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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, 1 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. 2 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 3 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 4 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 5 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 6 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 7 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 8 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 9 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 10 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 11 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 12 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 14 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 15 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 16 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 17 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 18 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 19 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 20 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 21 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 22 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 23 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 24 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 25 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 26 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 27 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 28 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. 29 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 30 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 31 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 32 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 33 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. 34 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 35 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 36 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 37 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. 38 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 39