MKT 4309 Final Review (ALL QUIZZES)

Which of the following is an excellent market-based performance metric and barometer of future revenues and profits?
a. customer satisfaction
Which of the following is NOT one of the benefits of a strong customer focus?
b. can charge higher prices than competitors
Which of the following is NOT characteristic of a company with a strong market orientation?
d. They have a strong internal focus.
A business determines that 75% of its customers are satisfied. This business also learns that 80% of a leading competitor’s customers are satisfied. If this business implements a program to reach 80% customer satisfaction, this is called _____.
c. managing to the averages
The first priority of market-based management should be _____.
a. to keep good customers
The average life expectancy of a customer for a company with 75% customer retention is _____.
d. 4 years
Sally shopped at Dillard’s Department store for two years but stopped because she was dissatisfied and started shopping at Parisian’s instead. Since Sally was a profitable customer for Dillard’s, the store conducted research to learn the reasons for customer dissatisfaction. After conducting research, Dillard’s rectified some of the problems that had dissatisfied customers and sent Sally an invitation and a $10 gift certificate to encourage her to come back. To Dillard’s, Sally is a(n) _____.
d. win-back customer
Time Works, Inc. incurs $400 in variable costs and $60 in marketing expenses for each $800 in sales revenue generated by a retained customer. If there are 150,000 retained customers, what is Time Works, Inc.’s net marketing contribution from these customers?
c. $51,000,000
_____ allow market-based businesses to take corrective action before customers switch their purchases to a competitor.
b. In-process market metrics
Net marketing contribution _____.
a. separates marketing and sales expenses from overall fixed operating expenses
In-process market metrics are particularly important because _____.
b. they are also leading indicators of financial performance
Sam is examining his company’s financial performance measures. Which of the following would be on the list?
e. marketing and sales expenses
Net marketing contribution is equal to _____.
c. (sales revenues) – (cost of goods sold) – (marketing and sales expenses)
What is the marketing return on sales (Marketing ROS) for a product line that generates $20 million in sales revenues with cost of goods sold equal to $12 million, marketing and sales expenses equal to $2 million, and other operating expenses equal to $2 million?
b. 30%
Overton Enterprises sells widgets to a marketplace where total demand is 12 million. Overton’s market share is 12 ½ percent; the selling price per widget is $40 and the variable costs per widget are $25. Overton spends $7 million on marketing expenses. What is Overton Enterprises’s net marketing contribution?
b. $15.5 million
Some of John’s friends consider him an expert on electronic products such as digital video recorders. He purchased one of these products years before any of his friends did, and he paid four times more for this product than they did. He wanted the benefits of this product and was not concerned that his friends thought he was foolish to buy one when they first came out on the market. John is considered to be a _____ customer.
b. lead
Awareness does not only refer to product awareness, but also to _____.
e. complete comprehension of benefits
In general, the customers who make up the early market are all of the following EXCEPT _____.
c. more likely to demand customer service
The stronger the benefits ____ and the more ____ the price, the greater the customer value created by the product and the faster the rate of customer market entry.
c. advantages; affordable
Which of the following is NOT a fundamental force that captures the shape of the market growth curve and the rate of market growth?
c. the number of customers who would buy the product if they knew it was available and accurately understood its benefits
The number of customers who have entered a market at a certain point in time is known as _____.
b. market penetration
A recent Consumer Reports study analyzed toasters and found that the average performance rating for all toasters tested was 69 with an average price of $33. Krups is a brand of toaster that sells for $32 and received an overall performance rating of 70. What is Krups’s relative price against the other toasters tested?
c. 97
Consumers can purchase inkjet printers for as little as $30. However, the price of replacement ink cartridges can be as much or more than the purchase price of the printer. This is part of the _____ of using an inkjet printer.
c. usage costs
Sony’s microwave achieved a relative performance rating of 119 relative to other microwaves tested. Its relative price score was 87. This means that according to this test, Sony provides _____.
e. above-average performance with below-average prices
Which of the following is NOT true regarding lead users?
c. They are always part of the newest user set.
Customer value is determined by _____ in the product category.
a. subtracting relative price from relative performance
Companies seeking ____ innovations need more than incremental product improvements that come from lead user analysis.
b. discontinuous
Which of the following in NOT a variable in determining value for a channel intermediary?
d. product warranty
In delivering customer value, which of the following is least likely to play a part?
c. promotion benefits
A study of gas station customers revealed that there are five kinds of gas buyers, each a little different and each differently profitable. If BP – Circle K gas and convenience stores focused their attention on the most profitable three segments, this would be an example of a(n) _____.
d. multi-segment strategy
Carla has determined that there are meaningful differences in customer needs within a specific segment that are not being met. What market segmentation strategy would be appropriate for Carla to use to capitalize on this opportunity?
c. sub-segment strategy
Which of the following is NOT a common measure of a market segment’s attractiveness?
b. net marketing contribution
Which of the following is NOT part of a business’ culture?
c. frequency of purchase
The first level of customer relationship marketing is a _____ strategy that recognizes individual customers by name and buying behavior.
a. mass-personalization
Since most large corporations focus on the mass market, smaller firms might profitably choose the _____.
c. small segment strategy
Which is NOT used by businesses to create additional customer value?
e. All of the above are used by businesses to create additional customer value.
Which of the following is most likely to be a barrier to exit?
b. specialized assets
Which of the following tactics can be used in implementing an oblique strategy?
e. all of the above
A larger production volume allows for production and purchasing economies that lower the unit cost of a product producing a _____ effect.
a. scale
Which of the following is TRUE regarding an oblique strategy?
