Download Chapter 1 Marketing: Creating and Capturing Customer Value

Chapter 1
Marketing: Creating and Capturing Customer Value
1) All of the following are accurate descriptions of modern marketing, EXCEPT
which one?
A) Marketing is the creation of value for customers.
B) Marketing is managing profitable customer relationships.
C) Selling and advertising are synonymous with marketing.
D) Marketing involves satisfying customers' needs.
E) Marketing is used by for-profit and not-for-profit organizations.
Answer: C
Diff: 2
Page Ref: 2 and 4
Skill: Concept
2) According to the opening scenario, the Tide marketing team is MOST concerned
about which of the following?
A) maintaining its brand share
B) fostering customers' emotional connections with their product
C) advertising their product's benefits
D) comparing the effectiveness of their product to other brands
E) incorporating consumer-generated marketing in the marketing mix
Answer: B
3) According to management guru Peter Drucker, "The aim of marketing is to
________."
A) create customer value
B) identify customer demands
C) make selling unnecessary
D) set realistic customer expectations
E) sell products
Answer: C
Diff: 2
Page Ref: 5
Skill: Concept
4) ________ is defined as a social and managerial process by which individuals and
organizations obtain what they need and want through value creation and exchange.
A) Selling
B) Advertising
C) Bartering
D) Marketing
E) Negotiating
Answer: D
Diff: 2
Page Ref: 5
Skill: Concept
5) Which steps of the five-step marketing process are about understanding customers,
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creating customer value, and building strong customer relationships?
A) the first two only
B) the first three only
C) the first four only
D) the last three only
E) the last four only
Answer: C
Diff: 2
Page Ref: 5
AACSB: Communication
Skill: Concept
6) When marketers set low expectations for a market offering, the biggest risk they
run is ________.
A) disappointing loyal customers
B) decreasing customer satisfaction
C) failing to attract enough customers
D) failing to understand their customers' needs
E) incorrectly identifying a target market
Answer: C
Diff: 1
Page Ref: 7
Skill: Concept
7) ________ is the act of obtaining a desired object from someone by offering
something in return.
A) A value proposition
B) Exchange
C) Bribery
D) Value creation
E) Donation
Answer: B
Diff: 1
Page Ref: 7
Skill: Concept
8) A(n) ________ is the set of actual and potential buyers of a product.
A) market
B) audience
C) group
D) segment
E) exchange
Answer: A
Diff: 1
Page Ref: 7
Skill: Concept
9) Consumer research, product development, communication, distribution, pricing,
and service are all core ________ activities.
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A) exchange
B) marketing
C) management
D) production
E) customer relationship management
Answer: B
Diff: 1
Page Ref: 7
AACSB: Communication
Skill: Concept
10) Which of the following is the most likely result of a marketing strategy that
attempts to serve all potential customers?
A) All customers will be delighted.
B) Customer-perceived value will increase.
C) Customer evangelists will become unpaid salespersons for the service or product.
D) Not all customers will be satisfied.
E) The company will need to follow up with a demarketing campaign.
Answer: D
Diff: 3
Page Ref: 9
AACSB: Analytic Skills
Skill: Concept
11) When customers don't know what they want or don't even know what's possible,
the most effective strategy is ________ marketing.
A) customer-driven
B) customer-driving
C) societal
D) production
E) product
Answer: B
Diff: 2
Page Ref: 11
Skill: Concept
12) The societal marketing concept seeks to establish a balance between consumer
short-run wants and consumer ________.
A) short-run costs and profits
B) short-run ethics
C) long-run welfare
D) immediate health
E) value propositions
Answer: C
Diff: 2
Page Ref: 11
AACSB: Ethical Reasoning
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13) Which concept holds that firms must strive to deliver value to customers in a way
that maintains or improves the consumer's and society's well-being?
A) marketing
B) selling
C) product
D) societal marketing
E) equity
Answer: D
Diff: 1
Page Ref: 11
AACSB: Ethical Reasoning
Skill: Concept
15) The three areas of consideration that should be balanced in the societal marketing
concept are consumer wants, society's interests, and ________.
A) human welfare
B) want satisfaction
C) company profits
D) short-run wants
E) long-term needs
Answer: C
Diff: 2
Page Ref: 11
AACSB: Ethical Reasoning
Skill: Concept
15) The set of marketing tools a firm uses to implement its marketing strategy is
called the ________.
A) promotion mix
B) product mix
C) marketing mix
D) TQM
E) marketing effort
Answer: C
Diff: 2
Page Ref: 12
Skill: Concept
Objective: 1-3
60) The final step in the marketing process is ________.
A) capturing value from customers
B) creating customer loyalty
C) creating customer lifetime value
D) understanding the marketplace
E) designing a customer-driven marketing strategy
Answer: A
Diff: 1
Page Ref: 21
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16) Stew Leonard, the owner of a highly successful regional supermarket chain, reacts
adversely to losing a single customer sale. He feels that this amounts to losing the
entire stream of future purchases that a customer is likely to make if he or she remains
in the area. Stew Leonard's concern is an illustration of which of the following?
A) share of customer
B) market share
C) profitability
D) customer lifetime value
E) market share maintenance
Answer: D
Diff: 2
Page Ref: 22
AACSB: Reflective Thinking
Skill: Concept
17) Advertising Age, a magazine for advertising professionals, recently gave its Ad
Agency of the Year award to ________.
