really don’t need sales anymore. Satisfied guests are your advertising.”

Refer to Ritz-Carlton Hotels. The chief operating officer’s statement regarding sales and advertising illustrates which marketing management philosophy embraced by this company?

Market
In the early 1920s, Ford promised its customers any color vehicle they wanted as long as it was black. Ford’s management assumed anyone buying a car would accept the color black, so it made products affordable by offering only one variety in large quantities. Ford is an example of a market-oriented firm.
False
SAP, the world’s largest business software company, has pledged to put the “customer at the center” of their universe. SAP has captured the idea of:
The marketing concept
Circuses

As recently as twenty years ago circuses came to town with tents, animals, clowns, and other performers. An advance man arrived about two weeks before the circus actually arrived, covered the community with posters, and gave out free tickets to schoolchildren. If the advance man had done a good job, when the circus arrived and opened its tent doors, three hundred to six hundred people would fill its seats. When the largest circus organizations merged, the newly formed Ringling Bros. and Barnum & Bailey’s Greatest Show on Earth began performing in 4,000-seat arenas.

Refer to Circuses. The circus’s goal of redesigning the circus experience is being completed through the coordination of many marketing activities, such as value pricing, a product that includes exciting performances, tent venue locations, and promotion. These activities make up the _____ for the circuses.

Marketing mix
3D Systems is a company that uses computers to generate new product prototypes. It has generated loyal business clients by providing the best customer support in the industry. The company also provides direct sales consultations that give its salespeople intimate knowledge about what exactly its customers want. This partnership between 3D Systems and its customers entails relationship marketing.
True
One of the reasons given for the decline of the passenger rail industry in the United States is that the industry defined its mission as trains and not as transportation sources. The railroad industry failed to:
Define its mission in terms of the benefits its customers seek
Retailers who give their sales clerks the authority to handle customer complaints without having to get approval from a supervisor are using empowerment.
True
Which marketing orientation assumes people will buy more goods and services if aggressive marketing techniques are used?
Sales
Starbucks Loyalty Rewards

The First Starbucks opened in 1970 in Seattle Washington. The demand for its coffee grew and Starbucks added more than 6,000 stores located in over 30 countries. In its more than 30 year history, Starbucks has never given out coupons for its coffee. Starbucks had only to make its coffee and customers came. Recently consumer quality perception of the Starbucks brand has started to fall. Starbucks started a consumer-response blog to learn more about what consumers expect from Starbucks. One of the most requests was for a customer rewards program. In response Starbucks has started the Starbucks card rewards which offers free refills on brewed coffee, free beverage with whole bean purchase, beverage customization and free Wi-Fi. Starbucks also put coupons in a national newspaper for those consumers who love coupons and created a new brew of coffee for those who prefer a milder coffee taste. Starbucks is hoping with these improvements will restore customers’ loyalty and confidence.

Refer to Starbucks. For more than thirty years Starbucks held the orientation of “If we build it, they will come.” This philosophy is most in line with a _____ orientation.

Production
An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals’ and society’s long-term best interests.
Societal orientation
Which marketing management philosophy focuses on the question, “How can we sell more aggressively?”
Sales
A company that has a market orientation and adheres to the marketing concept does NOT:
Fuel sales growth through the application of aggressive sales techniques.
The Ritz Carlton has Service Values which guide employees in providing its Gold Standard service. One of the service values states “I own and immediately resolve guest problems.” The Ritz Carlton management uses _____ to provide customer service.
Empowerment
All of the following are good reasons to study marketing EXCEPT:
Marketing creates consumer needs.
Personnel in sales-oriented firms tend to be “outward looking,” focusing on selling what the market wants.
False
Starbucks Loyalty Rewards

The First Starbucks opened in 1970 in Seattle Washington. The demand for its coffee grew and Starbucks added more than 6,000 stores located in over 30 countries. In its more than 30 year history, Starbucks has never given out coupons for its coffee. Starbucks had only to make its coffee and customers came. Recently consumer quality perception of the Starbucks brand has started to fall. Starbucks started a consumer-response blog to learn more about what consumers expect from Starbucks. One of the most requests was for a customer rewards program. In response Starbucks has started the Starbucks card rewards which offers free refills on brewed coffee, free beverage with whole bean purchase, beverage customization and free Wi-Fi. Starbucks also put coupons in a national newspaper for those consumers who love coupons and created a new brew of coffee for those who prefer a milder coffee taste. Starbucks is hoping with these improvements will restore customers’ loyalty and confidence.