b. It leverages a knowledge advantage with respect to customers and competitors.
Which of the following behaviors might be exhibited by a competitor under pressure to improve profits/cash flow?
d. tightening the terms of sale and payment conditions
Which of the following is an industry force that shapes competitive position and profitability?
d. market entry/exit
A business that dominates markets with a relative advantage in distribution, sales coverage, or marketing communications can control (and often block) market access, creating a source of competitive advantage. Which source of competitive advantage is this?
c. marketing advantage
As the sales force is given more products to sell to the same customers, a _____ effect is created.
d. marketing cost scope
The technique used to capture customer perceptions of competing products and services is known as _____.
b. perceptual mapping
What are the two levels of diversification?
b. product and market
Which strategy often occurs in the late stages of growth and mature stages of the product life cycle when growth potential is limited and competitive position is set?
a. Optimize Position
Defensive portfolio strategies are most likely to occur in _____ markets with _____ levels of competitive advantage or in _____ markets with _____ levels of competitive advantage.
b. attractive; strong; unattractive; weak
The three dimensions of market attractiveness are _____.
c. market forces, competitive environment and market access
The first step in the _____ process is a careful assessment of current business performance, market attractiveness and competitive position for each product-market a business wishes to consider over a 3- to 5-year planning horizon.
c. strategic market planning
Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell’s Marketing ROS?
b. 10%
Mercedes has selectively invested to strengthen its competition position in the SUV segment of the automotive market, which is growing in market attractiveness. What strategy is Mercedes using?
d. Improve Position
The _____ is equal to current market demand divided by market potential.
b. market development index (MDI)
Which type of strategic market plan is most appropriate for businesses operating in an unattractive market?
b. defensive
_____ emulate the dominant design and enter the market after letting the pioneer invest in developing the technology, establishing the design standard and initiating market development.
d. Early followers
Constraints due to price, use compatibility and availability create a large _____ potential for many products.
c. untapped new market
Which of the following is NOT a way to implement a new market entry strategy?
d. expand market demand
Tony Hawk’s skateboard equipment company wants to grow financially, but decides that the market for skateboards and gear is fairly saturated. Hawk decides to expand to snowboards, where he figures his brands will have credibility and the market is not as saturated. This type of strategy is called _____.
b. Enter Related New Markets
Sony found its profit margins were shrinking in consumer electronics as prices eroded faster than manufacturing costs could be lowered. To address this problem and restore margins to more acceptable levels, Sony examined its cost structure closely and identified a number of areas where costs could be cut including standardizing parts, reducing material costs, reducing costs of labor and adding more technology to its manufacturing processes. Which offensive strategy did Sony implement?
e. Lower Costs/Improve Marketing Productivity
Harley-Davidson derives 77% of its sales from the sale of motorcycles. The other 23% is a result of increased customer purchases of clothing, parts and accessories. The incremental sales of related products have much higher margins, build customer loyalty and enhance their brand awareness and brand equity as wearers of Harley-Davidson merchandise communicate their brand name. Which offensive strategy is Harley-Davidson pursuing?
b. Grow Revenue per Customer
The first step in optimizing net marketing contribution is optimal management of _____.
b. margin-volume
In the case of the Monetize, Harvest and Divest defensive strategies, each strategy is designed to _____.
a. maximize immediate cash flow
Which core defensive strategy is appropriate for a business with a very strong competitive advantage operating in a very attractive market?
d. Protect
When profiling the average follower (number two share) business that has achieved above-average profitability and the average follower business with below-average profit performance, it was found that, compared to followers with below-average profits, profitable share followers _____.
e. invest more in research and development as a percentage of sales
Which strategy would be used if a business is losing money in a given market and decides to pursue a quick market exit?
c. Divest
Which of the following is the strategic objective of the Optimize Position defensive core strategy?
b. maximize profits
Which of the following is the strategic objective of the Monetize, Harvest and Divest defensive core strategies?
c. cash flow
In general, businesses in high-share positions in growing or mature markets will use which type of strategic market plans to maintain cash flow that supports short-run profit performance and shareholder value?
b. defensive
Which of the following is a type of strategy to implement a Monetize, Harvest, or Divest defensive core strategy?
d. Manage for Cash Flow
Which of the following is a type of strategy to implement a Protect Position defensive core strategy?
a. Build Customer Retention
Which factors influence a channel system’s competitive advantage?
a. sale force size, sales force productivity, and/or share of distributor outlets
Under what conditions are mixed channel systems particularly important?
c. when products are fairly technical and localized availability and service are important
Which is NOT a function of a full service wholesaler?
d. production
The choice and management of marketing channels determines the service quality and the efficiency with which end-user customers are served, which impacts the _____ area of performance.
a. customer value
Which of the following might be included in a direct channel system?
b. brokers
Solutions “R” Us is a business that purchases computers, printers, modems, fax machines, software and telecommunications equipment from several manufacturers and resells them as complete (bundled) customized systems to small businesses to meet their specific needs. What type of channel intermediary is Solutions “R” Us?
b. value-added retailer
Arm & Hammer Peroxicare brand of toothpaste, which is manufactured by Church & Dwight, Co., is an example of using a _____ branding strategy.
c. brand and sub-brand name
Gardenburger is a company that manufacturers meatless products and markets its core brand as the Original. Gardenburger has since come out with Gardenburger Flame Grilled and Gardenburger Santa Fe offerings. This is an example of _____.
a. vertical brand-line extensions
Web portals Explorer, Magellan, Navigator and Safari are examples of names created to subtly communicate the experience of surfing the Web and are examples of _____ names.