A) the consumer
B) on-line marketers
C) Frito-Lay
D) Coca-Cola
E) YouTube
Answer: A
Diff: 3
Page Ref: 20
18) Which of the following is an example of consumer-generated marketing?
A) Toyota's presence in online communities
B) Nike's Nike Plus running Web site
C) MasterCard's use of "Priceless" commercials shot by customers
D) Neiman Marcus's InCircle Rewards program for its best customers
E) The Lexus Covenant aimed at creating customer delight
Answer: C
Diff: 2
Page Ref: 20
Skill: Concept
19) When an airline goes after a "share of travel" from its customers, it is attempting
to increase ________.
A) customer lifetime value
B) share of customer
C) total customer spending
D) customer satisfaction
E) customer ownership
Answer: B
Diff: 2
Page Ref: 22
AACSB: Reflective Thinking
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Skill: Concept
20) Beyond simply retaining good customers, marketers want to constantly increase
their "share of customer." What does this mean in marketing terms?
A) Marketers want to increase their market share.
B) Marketers want to increase the share they get of the customer's purchasing in their
product categories.
C) Marketers want to increase the profit margin with this target market.
D) Marketers want to continuously increase their customers' levels of satisfaction.
E) Marketers want to turn satisfied customers into delighted customers.
Answer: B
Diff: 3
Page Ref: 22
Skill: Concept
21) Customers can be classified into four relationship groups, according to their
profitability and projected loyalty. Which type of customers have the highest profit
potential and strong loyalty?
A) barnacles
B) strangers
C) butterflies
D) true friends
E) big fish
Answer: D
Diff: 2
Page Ref: 24
Skill: Concept
22) Which of the following statements about the Internet is most accurate?
A) Companies are cautiously using the Internet to build closer relationships with
customers and marketing partners alike.
B) After the dot-com meltdown of 2000, fewer consumers are buying products and/or
services online.
C) The Internet makes it easy for consumers to view, interact with, and create
marketing content.
D) Consumer e-commerce looks promising, but business-to-business e-commerce is
declining.
E) Web 2.0 involves a less balanced approach to online marketing than the original
dot-com boom did.
Answer: C
Diff: 2
Page Ref: 26
AACSB: Use of IT
Skill: Concept
23) Which of the following is currently the fastest-growing form of marketing?
A) consumer-generated marketing
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B) online marketing
C) mass media marketing
D) social marketing
E) word-of-mouth marketing
Answer: B
Diff: 3
Page Ref: 26
AACSB: Use of IT
Skill: Concept
24) Today almost every company, small and large, is affected in some way by which
of the following?
A) the societal marketing concept
B) not-for-profit marketing
C) global competition
D) customer-generated marketing
E) caring capitalism
Answer: C
Diff: 2
Page Ref: 26
Skill: Concept
25) Governmental agencies are becoming more involved in marketing as the years
pass. When a local government advertises keeping the area's streams and water supply
cleaner, it is involved in ________.
A) green marketing
B) social marketing campaigns
C) demarketing
D) environmental marketing
E) partnership marketing
Answer: B
Diff: 2
Page Ref: 29
Skill: Concept
26) Fast Food, Inc. views marketing as the science and art of finding, retaining, and
growing profitable customers by providing them with the food they want. Fast Food,
Inc. practices societal marketing.
Answer: FALSE
Diff: 2
Page Ref: 11
AACSB: Reflective Thinking
Skill: Application
27) The societal marketing concept calls on marketers to balance consumer wants and
desires, company profits, and society's interests.
Answer: TRUE
Diff: 2
Page Ref: 11
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AACSB: Ethical Reasoning
Skill: Concept
28) For most marketers, customer relationship management (CRM) is exclusively a
matter of customer data management.
Answer: FALSE
Diff: 2
Page Ref: 13
Skill: Concept
29) The marketing mix includes production, price, promotion, and packaging; this is
known as the four Ps of marketing.
Answer: FALSE
Diff: 2
Page Ref: 12
Skill: Concept
30) Customer-perceived value is defined as the customer's evaluation of the perceived
difference between all the benefits and all the costs of a marketing offer relative to
those of competing offers.
Answer: TRUE
Diff: 1
Page Ref: 13
Skill: Concept
Chapter 2 Company and Marketing Strategy:
Partnering to Build Customer Relationships
1) Which of the following involves adapting a firm to take advantage of opportunities
in its constantly changing environment?
A) long-range planning
B) short-range planning
C) media planning
D) strategic planning
E) annual planning
Answer: D
Diff: 2
Page Ref: 38
Skill: Concept
2) When a firm develops and maintains a strategic fit between its goals and
capabilities, it is performing ________.
A) mission planning
B) values planning
C) strategic planning
D) business-portfolio planning
E) operations planning
Answer: C
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Diff: 1
Page Ref: 38
3) Which of the following is the first step in strategic planning?
A) set objectives and goals
B) develop the business portfolio
C) define the company mission
D) plan marketing strategies
E) identify threats and weaknesses
Answer: C
Diff: 1
Page Ref: 39
4) Which of the following is NOT a step in the strategic planning process?
A) defining the company mission
B) setting company objectives and goals
C) designing the business portfolio
D) planning marketing and other functional strategies
E) evaluating all members of the value chain
Answer: E
Diff: 2
Page Ref: 39
5) Which of the following provides an answer to these questions: What is our
business? Who are our customers? What do our customers value? What should our
business be?
