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Test 930
MARKETING MANAGEMENT
1
1. The Uniform Commercial Code that regulates the way companies do business across state lines in the
United States is the basis for which of the following international agreements:
A. Contracts for the International Sale of Goods (CISG)
B. General Agreement on Tariffs and Trade (GATT)
C. North American Free Trade Agreement (NAFTA)
D. International Monetary Fund (IMF)
2. Which of the following retailers would be most likely to be part of the producer to retailer to consumer
channel:
A. Small boutique
C. Specialty shop
B. Large retail chain
D. Locally owned pharmacy
3. If a wholesaler objects to a supplier's policies restricting trade or competition, it is illegal for the supplier to
__________ with the wholesaler.
A. refuse to deal
C. communicate
B. comply
D. do business
4. Moving a product to market and making it available and accessible to customers are important activities
that influence the rest of the
A. product mix.
C. promotional plan.
B. marketing mix.
D. merchandise plan.
5. What does a channel of distribution usually need to be able to manage or avoid conflict within the
channel?
A. Updated technology
C. Equal authority
B. Strong leadership
D. Limited competition
6. Before a business can effectively evaluate members in its distribution channel, it must first
A. assess its logistics needs.
C. identify potential vendors.
B. conduct a location feasibility study.
D. develop a strategic alliance.
7. When developing performance standards for suppliers, businesses should make sure that the standards
are fair, understandable, and
A. measurable.
C. sensitive.
B. convenient.
D. unique.
8. One of the advantages of rehearsing an oral presentation is that it gives the businessperson the
opportunity to
A. organize new information.
C. time the presentation.
B. prepare attractive visuals.
D. anticipate questions.
9. The focus of most letters that a business writes to its customers should be about the
A. customers' interests.
C. business's history.
B. business's services.
D. customers' opinions.
10. What is a type of informal communication that coworkers often use to communicate with each other?
A. Structured
C. Network
B. Feedback
D. Grapevine
11. What might a business lose if an advertisement attracted new customers, but they were greeted by a
discourteous employee?
A. Negative impression
C. Service problems
B. Frequent complaints
D. Repeat business
Copyright © 2008 by Marketing Education Resource Center®, Columbus, Ohio
Test 930
MARKETING MANAGEMENT
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12. The most important business policy affecting customers directly is the ___________ policy.
A. promotional
C. credit
B. product
D. service
13. A company purchased a POS terminal for use in its new facility. This POS terminal would be classified in
economic terms as a(n) __________ good.
A. industrial
C. intangible
B. ultimate
D. consumer
14. Which of the following would affect demand for a consumer magazine:
A. The magazine's delivered circulation
C. The usefulness of the magazine
B. The number of inserts in the magazine
D. The cost of advertising in the magazine
15. A country's easy monetary policy is often used to correct the problem of
A. unemployment.
C. globalization.
B. high taxes.
D. import quotas.
16. Private enterprise is often called a __________ economy.
A. traditional
C. command
B. market
D. subsistence
17. Leonardo's is considering opening a second location in a nearby city. The owners are concerned with the
competition they might face from a business that is not quite like theirs, but also competes for scarce
consumer dollars. What form of competition are they facing?
A. Indirect
C. Direct
B. Price
D. Nonprice
18. What is the most appropriate instructional method for telling new employees about the history of the
company?
A. Mentor
C. Lecture
B. Demonstration
D. Simulation
19. What usually decreases as the rate of inflation increases?
A. Purchasing power
C. Export quotas
B. Interest rates
D. Money supply
20. The contraction stage of the business cycle is characterized by decreases in
A. sales and profits for businesses.
C. interest rates on loans.
B. savings by consumers.
D. unemployment.
21. One way to develop an achievement orientation is to establish
A. safe conditions.
C. personal relationships.
B. flexible deadlines.
D. reachable goals.
22. When businesses use teams to solve problems, they often are encouraging the teams to
A. manage diversity.
C. decide legal issues.
B. bring about change.
D. provide training.
23. Recognizing the work and accomplishments of employees often helps to build their
A. agreement.
C. self-esteem.
B. understanding.
D. sensitivity.
24. Businesses should view negotiation as a way to
A. keep negative people quiet.
B. get something done.
C. get the action they want.
D. build strong relationships.
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25. Which of the following speculative risks would most likely increase or decrease a business's income:
A. Facing a product liability suit
C. Investing in a variety of stocks
B. Receiving an insurance settlement
D. Losing the services of key executives
26. Which of the following is the most critical step in reducing business risk:
A. Installing a telephone code
C. Developing a financial plan
B. Organizing an inventory system
D. Preparing an employment policy
27. A business had sales last year of $235,000 and is forecasting a 4% increase for the coming year. What is
the sales forecast in dollar figures?
A. $240,000
C. $244,400
B. $239,000
D. $238,500
28. Budgets can be described in terms of:
A. account books, bills, and bankruptcy.
B. money, maps, and management.
C. desires, debt, and discipline.
D. savings, sales, and success.
29. Using the following information in a financial statement, determine what percent of net sales is gross
margin: net sales is $9,000; cost of goods sold is $6,000; and gross margin is $3,000.
A. 50%
C. 67%
B. 33%
D. 72%
30. The Tillman Company allocates its marketing budget by first setting its various marketing goals and then
determining costs associated with meeting those goals. What budgeting method is the Tillman Company
using to allocate marketing funds?
A. Forecast-and-outcome
C. Rule-of-thumb
B. Objective-and-task
D.
31. A business calculates the return on marketing investment (ROMI) to determine the
A. overall operating expenses.
C. success of a marketing program.
B. response rates of opt-in e-mail.
D. need for additional government bonds.
32. The Kenton Company introduced a new product line that earned significant profits, but also took market
share from its other products. This is an example of product
A. shifting.
C. cannibalization.
B. mix.
D. transference.
33. Why do human resources personnel usually have the responsibility of conducting exit interviews with
employees who are leaving the company rather than the employees' immediate supervisors?
A. Employees may be reluctant to give information in person.
B. Employees rarely have any valuable information or suggestions.
C. Employees may be reluctant to criticize the department or supervisor.
D. Employees may have suggestions for improving the human resources department.
34. Which of the following is an indicator that governments use to measure the state of the economy:
A. Consumer spending
C. Tax incentive
B. Regional competition
D. Market structure
35. Training which is conducted for the business, on a contractual basis, by professional consultants,
educational agencies, or trade and professional organizations is known as __________ training.
A. group
C. external
B. internal
D. on-the-job
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36. The two approaches supervisors may take toward disciplinary problems are
A. remediation and disciplinary suspension.
B. peer counseling and supervisory discipline.
C. preventive discipline and corrective discipline.
D. preventive discipline and corrective counseling.
37. Which of the following is an example of an external resource that a business might need to complete a
project:
A. Vendor
C. Team leaders
B. Company supervisor
D. Employees
38. The KEY Company needs to replace its marketing vice president. To find external candidates with
specific qualifications, the company might consider
A. placing an ad in the local newspaper.
C. contacting an executive recruiter.
B. promoting the marketing manager.
D. contracting with a temporary agency.
39. When processing payroll, why is it important for businesses to gather information about deductions and
hours worked?
A. To estimate commission rate
C. To forecast expenses
B. To calculate net pay
D. To analyze liabilities
40. The search capabilities of the Internet allow businesses to locate large amounts of specific information in
a matter of seconds and
A. protect the privacy of the web site.
C. analyze the value of the data.
B. create targeted questionnaires.
D. download the data for future use.
41. How could a business use marketing-research information it has gathered about the average age,
income, educational levels, and spending patterns of area consumers?
A. To establish an appropriate operating budget C. To identify problems within the business
B. To create a mailing list for the business
D. To develop a profile of the typical customer
42. Businesses often ask for the customer's zip code at the checkout counter to obtain immediate information
about
A. how much customers can pay for products.
C. a geographic area for a direct-mail campaign.
B. how often customers visit the business.
D. the average age of customers.
43. When a company is determining how to manage its marketing information, it must consider its needs and
its
A. channels.
C. resources.
B. ratios.
D. ranges.
44. Would a successful business ever change its marketing strategy?
A. No, changing marketing strategies is a complicated process.
B. Yes, a business should have no more than two marketing strategies.
C. Yes, changes in the marketplace require changes in marketing strategy.
D. No, once a business has a workable strategy, it should always be used.
45. Which of the following is a demographic characteristic used in market segmentation:
A. Income level
C. Lifestyle
B. Loyalty response
D. Personality
46. Which of the following is a geographic characteristic that businesses often use to identify market
segments:
A. Natural environment
C. Location of population
B. Country of origin
D. Physical surrounding
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47. Why is it important for a business to continually perform the marketing planning process, and revise and
update its marketing objectives and strategies?
A. To maintain adequate inventory levels
C. To reflect current wants and needs
B. To gather information from outside sources
D. To identify rising costs and expenses
48. Why do businesses often conduct an environmental scan to gather information about changes or trends
that are beginning to develop in the marketplace?