b. experiential
A(n) _____ brand is the core product of a business, the most visible embodiment of the brand name.
d. umbrella
Which of the following is important in the area of branding and brand management strategies?
d. brand identity
Brand awareness, market leadership, reputation for quality, brand relevance and brand loyalty are considered to be _____.
b. brand assets
The goal of a(n) _____ is to create a product-line position that is attractive to target customers and creates a good source of cash flow for the business.
c. positioning strategy
Which of the following is a marketing effort factor influencing a business’ market share?
e. retailing and merchandising
Which of the following is a favorable condition for implementing a penetration pricing strategy?
a. price-sensitive customers
All of the following are non-price life cycle costs of a product EXCEPT _____.
e. retail costs
Total contribution minus fixed expenses, marketing expenses and operating expenses equals _____.
c. operating income
A primary goal of _____ pricing is to maintain a strong business-to-business relationship even when market conditions in an industry change.
b. strategic-account
Which of the following pricing methods is likely to be used later than the others in the product life cycle?
a. plus-one pricing
Kawasaki sells motorcycles at relatively lower prices than the competition, even though the bikes it produces are the virtual equals of competitive products. This price edge could be considered what type of pricing method?
b. plus-one pricing
Which type of cost-based pricing approach is used in markets where there is little or no product differentiation, bidders are prequalified and bids must meet product specifications and delivery dates in order to be considered? Of those meeting the required specifications, suppliers are selected on the basis of the lowest price.
d. competitive bid pricing
A measure used to assess the responsiveness of consumers to advertising expenditures is known as _____.
c. advertising elasticity
The three fundamental marketing communications objectives are _____.
c. build awareness, reinforce the message and stimulate action
The idea that the advertising effort made in a given period will produce some additional sales response in subsequent sales periods is known as the _____.
c. advertising carryover effect
Which of the following is an objective associated with pull type communications?
d. reduced search costs
The objectives of a _____ marketing communication are to build awareness, attraction, and loyalty and to reduce search costs for consumers.
b. pull
Which of the following statements is FALSE?
c. A business needs to use as many exposures as it can afford because the required level of frequency is infinite
If advertising elasticity is equal to 0.35, this means that for every one percent change in advertising expenditures, there will be an estimated _____ percent change in volume sold.
c. 0.35
Billabong clothing expects that with its short-run advertising elasticity of 0.22, it can increase sales volume by 160,000 units in the first time period by boosting ad expenditures by 20%. If there is a 0.50 carryover effect, the total sales effect of this ad spending is _____ units.
e. 320,000
If a retailer buys around 80% of its products for resale at promotional prices, the retailer is likely _____.
d. forward buying
The market share index is an indicator of _____.
what market share should be given certain expected levels of market performance
In the early stages of the product life cycle, the marketing and sales expense is greater than gross profits because volumes are _____.
very small
In smaller towns, consumers have to travel long distances to find acceptable choices of goods such as clothing and furniture. This is an example of lack of _____ limiting the maximum number of potential customers in smaller towns.
availability
New customers will be hard to find, once a market reaches ____.
saturation
The market in which a business competes for target customers is known as a _____.
served market
Harley-Davidson Motor Company sends consultants to biker rallies to discover how their products are used and modified. Recent visits found that bikers were seeking items, such as bolt-on chrome products, horsepower performance enhancers and improved braking systems. This field research is an example of studying _____.
lead users
Which of the following is NOT considered when determining an overall measure of perceived customer benefits?
relative price
Which of the following is NOT a source of life cycle costs that
create economic value for a customer?
transaction cost
A Value Map plots _____ on one axis against _____ on the other axis.
relative price and relative performance
John is a small business owner who has a master’s degree in business, uses sophisticated computer systems to assist in the management of his business and has a passion to grow his business. John is a _____.
growth-oriented entrepreneur
After grouping customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem, the next step in a needs-based market segmentation process is to _____.
determine the overall attractiveness of a segment
_____ forces created by differences in values, attitudes and interests can contribute to differences in consumer needs.
Lifestyle
At the core of customer relationship marketing is _____.
database marketing
_____ is focused more on what happens after a customer is acquired in an effort to build a customer relationship that benefits both the customer and the company.
customer relationship marketing
Which of the following would NOT be considered a customer touch point?
television ads
If a market-based business with a strong market orientation is gathering competitor intelligence all the time and, as a result, has continuously evolving competitor profiles from which to evaluate its own competitiveness and competitive advantages, it is engaging in
competitor analysis
Firms with partial intelligence with respect to customers or competitors are likely to employ _____.
reactive strategies
Political barriers, technology or low-cost manufacturing, and high expenditures for advertising, R&D, and sale forces are all examples of _____.
barriers to entry
For a source of relative advantage to be considered a competitive advantage, it requires _____.
a. that the area of relative advantage be meaningful to target customers
b.that the relative advantage be sustainable
c.that the relative advantage be based on a low cost advantage
d.A and B above
e.A, B and C above
A and B above
If a business is a large purchaser of a commodity product (less important to the buyer) and is in an industry in which switching costs are low, supplier power is generally _____.
low
Luscious Lip’s market share should have been 8% in the lipstick market, but owing to a variety of other factors, its actual market share was only 5%. Furthermore, it was estimated that the business’ market share index potential would be 15% if the business achieved the desired level of customer response along the share development path. What is Luscious Lip’s Share Development Index (SDI)?
a.20