A) objectives and goals
B) a mission statement
C) a business portfolio
D) marketing and functional strategies
E) operational strategies
Answer: B
Diff: 2
Page Ref: 39
AACSB: Communication
Skill: Concept
6) After management has identified the key businesses making up its company, what
is the next step in portfolio analysis?
A) identifying businesses in which to invest
B) assessing the attractiveness of its SBUs
C) deciding whether to harvest any businesses
D) completing short-range planning
E) identifying SBUs
Answer: B
Diff: 2
Page Ref: 41
7) The best known product portfolio planning method was developed by ________.
A) the Boston Consulting Group
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B) Philip Kotler
C) Harvard University
D) the SRI Consulting Firm
E) James P. Hess
Answer: A
Diff: 2
Page Ref: 41
8) Most portfolio analysis methods evaluate SBUs on two dimensions, namely
________ and ________.
A) market share; strength of the SBU's position
B) market diversification; relative market share
C) market or industry attractiveness; strength of the SBU's position
D) market growth rates; profits
E) market penetration; market development
9) In the Boston Consulting Group approach, ________ provides a measure of market
attractiveness.
A) relative market share
B) market development
C) market penetration
D) market growth rate
E) market segmentation
Answer: D
Diff: 2
Page Ref: 41
Skill: Concept
10) In the Boston Consulting Group approach, ________ serves as a measure of
company strength in the market.
A) relative market share
B) market development
C) market diversification
D) market growth rate
E) market segmentation
Answer: A
Diff: 2
Page Ref: 41
11) Each department in a company that carries out value-creating activities can be
thought of as a link in the company's ________.
A) market development
B) product development
C) business portfolio
D) value chain
E) value delivery network
Answer: D
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Diff: 1
Page Ref: 46
Skill: Concept
Objective: 2-3
12) Jack Welch, CEO at General Electric, said that "Companies can't give job
security, only ________ can."
A) development
B) growth
C) good strategy
D) customers
E) efficiency
Answer: D
Diff: 3
Page Ref: 47
Skill: Concept
Objective: 2-3
13) Multinationals like Honda Motor Co. and Wal-Mart stores have designed
programs to work closely with their suppliers to help them reduce their costs and
improve quality. This illustrates the importance of an efficient ________.
A) business portfolio
B) low-cost operator
C) product mix
D) value delivery network
E) value chain
Answer: D
Diff: 2
Page Ref: 47
Skill: Concept
Objective: 2-3
14) Which of the following is the marketing logic by which a company hopes to
achieve profitable customer relationships?
A) price
B) a consistent product mix
C) the value delivery network
D) marketing strategy
E) differentiation
Answer: D
Diff: 1
Page Ref: 48
Skill: Concept
Objective: 2-4
15) Lucy Ortiz is preparing a PowerPoint presentation of the marketing process to
show at a sales meeting. ________ should appear in the center of her diagram
depicting marketing strategies and the marketing mix.
A) Sales goals
B) Customer value and relationships
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C) Company objectives
D) Customer retention rates
E) Competitors
Answer: B
Diff: 1
Page Ref: 49
Skill: Concept
Objective: 2-4
16) Which of the four Ps describes the goods-and-services combination the company
offers to the target market?
A) price
B) promotion
C) product
D) place
E) package
Answer: C
Diff: 1
Page Ref: 51
Skill: Concept
Objective: 2-5
17) In the four Ps of the marketing mix, design, packaging, services, and variety all
fall under the category of ________.
A) product
B) price
C) promotion
D) place
E) position
Answer: A
Diff: 2
Page Ref: 51
Skill: Concept
Objective: 2-4
18) Today the four Ps are compared to the four Cs. Product and place are called
________ and ________, respectively.
A) convenience; customer solution
B) customer cost; convenience
C) communication; customer solution
D) customer solution; convenience
E) communication; convenience
Answer: D
Diff: 3
Page Ref: 52
Skill: Concept
Objective: 2-4
19) In the marketing management functions, an SWOT analysis should ________ a
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marketing plan.
A) precede
B) coincide with
C) follow
D) evaluate
E) take priority over
Answer: A
Diff: 2
Page Ref: 54
Skill: Concept
Objective: 2-5
20) In a basic SWOT analysis the "T" stands for ________.
A) timing
B) trust
C) threats
D) trade
E) tangible
Answer: C
Diff: 1
Page Ref: 53
Skill: Concept
Objective: 2-5
21) The ________ organizational system's main advantage is that the company is
organized around the needs of specific market segments.
A) market management
B) geographic
C) product management
D) vertical
E) functional
Answer: A
Diff: 2
Page Ref: 56
Skill: Concept
Objective: 2-5
22) An increasingly large number of firms are changing their organizational focus
from ________ to ________.
A) product management; functional management
B) product management; geographic management
C) brand management; customer management
D) geographic management; functional management
E) global management; regional management
Answer: C
Diff: 2
Page Ref: 57
Skill: Concept
13
Objective:
2-5
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23) Evaluating the results of marketing strategies and plans and taking corrective
action to ensure that objectives are attained is called ________.
A) marketing control
B) strategic control
C) operating control
D) developmental control
E) efficiency
Answer: A
Diff: 1
Page Ref: 57
Skill: Concept
Objective: 2-5
24) The marketing control process entails the following steps in order: setting goals,
________, evaluating performance, and ________.
A) evaluating goals; measuring performance
B) achieving goals; measuring performance
C) taking corrective action; measuring performance
D) measuring performance; taking corrective action
E) taking corrective action; following up
Answer: D
Diff: 2
Page Ref: 57
Skill: Concept
Objective: 2-5
25) Which of the following is NOT a step in the marketing control process?
