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PM Exam 1d (16e) Ch 1-5
True/False
Indicate whether the statement is true or false.
____
1. Production and marketing of goods and services are two basic functions that create utility.
____
2. An exchange process is an activity in which two or more parties give something of value to each other to
satisfy perceived needs.
____
3. The marketing concept focuses on the objective of achieving short-term profits instead of long-run success
during tough economic times.
____
4. Product-oriented rather than customer-oriented management endangers the future growth of an organization.
____
5. The private sector has an even greater array of not-for-profit organizations than the public sector.
____
6. The main goal of not-for-profit organizations is to generate revenues above and beyond their costs to make
money for all stakeholders involved.
____
7. An important difference between not-for-profit and for-profit organizations is that, not-for-profit
organizations cannot market tangible goods.
____
8. Marketing of sporting, cultural, and recreational activities to selected target markets is known as cause
marketing.
____
9. Virtually all colleges and universities have alumni associations that publish magazines, hold reunions, and try
to raise funds. These activities constitute organization marketing.
____ 10. The traditional view of marketing can be described as transaction-based marketing.
____ 11. Relationship marketing moves customers up a loyalty ladder—from new customers to regular purchasers,
then to loyal supporters of the firm and its goods and services, and finally to advocates who not only buy its
products but recommend them to others.
____ 12. Information technology has enhanced the effectiveness of relationship marketing by leveraging
mass-marketing campaigns.
____ 13. Tactical planning usually involves the production of quarterly and semiannual plans, along with
divisional budgets, policies, and procedures.
____ 14. To be most effective, the planning process should include input from a wide range of sources both
internal and external to the organization.
____ 15. A mission can be defined as an essential purpose that differentiates one company from others.
____ 16. An organization lays out its basic objectives, or goals, in its complete mission statement.
____ 17. The number of suppliers available to a manufacturer or retailer affects the bargaining power of
buyers.
____ 18. A product strategy includes decisions about customer service, package design, brand names,
trademarks, patents, and warranties.
____ 19. The pricing strategy is the area of marketing that receives the least amount of public scrutiny.
____ 20. According to the BCG matrix, cash cow businesses produce strong cash flows and invest heavily in
the unit’s own promotions and production capacity.
____ 21. According to the BCG matrix, if a question mark cannot become a star, the firm should pull out of
the market and target other markets with greater potential.
____ 22. Environmental scanning is the process of collecting external data, analyzing it, and determining
whether the trends identified are opportunities or threats to the company.
____ 23. Strategic alliances are necessary in countries where local laws require foreign companies to work
with local businesses.
____ 24. A large pharmaceutical company invents a very small device that can be implanted in people with
diabetes to provide time-released amounts of insulin. A patent for this invention will set up a
temporary oligopoly for the company.
____ 25. The antitrust laws in the United States were designed to protect the interests of organizations having
monopoly positions.
____ 26. The competition between Amtrak, Hertz, and Delta Airlines for the travelers’ dollar is considered
indirect competition because these services can be substituted for one another.
____ 27. The success or failure of a product is independent of the competitive environment.
____ 28. Acquisitions and mergers help firms with limited resources to gain access to new markets or new
expertise.
____ 29. The industry deregulation phase has focused on increasing the competition in industries such as
utilities and financial services.
____ 30. Economic recovery can be described as a period when consumer spending begins to cautiously
increase, while companies try to hold down rising costs.
____ 31. Deflation is necessarily better for the economy than inflation as inflation devalues money and
reduces the purchasing power of consumers.
____ 32. The cultural diversity of the United States results in various submarkets, each with unique values,
cultural characteristics, purchasing behaviors, and consumer preferences.
____ 33. The choice between pleasing all consumers and remaining profitable—thus surviving—defines one
of the most difficult dilemmas facing business.
____ 34. The basic consumer rights expounded by President Kennedy include “the right to be safe,” referring
to the idea that the goods and services people buy should not be injurious in normal use.
____ 35. The Direct Marketing Association helps consumers to get their names removed from marketers’
targeted lists.
____ 36. Fresh Meadows, an organic yogurt manufacturer, organizes camps to assist and encourage farmers in
adopting organic farming practices. Fresh Meadows is engaging in socially responsible marketing.
____ 37. Every social network has its own search engine which allows users to search for topics that interest
them.
____ 38. CafeMom is a website that provides a platform for mothers and mothers-to-be to interact with each
other. The website also provides information on various topics such as parenting dilemmas, baby
care, and green living. CafeMom can be regarded as a social networking site.