b.53.3

c.62.5

d. 160

e. 3

b.53.3
In general, the customers who make up the early market are all of the following EXCEPT _____.
Selected Answer:

a. more knowledgeable

b. less price sensitive

c. more likely to demand customer service

d. less dependent on what others do or think

e. critical to a company’s early success

c. more likely to demand customer service
In the early stages of the product life cycle, the marketing and sales expense is greater than gross profits because volumes are _____.

a. very small

b. in the growth stage

c. very large

d. near peak levels

e. declining

a. very small
What is the first step in developing a good estimate of sales volume?

a. develop a good estimate of market demand

b. determine which stage of the product life cycle the product is in

c. determine the product life cycle profitability index

d. determine the share development path

e. determine market share

a. develop a good estimate of market demand
For a new market to move from the early market to the mainstream market requires the development of _____.

a. innovative solutions

b. unique features

c. emerging solutions

d. complete solutions

e. more products

d. complete solutions
Suppose the benchmark competitive product has a price of $300, costs $200 to install, and averages $500 in usage and maintenance costs. Your product is priced at $400, costs $100 to install, and averages $400 in usage and maintenance costs. In this situation, the economic value of your product over the benchmark competitive product is _____.

a. -$100

b. $0

c.$100

d. $125

e. $200

c.$100
A relative measure of performance can be created by _____.

a. dividing the overall rating of a product’s performance by the overall average performance rating for all products analyzed

b. dividing the overall rating of a product’s performance by the rating of the top-performing brand

c. dividing the overall rating of a product’s performance by its price

d. dividing the overall rating of a product’s performance by the average price for products in that product category

e. dividing a measure of the product’s benefits by the overall measure of all product’s in that category

a. dividing the overall rating of a product’s performance by the overall average performance rating for all products analyzed
Automobile paint and body shops use materials that are considered environmental hazards that are subject to several requirements regarding its disposal. As part of the cost of repair, customers getting their car repaired are assessed a $1.00 hazardous material handling fee. This is assessed to reduce the auto shop’s _____.

a. usage costs

b. acquisition costs

c. maintenance costs

d. ownership costs

e. disposal costs

e. disposal costs
Using _____ analysis, a business can more accurately determine what customers value when they make product choices involving several alternative product-price configurations.