Refer to Starbucks. The creation of a consumer-response blog is an example of _____.

Relationship marketing
At the Container Store every employee is trained to serve customers. Full time salespeople receive 240 hours of training. The Container Store works to hire people who are self-motivated and have a passion for customer service. The Container Store has a(n) _____ orientation.
Market
A statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions is known as a(n):
Mission statement
_____ is a strategy of increasing market share for present products in existing markets.
Market penetration
A marketing audit is a(n):
Thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization.
SoBe nutritional beverages uses twin lizards on every bottle of its products and in all of its promotion efforts. It even has its own Team Lizard made up of skateboarders, mountain bike riders, and inline skaters that it sponsors. The lizard is used to remind consumers of the product and its benefits. To which of the four Ps does this represent?
Promotion
Briggs and Stratton is a Southeastern company that makes small engines. The company is looking at customer trends, its competitors, and the economy to see if there are any threats or opportunities on the horizon. It has also examined its production policies and sales histories to determine its strengths and weaknesses. Briggs & Stratton is conducting a(n):
Situation analysis
An advantage that cannot be copied by the competition is called a(n) _____ competitive advantage.
Sustainable
A diversification strategy entails increasing sales by introducing new products into new markets.
True
Environmental scanning entails the collection and analysis of information about factors that may affect the organization as well as the identification of market opportunities and threats.
True
John R. Harland Company is best known for printing checks. Its Financial Solutions division develops software for mortgage companies and is currently producing much less than the desired level of profitability in a high-growth industry. According to the portfolio matrix, Harland would label its Financial Solutions division as a(n):
Problem child
Strategic planning is most effective when managers view it as an annual exercise.
False
A portfolio matrix is a tool for allocating resources among products or strategic business units on the basis of relative market share and degree of innovation.
False
A _____ is defined as a statement of what is to be accomplished through marketing activities.
Marketing objective
Typically, the development of the marketing mix starts with determining the promotion for a product.
False
Berkshire Hathaway Inc., a large property insurance company, owns a large chain of jewelry stores and has recently purchased Russell Corporation, a manufacturer of sporting goods. Berkshire Hathaway uses a market penetration strategy.
False
Chrysler has a financial unit that is responsible for vehicle leases to consumers. It has a distinct mission, control over its resources, and plans independent of the other divisions of Chrysler. This financial unit is an example of a(n):
Strategic business unit
Making sure products are available when and where customers want them is the job of which element of the marketing mix?
Distribution strategies
DeFeet International

DeFeet International started as a cyclist sock company. The founder, Shane Cooper, said that the existing socks for cyclists were just not of great quality so he made socks for his cycling team by knitting them inside out. The socks were of special materials aimed at giving the cyclist the most comfortable fit. These socks were not the traditional white socks but bright, bold, and flashy colored socks with cool graphics. These high tech socks were priced around $10 a pair. Their web site says “DeFeet is Made for Driven Soles.” Soon cycling elites like Lance Armstrong and Greg LeMond were sporting the DeFeet brand. The company branched into running, hiking and snow gear. Their products include socks, armskins, calfskins, boxer briefs, gloves, and shirts for the serious athlete. They also have a custom department where socks, armskins, and gloves can be customized with any motif including sponsor types of logos like Michelin, Pabst Blue Ribbon, or BP. Even kids can enjoy DeFeet’s high quality socks. DeFeet’s products can be found in retailers across the world, in more than twenty countries, like Israel, Australia, Belgium and the United States. More than two-dozen online retailers also carry their products.

Refer to DeFeet. What is DeFeet’s most likely target market strategy?