A. To develop new products
C. To analyze training needs
B. To identify potential threats
D. To predict future sales
49. Before deciding to enter the international market, businesses usually assess global trends and
opportunities to make sure there is a
A. method in place to expedite distribution.
B. market for their products in other countries.
C. work force that understands technological advancements.
D. government that is based on a democratic system.
50. Which of the following is an example of an internal change that could affect a business's sales forecast:
A. A new product line is to be offered by the business.
B. The birth rate increased following the Iraqi war.
C. A direct competitor is planning a new promotional campaign.
D. The economy is struggling with a major drop in stock market prices.
51. Which of the following is a characteristic of all effective marketing goals:
A. Controversial
C. Impractical
B. Qualitative
D. Specific
52. One reason it is important for a business to develop a marketing plan is that the plan
A. reduces the need to implement corrective action or contingency plans.
B. provides guidelines for personnel to meet the company's objectives.
C. increases the business's financial security in an unpredictable environment.
D. allows the business to focus on short-term goals instead of long-term goals.
53. One reason why a business conducts an annual review of the marketing plan is to
A. check for mistakes.
C. share information with employees.
B. meet federal standards.
D. set the stage for long-term market planning.
54. What do most businesses maintain to help them plan future sales and promotional activities?
A. Operating procedures
C. Inventory systems
B. Advertising proofs
D. Customer records
55. As a result of conducting an environmental scan, a business might find that the rate of unemployment is
slowly increasing, which is an example of a(n) __________ factor.
A. economic
C. political
B. geographic
D. cultural
56. Which of the following is a way that accidents are costly to employees:
A. Expensive repairs
C. Lost production
B. Lost income
D. Decreased sales
57. Which of the following is the last step in the industrial purchasing process:
A. Confirm delivery.
C. Identify needs.
B. Negotiate discounts.
D. Select supplier.
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58. Why is production important to businesses?
A. It creates goods and services businesses can sell.
B. It prevents businesses from wasting resources.
C. It enables businesses to charge high prices.
D. It informs businesses about consumers' needs and wants.
59. Which of the following is one of the biggest expenses that employees can help a business to control:
A. Payroll
C. Rent
B. Advertising
D. Taxes
60. Before negotiating a maintenance contract for new office equipment, a business owner should compare
the vendor's standard contract with the
A. financial data.
C. product warranty.
B. compliance policies.
D. restocking charges.
61. Why is it important for a business to keep its selling area neat and clean?
A. To interest employees
C. To please vendors
B. To satisfy inspectors
D. To attract customers
62. When a business pays a fee to a research firm so it can obtain secondary marketing information from a
subscriber-accessible database, it is purchasing marketing data from
A. syndicated services.
C. Intranet resources.
B. mining scouts.
D. statistical wholesalers.
63. If a business does not have internal resources to address legal and regulatory issues, it may decide to
contract the services of a(n)
A. research analyst.
C. tax accountant.
B. organizational consultant.
D. law firm.
64. One reason that a business tracks its marketing budget is to make sure that the projected expenses are
the same as
A. the operating costs.
C. last year's sales forecast.
B. last year's expenditures.
D. the actual expenses.
65. What should job applicants offer to do in the closing paragraph of an interview follow-up letter?
A. Work for a reduced salary
C. Send an appropriate gift
B. Provide further information
D. Accept any available job
66. Employees or companies are most likely to lose professional certification or operating licensure if they
participate in
A. lobbying efforts.
C. dangerous events.
B. illegal activities.
D. offensive actions.
67. Amy's job involves developing products and implementing strategies to communicate the products' value
to consumers through imagery. In which area of marketing management does Amy work:
A. Buying
C. Branding
B. Logistics
D. Finance
68. Which of the following is a potential consequence of unethical behavior associated with the product
function of marketing:
A. Industry collusion
C. Physical injury
B. Customer loyalty
D. Biased information
69. A primary goal of marketing management is to utilize a variety of resources to
A. force consumers to buy.
C. attract and keep customers.
B. promote self-interests.
D. encourage free trade.
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70. One reason it is important for marketing professionals to follow ethical standards is to
A. improve working conditions and financial security.
B. remove the risk of uncontrolled competition in the marketplace.
C. build positive relationships with other individuals and businesses.
D. prevent unnecessary changes in the business environment.
71. Which of the following is an advantage to marketing professionals who participate in professional
organizations:
A. Networking opportunities
C. Complimentary goods
B. Financial responsibilities
D. Instant recognition
72. A time-management technique that helps to ensure that the most important tasks get done is to prepare
a(n)
A. lead list.
C. daily schedule.
B. estimated budget.
D. job description.
73. If the only reason a business sets very low prices on products is to try to drive competitors out of
business, that practice is considered to be
A. ineffective.
C. misleading.
B. unethical.
D. deceptive.
74. In determining the selling price of a good or service, most of the factors to be considered by the seller are
internal to the business.
A. True, most factors affecting price are directly controlled by the business.
B. True, most factors affecting price are internal to the business.
C. False, most factors affecting price are not controlled by the firm.
D. False, most factors affecting price are directly controlled by the business.
75. An exclusive suite hotel that changes its marketing strategy to appeal to families rather than to
executives is an example of
A. regional advertising.
C. product screening.
B. concept testing.
D. product repositioning.
76. Why does a company need to know what stage of the product life cycle its products are in?
A. To prevent imitators from entering the market
B. To find new uses for the product
C. To predict the length of the life cycle
D. To adapt its marketing strategies
77. Satellite communications systems often impact the product/service management function by helping
businesses to
A. use software.
C. track shipments.
B. evaluate information.
D. order replacements.
78. When Devon had an idea for a new product option based on an existing product, the new product is
called a(n)
A. model replacement.
C. substitute.
B. brainstorm.
D. intangible item.
79. How do marketers measure the feasibility of a product idea?
A. Write a marketing proposal.
C. Develop a customer survey.
B. Make a prototype of the product.
D. Evaluate it against general criteria.
80. Which of the following is an example of an ongoing process that businesses can use to recognize
product opportunities:
A. Reviewing sales forecasts
C. Analyzing corporate objectives
B. Talking with customers and employees
D. Adding items to the product mix
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81. Businesses that satisfactorily handle purchasers' problems with a warranted or guaranteed product
usually increase
A. employee morale.
C. consumer complaints.
B. customer loyalty.
D. government intervention.
82. Which of the following laws prevents Joe Camel from being seen on television advertisements for
tobacco products:
A. The Cigarette Labeling and Advertising Act of 1967
B. The Fair Packaging and Labeling Act of 1967
C. The Federal Food, Drug, and Cosmetic Act of 1938
D. The Public Health Cigarette Smoking Act of 1971
83. Which product mix strategy should be tried first when sales of a product or product line decline?
A. Expansion
C. Alteration
B. Contraction
D. Trading-up
84. A business might bundle products together to sell at a lower price for a limited time in order to
A. eliminate cash shortages.
C. monitor promotional activities.
B. limit product returns.
D. encourage future sales.
85. Under which of the following circumstances should the supply of employees increase:
A. The business is closed for the day.
B. There is a high demand for customer service.
C. There are few customers in the store.
D. The business is in an off-season.
86. What is a strategy that a business might use to position its product?
A. Determine the target market
C. Develop a promotional plan
B. Focus on a competitor's weakness
D. Advertise a mission statement
87. A direct benefit to businesses of promotional activities is
A. a reduction in costs.
C. deceptive advertising.
B. debates over controversial issues.
D. increased product sales.
88. Which of the following is an example of a socially responsible promotional message:
A. If you want to be the center of attention, buy our product.
B. Our products outperform our competitors' products.
C. We construct our products with recycled materials.
D. The first 100 customers who visit the business will receive a free coffee cup.
89. Which of the following is a technological tool that marketers often use to record information and send it as
direct mail, so customers can view product data on their personal computers:
A. Sample pack
C. Cassette tape
B. Tracking cookie
D. Compact disk
90. A local dry cleaner sent out mailings promoting its alteration services that the company thought
consumers might be unaware of. This kind of direct-mail promotion is known as
A. reminder.
C. utility.
B. persuasive.
D. informative.
91. A primary advantage for marketers who use direct mail to promote products is that
A. it is more effective in creating brand awareness than television advertising.
B. most marketers find that it is more effective than micro-marketing methods.
C. it is usually less expensive than personal selling methods.
D. marketers can deliver their messages to a broad audience.
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92. What is one of the main reasons that a business develops a promotional plan?
A. To identify target market
C. To create consumer demand
B. To select advertising media
D. To conduct market research
93. You successfully sell the company's new product line to Ms. Jones, and she offers to put you in touch
with other businesses that might be interested in your product. What type of benefit of building a clientele
is this?
A. Loyalty
C. Referral
B. Word-of-mouth advertising
D. Repeat sales
94. Priority Auto maintains a database of e-mail addresses for its service customers. When it is time for the
next service check, an e-mail is sent to remind the customer to bring in the vehicle. This is an example of
how technology
A. enhances communication and follow-up with customers.
B. streamlines all aspects of the selling process.
C. contributes to intraorganizational communication.
D. facilitates cross-functional teaming.
95. Which of the following might a salesperson rely on to obtain firsthand product knowledge:
A. Vendor information
C. Personal experience
B. Customer opinion
D. Government reports
96. Which of the following is an example of a hidden benefit that salespeople should point out to customers:
A. Material
C. Comfort
B. Appearance
D. Warranty
97. Reaffirming the buyer-seller relationship is a step in the selling process that often leads to
A. repeat sales.
C. discovering needs.
B. initial contact.
D. reaching closure.
98. Which of the following is an ethical issue that a business manager might encounter:
A. Span of control
C. Conflict of interest
B. Balance of trade
D. Return on investment
99. Intermediaries are among the environmental factors that affect a business's planning because
intermediaries are responsible for
A. keeping pace with technological changes.
C. providing information about competitors.
B. researching the target market.
D. linking producers and consumers.
100. The primary purpose for establishing marketing policies is to
A. inform employees about government regulations.
B. provide guidelines for decision making.
C. reduce operating costs and waste.
D. confirm brand awareness with targeted messages.
Test 930
MARKETING MANAGEMENT — KEY
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1. A
Contracts for the International Sales of Goods (CISG). This agreement was developed by the United
Nations and is also referred to as the Vienna Convention. It is based on the Uniform Commercial Code
(UCC) which is a large set of business laws that clarify many laws relating to commercial transactions in
the United States. These laws govern the way that companies do business with each other and with
consumers across state lines. Many nations throughout the world have adopted the CISG which provides
uniformity to international contracts and business dealings. The General Agreement on Tariffs and Trade
(GATT) is an agreement among many nations to encourage economic cooperation and liberalization of
international trade. The North American Free Trade Act (NAFTA) is an agreement among the United
States, Canada, and Mexico eliminating all of their trade barriers. The International Monetary Fund (IMF)
provides loans to countries to encourage international trade and stabilize monetary systems.