A) setting goals
B) measuring performance
C) taking corrective action
D) defining the mission
E) evaluating the causes of gaps between expected and actual performance
Answer: D
Diff: 3
Page Ref: 57
Skill: Concept
Objective: 2-5
26) Mission statements should be realistic and general in nature.
Answer: FALSE
Diff: 2
Page Ref: 39
Skill: Concept
Objective: 2-1
27) ABC Fortunes has just developed a formal statement of its purpose. This firm has
put together a mission statement.
Answer: TRUE
Diff: 1
Page Ref: 39
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Skill: Concept
Objective: 2-1
28) Mission statements should both emphasize the company's strengths in the
marketplace and be motivating.
Answer: TRUE
Diff: 2
Page Ref: 39
AACSB: Communication
Skill: Concept
Objective: 2-1
29) At America Online, "we create customer connectivity, anytime, anywhere," is a
product-oriented business definition.
Answer: FALSE
Diff: 3
Page Ref: 39
AACSB: Reflective Thinking
Skill: Application
Objective: 2-1
30) "At Nike, we sell shoes" is a market-oriented business definition.
Answer: FALSE
Diff: 3
Page Ref: 40
AACSB: Reflective Thinking
Skill: Application
Objective: 2-1
Chapter 3
Analyzing the Marketing Environment
1) You are directed to study the actors close to the company that affect its ability to
serve its customers-departments within the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics. What are you studying?
A) the macroenvironment
B) the microenvironment
C) the marketing environment
D) the demographic environment
E) the global environment
Answer: B
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
2) Which of the following terms is used to describe the factors and forces outside
marketing that affect marketing management's ability to build and maintain successful
relationships with target customers?
A) the marketing environment
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B) the cultural environment
C) strategic planning
D) target markets
E) the marketing mix
Answer: A
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
3) You are directed to study the demographic, economic, natural, technological,
political, and cultural factors that are larger societal forces affecting your company.
What are you studying?
A) the macroenvironment
B) the microenvironment
C) the external environment
D) the marketing mix
E) the global environment
Answer: A
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
4) Which of the following is NOT a type of factor in a company's macroenvironment?
A) demographic
B) economic
C) technological
D) competitive
E) political
Answer: D
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
5) All of the groups within a company are called the ________.
A) culture
B) diversity
C) internal environment
D) climate
E) range
Answer: C
Diff: 2
Page Ref: 67
Skill: Concept
Objective: 3-1
6) Which type of market buys goods and services to produce public services or to
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transfer them to others who need them?
A) government
B) reseller
C) wholesale
D) consumer
E) retail
Answer: A
Diff: 1
Page Ref: 69
Skill: Concept
Objective: 3-1
7) Rachel Patino works for a wholesale company called Distributors Unlimited. She is
responsible for buying and selling goods at a profit to small retailers. What is her
market?
A) business
B) reseller
C) wholesale
D) consumer
E) retail
Answer: B
Diff: 1
Page Ref: 69
Skill: Concept
Objective: 3-1
8) Your marketing department is currently researching the size, density, location, age,
and occupations of your target market. Which environment is being researched?
A) demographic
B) psychographic
C) economic
D) geographic
E) cultural
Answer: A
Diff: 1
Page Ref: 70
Skill: Concept
Objective: 3-2
9) The three largest generational groups in America are the baby boomers, Generation
Xers, and ________.
A) seniors
B) Millennials
C) teens
D) tweens
E) toddlers
Answer: B
Diff: 1
Page Ref: 71
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AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
10) As a group, ________ are the most affluent Americans.
A) baby boomers
B) Generation Xers
C) the Millennials
D) echo boomers
E) seniors
Answer: A
Diff: 2
Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
11) "Dreams don't retire" is the theme of a(n) ________ marketing campaign aimed at
baby boomers.
A) financial services
B) anti-aging products
C) travel and entertainment
D) fitness products
E) technological products
Answer: A
Diff: 2
Page Ref: 73
Skill: Concept
Objective: 3-2
12) In 1950, women made up under 40 percent of the workforce; now they make up
________ percent.
A) 35
B) 40
C) 43
D) 46
E) 59
Answer: E
Diff: 3
Page Ref: 75
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
13) Which of the following is a trend that depicts the increasingly nontraditional
nature of today's American family?
A) working women making up a smaller percentage of the workforce
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B) the falling percentage of married couples with children
C) dual-income families declining in number
D) stay-at-home dads declining in number
E) the declining reliance on convenience foods and services
Answer: B
Diff: 2
Page Ref: 75
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
14) Over the past two decades, the U.S. population has shifted most heavily toward
the ________ states.
A) Midwestern
B) Northern
C) Sunbelt
D) Southeastern
E) Northeastern
Answer: C
Diff: 2
Page Ref: 76
Skill: Concept
Objective: 3-2
15) Which of the following geographical areas has NOT seen a recent population
increase?
A) micropolitan areas
B) suburbs
C) the West
D) the Northeast
E) the South
Answer: D
Diff: 3
Page Ref: 76
Skill: Concept
Objective: 3-2
16) Which of the following American government agencies is charged with setting
and enforcing pollution standards?