Appeal to multiple segments
What is the most critical element in successful strategic planning?
Top management support and participation
To be useful, marketing objectives should meet four criteria: realistic, measurable, time-specific, and based on sales.
False
DeFeet International

DeFeet International started as a cyclist sock company. The founder, Shane Cooper, said that the existing socks for cyclists were just not of great quality so he made socks for his cycling team by knitting them inside out. The socks were of special materials aimed at giving the cyclist the most comfortable fit. These socks were not the traditional white socks but bright, bold, and flashy colored socks with cool graphics. These high tech socks were priced around $10 a pair. Their web site says “DeFeet is Made for Driven Soles.” Soon cycling elites like Lance Armstrong and Greg LeMond were sporting the DeFeet brand. The company branched into running, hiking and snow gear. Their products include socks, armskins, calfskins, boxer briefs, gloves, and shirts for the serious athlete. They also have a custom department where socks, armskins, and gloves can be customized with any motif including sponsor types of logos like Michelin, Pabst Blue Ribbon, or BP. Even kids can enjoy DeFeet’s high quality socks. DeFeet’s products can be found in retailers across the world, in more than twenty countries, like Israel, Australia, Belgium and the United States. More than two-dozen online retailers also carry their products.

Refer to DeFeet. If you were to define DeFeet’s mission which would be most appropriate?

DeFeet provides the highest quality apparel for customers who demand the best.
The greater the number of persons affected by a negative outcome, the more likely that marketers will recognize a problem as unethical.
True
Pacific Gas and Electric (PG&E) Company has donated almost $300,000 to 58 local governments and community-based organizations for local economic development projects. Recipients of these grants include the San Benito County Economic Development Corporation’s Business Outreach Program, the San Jose Conservation Corps’ Hennessy Place Affordable Single-Family Housing Project, and Mariposa County’s Business Development Training Program. This sort of donation indicates PG&E was operating at a(n) _____ responsibility level of the pyramid of corporate social responsibility.
Philanthropic
Which level of ethical development moves from an egocentric viewpoint toward the expectations of society?
Conventional morality
_____ are the rules that people develop as a result of cultural values and norms.
Morals
Unfortunately, most businesspeople have not progressed beyond the self-centered and manipulative actions of preconventional morality.
False
While there are plenty of benefits for a socially responsible company, there is no clear-cut determination that ignoring social responsibility will have an adverse impact.
False
All of the following statements about the creation of a code of ethics are true EXCEPT:
A code guarantees ethical behavior among a firm’s employees.
Drug Marketing

Pharmaceutical companies spent $4.4 billion on prescription drug advertising in 2008, mostly on television and in magazines. While the Internet is becoming a more prominent medium to reach consumers and is the primary source used to seek health information, these companies spent less than $130 million on Web marketing. One reason is that there are no guidelines, which makes these heavily-regulated marketers uneasy. For example, television commercials for prescription drugs must include disclosures regarding the major side effects if the brand name is mentioned in the ad. The Food and Drug Administration (FDA) claims that existing regulations address many of the Internet advertising issues, but other aspects of Web marketing, such as social networking and search marketing, must be reviewed. That’s why the FDA hearings on this issue were attended by pharmaceutical giants and Web companies like Google, Yahoo, and WebMD Health.

Refer to Drug Marketing. If a drug manufacturer claimed that its manufacturing processes were environmentally-friendly in its advertising, this is an example of:

Green marketing
Ethical development can be thought as having three levels. The most basic, childlike level is the _____ stage.
Pre-conventional morality
Most people have not applied ethical standards in their everyday lives.
False
Many airlines offer passengers the option to purchase carbon offsets as an environmentally-friendly compensation for their carbon footprint. For example, Delta customers can pay $10 to a fund that plants trees as a way to offset the carbon emissions from the airplane. Some would say Delta is:
Socially responsible
Because social responsibility has proven to have a limited return on investment, the number of businesses opting to act socially responsible is declining.
False
Ethical questions apply to narrow, defined issues and broad philosophical, social questions.
True
Novartis created the Novartis Research Institute for Tropical Diseases in Singapore. The institute is unique because it is a not-for-profit organization that focuses on the discovery of new drugs for the treatment of neglected diseases, such as dengue fever and tuberculosis. Not only is this good business, it is also:
Socially responsible
At which level of the pyramid of corporate social responsibility must a business “play by the rules”?
Legal
NSTAR Gas & Electric Company in Boston provides continuing financial support for an injury prevention program run by the Children’s Hospital Boston. This funding is an example of:
Corporate social responsibility
Which of the following statements about the theory of sustainability is true?
Sustainability is the idea that socially responsible companies will outperform their peers when they focus on the world’s problems as marketing opportunities.
At what level of the pyramid of corporate social responsibility will firms do what is right, just, and?
Ethical
At what level of the pyramid of corporate social responsibility will a company be a good corporate citizen?
Philanthropic
The foundation for the pyramid of corporate social responsibility is philanthropic responsibility.
False
Rising incomes mean a higher standard of living.
False
Consumers born between 1965 and 1978 form a group called _____.
Generation X
Girls between the ages of 8 and 14 are one of the growing markets for high-end shoe manufacturers. These girls want styles that are both youthful and grown-up looking. They are _____.
Tweens
Companies use environmental management when they implement strategies that attempt to shape the external environment within which they operate.
True
Which type of research is also called pure research and attempts to expand the frontiers of knowledge but is not aimed at a specific, pragmatic problem?
Basic
The Hispanic population is driving minority growth in the United States.
True
Multiculturalism occurs when all major ethnic groups in an area are roughly equally represented.
True
When Miriam went to the specialist, she was asked to sign several official forms that the receptionist handed her so that her primary care doctor could be given the results of her medical examination. The law that requires her permission for the physician’s office to hand out personal information about her is the result of legislation determined to:
Protect consumers from identity theft.
A cold medicine manufacturer offers a promotion allowance to retailers for setting up displays featuring its products. Retailers are also offered promotional allowances on purchases of the products. Which legislation requires the manufacturer to make these promotion allowances available to all retailers on a proportionately equal basis?
Robinson-Patman Act
Nearly 50 nations have, or are developing, privacy legislation.
True
In the future, electrical power may come from quantum nucleonics, a form of nuclear power that produces no residual radiation. The ability to use this form of power will require equipment adaptations, but it will solve the world’s need for clean and efficient power. When quantum nucleonics is developed, it will be an example of how _____ factors can affect an organization.
Technological
Juan is a marketing professor researching consumer decision-making processes. Specifically, he is examining if including a picture in a print advertisement is more effective than not including a picture in influencing readers’ attitude toward the advertisement and brand advertised. He is not researching any specific brand, but rather he is interested in testing Dual Coding theory that predicts that pictures will have a more positive impact on attitudes. Juan is conducting _____ research.
Basic
E-cigarettes

Smoking inflames non-smokers and claims the lives of more than 400,000 smokers each year, so the electronic cigarette is a welcomed alternative. Electronic cigarettes, called e-cigarettes, are battery-powered devices that emit a vapor from nicotine, flavorings, and other chemicals. It looks like a cigarette and allows smokers to inhale the nicotine vapor in places where smoking is not allowed. The product has been touted as a means to quit smoking as well. However, critics, especially the Food and Drug Administration, claim that “vaping” poses risks. In fact, the FDA claims its tests revealed a toxic chemical that is found in anti-freeze as well as other carcinogens. The FDA blocked a shipment of the product from China and banned the sale of this product in the United States. In addition to the safety issue, the FDA is concerned that children might be attracted to this product because they come in flavors other than traditional menthol, such as bubble gum, chocolate, and strawberry. The FDA wants this product to go through the same rigorous testing that drugs must go through before being marketed. However, the FDA’s authority over this product is questioned. While Congress has recently given the FDA authority over tobacco products, this is not a tobacco product and the Electronic Cigarette Association is fighting the ban.

Refer to E-cigarettes. The FDA is part of which environmental factor affecting the marketing of this product?

Political and legal
China’s new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation, has been praised by environmentalists. The move is hitting hard at the Japanese who consume 25 billion sets of wooden chopsticks annually. Almost all of the chopsticks used in Japan come from China. The requirement for Chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a _____ factor in their external environment.
Legal
Commercial truck drivers have really suffered financially as a result of increasing diesel fuel prices. As they look for ways to make their trucks perform more efficiently, manufacturers have created truck body designs that are more aerodynamically sound. This is an example of how _____ factors can help during recessionary periods.
Technological
A marketing researcher is conducting a focus group interview with a group of working mothers to learn how Kraft can better meet their needs for convenience foods. What type of research does this represent?
Applied
Every night Universal Studios Japan hosts a fireworks display. The theme park recently came under government investigation when allegations were made that the park was detonating more than 50 pounds of explosives in its nightly fireworks displays. In the small nation, the use of explosives is stringently controlled. This is an example of how _____ factors can influence a business.
Legal and political
Which of the following is the most difficult for marketing managers to forecast, influence, or integrate into marketing plans?
Social change
Dog Spa

Kelly Tumlin wants to open a dog grooming salon that will offer healthy, natural pet care and holistic pet products. All of the products sold at the salon will be of the highest quality and made of all-natural ingredients. Tumlin wants to pamper pets just like a spa pampers their owners. To determine the feasibility of the grooming salon, Tumlin hired a marketing researcher who studied all the market information available and determined that single, white-collar workers between the ages of 30 and 60 were the most likely people to use the services proposed by Tumlin. The researcher also determined the west side of the city offers the best location for the enterprise even though zoning regulations are much stricter in that area.