SOURCE: BL:004
SOURCE: Jennings, M.M. (2000). Business: Its legal, ethical and global environment (5th ed.)
[pp. 213-215]. Cincinnati: West Legal Studies in Business, South-Western College
Publishing.
2. B
Large retail chain. Large department stores and retail chains are among those who usually deal directly
with producers. When it is not possible for a producer to reach a large number of consumers on a direct
basis, retailers can provide wide distribution of products to consumers at lower costs than producers can
on a direct basis. All of the other alternatives are businesses that would buy from intermediaries because
their orders would be too small for direct purchase from the producers.
SOURCE: CM:003
SOURCE: MB LAP 3—Channels of Distribution
3. A
Refuse to deal. It is illegal for a supplier to refuse to deal with a channel member in an existing
distribution channel solely because the channel member disagrees with a policy that may be illegal in
itself (i.e., restricts trade or limits competition). Suppliers routinely communicate and do business with
wholesalers, but not doing so is not illegal. Suppliers usually try to comply with a wholesaler's requests.
SOURCE: CM:005
SOURCE: Pride, W.M., & Ferrell, O.C. (2000). Marketing: Concepts and strategies (2000e)
[pp. 366-367]. Boston: Houghton Mifflin.
4. B
Marketing mix. Although distribution decisions do not necessarily precede other marketing decisions,
they must be acknowledged as an important influence on the marketing mix of a product. Products must
be available and accessible in order for customers to be able to buy. Product mix, promotional plans, and
merchandise plans are also considered in the marketing mix.
SOURCE: CM:007
SOURCE: Pride, W.M., & Ferrell, O.C. (2000). Marketing: Concepts and strategies (2000e) [p. 351].
Boston: Houghton Mifflin.
5. B
Strong leadership. A channel of distribution that has strong leadership is often able to manage or avoid
conflict because the leadership has the power to assign specific responsibilities to each channel member.
Strong leadership has the authority to set goals for the entire channel and demand cooperation, which
reduces the possibility of conflict. When a channel has strong leadership, channel members work for the
good of the channel rather than for their individual goals. A channel of distribution does not need updated
technology or limited competition to manage or avoid conflict within the channel. Equal authority might
create conflict because there is no clear leader who has power and control over the channel.
SOURCE: CM:008
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 444-445]. Mason,
OH: Thomson/South-Western.
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6. A
Assess its logistics needs. As a company grows and changes, its needs and objectives often change,
too. Before a business can determine if channel members meet its needs, it must first determine its own
needs. By assessing logistics needs such as customer requirements, industry trends, environmental
issues, technological developments, and current distribution inefficiencies, it can establish criteria to
evaluate channel-member performance level. Identification of potential vendors and the development of a
strategic alliance are factors that are considered after the logistics needs assessment is complete. A
location feasibility study is conducted when a company wants to evaluate property for business
operations.
SOURCE: CM:011
SOURCE: Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics: A
supply chain perspective (7th ed.) [p. 421]. Mason, OH: South-Western.
7. A
Measurable. Standards are specifications or statements that are used as a basis for comparing or
judging goods or services. Standards help a business evaluate how well its suppliers are meeting its
needs. So the business can determine at what level its suppliers are meeting its needs, the standards
should be measurable. Each standard should have a numerical value assigned to determine its worth or
rating. To build and maintain positive channel relationships, the standards should be fair and
communicated so that each channel member understands what is expected. The standards do not need
to be convenient, sensitive, or unique.
SOURCE: CM:016
SOURCE: Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics: A
supply chain perspective (7th ed.) [pp. 484-486]. Mason, OH: South-Western.
8. C
Time the presentation. Rehearsing the presentation provides the businessperson with an opportunity to
time the presentation and decide what revisions are needed before the actual presentation. In many
situations, businesspeople are allowed only a certain amount of time to make presentations. Therefore, it
is necessary to include all the important information within that time frame. Timing the presentation in
advance will allow the businessperson to be sure that the complete message is being presented. Visuals
should be prepared in advance in order to use them during the rehearsal. All information should be
included in the presentation before it is rehearsed. Businesspeople do not rehearse presentations to
anticipate questions.
SOURCE: CO:025
SOURCE: Hyden, J.S., Jordan, A.K., Steinauer, M.H., & Jones, M.J. (1999). Communicating for
success (2nd ed.) [p. 94]. Cincinnati: South-Western Educational.
9. A
Customers' interests. Businesses' letters to customers should have a "you" perspective. The letters may
include information about the business's history and/or services, but these factors should be linked to
meeting customers' needs. In most cases, customers' opinions are not known by businesses and cannot
be addressed.
SOURCE: CO:133
SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [p. 282].
Boston: Irwin/McGraw-Hill.
10. D
Grapevine. Grapevine is an oral communication method in which information is passed around the
company but not formally announced or verified. Coworkers frequently discuss company issues and pass
on information from one department to another through the grapevine. Employees often obtain
information and communicate it to others by the grapevine before management makes an official
announcement. Feedback is evaluative information given by supervisors to employees. Network is a
system of contacts within and outside the organization. Structured is formal communication.
SOURCE: CO:014
SOURCE: DuBrin, A.J. (2003). Essentials of management (6th ed.) [pp. 357-359]. Mason, OH:
South-Western.
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MARKETING MANAGEMENT — KEY
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11. D
Repeat business. A business needs to maintain a positive relationship with customers in order to attract
repeat business. Customers who encounter discourteous treatment by employees often do not return.
The loss of repeat business is very costly because it is more expensive to attract new customers than to
keep existing ones. Also, customers who are poorly treated usually tell others. As a result, many potential
customers may decide not to do business with the company. Customers who are treated discourteously
by employees often complain about the business, develop a negative impression of the business, and
experience service problems.
SOURCE: CR:003
SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 11-14). Mason, OH: SouthWestern.
12. B
Product. The most important business policy affecting customers is the product policy. Management
decides what kind of products to offer, and these products attract customers more than any other feature
of the business. Service policies provide special features that other, similar businesses may not offer,
such as delivery or installation. Credit policies are the arrangements by which customers can purchase
now and pay later. Promotional policies are guidelines affecting the kinds of special activities, such as
contests and prizes, that businesses use to attract customers and to increase sales.
SOURCE: CR:007
SOURCE: HR LAP 25—Interpreting Business Policies
13. A
Industrial. The POS terminal was purchased by the business to carry out its daily operations. It is,
therefore, considered an industrial good. Goods and services that are purchased by the ultimate
consumer are referred to as consumer goods. Intangible goods are those goods which cannot be
touched. For example, a motion picture and a bus ride are intangible.
SOURCE: EC:002
SOURCE: EC LAP 10—Goods and Services
14. C
The usefulness of the magazine. The primary factor in determining demand is product usefulness, or
utility. Consumers will buy magazines that are useful or of particular interest to them. The cost of
advertising in the magazine would affect the decision of businesses interested in purchasing advertising.
Inserts are advertisements printed on separate sheets for inclusion in newspapers. Delivered circulation
would be an indication of demand since it is a figure based on the number of copies sold on newsstands
and through subscriptions.
SOURCE: EC:005
SOURCE: EC LAP 11—It's the Law (Supply and Demand)
15. A
Unemployment. If a country is experiencing a time of high unemployment, it often relaxes the monetary
policy to stimulate economic growth. For example, interest rates might be lowered to encourage
businesses to borrow money to expand. As a result, more jobs become available and the high
unemployment problem is eliminated. A country's easy monetary policy is not used to correct the problem
of high taxes, globalization, or import quotas.
SOURCE: EC:073
SOURCE: McConnell, C.R., & Brue, S.L. (2005). Economics: Principles, problems, and policies
(16th ed.) [pp. 278-279]. Boston: McGraw-Hill/Irwin.
Test 930
MARKETING MANAGEMENT — KEY
13
16. B
Market. Private enterprise is often called a market economy because individuals and businesses in the
marketplace answer the economic questions of what, how, and for whom to produce. A private enterprise
or market economy is an economic system in which individuals and groups, rather than government, own
or control the means of production. A traditional or subsistence economy is an economic system in which
people produce only what they must have in order to exist and all economic decisions are based on habit
and tradition. A command economy is an economic system in which all or many of the means of
production and distribution are owned and controlled by the government.