a. conjoint

b. regression

c. empathic

d. focus group

e. discovery

a. conjoint
Dell Computers allows each customer to build a custom product to meet his or her specific needs, personal constraints and price considerations. By doing so, Dell also obtains important information about which features customers prefer, how preferences differ across demographic market segments and how they change over time. Dell is using which type of customer relationship marketing strategy?

a. mass-personalization

b. mass-customization

c. customer relationship management

d. sub-segment

e. multi-segment

b. mass-customization
Honda motor company started selling small (125-250 cc engines) motorcycles in the U.S. in the 1960s. Since then, Honda has steadily moved up in numbers of models and engine displacement sizes. In 2000, for example, Honda introduced a V-Twin cruiser model that sported an 1800 cc engine. This movement up the scale is which type of market segmentation strategy?

a. step-up segment strategy

b. adjacent segment strategy

c. small segment strategy

d. niche segment strategy

e. sub-segment strategy

b. adjacent segment strategy
Customer familiarity, channel access and company fit are all measures of the _____ assessment of a segment’s attractiveness.

a. competitive intensity

b. market access

c. market growth

d. profitability

e. feasibility

b. market access
Market size, growth rate and market potential are all measures of the _____ assessment of a segment’s attractiveness.

a. competitive intensity

b. market access

c. market growth

d. profitability

e. feasibility

c. market growth
Which of the following is NOT a public and readily available source of competitor intelligence?

a. dealers

b. trade press

c. industry consultants

d. government documents

e. All of the above are public and readily available sources of competitor intelligence.

e. All of the above are public and readily available sources of competitor intelligence.
Which of the following behavior might be exhibited by competitors that lack marketing leadership/market focus?