____ 39. MacRumors.com, a website that aggregates Mac and Apple related news, rumors, and reports, can
be regarded as a blogging site as it allows users to post all the news related to a specific group of
products.
____ 40. The first step in creating a social media marketing plan is to write an executive summary.
____ 41. The overview of a social media marketing plan describes the overall market conditions and the
firm’s current position in social media.
____ 42. Marketing efforts aimed at creating brand awareness will have a broader target audience compared
to those aimed at strengthening relationships with existing customers.
____ 43. Adrian works with the marketing team of an automobile company. He oversees the look and feel of
the online communities which the company uses to market its products. His role is similar to that of
a social media designer.
____ 44. The United States has the highest number of Internet users in the World.
____ 45. A private exchange is a secure website at which a company and its suppliers share all types of data
related to e-marketing, from product design through order delivery.
____ 46. The term e-tailing refers to online retail sales.
____ 47. The use of bots has made shopping easier, as it can search hundreds of websites for information on
products that meet certain criteria set by the customer.
____ 48. Cookies and spyware are software used for protecting a website by encrypting it.
____ 49. Pure-play e-retailers, even with no real experience of selling and satisfying customers, have been
more successful than traditional retailers who entered e-business.
____ 50. For many companies, revenue is not a major website objective.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
1. Banks have recently begun to install ATMs in supermarkets to address customers’ wants for instant cash
when they go shopping. What type of utility are banks creating for customers?
a. Form
b. Possession
c. Place
d. Ownership
____
2. Which of the following is true regarding marketing?
a. The marketing concept emphasizes creating and maintaining short-term successful
relationships with customers and suppliers.
b. Marketing encompasses such a broad scope of activities and ideas that settling on one
definition is often difficult.
c. Marketing refers to an activity in which two or more parties give something of value to
each other to satisfy perceived needs.
d. The marketing concept is a belief that consumers will resist purchasing nonessential goods
and services.
____
3. The marketing philosophy summarized by the phrase “a high-quality product will sell itself” is a characteristic
of the _____ era.
a. production
b. sales
c. marketing
d. relationship
____
4. Which of the following statements regarding the marketing era is true?
a. Marketing and selling would no longer be considered synonymous terms.
b. Marketing was relegated to a supplemental role performed after the production process.
c. The marketing concept was linked to a shift from a buyer’s market to a seller’s market.
d. Business success often was defined solely in terms of production successes.
____
5. Which of the following is an example of person marketing?
a. A firm creating awareness of the importance of using public transport.
b. A country promoting its sightseeing spots and cuisines.
c. A mall being inaugurated by a popular commercial actor.
d. A firm promoting an inter-state soccer match.
____
6. Phoebe was asked to bring a can of food for the local food bank as the “price of admission” for a certain
ceremony. This is an example of _____.
a. person marketing
b. organization marketing
c. ownership utility
d. cause marketing
____
7. The Tour de Cure is a bicycle ride, not a race, to raise money for the American Diabetes Association and is
held in 40 states nationwide. This is an example of:
a. event marketing.
b. organization marketing.
c. person marketing.
d. place marketing.
____
8. As an official sponsor of the Olympics, the Coca-Cola Company engages in _____ marketing.
a. place
b. event
c. person
d. organization
____
9. Many hotel chains offer free stays and other perks to repeat customers. This is an example of:
a. relationship marketing.
b. transaction-based marketing.
c. interactive marketing.
d. social marketing.
____ 10. Buying and selling are:
a. the two exchange functions of marketing.
b. physical distribution functions.
c. exchange and distribution functions, respectively.
d. distribution and exchange functions, respectively.
____ 11. Which of the following forms the first half of the exchange process?
a. Standardizing
b. Buying
c. Selling
d. Storing
____ 12. Relationship marketing can help a company:
a. create long-term and cost-effective links with individual customers and suppliers
for mutual benefit.
b. reduce its strategic planning effort since the need for such planning is greatly
diminished by relationship marketing.
c. locate more effective media for use in advertising and mass marketing.
d. eliminate the strategic planning process and move into tactical plans directly.
____ 13. Preparation of quarterly and semiannual plans by personnel such as the general sales manager or
advertising director would be classified as _____ planning.
a. consumer
b. tactical
c. procedural
d. operational
____ 14. Which of the following best represents a mission statement?
a. U.S. Army: Be all that you can be
b. Bass Pro Shop: To be the leading merchant of outdoor recreational products,
inspiring people to love, enjoy, and conserve the great outdoors
c. Kellogg's: Breakfast cereals at a price everyone can afford
d. Walmart: Stores big enough to make shopping interesting for every family member
____ 15. Promotional schemes like frequent shopper programs provide incentives to loyal buyers.
Considering Porter’s Five Forces model, such offers will:
a. reduce the threat of new entrants.
b. decrease the rivalry among competitors.
c. decrease the bargaining power of the supplier.
d. increase the threat of substitute products.