SOURCE: EC:009
SOURCE: EC LAP 15—Private Enterprise
17. A
Indirect. Indirect competition is a rivalry between or among businesses that offer dissimilar goods or
services. All businesses compete for scarce consumer dollars that might be spent on goods and services
different from their own. Price competition is a type of rivalry between or among businesses that focuses
on the use of price to attract scarce customer dollars. Nonprice competition is a type of rivalry between or
among businesses that involves factors other than price. Direct competition is rivalry between or among
businesses that offer similar types of goods or services.
SOURCE: EC:012
SOURCE: EC LAP 8—Ready, Set, Compete!
18. C
Lecture. The lecture method is useful for presenting general information to a large number of people at
one time. In demonstrations, new employees watch procedures to be learned as they are presented by
an experienced worker. Mentors are experienced workers who answer questions and guide new
employees during the first few weeks of employment. Simulation is a technique that approximates reality.
SOURCE: HR:361
SOURCE: MN LAP 44—Orienting New Employees
19. A
Purchasing power. Purchasing power is a consumer's ability to purchase goods and services. The rate of
inflation, the percentage of change in price levels, has a major effect on purchasing power because when
inflation is high, a dollar will not buy as much. For example, if the rate of inflation increases from last year
to this year, $1.00 will buy less this year than it did last year. If inflation increases and incomes stay the
same, people will lose purchasing power and not be able to buy the same amount of goods and services.
Money supply is the total quantity of money that exists at one time in a nation. The interest rate is the
percentage figure used in calculating interest charges. Export quotas are the restrictions on the quantity
of goods that can move out of a country.
SOURCE: EC:083
SOURCE: O'Sullivan, A., & Sheffrin, S.M. (2003). Economics: Principles in action (pp. 342-343). Upper
Saddle River, NJ: Prentice Hall.
20. A
Sales and profits for businesses. The contraction stage occurs when the demand for products starts to
fall and unemployment rises. Consumers spend less and save more during the contraction phase. This
results in fewer sales and less profits for businesses. Interest rates on loans increase rather than
decrease during this phase.
SOURCE: EC:018
SOURCE: EC LAP 9—Business Cycles
Test 930
MARKETING MANAGEMENT — KEY
14
21. D
Reachable goals. Individuals who have an achievement orientation want to do their best and be
successful. One way to develop an achievement orientation is to establish reachable goals. Achieving
goals builds confidence and self-esteem and encourages individuals to continue achieving. If the goals
are unrealistic, individuals might fail, which often leads to giving up rather than trying to achieve in the
future. In order to achieve, it is often necessary to establish firm deadlines. Establishing personal
relationships and safe conditions are not ways of developing an achievement orientation.
SOURCE: EI:027
SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (p. 198). New York:
Glencoe/McGraw-Hill.
22. B
Bring about change. Team building is an organizational development technique that businesses often
use to bring about change. When businesses develop teams, they often want the teams to address
certain problems within the organization. The purpose of the teams is to find solutions to the problems
and recommend changes that will correct the problems. One issue that teams might address is the way
the business handles diversity in the workplace. Teams are not expected to decide legal issues or
provide training. However, they may suggest that the business hire an attorney or provide training to
employees to solve certain problems.
SOURCE: EI:044
SOURCE: Lussier, R.N. (2003). Management fundamentals: Concepts, applications, skill development
(2nd ed.) [pp. 219-223]. Mason, OH: South-Western.
23. C
Self-esteem. Self-esteem is the way a person feels about him/herself at any given time. Recognizing the
work and accomplishments of employees often helps to build their self-esteem because it makes them
feel good about themselves. Recognition helps people feel important and respected, which leads to an
increase in self-esteem. Understanding is grasping the meaning. Agreement is a negotiation outcome.
Sensitivity is responsiveness to the feelings of others.
SOURCE: EI:014
SOURCE: QS LAP 13—Gimme Five!
24. D
Build strong relationships. Negotiation can be a means of strengthening long-term relationships with
customers, suppliers, coworkers, and other businesses. Negotiation demands a spirit of cooperation.
Entering negotiation with the idea of getting a certain action, keeping negative people quiet, or getting
something done will not produce a situation that allows everyone to feel they have gained through the
process.
SOURCE: EI:062
SOURCE: U.S. Small Business Administration, Online Women's Business Center. (n.d.). Negotiating:
You've Done It Before. Retrieved October 25, 2005, from
http://www.sba.gov/test/wbc/docs/manage/negotiating.html
25. C
Investing in a variety of stocks. Investing in a variety of stocks is a speculative risk because there is a
chance of loss, no change, or gain. Depending on which stocks a business buys and how well they
perform in the market, the business could significantly increase or decrease its income. Businesses
cannot purchase insurance to protect them from losses that result from speculative risks because taking
the risk is voluntary. Businesses receive insurance settlements to cover losses from pure risks. Losing
the services of key executives due to injury or death is a pure risk that can be covered by life insurance.
Businesses also purchase insurance to protect them from losses that might result from a product liability
suit.
SOURCE: FI:080
SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:
Teacher's manual (2nd ed.) [p. 377]. New York: Glencoe/McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
15
26. C
Developing a financial plan. The development of a financial plan is the most critical step in reducing
business risk. The goal of the financial plan is to reduce the need for capital to the lowest possible level
and still produce the desired profit. Managers need to become familiar with financial terms and with the
five financial tools that are used to make the necessary estimates in order to alter their marketing
strategy to reflect financial realities. Organizing an inventory system, installing a telephone code, and
preparing an employment policy are not steps in reducing business risk.
SOURCE: FI:084
SOURCE: BA LAP 2—Risk Management
27. C
$244,400. In order to determine the sales forecast in dollar figures, multiply the percent of increase by
last year's sales figure ($235,000 x 4% or .04 = $9,400). Add this figure to last year's sales ($235,000 +
$9,400 = $244,400) to obtain a sales forecast of $244,400.
SOURCE: FI:096
SOURCE: IM LAP 4—Forecasting Sales
28. B
Money, maps, and management. Budgets can be described in terms of money, maps, and management.
Budgets are about money, can be compared to maps, and are great management tools. Account books,
bills, and bankruptcy; desires, debt, and discipline; and savings, sales, and success are all related to
certain aspects of budgeting, but none describes its main characteristics as well as money, maps, and
management.
SOURCE: FI:106
SOURCE: FI LAP 3—Money Tracks
29. B
33%. The formula for determining gross margin as a percentage of sales is gross margin divided by net
sales = percent of gross margin. In this case, divide gross margin by net sales ($3,000 ÷ $9,000 = .33 or
33%).
SOURCE: FI:102
SOURCE: Stull, W.A. (1999). Marketing and essential math skills: Teacher's edition (p. 240).
Cincinnati: South-Western Educational.
30. B
Objective-and-task. A marketing budget is an estimate of income and expenses associated with
marketing activities for a specific time. Businesses use one, or a combination of, methods to determine
how much money to allocate for anticipated marketing expenses. The objective-and-task method
involves setting marketing goals (objectives) and determining the tasks (activities) necessary to achieve
the goals. After determining the tasks that the business needs to implement to achieve the goals, the
business can estimate the costs associated with the tasks. The rule-of-thumb considers historical data to
allocate the budget, such as previous sales, and the previous expenses of similar marketing activities.
Competitive parity is a rule-of-thumb budgeting method that is based upon the company's market share.
Forecast-and-outcome is a fictitious term.
SOURCE: FI:320
SOURCE: Grewal, D., & Levy, M. (2008). Marketing (pp. 476-478). New York: McGraw-Hill.
31. C
Success of a marketing program. The return on marketing investment (ROMI) is the profit divided by the
investment, which provides information about how successful a marketing program or an element of a
marketing program was in terms of what the returns (generally sales revenue) were for the money
expended (invested). E-mail response rates might be variables considered when determining the ROMI.
A business does not calculate the ROMI to determine overall operating expenses, nor does it calculate
ROMI to determine the need for additional government bonds.
SOURCE: FI:321
SOURCE: Etzel, M. J., Walker, B. J., & Stanton, W. J. (2007). Marketing (14th ed.) [p. 14]. New York:
McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
16
32. C
Cannibalization. This is the situation that exists when the sale of one of a company's products takes
away sales from another of its products. A business must monitor the financial gains of new products that
it provides against financial losses that the existing products experience resulting from lower market
share. If market share and financial losses are significant, the business might consider eliminating the
existing, older products. This situation might occur if the cost to produce or stock a product is higher than
the sales it brings in. Product mix is the particular assortment of goods and services that a business
offers in order to meet the needs of its market(s) and its company goals. Product shifting and product
transference are fictitious terms.
SOURCE: FI:324
SOURCE: Etzel, M. J., Walker, B. J., & Stanton, W. J. (2007). Marketing (14th ed.) [pp. 573-573].
New York: McGraw-Hill.
33. C
Employees may be reluctant to criticize the department or supervisor. Employees may resign because
they are unhappy with their supervisor or the way the department is managed. If their supervisor
conducts the exit interview, they may not be truthful in explaining their reasons. For this reason, it is
better to have the human resources department conduct exit interviews. Employees will be more
comfortable giving critical information that may help the business to make improvements. Most
employees are not reluctant to give information in person. They often have valuable suggestions for
improving their departments rather than the human resources department.
SOURCE: HR:357
SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)
[p. 640]. Cincinnati: South-Western.
34. A
Consumer spending. Governments monitor consumer spending because it indicates the state of the
economy. Consumer spending is an indication of the state of the economy because consumers spend
money when the economy is stable or growing. However, if the economy is slowing down, consumers
usually reduce spending because they are concerned about possible unemployment or an increase in
interest rates. Regional competition, tax incentive, and market structure are not indicators that
governments use to measure the state of the economy.