What type of research did the marketing consultant perform for Tumlin?

Applied
The study of people’s vital statistics, such as their ages, births, deaths, and locations, is called:
Demography
A soft drink manufacturer who was thinking of investing in a bottling plant in the Czech Republic should know the nation is proud of the fact it is among the world’s biggest beer drinkers. Czechs consume an average of one-half liter of beer a day for every man, woman, and child in the country. The _____ environment of this country could very easily prevent the soft drink bottling company from succeeding.
Cultural
All of the following statements about global marketing are true EXCEPT:
Foreign competitors have not gained significant market share in the U.S.
The U.S. government prohibits the importation of Havana cigars because of political differences with Cuba. This is an example of an import exchange control.
False
Vast differences in natural resources create all of the following EXCEPT:
Export opportunities for countries with no natural resources.
Which of the following is a criticism of multinational corporations?
Multinationals sometimes support reactionary and oppressive regimes.
Breathe Right

CNS, Inc. is the manufacturer of Breathe Right nasal strips, a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages. Since their introduction in the United States, Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow, snorers hoping for a sound night’s sleep, and allergy and cold sufferers looking for relief from their stuffed noses. Because CNS is a small company, it initially had trouble promoting its product. Then San Francisco 49er Jerry Rice started regularly wearing one, and U.S. sales took off. Today, Breathe Right strips are marketed in more than 40 countries. When CNS decided to expand globally, its size made it look for a partner. It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.

Refer to Breathe Right. The same Breathe Right nasal strip you can buy in any pharmacy in the United States can also be purchased in 40 other countries. CNS used a _____ strategy.

Global market standardization
Global trade has reached about $11 trillion a year.
True
Global marketing standardization:
Presumes markets throughout the world are becoming more alike.
Many people fear world trade because it:
Causes some people to lose their jobs as production shifts abroad.
The primary reason large U.S. companies send U.S. jobs abroad is because labor costs are higher here in the United States. They are engaging in _____.
Outsourcing
Which of the following is the latest round of World Trade Organization (WTO)?
Doha Round
Franchising is a form of:
Licensing
_____ is a global marketing strategy that requires active ownership (either a controlling interest or large minority interest) of a foreign company or overseas manufacturing or marketing facilities.
Direct investment
A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.
Exchange control
The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.
Uruguay Round
The same environmental factors that operate in the domestic market also exist internationally. These factors (culture, economic development, political and legal structure, demographics, and natural resources) should be examined regardless of the country.
True
U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the European market. This is an example of a joint franchise.
False
A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:
Its marketing mix
Claiborne Inc. produces leather accessories for motorcycle riders and is in stage one of creating their global business. This means that they:
Operate in one country and sell to others.
The fact that Russia’s inflation rate has increased 15.1% since May of 2007 would be an important _____ factor for a company that wanted to do business in that country.
Economic
All of the following are characteristics of culture EXCEPT:
Culture is an inherent trait.
College Decision

Juan is a senior in high school and is deciding which university to go to after he graduates. He has received several pieces of mail from local universities with information on scholarship opportunities because he has a good GPA and a high ACT score. He and his parents have visited several schools and talked to advisors regarding his chosen major, marketing. Juan is thinking about going to the local community college where all of his friends are planning to go, but his parents want him to go to a more prestigious school because they think he will get a better education there.