____ 16. Bell Weddings was the company that pioneered the wedding planning industry. The owners realized
that customizing weddings to the wishes of the families, taking charge of the responsibilities, and
creating a day that is memorable for clients was an incredible business venture. The case of Bell
Weddings illustrates the value of _____.
a. organizational vulnerabilities
b. the first mover strategy
c. operating plans
d. portfolio analysis
____ 17. An example of a firm's strength discovered by a SWOT analysis might be:
a. ownership of valuable patents.
b. a narrow current product line.
c. changing buyer tastes in the marketplace.
d. existing government policies favoring the industry.
____ 18. Decisions relating to the product strategy primarily revolve around _____.
a. the promotional offers that would increase the visibility of the product in the
market
b. the features of the products being released in the market
c. the choice of high/low or everyday low pricing by the company
d. the selection of wholesalers and retailers to transport the stock to the market
____ 19. The performance framework developed by the Boston Consulting Group (BCG) plots:
a. market share against market growth potential.
b. market attractiveness against number of product lines.
c. current market conditions against past trends.
d. performance in test markets before a full-scale rollout.
____ 20. In terms of the BCG Matrix, which of the following SBUs are characterized by earning only low
market shares in low-growth markets?
a. Stars
b. Question marks
c. Dogs
d. Cash cows
____ 21. YOU Inc., a radio cassette manufacturer, sold its business due to poor market shares. According to
the BCG Matrix, the firm sold its business because the business had become a _____ as seen in its
poor prospects and performance.
a. star
b. question mark
c. cash cow
d. dog
____ 22. Pharmaceutical companies often get patents granting them the exclusive right to produce and market
drug formulations they have developed. These patents are:
a. the result of non-compete agreements signed by pharmaceutical firms.
b. in violation of ethical principles on which business is based.
c. probably of little use because what one firm can patent, another can duplicate.
d. rewards for the millions that firms have invested in the research and development
process.
____ 23. Which of the following is an example of indirect competition?
a. A Sony home entertainment system competing with a Jacuzzi hot tub
b. An ExxonMobil station opening across the street from a Shell retail outlet
c. Competition among Verizon, AT&T, and T-Mobile
d. The purchase of a Honda Accord competing with a Toyota Camry
____ 24. The _____ component of the marketing environment consists of laws that require firms to operate
under competitive conditions and to protect consumer rights.
a. economic
b. competitive
c. social-cultural
d. political-legal
____ 25. Artisanal Brands, Inc. markets and distributes a line of specialty, artisanal, and farmstead cheese
products in the United States. The company gives bulk discounts to their wholesalers. The result is
that smaller stores are getting the products at a higher rate as compared to supermarkets and large
shopping chains. These stores will be protected under the _____.
a. Sherman Antitrust Act
b. Robinson-Patman Act
c. Wheeler-Lea Act
d. Celler–Kefauver Act
____ 26. Which act prohibits restraint of trade and monopolization and identifies a competitive marketing
system as a national policy goal?
a. The Wheeler-Lea Act
b. The Sherman Antitrust Act
c. The Federal Trade Commission Act
d. The Clayton Act
____ 27. If a business refuses to comply with a request by the _____, the agency can issue a cease-and-desist
order, which gives a final demand to stop an illegal practice.
a. Environmental Protection Agency
b. Consumer Product Safety Commission
c. U.S. Department of Justice
d. Federal Trade Commission
____ 28. The Council of Better Business Bureaus is a national organization devoted to consumer
service and _____.
a. business self-regulation
b. deregulation
c. corporate lobbying
d. socially responsible investing
____ 29. In times of prosperity, marketers respond to consumer buying behavior by:
a. launching special value-priced products that are likely to appeal to cost-conscious
buyers.
b. holding down costs and offering superior services at lower prices.
c. lowering prices and increasing promotions that include special offers to stimulate
demand.
d. offering new products, increasing their promotional efforts, and expanding
distribution.