A) the Environmental Protection Agency (EPA)
B) the Federal Trade Commission (FTC)
C) the Food and Drug Administration (FDA)
D) the Consumer Product Safety Commission
E) the Federal Energy Regulatory Commission
Answer: A
Diff: 2
Page Ref: 81
AACSB: Ethical Reasoning
Skill: Concept
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Objective:
3-3
17) Which of the following has encouraged marketers to pursue environmentally
sustainable strategies?
A) the EPA
B) the black market
C) the green movement
D) deregulation
E) green intervention
Answer: C
Diff: 2
Page Ref: 82
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-3
18) Which of the following is a result of regulations set up by the Food and Drug
Administration and the Consumer Product Safety Commission?
A) The time between new product ideas and their introduction to the market has
decreased.
B) Spending on research and development has decreased.
C) Research costs for companies have grown.
D) More companies have failed to meet safety standards.
E) Companies are more focused on making practical, affordable versions of products.
Answer: C
Diff: 2
Page Ref: 83
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-3
19) Marketers should be aware of laws, government agencies, and pressure groups
that influence or limit various organizations and individuals in a given society. This is
most accurately described as the ________ environment.
A) socio-legal
B) cultural
C) political
D) legal-technological
E) economic
Answer: C
Diff: 1
Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
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20) Even the most liberal advocates of free-market economies agree that the system
works best with ________ regulation.
A) private
B) maximum
C) intermittent
D) at least some
E) no
Answer: D
Diff: 2
Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
21) When the marketing manager Suzie Kwan discusses factors and forces outside
marketing, such as political that affect marketing management's ability to build and
maintain successful relationships with target customers, she is talking about the
external marketing concept.
Answer: FALSE
Diff: 2
Page Ref: 66
Skill: Application
Objective: 3-1
22) The microenvironment consists of larger societal forces that affect a company,
such as demographic, economic, political, and cultural forces.
Answer: FALSE
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
23) The macroenvironment consists of the factors close to the company that affect its
ability to serve its customers, such as suppliers, customer markets, competitors, and
publics.
Answer: FALSE
Diff: 1
Page Ref: 66
Skill: Concept
Objective: 3-1
24) Trudie Jones works for a distribution channel firm that helps several electronics
companies find customers or make sales to them. Trudie works for a reseller.
Answer: TRUE
Diff: 3
Page Ref: 67
AACSB: Reflective Thinking
Skill: Application
Objective: 3-1
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25) Marketing research firms, advertising agencies, media firms, and marketing
consulting firms are all referred to as marketing services agencies.
Answer: TRUE
Diff: 2
Page Ref: 68
AACSB: Communication
Skill: Concept
Objective: 3-1
26) Today's successful marketers recognize the importance of working with their
intermediaries as channels through which they sell their products rather than as
full-fledged partners.
Answer: FALSE
Diff: 2
Page Ref: 68
Skill: Concept
Objective: 3-1
27) Consumer organizations such as environmental and minority groups that may
questions a company's marketing decisions are referred to as local publics.
Answer: FALSE
Diff: 2
Page Ref: 69
Skill: Concept
Objective: 3-1
28) A company markets wild and crazy games for teens to play at parties. This
company's customer market is a business market.
Answer: FALSE
Diff: 2
Page Ref: 69
AACSB: Reflective Thinking
Skill: Application
Objective: 3-1
29) The demographic environment is of major interest to marketers because it
involves people, and people make up markets.
Answer: TRUE
Diff: 1
Page Ref: 70
Skill: Concept
Objective: 3-2
30) The single most important demographic trend in the United States that marketers
should understand is the changing family structure.
Answer: FALSE
Diff: 3
Page Ref: 70
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
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Chapter 6
Business Markets and Business Buyer Behavior
1) In which of the following ways is GE like most other large companies?
A) It produces hundreds of products for a wide range of markets.
B) It has an entertainment division.
C) It has a finance division.
D) Most of its business comes from final consumers.
E) Most of its business comes from commercial and industrial customers.
Answer: E
Diff: 1
Page Ref: 168
Skill: Concept
Objective: 6-1
2) As a purchasing agent, Benni Lopez buys goods and services for use in the
production of products that are sold and supplied to others. Benni is involved in
________.
A) consumer buying behavior
B) post-purchase dissonance
C) retail buyer behavior
D) business buyer behavior
E) interpretive business research
Answer: D
Diff: 1
Page Ref: 168
Skill: Concept
Objective: 6-1
3) Business buying behavior refers to the buying behavior of organizations that buy
all of the following EXCEPT ________.
A) products for use in production of other products
B) services for use in production of other services
C) products purchased to resell to others
D) products purchased to rent to others
E) products purchased for personal consumption
Answer: E
Diff: 1
Page Ref: 168
Skill: Concept
Objective: 6-1
4) In one way or another, most large companies sell to ________.
A) consumers
B) other organizations
C) employees
D) not-for-profit companies
E) the service sector
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Answer: B
Diff: 2
Page Ref: 168
Skill: Concept
Objective: 6-1
5) When compared to consumer markets, business markets are ________.
A) approximately the same
B) smaller
C) huge
D) somewhat larger
E) less complex
Answer: C
Diff: 2
Page Ref: 168
Skill: Concept
Objective: 6-1
6) The buying center and the buying decision process are affected by all of the
following factors EXCEPT ________.
A) internal organization factors
B) interpersonal factors
C) individual factors
D) external environmental factors
E) self-concept factors
Answer: E
Diff: 2
Page Ref: 172
Skill: Concept
Objective: 6-2
7) Which business buying situation is the marketer's greatest opportunity and
challenge?