Refer to College Decision. Juan’s parents’ opinion that he will get a better education if he attends a prestigious school rather than a community college is an example of:

Selective distortion
_____ is characterized by low involvement, a short time frame, an internal-only information search, and low costs.
Routine response behavior
An individual’s _____ is a composite of psychological makeup and environmental forces. It provides consistency to an individual’s reactions to situations.
Personality
Which of the following is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, and hearing?
Stimulus
Melissa has been given a horse and needs to buy a new Western saddle. She has narrowed the brands of saddles she is considering down to Dale Chavez, Abetta, and Big Horn. These three brands of Western saddles represent Melissa’s
Evoked set
Homogeneous groups within a culture that share elements of the overall culture as well as have elements that are unique to that group are called:
Subcultures
Which of the following represents the way an individual actually perceives himself or herself?
Real self-image
Ralph played mediocre golf for over 20 years. Then he retired and vowed to improve his golf game by buying one of the new golf clubs that promise increased distance and have a $700 price tag. According to Maslow’s hierarchy of needs, Ralph is most likely trying to satisfy his _____ needs.
Self-actualization
After a need or want is recognized, a consumer may be motivated to clarify the options available and generate an evoked set of brands. This occurs during which part of the consumer decision-making process?
Information search
While Robinson was looking at the CDs at Wal-Mart, he was trying to remember the name of the group that sang the song he liked on last night’s episode of his favorite TV show so he could buy it. Since recording companies pay to have their CDs promoted on television shows, the source of information Robinson is trying to recall is:
Marketing-controlled
Jackson has moved to a new community and can no longer attend his old church. He is currently visiting churches to make a decision about which one best serves his needs. In making his decision, Jackson will engage in _____ consumer decision making.
Limited
The steps of the consumer decision-making process in order are:
Need recognition, information search, evaluation of alternatives, purchase, and post purchase evaluation
There are many travel agencies in the world. One of the largest is Thomas Cook, which is in England. The slogan the travel agency has used for years is, “Don’t just book it. Thomas Cook it.” The slogan implies that if you are making any travel plans, you should call the Thomas Cook agency and not some other agency. What learning concept is Thomas Cook relying on with this advertising claim?
Stimulus discrimination
_____ is the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and is transmitted from one generation to the next.
Culture
_____ occurs when consumers remember only information that supports their personal feelings or beliefs.
Selective retention
Your best friend has sought your advice on what type of clothing she should buy for a job interview. If she gets the job, she will be the assistant to the producer of her favorite television program. She really wants this job and considers it a once in a lifetime opportunity. By asking your help with her wardrobe, your friend is most likely trying to:
Reduce perceived risk of negative consequences.
Manufacturers of consumer goods often give away trial sizes of new products to encourage:
Experiential learning
Extending a well-known and respected brand name from one product category to another product category is referred to as:
Brand extensions
Andrea just purchased a trip to Jamaica as a present to her husband for their tenth wedding anniversary. Andrea is anxious about the trip, afraid Bill will not like her choice of location and worried she spent too much money. Andrea is experiencing:
Cognitive dissonance
Which type of business product represents goods, such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment?
Accessory equipment
Axel Spring AG, one of Europe’s largest newspaper publishers, with 10,000 employees and more than 150 papers in 30 countries, announced it would switch its entire operation from PCs to Macs. Axel decided to make a switch to Apple because the company’s layout work was already being done by Macs, the Macs were more user friendly, more elegant, and cheaper to maintain than they had been in the past. This is an example of a _____.
Modified rebuy
Corn refiners buy shelled corn and convert it into a variety of products, including high fructose corn syrup. The refiners then sell the syrup to soda and food product companies for use in foods and beverages. The corn refiners represent the _____ sector of the business market.
Producer
PAS Systems has developed a new product–an unobtrusive flashlight-alcohol detector. The flashlight readings are inadmissible in court but are used by police officers to decide whether to hold someone for a sobriety test. Each one costs $600. After seeing a prototype brought back by one of its employees from a highway safety convention, the Georgia Governor’s Office of Highway Safety decided to equip every DUI officer with one. In this example, the individual who attended the convention had the roles of _____ in the buying center.
Gatekeeper and influencer
All of the following are demand characteristics of business markets EXCEPT:
Stable demand
The _____ is the set of all persons in an organization who become involved in the purchasing process.
Buying center
When demand for a product is _____, an increase or decrease in the price of the product will not significantly affect demand for the product.
Inelastic
Lucent Technologies

Because AT&T Corporation wanted to become a big player in the booming market for outsourcing computer services, it set up Lucent Technologies to manage corporate clients’ worldwide computer networks. Lucent Technologies assists corporations in global network and computer management by drawing on AT&T’s worldwide digital network and its computer hardware and software businesses. It also relies on the expertise of technicians at Bell Laboratories.