____ 30. During which phase in the business cycle do marketers consider lowering prices and increasing
promotions that include special offers to stimulate demand?
a. Prosperity
b. Recession
c. Growth
d. Maturity
____ 31. When marketers offer new products, increase their promotional efforts, and expand their
distributional limits, it is a sign of:
a. low inflation and low unemployment.
b. low inflation and high unemployment.
c. high inflation and high unemployment.
d. high inflation and low unemployment.
____ 32. Which of the following usually indicates a strong economy?
a. Growth in services such as banking and restaurants
b. Cautious spending by businesses and consumers
c. A focus on basic, functional products with lower price tags
d. Increase in purchasing power coupled with uncertain consumer demand
____ 33. _____ are used by the federal government to control extreme fluctuations in the business cycle that
can lead to a depression.
a. Deregulation
b. Monetary and fiscal policies
c. Stringent environmental policies
d. Mergers and acquisitions
____ 34. It is believed that marketers need to reevaluate their strategies and concentrate on their most
promising products during the _____ stage of the business cycle.
a.
b.
c.
d.
recession
recovery
maturity
prosperity
____ 35. The amount of money available with people after buying necessities such as food, clothing, and
housing is referred to as _____.
a. basic income
b. gross income
c. discretionary income
d. personal income
____ 36. It has been seen that periods of major innovations often lead to:
a. reduced personal consumption.
b. higher standards of living.
c. decreased annual spending.
d. reduced discretionary income.
____ 37. Which technology creates a common interface for data to be carried across networks between
different devices?
a. IMS
b. Wi-Fi
c. VoIP
d. RFID
____ 38. Topix.net is a website that allows people to comment on news articles and report on events occurring
in their local communities. It also allows users to edit and rate the topics of their choice. Topix.net
can be grouped under which of the following social media platforms?
a. Social blogging sites
b. Social networking sites
c. Online forums
d. Social news sites
____ 39. Which of the following is a unique feature of social media marketing?
a. It is limited by geographical boundaries.
b. It creates ways for customers to engage in conversations with each other and the
organization.
c. It seeks to control the content and message received by the audience.
d. It mainly focuses on promoting the company outright rather than focusing on the
audience.
____ 40. In a B2B context, businesses use social media mainly to:
a. share views and make final buying decisions.
b. learn about new goods and services.
c. connect with the general public.
d. build relationships, including partnerships with other companies.
____ 41. The individual who creates and oversees the look and feel of an online community, Facebook page,
or other branded content for a particular company is called a(n) _____.
a.
b.
c.
d.
online community manager
social media designer
content programmer
blogger
____ 42. The most important goal of a marketing website is to:
a. give prospective employees the opportunity to apply for jobs online.
b. provide financial information to investors.
c. increase purchases by visitors.
d. build relationships with customers.
____ 43. Which of the following is true of B2B E-marketing?
a. It cannot be used to provide detailed product descriptions.
b. It can help slash order-processing expenses.
c. It is a minor part of the e-business activity and typically involves less steps
compared to consumer purchases.
d. It is not a very attractive option for buying and selling as more errors occur when
orders are placed over the Internet.
____ 44. Which of the following terms refers to a company website that sells products to customers?
a. Information kiosk
b. Corporate website
c. Online community
d. Electronic storefront
____ 45. It is now possible to enter into legal contracts online, due to the development of:
a. the electronic shopping cart.
b. the electronic signature.
c. cloud computing.
d. data scrambling technology.
____ 46. Channel conflicts can be defined as conflicts:
a. over revenue sharing between manufacturers and their workers.
b. among manufacturers, wholesalers, and retailers.
c. among customers and marketers regarding data privacy and information security.
d. between marketers and the government over legal issues.
____ 47. Online communities like Internet forums, newsgroups, and social networking sites take advantage of
the _____ function of the Internet.
a. entertainment
b. communication
c. information
d. comparison
____ 48. Specialized online services that center on a specific topic or area of interest, such as white water
rafting or stamp collection, are known as:
a. electronic bulletin boards.
b. podcasts.
c. blogs.
d. social networks.
____ 49. Web-to-store shoppers are a group of consumers who:
a. purchase an item online after having inquired about it by visiting a store.
b. purchase the primary item on the Web and go to the store to buy accessories.
c. use the Internet as a tool when shopping at brick-and-mortar retailers.
d. promote online purchasing of products.
____ 50. The Metrics Group is a firm that helps companies improve the performance of their websites. The
firm rates the effectiveness of the website based on the percentage of website visitors making
purchases through the site. Which of the following measures is being used by the firm while
assessing the effectiveness of the websites?
a. Click-through rate
b. Brand awareness
c. Conversion rate
d. Customer engagement
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