SOURCE: EC:081
SOURCE: Burrow, J.L. (2006). Marketing (2nd ed.) [p. 395]. Mason, OH: South-Western.
35. C
External. External training is readily available in most locations. Internal training is provided by
management or the company's training staff and is usually conducted within the business. On-the-job
training occurs when employees receive instruction at the work site and learn by doing. Group training
involves a small group of employees or the entire workforce in training at the same time and is usually
used for explaining theory or reasons for a specific operation.
SOURCE: HR:362
SOURCE: MN LAP 42—Training/Human Resource Development
36. C
Preventive discipline and corrective discipline. Preventive discipline involves managing people in a
certain way so that behaviors which would require discipline are prevented. Corrective discipline is used
to discourage further violations after infractions have already occurred. Remediation is the umbrella term
which includes both forms of disciplinary action. Corrective counseling is a discussion of an infraction and
may be used as part of the corrective discipline process. Peer counseling involves persons on an equal
level. It may also be used to change negative behaviors. Supervisory discipline refers to the level of the
employee being disciplined.
SOURCE: HR:369
SOURCE: MN LAP 53—Remedial Action
Test 930
MARKETING MANAGEMENT — KEY
17
37. A
Vendor. A vendor or supplier provides goods and services to the business that the business cannot
produce itself. To complete a project, a business might need certain supplies or special services that it
does not have within the organization. Because the business cannot obtain the supplies or services
within the organization, the supplies or services are external resources. Company supervisors, team
leaders, and employees are internal human resources.
SOURCE: HR:400
SOURCE: Gido, J., & Clements, J.P. (2003). Successful project management (2nd ed.) [pp. 241, 415].
Mason, OH: South-Western.
38. C
Contacting an executive recruiter. Recruiters are individuals or firms that help businesses locate qualified
employees for a fee. Executive recruiters usually specialize in locating high-level candidates who
possess specific qualifications. Because executive recruiters have the resources and networking
capabilities, they often can find qualified candidates for businesses quickly and less expensively than the
businesses themselves. Placing a classified ad in the local newspaper and contracting with a temporary
agency are not the most reliable methods for attracting qualified, high-level executives. Promotions
involve internal rather than external job candidates.
SOURCE: HR:408
SOURCE: Dessler, G. (2000). Human resource management (8th ed.) [pp. 147-149]. Upper Saddle
River, NJ: Prentice Hall.
39. B
To calculate net pay. Net pay is the amount of money an employee actually receives after all deductions
are subtracted from gross pay. In order to calculate net pay, businesses must gather information about
deductions and hours worked. For example, some employees might have deductions for taxes, health
insurance premiums, union dues, and retirement funds, while other employees have deductions only for
taxes. Therefore, the amount of deductions will be different. Also, some employees are paid a higher
hourly rate than others, and some employees are paid a straight salary. Businesses must consider all of
the differences when processing payroll in order to calculate the correct net pay for each employee.
Businesses do not gather information about deductions and hours worked to estimate commission rate,
forecast expenses, or analyze liabilities.
SOURCE: HR:394
SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal
finance (pp. 612-613). New York: Glencoe/McGraw-Hill.
40. D
Download the data for future use. Businesses often use the search capabilities of the Internet to look for
marketing information that would take a long time to find using conventional research techniques. The
technology that makes the Internet possible allows businesses to quickly and inexpensively search for
information throughout the world. Searching online allows businesses to locate large amounts of specific
information in a matter of seconds. Once a business locates useful marketing information online, it can
download the information to a disk and print hard copies. This enables businesses to refer to the data
whenever necessary and keep the information for future use. The search capabilities of the Internet do
not allow businesses to create targeted questionnaires, analyze the value of the data, or protect the
privacy of the web site.
SOURCE: IM:183
SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach
for the new millennium (pp. 120-124). Boston: Irwin/McGraw-Hill.
41. D
To develop a profile of the typical customer. Demographic information is often gathered through
marketing research. The business can use such information to develop a profile of the typical customer in
order to try to meet customers' needs. The business cannot create a mailing list from this information
since names and addresses are not included in the data. The information also would not help the
business to identify internal problems or set up an operating budget.
SOURCE: IM:010
SOURCE: IM LAP 5—Nature of Marketing Research
Test 930
MARKETING MANAGEMENT — KEY
18
42. C
A geographic area for a direct-mail campaign. Businesses often collect zip code information to find out
where their customers live. Then, they use the information to mail promotional materials to residents of
those areas. Zip code information does not tell how often customers shop. While zip codes are useful
when researching census or other demographic information, they will not in themselves tell how much
customers can pay or the average age.
SOURCE: IM:182
SOURCE: U.S. Small Business Administration (n.d.). What is marketing research? Retrieved August 28,
2007, http://www.sba.gov/starting_business/marketing/research.html
43. C
Resources. Because companies provide different products to different target markets, their marketinginformation needs differ, too. Therefore, a company must consider its unique needs and resources when
developing a system to manage its marketing information. For example, a large business that has several
staff members (human resources) and a lot of money (financial resources) has the ability to build a more
complex technological system than a small company with a few employees and little money. A company
does not consider ratios, channels, and ranges when it determines how to best manage its marketing
information.
SOURCE: IM:163
SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [pp. 99-100]. Upper
Saddle River, NJ: Prentice Hall.
44. C
Yes, changes in the marketplace require changes in marketing strategy. Changes such as price
increases, new competition, or an increase in operating expenses require that businesses have flexible
strategies. A responsible business operation will be prepared to redesign its strategies as needed.
SOURCE: MP:001
SOURCE: IM LAP 7—Pick the Mix
45. A
Income level. Demographic segmentation divides a market by characteristics people have in common
that affect their purchasing power. In addition to income level, demographic characteristics include age,
gender, educational level, life stage, and occupation. Lifestyle and personality are examples of
psychographic characteristics. Loyalty response is a type of behavioral segmentation.
SOURCE: MP:003
SOURCE: IM LAP 9—Have We Met?
46. C
Location of population. Geographic segmentation is the division of a market on the basis of where
consumers are located. Many businesses identify market segments based on geographics because
people in different parts of the country or in different parts of the world have different wants and needs
based on where they live. For example, people who live in mountainous areas need different products
than people who live by an ocean. By identifying these various market segments, businesses will be able
to understand their different wants and needs. Country of origin is the part of the world from which a
person has come. Natural environment and physical surrounding are not considered geographic
characteristics.
SOURCE: MP:004
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [p. 235]. Mason, OH:
Thomson/South-Western.
Test 930
MARKETING MANAGEMENT — KEY
19
47. C
To reflect current wants and needs. Marketing planning is the process of identifying objectives, and
developing marketing strategies to achieve those goals. Because the market is continually changing,
marketing planning is an ongoing process. Businesses need to continually perform this process in order
to revise and update marketing objectives and strategies to reflect current wants and needs. If
businesses fail to remain current, they run the risk of losing customers to competitors that are more in
tune with current wants and needs. Part of the marketing planning process involves gathering information
from outside sources in order to identify new trends. Businesses do not continually perform the marketing
planning process to maintain adequate inventory levels or to identify rising costs and expenses.
SOURCE: MP:006
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 40-41].
Mason, OH: Thomson/South-Western.
48. B
To identify potential threats. Businesses often use a procedure known as environmental scanning to
gather information about changes or trends that are beginning to develop in the marketplace. This
procedure allows businesses to identify changes at an early stage and decide if they present a threat to
the way the business is currently operating. Identifying potential threats enables a business to adapt and
remain competitive. Businesses do not conduct environmental scans to develop new products, analyze
training needs, or predict future sales. However, the results of an environmental scan might lead a
business to develop new products or provide additional training for salespeople.
SOURCE: MP:008
SOURCE: Zikmund, W.G., & d'Amico, M. (1999). Marketing (6th ed.) [pp. 43-44]. Cincinnati: SouthWestern College.
49. B
Market for their products in other countries. Before businesses decide to enter the international market,
they usually assess global trends and opportunities to make sure there is a market for their products in
other countries. Businesses want to find out if foreign countries have prosperous economies which will
allow citizens to buy products. They also want to find out what consumers in other countries want and
need. Once they assess the situation, businesses can decide if they will be successful in the international
market. Then, they analyze the distribution method. It is not always necessary for a work force to
understand technological advancements, as many products are not technical in nature. Businesses are
not restricted to dealing with governments that are based on a democratic system.
SOURCE: MP:011
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 102-105].
Mason, OH: Thomson/South-Western.
50. A
A new product line is to be offered by the business. Internal changes are circumstances within the
business. They include changes in personnel, promotion, pricing, product lines, distribution processes,
and marketing strategies. The business has control over internal changes and can adapt its sales
forecast accordingly. External changes occur outside the business, and businesses have no control over
these changes. Competitors' actions, population changes, and economic changes are examples of
external factors that can affect sales forecasts.
SOURCE: MP:013
SOURCE: IM LAP 3—Nature of Sales Forecasts
51. D
Specific. A marketing plan is a set of procedures or strategies for attracting the target customer to a
business. Marketing goals are the goals that a business seeks to reach with its marketing plan. Effective
marketing goals are attainable, measurable, time bound, and specific. The goals are not necessarily
qualitative, which are goals based on expert opinion and personal experience, nor are they always
controversial. The business should not develop impractical goals.