Refer to Lucent Technologies. First National Bank of Chicago, one of AT&T’s customers, claims the new network helped the bank win a huge contract from the U.S. Treasury. For classification purposes, First National Bank would be which type of customer?

Producer
Apple iTunes has sold over five billion downloads. Without iTunes the demand for the Apple iPod line of products would be small. Without the musicians there would be no iTunes. A condition of _____ demand exists.
Joint
If a business needs a particular good or service and decides to look among its own customers for a provider of that good or service, the business is:
Practicing reciprocity
FAA

The Federal Aviation Administration has been struggling for several years with antiquated systems, and all it takes is a single failure on one piece of the system to shut down the entire air-traffic control system for several hours, resulting in significant snarls at major airports. The most recent failure occurred in the FAA’s core telecommunications network, called the Federal Telecommunications Infrastructure (FTI), which is managed by Harris Corporation. Marc Raimondi, a spokesperson for Harris Corporation, said, “The FTI system has proven to be one of the most reliable and secure communications networks operating within the civilian government.” Snafus like this have been happening with alarming frequency, prompting Congress to demand the FAA and its contractors to do more to prevent these malfunctions. The problem is that the FAA has been using a patchwork approach by updating with modern hardware and software on old systems instead of a complete overhaul of the system. The FAA’s next generation of modernization will rely on satellite-based networks instead of phone lines and data cables. The FAA is waiting for White House approval on whether it will have the funds to take this next step.

Refer to FAA. Harris Corporation provides which type of business product to the FAA?

Business services
Claxton Fruitcakes

One common Christmas tradition in many households is the Claxton fruitcake. The fruitcake bakery in Claxton, Georgia, makes about 6 million pounds of fruitcake annually and has $12 million in sales. One fruitcake batch weighs 375 pounds. About 70 percent of that weight is fruits and nuts. A single batch is divided into 34 loaf pans that hold 11 pounds each. Loaves are cooked for 100 minutes at 375 degrees. The bakery can cook 6,000 pounds at a time. During the baking season (August-December), the bakery uses a tractor-trailer load of raisins each day. The suggested retail price of a one-pound Claxton fruitcake is $3.69.

Refer to Claxton Fruitcakes. Any company that purchased Claxton fruitcakes to give to its customers would treat this purchase like any other purchase and evaluate the cake and the company in terms of:

Quality, service, and price
When two or more items are used in combination to produce a final product, they are said to have _____ demand.
Joint
Texas Instruments has developed a detailed Values and Ethics Statement and Code of Business Conduct. Why did they choose to create this?
A Code of Ethics helps guide buyers and sellers and overall helps the company to follow ethical practices.
Another name for business supplies like pens, paper, and file folders is:
MRO items
Inland Eastex manufactures a heavy paper stock that is used for printing covers for many different types and sizes of consumer magazines. Consumer magazine sales determine how much paper Inland Eastex sells. This is an example of:
Derived
Major equipment goods, such as machines, mainframe computers, and buildings are also referred to as:
Installations
The Beaumont Homeowner’s Association had to replace its pool pump. They asked two local companies—Thompson Pools and Southern Pool and Spa Company—for quotes on replacing the pump. Beaumont negotiated with both companies and quickly decided to buy from the Thompson Pool because its quote was $200 cheaper in its labor estimate. Which evaluative criterion appears to have been most important in making this purchase decision?
Price
What would a U.S. company that manufactures the lighted signs used in amusement parks, at outdoor sports arenas, for restaurant promotion, and by state departments of transportation on the sides of roads use to facilitate its market segmentation and targeting if it wanted data that were readily available and usable?
The North American Industry Classification System
A industrial cleaning products distributor needed to hire a janitorial service to keep his establishment clean so he chose one of his customers for the job. This is an example of _____.
Reciprocity
In Baton Rouge, Louisiana everyone who is anybody in society can’t wait to get a copy of 225 magazine. The magazine is targeted to the upper middle and upper classes in Baton Rouge and features articles on how they work and play. The editor of 225 magazine is relying on _____ segmentation.
Geodemographic
The business market consists of four broad segments: producers, resellers, governments, and regions.
False
The first step in segmenting a market is to choose a basis or bases for segmenting the markets.
False
The Hispanic American market is best treated as a single segment.
False
Kraft Foods plans to tailor different ads for different neighborhoods in the same region. For example, viewers watching a cable show in a Hispanic neighborhood in Chicago would see different ads during the same commercial breaks as non-Hispanics living in a different neighborhood. Kraft’s strategy best exemplifies _____ segmentation.
Geodemographics
Mercedes-Benz