A) modified rebuy
B) straight rebuy
C) new task
D) multiple rebuys
E) system rebuy
Answer: C
Diff: 2
Page Ref: 173
Skill: Concept
Objective: 6-2
8) In which type of buying situation would a supplier most likely focus on
maintaining product and service quality?
A) straight rebuy
B) modified rebuy
C) new task
D) systems task
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E) solutions task
Answer: A
Diff: 3
Page Ref: 173
Skill: Concept
Objective: 6-2
9) You just lost a major account because a competitor provided the most complete
system to meet the customer's needs and solve the customer's problems, and made the
sale. In other words, the competition beat you with ________.
A) solutions selling
B) team selling
C) cross-functional skill
D) customer relationship management
E) promotions
Answer: A
Diff: 2
Page Ref: 173
Skill: Concept
Objective: 6-2
10) Another name for systems selling is ________ selling.
A) solutions
B) blanket contract
C) vendor-managed inventory
D) negotiated contract
E) periodic purchase
Answer: A
Diff: 1
Page Ref: 173
Skill: Concept
Objective: 6-2
11) Policies, procedures, and systems are all examples of ________ influences on
business buyer behavior.
A) environmental
B) authoritative
C) interpersonal
D) organizational
E) cultural
Answer: D
Diff: 2
Page Ref: 176
Skill: Concept
Objective: 6-2
12) Status, empathy, and persuasiveness are all examples of ________ influences on
business buyer behavior.
A) environmental
B) individual
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C) interpersonal
D) organizational
E) cultural
Answer: C
Diff: 2
Page Ref: 176
Skill: Concept
Objective: 6-2
13) Charlie Van Dusen, executive vice president of National Central Bank, is going
through all of the stages of the buying process to purchase a computer system for the
bank. Charlie is facing a(n) ________ situation.
A) straight rebuy
B) modified rebuy
C) new-task buying
D) limited budget
E) independent buying
Answer: C
Diff: 2
Page Ref: 176
Skill: Concept
Objective: 6-3
14) Which of the following is an example of an internal stimulus that might lead to
the business buying process stage of problem recognition?
A) A buyer gets a new idea from an advertisement.
B) A buyer gets a new idea at a trade show.
C) A buyer is unhappy with a current supplier's price.
D) A buyer receives a call from a salesperson offering better service terms.
E) A buyer learns about a new product at an industry convention.
Answer: C
Diff: 2
Page Ref: 177
Skill: Concept
Objective: 6-3
15) The first step of the business buying process is ________.
A) general need description
B) alternative evaluations
C) problem recognition
D) order-routine specification
E) performance review
Answer: C
Diff: 2
Page Ref: 177
Skill: Concept
Objective: 6-3
16) Business marketers often alert customers to potential problems and then show
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how their products provide solutions. These marketers are hoping to influence which
stage of the business buying process?
A) general need description
B) alternative evaluations
C) problem recognition
D) order-routine specification
E) performance review
Answer: C
Diff: 2
Page Ref: 177
Skill: Concept
Objective: 6-3
17) Empire Products has begun a process to find the best suppliers. Empire Products
is actively engaged in ________.
A) value analysis
B) performances review
C) supplier search
D) supplier control
E) supplier selection
Answer: C
Diff: 1
Page Ref: 177
Skill: Concept
Objective: 6-3
18) A buyer would be most likely to review trade directories in which stage of the
business buying process?
A) problem recognition
B) general need description
C) product specification
D) supplier search
E) supplier selection
Answer: D
Diff: 2
Page Ref: 177
Skill: Concept
Objective: 6-3
19) In the generally accepted stages of the business buying process, the step following
product specification is ________.
A) proposal solicitation
B) supplier search
C) problem recognition
D) general need description
E) order-routine specification
Answer: B
Diff: 2
Page Ref: 177
Skill: Concept
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Objective:
6-3
20) In the generally accepted stages of the business buying process, the step following
problem recognition is ________.
A) proposal solicitation
B) supplier search
C) product value analysis
D) general need description
E) performance review
Answer: D
Diff: 2
Page Ref: 177
Skill: Concept
Objective: 6-3
21) Members of the buying center at ABC Kid's World are drawing up a list of
desired toy supplier attributes and their relative importance. Next, they intend to
compare several suppliers to these attributes. In which step of the business buying
process is the buying center at ABC Kid's World engaged?
A) supplier search
B) proposal solicitation
C) supplier selection
D) order-routine specification
E) performance review
Answer: C
Diff: 2
Page Ref: 178
Skill: Concept
Objective: 6-3
22) A firm's mission statement should be the basis for both its business and marketing
objectives.
Answer: FALSE
Diff: 2
Page Ref: 40
AACSB: Communication
Skill: Concept
Objective: 2-1
23) The major activity in strategic planning is strategic business unit planning,
whereby management evaluates the products and businesses making up the company.
Answer: FALSE
Diff: 2
Page Ref: 41
Skill: Concept
Objective: 2-2
24) When designing business portfolios, most companies are well advised to add a
broad range of products and businesses to their organization.
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Answer: FALSE
Diff: 2
Page Ref: 41
Skill: Concept
Objective: 2-2
25) The purpose of strategic planning is to find ways in which your company can best
use its strengths to take advantage of attractive opportunities in the environment.
Answer: TRUE
Diff: 2
Page Ref: 41
Skill: Concept
Objective: 2-2
26) In the BCG matrix, "dogs" are low-growth businesses and products that do not
generate enough cash to maintain themselves.