SOURCE: MP:015
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 34). New York:
Glencoe/McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
20
52. B
Provides guidelines for personnel to meet the company's objectives. A marketing plan is a set of
procedures or strategies designed to attract target customers to a business. A comprehensive marketing
plan identifies the specific actions and activities that a company will use to attract its target customers.
Therefore, the marketing plan provides guidance for employees who are carrying out the marketing
activities. Because internal and external factors change, a marketing plan does not reduce the need for a
business to develop corrective action or contingency plans, nor does it increase its financial security.
Marketing plans contain both short-term and long-term goals.
SOURCE: MP:018
SOURCE: Boone, L.E., & Kurtz, D.L. (2002). Contemporary marketing (p. 202). Mason, OH: SouthWestern.
53. D
Set the stage for long-term market planning. Businesses review their marketing plans to do long-term
planning, which may result in expansion or diversification. Businesses do not review marketing plans to
check for mistakes, meet federal standards, or share information with employees.
SOURCE: MP:022
SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:
Teacher's manual (2nd ed.) [p. 175]. New York: Glencoe/McGraw-Hill.
54. D
Customer records. Most businesses maintain customer records that contain information about what
customers are buying, when they are buying, and how much they are buying. By analyzing this
information, businesses are able to plan future sales and promotional activities that will appeal to
customers and encourage them to buy. Without this type of information, businesses might have no idea
what customers will want to buy in the future. Businesses do not maintain advertising proofs, inventory
systems, or operating procedures to help them plan future sales and promotional activities.
SOURCE: NF:002
SOURCE: Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 120-121]. Mason, OH: South-Western.
55. A
Economic. An environmental scan is an analysis of external forces that influence a business's success.
The fluctuation of unemployment rates is an economic factor because unemployment has an effect on
consumers' ability to buy goods and services. If consumers are unemployed, they do not have income to
spend. As a result, businesses do not sell as much because consumers are not buying. When this
situation occurs, businesses often reduce expenses in an attempt to stay in business until the rate of
employment starts to rise again. The rate of unemployment is not a geographic, political, or cultural
factor.
SOURCE: NF:015
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 30-32, 84-86).
New York: Glencoe/McGraw-Hill.
56. B
Lost income. Accidents are costly to both employers and employees. One way that accidents are costly
to employees involves missing work and losing income. Some workers may be temporarily or
permanently disabled and lose income for a long period of time or have their income drastically reduced.
Expensive repairs, lost production, and decreased sales are ways that accidents are costly to employers.
SOURCE: OP:009
SOURCE: RM LAP 3—Handling Accidents
57. A
Confirm delivery. The final step in the industrial purchasing process is expediting, or following up, to
confirm delivery. Once the purchase order has been accepted, the purchaser usually contacts the vendor
as the agreed-upon delivery date approaches in order to make sure the shipment will arrive on schedule.
Selecting suppliers, negotiating discounts, and identifying needs are earlier steps in the industrial
purchasing process.
SOURCE: OP:015
SOURCE: PU LAP 1—Purchasing
Test 930
MARKETING MANAGEMENT — KEY
21
58. A
It creates goods and services businesses can sell. Production is important to businesses because
without production, businesses would have nothing to sell. All businesses must have products to sell in
order to remain in business. Businesses must control production costs so that they do not have to charge
higher prices than competitors. Marketing research, not production, informs businesses about
consumers' wants and needs. Only if production is efficient does it prevent businesses from wasting
resources.
SOURCE: OP:017
SOURCE: BA LAP 1—Nature of Production
59. A
Payroll. One of a business's biggest expenses is payroll. Therefore, it is important for businesses to get
full value for their payroll dollars in order to control expenses. Employees who arrive on time and work
their designated hours are helping to ensure that the business receives the time it pays for. Advertising,
taxes, and rent are other types of business expenses that are not under the employee's control.
SOURCE: OP:025
SOURCE: MN LAP 56—Employee Role in Expense Control
60. C
Product warranty. A warranty is a promise made by the seller to the buyer that the seller will repair or
replace a product that does not perform as expected. The terms of warranties vary but might include free
labor, parts, and service calls for a specific amount of time after the purchase. It is important to compare
the terms of a maintenance contract for a new piece of equipment because it is possible that many
stipulations in the warranty are covered in the standard maintenance contract. In this situation, the
business owner could pay for goods and services offered in the maintenance contract that are already
provided in the warranty. Restocking fees are charges that a buyer pays to return unwanted goods to the
seller. Compliance policies and financial data are general terms and are not generally used to compare
maintenance contracts.
SOURCE: OP:027
SOURCE: CA Dept. of Consumer Affairs. (n.d.). Consumer Tips on Product Service Contracts.
Retrieved August 28, 2007, from http://www.bear.ca.gov/service-contract/service-tips.pdf
61. D
To attract customers. Customers usually prefer to shop at businesses that are clean and neat. Keeping
the selling area in good condition promotes an image that appeals to customers and encourages them to
buy. Customers are more likely to be attracted to clean businesses, which often leads to an increase in
sales. Businesses do not keep their selling areas neat and clean in order to satisfy inspectors, please
vendors, or interest employees.
SOURCE: OP:032
SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)
[pp. 318-320]. Upper Saddle River, NJ: Prentice Hall.
62. A
Syndicated services. Many businesses do not have the resources to obtain primary information to make
marketing decisions. Therefore, they often use secondary marketing information, which is data that is
collected for purposes other than the project or problem at hand. Purchasing relevant secondary
information from reputable sources is a cost-effective way of obtaining a variety of information to help
businesses make marketing decisions. Many businesses subscribe to syndicated services, which are
organizations that have access to vast amounts of information, such as statistical data, demographics,
and psychographics. Businesses do not subscribe to obtain data from mining scouts, Intranet resources,
or statistical wholesalers.
SOURCE: OP:181
SOURCE: Burns, A.C., & Bush, R.F. (2000). Marketing research (3rd ed.) [pp. 193-195]. Upper Saddle
River, NJ: Prentice Hall.
Test 930
MARKETING MANAGEMENT — KEY
22
63. D
Law firm. Many businesses do not have the expertise to address legal issues such as complex contracts,
lawsuits, and other legal issues. When such issues arise, they often contract these services from law
firms. Lawyers have the special training and necessary knowledge to interpret the various laws that affect
businesses. A tax accountant possesses knowledge about taxation issues that affect businesses. A
research analyst interprets certain types information or data. A business would hire an organizational
consultant if it wanted to find ways to streamline and improve business processes and workflow.
SOURCE: OP:182
SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal
finance (p. 111). New York: Glencoe/McGraw-Hill.
64. D
The actual expenses. A marketing budget is an estimate of the projected income and expenses for a
certain period--usually 12 months. Businesses track their budgets to make sure they are not spending too
much money. If businesses do not review their budgets, and they spend too much money on their
marketing activities, they may not have enough income to cover the expenses. Therefore, ideally, the
projected and actual expenses are the same. Although a business often considers historical data (e.g.,
previous sales and expenses) when developing the budget, costs tend to increase somewhat, and are
not variables to consider when actually tracking the budget. Operating costs are projected on the
operating budget rather than the marketing budget.
SOURCE: OP:185
SOURCE: Ivancevich, J., & Duening, T. (2007). Business: Principles, practices, and guidelines (2nd ed.)
[p. 562]. Mason, OH: Thomson.
65. B
Provide further information. By offering to provide further information, applicants are indicating their
interest in the job without stating it directly. They are reinforcing their desire to be hired. Interviewers
usually take this type of offer to mean that the applicant wants to be seriously considered for the position.
Applicants have applied for a specific job and should not offer to take anything that is available. The job
they have applied for has a specific salary range, and it would be inappropriate to offer to work for less.
Applicants are not expected to send gifts of any type to interviewers.
SOURCE: PD:029
SOURCE: Daggett, W.R., & Miles, J.E. (1998). The dynamics of work: Introduction to occupations
(2nd ed.) [p. 72]. Cincinnati: South-Western Educational.
66. B
Illegal activities. When people participate in illegal business activities, they are not only breaking societal
laws, they are breaching a professional code of conduct, or ethical behavior. Often, professionals that
have special certification to work in a specific field are subject to probation or certification loss if they
break the law and breach the industry's code of ethics. Companies that have licenses to perform certain
business activities can also have their licensure revoked. Participating in dangerous events or offensive
actions does not always involve breaching ethics. Lobbying efforts are activities that are intended to
influence legislation.
SOURCE: PD:130
SOURCE: Miller, R.L., & Jentz, G.A. (2005). Fundamentals of business law (6th ed.) [p. 126]. Mason,
OH: Thomson/South-Western.
67. C
Branding. A brand is all of the combined impressions and experiences associated with a particular
company, good, or service. Businesses develop strategies to position their products and communicate
certain images about the products to attract their target markets. People who work to create products,
and implement strategies to position and brand the products are commonly called brand managers.
Logistics refer to the framework a business uses to coordinate various efforts, such as product
distribution. Buying is a function (activity) of purchasing or product acquisition. Finance involves
managing and obtaining funds for the use of achieving the business's goals.
SOURCE: PD:133
SOURCE: Etzel, M. J., Walker, B. J., & Stanton, W. J. (2007). Marketing (14th ed.) [pp. 227-228].