a. frequently cutting prices to increase volume

b. reducing advertising and not attending trade shows

c. tightening the terms of sale and payment conditions

d. pay sales people to collect unpaid bills

e. cutting investment in research and development

a. frequently cutting prices to increase volume
Which type of portfolio strategy is less likely to generate significant sales revenue growth but are critical sources of short-run cash flow and profit performance?
Defensive
Which of the following is TRUE?
a. Offensive strategic market plans require investment for growth, which limits long-run profit performance, but does not limit sales revenue.
b. Defensive strategic market plans promote short-run profit performance but are not that effective in growing sales revenue.
c. In the long run, a defensive-oriented market strategy will shift from an offensive strategic market plan to a growth-oriented plan.
d.Offensive strategic market plans are geared to deliver above-average performance in the areas of sales growth, share position, and improved short-run profits.
e.Defensive strategic market plans are not geared towards the protection of market share.
b. Defensive strategic market plans promote short-run profit performance but are not that effective in growing sales revenue.
The sum of the weighted competitive advantage scores for differentiation advantage, cost advantage and marketing advantage is known as the _____.
Competitive Position Index
The three dimensions of competitive position are _____.
differentiation position, cost position and marketing position
Which strategy would be appropriate for a business with a very high competitive advantage operating in a highly attractive market?
Protect Position
Bob is performing a careful assessment of current business performance, market attractiveness and competitive position for each product-market his business wishes to consider over a 3- to 5-year planning horizon. Bob is performing a _____ process.
Strategic Marketing Planning
Which of the following is an advantage of entering unrelated new markets?
reduced market dependency
With few, if any, competitors in an untapped new market, a business has the opportunity to pioneer a portion of the market largely ignored by competitors. This is known as _____.
first-mover advantage
Which of the following is NOT a fundamental reason why businesses examine growth opportunities outside the existing markets they serve?
Their share development index is too low.
A business with a share development index equal to 35 means _____.
that the business has achieved only 35 percent of its potential market share
Coca-Cola is still seeking to grow market share by entering the $1 billion energy drinks market. Which type new market strategy is this?
Enter Related New Markets
With demand in the under $1,000 personal computer segment growing faster than in any other segment, Intel responded with a new product, the Celeron chip, designed for the price-performance needs of the segment. Which offensive strategy is Intel pursuing?
Enter New-Market Segments
The goal of a monetize strategy is to _____.
extract the maximum short-run cash flow from the market
Profitable high-share businesses and profitable low-share businesses have which area of performance in common?
relative product quality
Which defensive strategy operates with minimal market resources and typically low prices?
Monetize
Customer Value Equals
relative benefits minus relative price
Which defensive strategy requires careful margin management and efficient use of marketing resources?
Maximize Net Marketing Contribution
Which is NOT a factor that a business second in market share needs to consider before deciding whether to challenge the leader with an offensive share penetration strategy or to protect its share position and maximize the profits that can be extracted from its current share
the number of competitors in the market
Which type of business can build profits with a defensive strategy to protect share while building customer retention?
a. high-share market leader
b. share follower
c. low-share niche business
d. A and B above
e. A, B and C above
e. A, B and C above
When additional profits can be made with a slow exit from a market, a _____ strategy can be a good source of short-run profits.
Harvest
Which defensive strategy would be most appropriate when there are not sufficient resources to invest to protect the current share position or when greater levels of profitability can be derived from a narrower, more selective choice of target customers?
Reduce Market Focus
Low levels of ad exposure occur because of
poor media selection
To reach target consumers effectively a business has to have a good understanding of their
Media Habits
Product positioning starts with target consumers NOT
Company engineers or product managers
Original equipment manufacturers
buy components products from manufacturers to incorporate into their manufactured products
To determine if a channel system is visible a business has to consider which of the following benefits with respects to a customers service needs and expectations
availability/delivery
Why might a business use a combination of direct, indirect and mixed channel systems
to reach different target market cost effectively and to deliver the service
The service quality dimension of __________ relates to service obsession to get it right when things go wrong.
responsiveness
Which is NOT an element of the brand and product line strategies step of developing product positioning strategies?
Product and/or service differentiation
_____ buy component products from manufacturers to incorporate into their manufactured products.
Original equipment manufacturers
To determine if a channel system is viable, a business has to consider which of the following benefits with respect to a customer’s service needs and expectations?
availability/delivery
If there are 10 manufacturers and 200 retailers, and each manufacturer has 12 interactions per year with each retailer at a cost of $100 per transaction, the total transaction cost of doing business through this channel method is _____.
$2,000
Procter & Gamble has over 10 brands of laundry detergent, each with a unique focus and product-positioning strategy. Buyers would not know that Procter & Gamble is the manufacturer of a specific brand unless they looked closely at the small print on the package. This is an example of using a _____ branding strategy.
brand name only
When customers walk into Moe’s, a southwest franchised grill, they are greeted by the employees yelling, “Welcome to Moe’s!” This is best an example of a service quality _____.
emotional enhancer
The purpose of a ________________is to attract more customers and also allow existing customers to trade up to higher quality higher price products.
Expanded line products
The steps in developing a __________is to define the desire product positioning and value proposition for a specific target market.
Brand identity
Within the dimensions of product quality which of the following is a “quality killer”?
conformance
Which of the following is a cost based approach to pricing?
floor pricing
The value is used pricing method assesses a product ___________ value when determining price.
economic
Which of the following is part of the ease of switching index?
Product differentiation
Which is not favorable condition for implementing skim pricing?