Answer: FALSE
Diff: 3
Page Ref: 42
Skill: Concept
Objective: 2-2
27) The growth strategy of diversification involves offering modified or new products
to current markets.
Answer: FALSE
Diff: 2
Page Ref: 46
Skill: Concept
Objective: 2-2
28) When an organization identifies and develops new markets for its current products
and services, it is engaged in market development.
Answer: TRUE
Diff: 1
Page Ref: 45
Skill: Concept
Objective: 2-2
29) When a firm finds products or businesses that no longer fit its overall strategy, it
must carefully milk, harvest, or better develop them.
Answer: FALSE
Diff: 2
Page Ref: 46
Skill: Concept
Objective: 2-2
30) In today's marketplace, competition increasingly takes place between entire value
delivery networks rather than between individual competitors.
Answer: TRUE
Diff: 1
Page Ref: 48
Skill: Concept
Objective: 2-3
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Chapter 7
Customer-Driven Marketing Strategy: Creating Value for Target
Customers
1) When a company identifies the parts of the market it can serve best and most
profitably, it is practicing ________.
A) concentrated marketing
B) mass marketing
C) market targeting
D) segmenting
E) differentiation
Answer: C
Diff: 2
Page Ref: 191
Skill: Concept
Objective: 7-1
2) What are the four steps, in order, to designing a customer-driven marketing
strategy?
A) market segmentation, differentiation, positioning, and targeting
B) positioning, market segmentation, mass marketing, and targeting
C) market segmentation, targeting, differentiation, and positioning
D) market alignment, market segmentation, differentiation, and market positioning
E) market recognition, market preference, market targeting, and market insistence
Answer: C
Diff: 2
Page Ref: 191
Skill: Concept
Objective: 7-1
3) Through market segmentation, companies divide large, heterogeneous markets into
smaller segments that can be reached more ________ with products and services that
match their unique needs.
A) efficiently
B) effectively
C) intensely
D) indirectly
E) both A and B
Answer: E
Diff: 2
Page Ref: 192
Skill: Concept
Objective: 7-2
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4) Even though several options are available at any one time, there ________ to
segment a market.
A) is one single best way
B) is no single way
C) is a most effective way
D) are limited ways
E) are four ways
Answer: B
Diff: 2
Page Ref: 192
Skill: Concept
Objective: 7-2
5) Your firm has decided to localize its products and services to meet local market
demands. A good approach to use would be ________ segmentation.
A) geographic
B) benefit
C) end-use
D) customer
E) image
Answer: A
Diff: 1
Page Ref: 193
Skill: Concept
Objective: 7-2
6) You have discovered that the segments you are targeting are conceptually
distinguishable and respond differently to different marketing mix elements and
programs. These segments are ________.
A) accessible
B) measurable
C) reachable
D) differentiable
E) observable
Answer: D
Diff: 2
Page Ref: 201
Skill: Concept
Objective: 7-2
7) To evaluate the different market segments your company serves, you would look at
all of these factors EXCEPT which one?
A) segment size
B) segment growth
C) segment structural attractiveness
D) company values
E) company resources
Answer: D
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Diff: 3
Page Ref: 201
Skill: Concept
Objective: 7-3
8) Barney Hopkins has compiled a list of things that make segments more attractive.
Which one of the following items should NOT be on the list?
A) relative power of buyers
B) lack of powerful suppliers to control prices
C) few substitute products
D) competition with superior resources
E) financial resources
Answer: D
Diff: 2
Page Ref: 201
Skill: Concept
Objective: 7-3
9) Which of the following is NOT one of the reasons a segment would be less
attractive to a company?
A) strong competitors
B) substitute products
C) concentrated market
D) power of buyers
E) power of suppliers
Answer: C
Diff: 2
Page Ref: 201
Skill: Concept
Objective: 7-3
10) In general, a company should enter only segments in which it can ________ and
________.
A) offer lower prices; ship faster
B) offer superior value; gain advantages over competitors
C) offer superior value; ship faster
D) gain advantages over competitors; differentiate its products
E) identify behaviors; understanding spending power
Answer: B
Diff: 3
Page Ref: 201
Skill: Concept
Objective: 7-3
11) Which of the segmenting strategies carries higher-than-average risks in consumer
markets?
A) concentrated
B) mass
C) differentiated
D) undifferentiated
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E) multiple-segment
Answer: A
Diff: 3
Page Ref: 205
Skill: Concept
Objective: 7-3
12) As You Like It, Inc., customizes its offers to each individual consumer. This
practice of tailoring products and marketing programs to suit the tastes of specific
individuals and locations is referred to as ________ marketing.
A) niche
B) mass
C) differentiated
D) undifferentiated
E) micro
Answer: E
Diff: 2
Page Ref: 205
Skill: Concept
Objective: 7-3
13) ________ tailors brands and promotions to the needs and wants of specific cities,
neighborhoods, and even stores.
A) Undifferentiated
B) Differentiated marketing
C) Niche marketing
D) Local marketing
E) Individual marketing
Answer: D
Diff: 1
Page Ref: 205
Skill: Concept
Objective: 7-3
14) Which of the following is the narrowest marketing strategy?
A) segmented strategy
B) local marketing
C) differentiated marketing
D) mass marketing
E) undifferentiated marketing
Answer: B
Diff: 3
Page Ref: 202
Skill: Concept
Objective: 7-2
15) Which of the following is NOT a drawback of local marketing?