New York: McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
23
68. C
Physical injury. When a marketer's actions contradict the behavior standards that an organization
establishes, the marketer is being unethical. Unethical behavior can occur in all aspects of marketing
including promotion, channel management, research, and product management. When marketers do not
behave ethically, they often face negative consequences. For example, if a business sells an untested
product, consumers might incur injury or illness if the product is misused or consumed. Customer loyalty
is a positive outcome of ethical behavior. Collusion, or price fixing, is unethical behavior associated with
the pricing function. Biased information is a consequence of marketing research that is performed
incorrectly or haphazardly.
SOURCE: PD:135
SOURCE: Zikmund, W.G., & d'Amico, M. (1999). Marketing (6th ed.) [p. 54]. Cincinnati: South-Western
College.
69. C
Attract and keep customers. Marketing management involves all of the systematic processes that
companies use to develop and deliver products to their customers and to communicate how those
products provide customer value and satisfaction. Companies use these processes, strategies, and
activities to attract and keep customers because without customers, the companies would not be in
business. While companies must meet business objectives, they should promote product value to the
customers rather than their self-interests. Businesses cannot force consumers to buy their products. Free
trade occurs when countries allow product exchange with other nations with few, if any, government
restrictions.
SOURCE: PD:136
SOURCE: Kotler, P., & Keller, K. L. (2006). Marketing management (12th ed.) [pp. 6-7]. Upper Saddle
River, NJ: Prentice-Hall/Pearson Education.
70. C
Build positive relationships with other individuals and businesses. Ethical standards are guidelines for
behavior. Because personal ethics among people vary, some industries develop ethical standards so that
each person working in the industry knows what is acceptable and not acceptable behavior in the
profession. Businesses and employees who follow these standards demonstrate integrity and build trust
with customers, other organizations, and community members. The primary purpose of following ethical
standards in marketing is not to remove competition from the marketplace, improve working conditions
and financial security, or prevent changes in the business environment.
SOURCE: PD:137
SOURCE: Etzel, M. J., Walker, B. J., & Stanton, W. J. (2007). Marketing (14th ed.) [pp. 17-18].
New York: McGraw-Hill.
71. A
Networking opportunities. A professional organization consists of people who work in the same career or
industry, who share common business interests, and who work together to focus on expanding
professional knowledge and building strong professional standards. Networking is exchanging
information with others for the purpose of professional or business development and/or advancement. By
sharing information with others, marketing professionals often obtain new ideas, discover new ways to
address problems, and learn about new job opportunities. Financial responsibilities might be considered
disadvantages. Complimentary goods and instant recognition are not primary advantages to marketers
who participate in professional organizations.
SOURCE: PD:144
SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 112-114).
New York: Glencoe/McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
24
72. C
Daily schedule. After you identify your activities, estimate how much time they will take, and identify their
importance, you need to schedule when the activity will be completed during the day. A scheduled
activity is much more likely to be carried out than one that has not been put on the schedule. A budget
estimates what income and expenses will be for a specific period of time. A lead list is a list of
organizations or individuals who might be interested in a salesperson's good or service. A job description
is a written record of the duties and responsibilities associated with a particular job.
SOURCE: PD:019
SOURCE: OP LAP 1—About Time (Time Management in Business)
73. B
Unethical. Setting very low prices on products to try to drive competitors out of business is an example of
predatory pricing. In most cases, this type of pricing is considered unethical because its only purpose is
to eliminate competition. Once businesses have driven out competitors, they usually raise prices because
customers now have nowhere else to buy those products. This type of pricing often is effective in
attracting customers; however, it is unethical because it eliminates competition. This type of pricing is not
misleading or deceptive because it clearly advertises a very low price.
SOURCE: PI:015
SOURCE: Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd ed.)
[pp. 326-327]. Boston: Irwin/McGraw-Hill.
74. C
False, most factors affecting price are not controlled by the firm. Most of the factors to be considered in
setting prices are external to the business. These factors are not controlled by the firm and include such
factors as supply and demand, economic conditions, competition, and channel members.
SOURCE: PI:002
SOURCE: PI LAP 3—Factors Affecting Selling Price
75. D
Product repositioning. Product/Service management continues even after the product is established in
the market. Its performance must be monitored so that, if necessary, changes can be made to extend its
life cycle. Sometimes a product is repositioned in order to attract new users. An exclusive suite hotel that
changes its marketing strategy to appeal to families rather than to executives is repositioning itself as a
family-oriented property. Concept testing is exploring the concept, or idea, for a product in order to obtain
feedback. Product screening is the process of considering each idea for a new product and discarding
those that seem unworkable. Advertising is any paid form of nonpersonal promotion of ideas, goods, or
services.
SOURCE: PM:001
SOURCE: PP LAP 5—Product/Service Planning
76. D
To adapt its marketing strategies. Businesses change their marketing strategies as their products go
through the stages of the life cycle. This means that companies need to know where products are in their
life cycles in order to use marketing strategies appropriate for each stage. It is not usually possible to
prevent imitators from entering the market or to predict the length of a product's life cycle. Finding new
uses for the product is a marketing strategy that is used to boost sales for a mature product.
SOURCE: PM:024
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 557-559]. Woodland Hills, CA: Glencoe/McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
25
77. C
Track shipments. An important part of product/service management involves maintaining and improving
the good or service because customers expect a quality good or service that keeps up with advances in
technology. Satellite communications systems make it possible for businesses to track shipments for
customers, thereby improving the good or service. If a business sells a product, it can track the product
from the time it is ordered until it is delivered. If the business sells a service such as delivery, it can use
satellite communications systems to track the delivery process. Satellite communications systems do not
help businesses to order replacements, evaluate information, or use software.
SOURCE: PM:039
SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an
e-commerce world (7th ed.) [pp. 124-125]. Mason, OH: South-Western.
78. C
Substitute. Often, people think of new product ideas by altering existing products. The substitute item
does not always replace the original item, but it provides the target market with another option that will
still satisfy its needs and wants. For example, when making notes, people have their choice of using
small notepaper or post-its, which are small notepads with an adhesive that sticks to objects.
Brainstorming is a creative-thinking technique. A model is a small-scale representation of an item.
Intangible products cannot be detected through the senses and are services that people perform rather
than items people make.
SOURCE: PM:127
SOURCE: PM LAP 11—Unleash Your Oh! Zone (Product Idea Generation)
79. D
Evaluate it against general criteria. Before a business invests time, personnel, and money to take an idea
and turn it into a product, it must determine if the product is feasible or reasonable to make and market
successfully. By establishing criteria (judgment statements or standards), the business can weigh the
pros and cons of the idea before going forward with product development. A business develops a product
prototype after determining that the idea is feasible. A survey is a marketing-research tool that a business
uses to obtain information about a good or service. Simply developing a customer survey does not
establish the feasibility of the product idea. Additionally, writing a marketing proposal does not help the
business determine the product idea's feasibility.
SOURCE: PM:129
SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (p. 281). Tinley Park, IL:
Goodheart-Willcox.
80. B
Talking with customers and employees. A product opportunity is a situation in which a business acts on
the chance to provide a good or service to a market segment that wants and is willing to pay for the
product. Businesses must develop processes for recognizing product opportunities so that they can
continue to compete in the marketplace. By talking with customers and the employees who are in contact
with customers, a business can get ideas about what customers want. Then, the business can analyze
the feedback to develop new products to meet the customers' needs. Reviewing sales forecasts,
analyzing corporate objectives, and adding items to the product mix do not help businesses recognize
product opportunities.
SOURCE: PM:136
SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an
e-commerce world (7th ed.) [pp. 286-287]. Mason, OH: South-Western.
81. B
Customer loyalty. Warranties and guarantees can be used to foster customer loyalty. When a business
handles a customer's problem with a warranted or guaranteed product satisfactorily, the customer feels
good about the business and is more likely to buy from it again. Increasing employee morale is not the
purpose of handling such problems effectively, although that may occur. Satisfactorily handling problems
generally reduces the number of consumer complaints and decreases the possibility of government
intervention.
SOURCE: PM:020
SOURCE: PP LAP 4—Warranties and Guarantees
Test 930
MARKETING MANAGEMENT — KEY
26
82. D
The Public Health Cigarette Smoking Act of 1971. This law banned radio and television advertising of
tobacco products. The Fair Packaging and Labeling Act of 1967 includes laws that require product labels
to identify the product, provide the names and addresses of the producer or distributor, and describe the
contents of packages. The Federal Food, Drug, and Cosmetic Act of 1938 bans the production,
transportation, and sale of misbranded or adulterated foods, drugs, cosmetics, and medical devices;
requires testing of new drugs and generic labeling of all drugs; sets standards for production and sale of
poisonous substances; and sets quality standards for foods. The Cigarette Labeling and Advertising Act
of 1967 requires labels of cigarette packages to include warnings about the hazards of smoking.
SOURCE: PM:017
SOURCE: PP LAP 7—Consumer Protection in Product Planning
83. C
Alteration. Alteration is making changes in the company's products or product lines. It is wise to try this
method first when product sales of a product or product line decline because it is less expensive than
developing a new product or product line. Expansion is adding product items or product lines. This would
not solve the problem of declining sales of another product or product line. Contraction is deleting or
removing products or product lines. This method could be used if alteration does not succeed. Trading-up
is adding a higher priced product or product line to the product mix. This would not stop the decline of
sales in other product lines.
SOURCE: PM:003
SOURCE: PP LAP 3—Product Mix
84. D
Encourage future sales. Product bundling involves combining goods and/or services and offering them to
customers as one product for a lower price than if the customers were to buy all of the products
individually. The reason why businesses bundle products is to get customers to try a product they would
not normally purchase. If the customers try the product, and like it, they might purchase the product as an
unbundled item at another time, which encourages future sales. Businesses do not bundle products so
they can limit returns, monitor promotional activities, or eliminate cash shortages.