no or limited differentiation
Which pricing approach is done in response to different groups of customers and their different needs and price sensitivities?
segment pricing
Jose’s Mexican restaurant has a margin per unit of $2.00 for a typical dinner offering on his menu, total fixed expenses of $10,000, and average variable costs of $3.00 per dinner. How many dinners must Jose sell to break even?
$5,000
Building awareness, comprehension, intentions and action are major steps upward in the _____.
hierarchy of customer response
Which of the following is an objective associated with push type communications?
greater shelf space
The objective of ________ market communication are to build awareness, attraction, and loyalty and reduce search cost for consumers.
Pull
Market communication targeted to end user consumers are known as which type of communication strategy
Pull
The decisions activities and communications strategies that are directed towards trying to create and maintain a firms intended product concept in the customers mind
product positioning
The decisions and activities intended to create and maintain a certain concept of firms product in customers mind
positioning
A value proposition
a set of benefits and values that company promises to deliver to customers to satisfy their needs
Positioning process
must be continually modified to match customers wants
5 service qualities
empathy, assurance, responsiveness, reliability and tangibles
An ad campaign that buys a constant amount of GRPs throughout the year but then increases the GRP total during the eight weeks leading up to the most heavy purchasing period of the year is using a _____ message reinforcement strategy.
Heavy up
Which type of exposure pattern would be most appropriate for products that can be purchased more readily at some times of the year such as products consumed most heavily in the summer?
Heavy up
An indirect marketing channel might include all EXCEPT which of the following?
Telemarketing
Marketing channels are a key component of a(n) _____ that links manufacturers with end-user customers.
Supply Chain
Charles recently purchased a Dell computer. Included in his purchase were an inkjet printer, a digital camera and an office software program that included a word processor, a spreadsheet, a database and an email program. The price he paid for the computer, software and accessories was lower than the total price that he would have paid if the products were purchased separately. This is an example of _____.
Product Bundling
Within the dimensions of service quality, which of the following is a “quality enhancer”?
Customer Empathy
Achieving a certain level of _____ is directly dependent on the strength of a business’ product positioning and marketing effort.
Market Share
A price elasticity of -2.0 means that a price reduction of one percent will result in _____.
an increase in demand by 2%
Which of the following is most likely to occur at the early stages of the product life cycle?
Skim Pricing
The goal in creating a pricing strategy should be to determine what price produces a combination of volume and margin that increases the business’s total _____.
contribution
Cost-based pricing by low-cost producers is most likely to occur in which stage of the product life cycle?
Growth
Harvest pricing is usually used in the _____ stage of the product life cycle.
Decline
_____ is the percentage of target customers who will be exposed to the business’ message given a certain combination of media.
Reach
One approach to message reinforcement that maintains awareness, reduces copy wear-out and is cost efficient is _____.
Pulsing
Television advertising that achieves, for example, 150 GRPs over a 4-week exposure period and is run in alternating 4-week periods in which during the intervening 4-week period no messages are run is an example of which approach to message reinforcement?
Pulsing
If 60% of the target market is exposed to a marketing communication, and 50% of that group is aware of the offering, and 70% understand the message, and 60% of that group intends to purchase, and 90% of that group actually does purchase, what is the Customer Response Index for the buying group.
11.3%
When Walkman personal stereo systems were introduced, they were an instant hit because it was easy for potential buyers to see how they worked. Based on this information, the success of this product early on was due to _____.
observability
What can be said about a new product that has an overall customer adoption forces index of 80% and an overall product adoption index of 40%?
This product’s rate of market penetration is slowed by product forces.
For a business with several products at different stages of the product life cycle, we can use the percentage of sales at each stage to compute _____.
an overall product life cycle profit
If four-wheel drive capability is weighed a 40 on relative importance, and your truck scores eight out of 10, while the three competitors score eight, six, and six, respectively, your truck has a relative advantage score of _____.
27
Automobile paint and body shops use materials that are considered environmental hazards that are subject to several requirements regarding its disposal. As part of the cost of repair, customers getting their car repaired are assessed a $1.00 hazardous material handling fee. This is assessed to reduce the auto shop’s _____.
disposal costs
Whereas product-focused businesses are providers of products, market-based businesses are _____.
providers of solutions
Using _____ analysis, a business can more accurately determine what customers value when they make product choices involving several alternative product-price configurations.
Conjoint
Number of competitors, ease of entry and the number of substitutes are all measures of the _____ assessment of a segment’s attractiveness.
competitive intensity
Which of the following is NOT a usage behavior force that shapes customer needs?
Interest
As a business adds products to its product line that have similar purchased materials and manufacturing processes, it is able to lower the average unit cost of all products, producing a _____ effect.
Scope
A market-based strategy that leverages a knowledge advantage with respect to both customers and competitors and can be implemented with a nonconfrontational approach that minimizes losses is known as a(n) _____.
oblique strategy
Which of the following is TRUE regarding a reactive strategy?
a. It is an overreaction to customer demands due to limited competitor knowledge.
b. It leverages a knowledge advantage with respect to customers and competitors.
c. It is an overreaction to competitor moves due to limited competitor knowledge.
d. It is based on minimal or limited customer/competitor knowledge.
e. either A or C above
e. either A or C above
More intense competitor rivalry tends to _____ prices and margins and _____ marketing expenses in the battle to attract and retain customers.
lower; raise
A business in a market with low entry barriers, high exit barriers, high levels of customer and supplier power, many substitutes and intense rivalry among competitors will have _____ than a business with a more favorable set of competitive forces.
a lower profit potential
What three components combine to form the customer loyalty score (CLS)?
customer satisfaction, customer retention and customer recommendation