A) It can drive up manufacturing costs.
B) It can drive up marketing costs by reducing economies of scale.
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C) It can create logistics problems.
D) A brand's overall image might be diluted through too much variation.
E) Supporting technologies are expensive.
Answer: E
Diff: 3
Page Ref: 206
Skill: Concept
Objective: 7-3
16) In target marketing, the issue is not really who is targeted, but rather ________
and for ________.
A) why; what
B) how; what
C) why; how long
D) where; how long
E) how; where
Answer: B
Diff: 2
Page Ref: 209
AACSB: Ethical Reasoning
Skill: Concept
Objective: 7-3
17) Which group determines a product's position relative to competing products?
A) manufacturers
B) wholesalers
C) retailers
D) consumers
E) suppliers
Answer: D
Diff: 1
Page Ref: 209
Skill: Concept
Objective: 7-4
18) A product's position is based on important attributes as perceived by ________.
A) suppliers
B) competitors
C) market conditions
D) consumers
E) managers
Answer: D
Diff: 2
Page Ref: 209
Skill: Concept
Objective: 7-4
19) Consumers position products and services ________.
A) after marketers put marketing mixes in place
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B) generally after consulting friends who use them
C) with or without the help of marketers
D) only reluctantly
E) based on nearby competitors' positions
Answer: C
Diff: 1
Page Ref: 209
Skill: Concept
Objective: 7-4
20) Which of the listed choices is NOT a positioning task?
A) identifying a set of possible competitive advantages upon which to build a position
B) surveying frequent users of the product
C) selecting an overall positioning strategy
D) effectively communicating and delivering the chosen position to the market
E) selecting the right competitive advantages
Answer: B
Diff: 2
Page Ref: 210
AACSB: Communication
Skill: Concept
Objective: 7-4
21) Jay Bee Promotions tailors its advertising and promotional services to the needs
and preferences of individual customers. Which of the following terms does NOT
apply to this type of marketing?
A) one-to-one
B) customized
C) markets-of-one
D) concentrated
E) mass customization
Answer: D
Diff: 3
Page Ref: 206
AACSB: Analytic Skills
Skill: Application
Objective: 7-3
22) The Jay Group hires better employees than the competition by conducting lengthy
searches and interviews. Management also trains employees much better than
competitors do. The Jay Group has gained a strong competitive advantage through
which type of differentiation?
A) image
B) people
C) services
D) product
E) channel
Answer: B
Diff: 2
Page Ref: 213
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AACSB: Reflective Thinking
Skill: Application
Objective: 7-4
23) Ford Motor Company emphasizes "Quality First Ford Tough" in its truck
products. In doing so, the company has developed a differentiation strategy based on
________.
A) people
B) image
C) products
D) services
E) positioning
Answer: B
Diff: 2
Page Ref: 213
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4
24) Cheap Heaps Auto specializes in lower quality vehicles, with a few dents, priced a
great deal lower than other used cars. Cheap Heaps has chosen to position their
products with a ________ strategy.
A) more-for-the same
B) more-for-less
C) same-for-less
D) less-for-much-less
E) A or C
Answer: D
Diff: 2
Page Ref: 215
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4
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25) Neiman Marcus claims superior quality, performance, and style. The owners
provide the most upscale products and services and charge a higher price to cover the
higher costs. What type of positioning does Neiman Marcus use?
A) more-for-the-same
B) more-for-more
C) repositioning
D) the-same-for-less
E) more-for-less
Answer: B
Diff: 1
Page Ref: 215
AACSB: Reflective Thinking
Skill: Application
Objective: 7-4
26) Jolene Enterprises mass produces an all-purpose floor cleaner, mass distributes it
and mass promotes it. This firm uses ________ marketing.
A) segmented
B) undifferentiated
C) traditional
D) differentiated
E) none of the above
Answer: B
Diff: 1
Page Ref: 201
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3
27) A marketer focuses on several commonalities among all consumers. This
marketer appears to be engaging in ________.
A) differentiated marketing
B) undifferentiated marketing
C) segmented marketing
D) concentrated marketing
E) mass customization
Answer: B
Diff: 2
Page Ref: 201
AACSB: Analytic Skills
Skill: Application
Objective: 7-3
28) Which of the following is the most logical reason for Procter & Gamble offering
products that compete with one another on the same supermarket shelves?
A) Different people want a greater selection.
B) Procter & Gamble has little competition.
C) Different people want different mixes of benefits from the products they buy.
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D) Retailers request it.
E) It creates healthy competition.
Answer: C
Diff: 3
Page Ref: 203
AACSB: Analytic Skills
Skill: Application
Objective: 7-3
29) Sanguine Services practices a marketing strategy where its limited resources are
used to go after a large share of two small niches. Sanguine practices which one of
these strategies?
A) undifferentiated
B) differentiated
C) mass
D) concentrated
E) geographically dispersed
Answer: D
Diff: 2
Page Ref: 204
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3
30) Bob and Phyllis Cords own two retail stores, one in Pottstown and one in
Norristown. Though the towns are only 40 miles apart, the consumers at both stores
are very different demographically. Bob and Phyllis alter the product offerings
between both locations in an effort to cater to both demographic groups. This is an
example of ________.
A) local marketing
B) psychographic segmentation
C) micromarketing
D) demographic segmentation
E) A and C
Answer: E
Diff: 2
Page Ref: 205
AACSB: Reflective Thinking
Skill: Application
Objective: 7-3
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