SOURCE: PM:041
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 425-426].
Mason, OH: Thomson/South-Western.
85. B
There is a high demand for customer service. It's the basic law of supply and demand: The supply of
employees should always meet or exceed the demand for their services in order for a business to
prevent long customer waits and poor service. If there are only a few customers in the store, it is actually
okay for the supply of employees to go down because it will still be possible to meet their service needs.
It makes sense that when the business is closed, there will be fewer employees at work. During offseasons (e.g., winter in the lawn-care industry), it is acceptable to have a small supply of employees
(e.g., landscapers) to take care of service demands.
SOURCE: PM:013
SOURCE: PM LAP 1—Customer Service Supersized!
86. B
Focus on a competitor's weakness. Before a positioning strategy is chosen, a company must decide how
it is going to differentiate itself from competitors. One way is to identify a weakness that a competitor has.
Then, the company points out that it has something to offer that the competitors don't have. A business
usually determines its target market before developing a positioning strategy. Once the strategy is in
place, a business might develop a promotional plan and advertise a mission statement.
SOURCE: PM:043
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 560-561]. Woodland Hills, CA: Glencoe/McGraw-Hill.
Test 930
MARKETING MANAGEMENT — KEY
27
87. D
Increased product sales. Businesses use promotion to "spread the word" to consumers that they offer
certain products which often result in increased sales. Businesses may also benefit from a more
favorable corporate image. Deceptive advertising, added costs, and debates over controversial issues
are disadvantages to the business.
SOURCE: PR:001
SOURCE: PR LAP 2—Promotion
88. C
We construct our products with recycled materials. Social responsibility is the duty of a business to
contribute to the well-being of society. Many consumers are concerned about the environment and prefer
to purchase items made with recycled materials. Businesses often develop promotional messages that
inform consumers that they make their products with recycled materials. When a business claims that its
products perform better than its competitors' products, it is comparing products. A message that implies
that a person can be popular if s/he purchases a certain product is sending a materialistic message.
Giving out coffee cups is an example of a sales promotion.
SOURCE: PR:099
SOURCE: Arens, W.F. (2004). Contemporary advertising (9th ed.) [p. 71]. Boston: Irwin/McGraw Hill.
89. D
Compact disk. A compact disk is a small optical disk that has the ability to hold large amounts of
information. A business can record promotional information about its products on compact disks and
send the disks as direct mail to the business's target market. The direct-mail recipients can then view the
promotional information on their computers. A cookie is a text file that is put on a web-site visitor's hard
disk and then later retrieved during subsequent visits to the site in order to track Internet behavior.
Cassette tapes record and play audio data by using a tape recorder, which many people consider
obsolete. Sample packs, which are samples of a product that a recipient can try, are often part of directmail promotional pieces. However, sample packs do not necessarily include compact disks.
SOURCE: PR:100
SOURCE: Arens, W.F. (2004). Contemporary advertising (9th ed.) [p. 571]. Boston: Irwin/McGraw Hill.
90. D
Informative. Informative direct mail provides consumers with background information on a good or
service. The dry cleaner wants consumers to know what types of alterations it offers. Persuasive direct
mail is a type of direct mail used by businesses to encourage immediate action through the use of selfaddressed, stamped, reply envelopes or toll-free telephone numbers. Reminder direct mail is a type of
direct mail primarily intended to make the consumer consider the good or service. Utility direct mail is the
functional part of a direct mailing such as a business-reply postcard.
SOURCE: PR:007
SOURCE: PR LAP 3—Ad-quipping Your Business
91. C
It is usually less expensive than personal selling methods. Direct mail is defined as promotional
messages that are sent directly to consumers' homes and businesses. Direct mail appears in many
forms, including postal mail (e.g., catalogs, sales letters) and electronic mail (e-mail). Personal selling is a
form of promotion that determines client needs and wants and responds through planned, personalized
communication that influences purchase decisions and enhances future business opportunities. Although
developing direct-mail pieces can be expensive, personal selling is generally considered the most
expensive promotional method. Micro-marketing is a general term that is sometimes used to describe
target marketing. Direct mail (e.g., junk mail, spam) is not necessarily more effective in creating brand
awareness than television advertising. Direct mail is used more often with targeted markets, rather than
broad audiences.
SOURCE: PR:089
SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [p. 507]. Upper Saddle
River, NJ: Prentice Hall.
Test 930
MARKETING MANAGEMENT — KEY
28
92. C
To create consumer demand. One of the main objectives of developing a promotional plan is to create
consumer demand for the business's goods or services. The promotional plan is a framework for the
promotional activities of a business. A business designs a specific plan in the hopes of attracting
customers and creating in them a desire to purchase the business's goods or services. Identifying the
target market, selecting advertising media, and conducting market research are steps in developing a
promotional plan rather than reasons for developing one.
SOURCE: PR:073
SOURCE: Lovelock, C., & Wright, L. (1999). Principles of service marketing and management (p. 513).
Upper Saddle River, NJ: Prentice Hall.
93. C
Referral. Referrals are individuals or businesses to whom salespeople are recommended. Loyal
customers often provide salespeople with leads to new clients. Repeat sales are sales made to the same
customer over and over again. Word-of-mouth advertising is promotion or publicity for a business
provided by customers who tell others of their satisfaction. Loyalty is preference for a business that
results from building goodwill.
SOURCE: SE:828
SOURCE: SE LAP 115—Keep Them Loyal (Building Clientele)
94. A
Enhances communication and follow-up with customers. This use of technology improves communication
and follow-up and leads to repeat business. Customers are more likely to respond positively when they
are reminded about needed service. Cross-functional teaming refers to improving the ability of different
teams within an organization to work together in various areas. This would streamline the follow-up step
but not all aspects of the selling process. Intraorganizational communication refers to communication
within the organization rather than outside of the organization.
SOURCE: SE:107
SOURCE: Ingram, T.N., LaForge, R.W., Avila, R.A., Schwepker, C.H., & Williams, M.R. (2001).
Professional selling: A trust-based approach (pp. 131-133). Mason, OH: South-Western.
95. C
Personal experience. An effective way of obtaining firsthand product knowledge is for a salesperson to
use the product personally. Salespeople who use the products they sell find out exactly how the product
works and often are better able to answer customers' questions. Personal experience is a good way of
learning about products. Customer opinion, vendor information, and government reports are not ways of
obtaining firsthand product knowledge.
SOURCE: SE:062
SOURCE: Burrow, J.L. (2002). Marketing (pp. 465-467). Mason, OH: South-Western.
96. C
Comfort. Hidden benefits are advantages that cannot be seen or understood without the assistance of a
salesperson. For example, when buying a pair of shoes, the customer can see the color and style of the
shoes but may be unaware of the shoe's comfort unless the salesperson points out that benefit.
Explaining hidden benefits often helps a salesperson to increase sales. Material, appearance, and
warranty are examples of features rather than benefits.
SOURCE: SE:109
SOURCE: SE LAP 113—Find Features, Boost Benefits (Feature-Benefit Selling)
97. A
Repeat sales. Reaffirming the buyer-seller relationship through effective follow-up serves to nurture and
maintain this relationship after the initial sale. This reaffirmation often leads to repeat sales because the
customer is satisfied with the service. Initial contact is the approach. Discovering needs and reaching
closure take place before reaffirming the buyer-seller relationship.
SOURCE: SE:048
SOURCE: SE LAP 126—The Selling Process
Test 930
MARKETING MANAGEMENT — KEY
29
98. C
Conflict of interest. Managers might encounter a conflict of interest if they are unable to be objective
when making decisions about employees. For example, if they are friends with an employee, they might
not want to give that person a negative performance evaluation even though it is justified. In those
situations, managers should remove themselves in order to be ethical and allow a manager who is not a
friend of the employee to conduct the evaluation. Balance of trade is the difference between the value of
a nation's exports and its imports. Span of control is the number of workers reporting to a manager.
Return on investment is income received from an investment in a business.
SOURCE: SM:002
SOURCE: DuBrin, A.J. (2003). Essentials of management (6th ed.) [pp. 91-93]. Mason, OH: SouthWestern.
99. D
Linking producers and consumers. Intermediaries, or middlemen, are all of the businesses or individuals
which perform the activities needed in getting a good or service from those who produce it to those who
consume it. Businesses must choose the intermediaries with whom they do business very carefully in
order to operate successfully. Some intermediaries are a good source of information about competitors,
but they are not responsible for providing such information. Intermediaries are also not responsible for
researching a business's target market or keeping it up to date about technological changes.
SOURCE: SM:011
SOURCE: MN LAP 43—External Planning Considerations
100. B
Provide guidelines for decision making. Marketing policies are general guidelines that help businesses
make various marketing decisions. For example, in the product-management function of marketing,
product policies provide guidelines for the goods and services the business offers to its customers. In the
selling function of marketing, selling policies guide the personal selling effort and outline how things
should be done. Promotion policies are the general guidelines for the promotion function of marketing.
The primary purpose of marketing policies is not to inform employees about government regulations,
reduce operating costs and waste, or confirm brand awareness with targeted messages.
SOURCE: SM:025
SOURCE: Rue, L., & Byars, L. (2006). Business management: Real-world applications and connections
(pp. 241-242). Woodland Hills, CA: McGraw-Hill.