In general, it costs _____ times more to replace a customer than it costs to keep a customer.
Five
Which of the following does NOT affect customer lifetime value?
net operating expenses
A “captured customer” most likely _____.
will not to recommend a brand or company to others
Hood Industrials received $800 in sales revenue by an average retained customer. To attain that $800, the company incurred $400 in variable costs and $60 in direct marketing expenses for each retained customer. Each lost customer generated $200 in sales revenue while costing the company $150 in variable costs and $100 in direct marketing costs. Each new customer generated $400 in sales revenue, but Hood had to incur $300 in variable costs and $300 in direct marketing expenses for each new customer attained. If there are 150,000 retained customers, 50,000 lost customers, and 50,000 new customers, which type of customer generates the lowest net marketing contribution?
New
Estimate the net present value of the customer cash flow with an 80% customer retention rate and a 10% discount rate if the initial cost to acquire this customer is $50, and the business receives $30 in revenues in the first year, $40 in the second, $45 in the third, $50 in the fourth, $55 in the fifth, and $0 in the sixth.
$112
Market-based accounting helps a business understand all of the following EXCEPT _____.
product unit margin
Which of the following is NOT a market performance metric?
relative price and value
Cash flow is only produced _____.
when a customer buys a business’ product or service
Which of the following is a financial performance metric?
sales per employee
Overton Enterprises sells widgets to a marketplace where total demand is 12 million. Overton’s market share is 12 ½ percent; the selling price per widget is $40 and the variable costs per widget are $25. Overton spends $7 million on marketing expenses and has $2 million in other operating expenses. What is Overton Enterprises’s profit (before tax)?
$13.5 Million
If 75% of consumers are aware of Toyota’s Prius hybrid car, and 45% of that group likes the product’s benefit, and 44% of that group finds the price acceptable, and 51% of that group is able to easily buy the product in their local market, and 75% of that group has a favorable service experience when dealing with Toyota and its dealers, then the market share index for the Prius is _____.
5.7%
Which is NOT one of the key benefits to a market-based business provided by a broad strategic market definition?
It creates an awareness of a product and its benefits.
Which of the following statements is FALSE regarding the product life cycle profit index?
The product life cycle profit index cannot be used by a business with several products at different stages of the product life cycle.
Suppose the benchmark competitive product has a price of $300, costs $200 to install, and averages $500 in usage and maintenance costs. Your product is priced at $400, costs $100 to install, and averages $400 in usage and maintenance costs. In this situation, the economic value of your product over the benchmark competitive product is _____.
$100
Value for the channel intermediary is derived from a combination of (1) profitable use of space, (2) inventory turnover, and (3) ____.
the marketing expenses needed to promote the product held in that space
Sub-Zero, with a 2 percent share of the U.S. refrigerator market, competes with industry giants who have large economies of scale and marketing resources. However, Sub-Zero holds 70 percent of the “Super Premium” segment, specializing in very expensive built-in refrigerators that start at $3,500. What type of market segmentation strategy is Sub-Zero pursuing?
niche segment strategy
Coca-Cola, Caterpiller, Sony and Toyota are well-recognized global brands that use a generic value proposition built around their core customers’ needs and the business’ generic positioning strategy. The type of segmentation strategy used by these companies can best be described as a(n) _____ strategy.
Mass market
Market size, growth rate and market potential are all measures of the _____ assessment of a segment’s attractiveness.
Market Growth
Customer relationship marketing has different strategies based on different levels of _____ for the company and its customers.
Value
Which of the following is TRUE regarding an inside the box strategy?
It is based on minimal or limited customer/competitor knowledge.
Which of the following is NOT a public and readily available source of competitor intelligence?
a. dealers
b. trade press
c. industry consultants
d. government documents
e. All of the above are public and readily available sources of competitor intelligence.
All of the above are public and readily available sources of competitor intelligence.
Which of the following in an internal metric?
Order Cycle Time
Which of the following behavior might be exhibited by competitors that lack marketing leadership/market focus?
frequently cutting prices to increase volume
The offensive strategic market plan to invest marketing resources to grow the market or market share is known as _____.
Invest to grow
Which of the following is considered a market force that influences a market’s attractiveness?
Buyer Power
Which of the following is TRUE with respect to offensive strategic market plans and short-run performance?
Offensive strategic market plans require investment for growth, which limits short-run profit performance.
Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell’s net marketing contribution?
$2.5 Billion
Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell’s gross profit?
$5 Billion
What does it mean if the market development index is equal to 20?
There are many potential customers who have not entered the market.
A firm should use an offensive strategy when they compete in a _____ market and has a(n) _____ competitive advantage.
very attractive; very weak
What is meant by “new emerging market”?
Customers have not yet entered.
Carol has determined that along the share-development path, she estimates that her business should perform at a 90% level of product awareness, 50% in product preference, 80% in intentions to purchase, 80% in product availability and 70% in rate of purchase. Carol’s actual market share is equal to 9%. What is the approximate market share potential for Carol’s business?
20%
Nautilus was a pioneer in the home-fitness equipment market and sold their products exclusively through a direct marketing approach. Since the majority of sales in this market occurred in retail stores, Nautilus began selling through specialty sports equipment retailers as well as mass market sporting goods stores. Which offensive strategy does this represent?
Build Marketing Advantage
Which of the following is the strategic objective of the Protect Position defensive core strategy?
Maintain Sales
Which of the following statements is TRUE?
Low-share niche businesses with above-average customer value are more profitable than other low-share niche businesses with a different customer value profile.
To divest a share position, the desired choice is to _____.
find a buyer for the business
Customer Value equals _____.
relative benefits minus relative price
In heavily advertised consumer goods markets, share erosion _____ with major reductions in the advertising budget.
Can be rather dramatic