Daimler AG, the maker of Mercedes-Benz automobiles, is planning to launch a new line of downsized luxury vehicles in the United States by 2012. Daimler has experienced a recent drop in global sales attributed to its product mix that focuses on larger luxury automobiles. With increasing fuel prices and stricter U.S. fuel-economy standards coming down the pipeline, Daimler doesn’t want to be left behind. Daimler is behind its competition, though. Its German rivals, Audi and BMW, have been relatively successful in the U.S. BMW”s Mini Cooper, demanding as much as $34,000, has already driven away with some of Daimler’s potential sales. While Daimler already offers the Smart car in the U.S., the new offerings will not be going after the same consumers.

Refer to Mercedes-Benz. One potential problem is that some of the purchasers of Daimler’s downsized luxury vehicles could be consumers who would have purchased a larger, higher-priced Mercedes-Benz. This situation is called:

Cannibalization
Fisher-Price is identifying Asian markets that are interested in their line of talking toys. Fisher-Price is engaged in the process of market segmentation.
True
In market segmentation, individual psychographic variables can be combined with other variables to provide more detailed descriptions of market segments.
True
A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause them to have relatively similar product needs.
Market segment
Firms can be categorized by the type of purchasing strategy used. _____ consider numerous, even unfamiliar suppliers and solicit and analyze options.
Optimizers
Mercedes-Benz

Daimler AG, the maker of Mercedes-Benz automobiles, is planning to launch a new line of downsized luxury vehicles in the United States by 2012. Daimler has experienced a recent drop in global sales attributed to its product mix that focuses on larger luxury automobiles. With increasing fuel prices and stricter U.S. fuel-economy standards coming down the pipeline, Daimler doesn’t want to be left behind. Daimler is behind its competition, though. Its German rivals, Audi and BMW, have been relatively successful in the U.S. BMW”s Mini Cooper, demanding as much as $34,000, has already driven away with some of Daimler’s potential sales. While Daimler already offers the Smart car in the U.S., the new offerings will not be going after the same consumers.

Refer to Mercedes-Benz. Which positioning base will Daimler be using if the company emphasizes the type of people who buy Mercedes-Benz automobiles in its promotional efforts?

Product user
The process of market segmentation involves breaking down a heterogeneous market into homogeneous and identifiable segments. If this process is carried to its extreme, then one could say that:
Every individual in the world is a market segment
When a firm uses a concentrated targeting strategy, it can:
Offer a highly specialized marketing mix
_____ is the development of a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general, and is related to the place a product occupies in consumers’ minds relative to competing offerings.
Positioning
Tall Paul’s designs and sells household furniture and furnishings to people who are over 6’6″ tall–a rather small target market. Tall Paul’s uses a(n) _____ targeting strategy.
Concentrated
Turkey Hunting Equipment

Around the beginning of fall each year, about 2.7 million turkey hunters all over the United States start looking at catalogs for the perfect item to guarantee that this year they will kill a wild turkey, the most elusive game bird on the North American continent. The devoted turkey stalker can stock up on everything from camouflaged turkey hunting socks, turkey license plate holders, vests with huge pockets for toting dead birds, and hunting videos to turkey decoys, turkey earrings, and turkey callers. Neil Cost is considered the best manufacturer of turkey callers in the world. It is his only product, and each is highly prized by turkey hunters. It is not unusual for a turkey hunter to pay $5,000 for one of Cost’s callers.

Refer to Turkey Hunting Equipment. Given that the wild turkey hunters number approximately 2.7 million, it meets the segmentation criterion of:

Substantiality
After selecting a market for study and choosing bases for segmenting that market, the next step is to:
Choose a basis or bases for segmenting the market
Until the 1990s, few firms practiced market segmentation.
False
All of the following are bases for psychographic segmentation EXCEPT:
Benefits
Increasing share of customer means:
Selling more products to each customer