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CHAPTER 10
MULTIPLE CHOICE QUESTIONS
Motivating Employees
1. An employee’s rational and emotional commitment to his or her work is called an employee’s sense of _____.
a) morale
b) job satisfaction
c) engagement
d) motivation
2. An employee with high _____ is more likely to be cheerful, enthusiastic, loyal, and productive.
a) morale
b) job satisfaction
c) morals
d) anxiety
3. _____ is the combination of forces that moves individuals to take certain actions and avoid others in pursuit of
individual objectives.
a) Engagement
b) Motivation
c) Morale
d) Job satisfaction
4. ____ was one of the first theorists to systematically study the relationship between employee motivation and
efficiency.
a) Frederick Herzberg
b) Abraham Maslow
c) Douglas McGregor
d) Frederick Taylor
5. The management approach that seeks to improve employee efficiency through the scientific study of work is known
as _____.
a) reinforcement theory
b) equity theory
c) expectancy theory
d) scientific management
6. Managers who use scientific management assume that _____ is the primary motivational element.
a) self-advancement
b) monetary reward
c) opportunities for personal satisfaction
d) self-respect
7. In 1943 psychologist _____ proposed the theory that behavior is determined by a hierarchy of five categories of
needs.
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a)
b)
c)
d)
Frederick Herzberg
Abraham Maslow
Douglas McGregor
Frederick Taylor
8. Margot works to satisfy her need for basic survival such as food, clothing, and shelter. Of the following, which level
of needs is Margot working to fulfill?
a) esteem
b) physiological
c) security
d) self-actualization
9. Health insurance, pension plans, and safe working conditions fulfill needs at which level of the needs hierarchy?
a) esteem
b) physiological
c) safety
d) social
10. Zackary works not only to make money to support his family but also because he feels his work is worthwhile and
satisfying. Which level of needs is Zackary fulfilling in his work?
a) esteem
b) security
c) self-actualization
d) social
11. According to ______, improving factors such as working conditions and job security can lessen employee
dissatisfaction but cannot motivate workers to perform more efficiently.
a) Frederick Herzberg
b) Abraham Maslow
c) Adam Smith
d) Frederick Taylor
12. _____ factors are aspects of the work environment that are associated with dissatisfaction, while _____ are factors
that may increase motivation.
a) Hygiene; motivators
b) Motivators; hygiene
c) Dissatisfying; hygiene
d) Satisfying; motivators
13. As a manager, Ogden believes that people dislike work and can be motivated only by the fear of losing their jobs or
by extrinsic rewards. According to McGregor’s theory on employee motivation, Ogden is a _____ manager.
a) Theory X
b) Theory Y
c) Theory Z
d) Micro
14. Theory Y managers motivate people to perform by giving them the opportunity to achieve _____ rewards.
a) extrinsic
b) intrinsic
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c) intangible
d) tangible
15. Shelley believes that people like to work and will naturally work toward goals to which they are committed. To
which of McGregor's theories does Shelley subscribe?
a) Theory X
b) Theory Y
c) Theory Z
d) Theory C
16. E-Z Mark, Inc., employees are treated as family and are involved in most company decisions. What theory describes
this situation?
a) Theory X
b) Theory Y
c) Theory Z
d) Theory C
17. Theory Z was proposed by _____ in the 1980s.
a) Abraham Maslow
b) William Ouchi
c) Peter Drucker
d) B.F. Skinner
18. Alex works side by side with another employee, doing the same job and giving the same amount of effort, only to
learn that his colleague earns more money. Alex perceives a state of inequity, and he becomes unhappy with his
work situation. What theory on motivation explains Alex’s dissatisfaction?
a) Herzberg’s two-factor theory
b) expectancy theory
c) Ouchi’s theory
d) equity theory
19. _____ suggests that the effort employees put into their work depends on expectations about their own ability to
perform, expectations about the rewards that the organization will give in response to that performance, and the
attractiveness of those rewards relative to their individual goals.
a) Equity theory
b) Expectancy theory
c) Goal-setting theory
d) Theory Z
20. As a carpenter assigned to a home remodeling project, you do not feel confident in your ability to do an absolutely
perfect job on the kitchen cabinets, nor do you know what level of performance is expected from you. As a result,
your motivation suffers. This is an example of _____.
a) equity theory
b) goal-setting theory
c) reinforcement
d) expectancy theory
21. Retailer Eddie Bauer rewards its store employees with a 35-cent-per-hour bonus if a store meets its sales goals, and a
65-cent bonus if sales exceed the goal by 5 percent. This is an example of _____.
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a)
b)
c)
d)
goal-setting theory
Theory Y
Theory Z
expectancy theory
22. A companywide process that empowers employees and involves them in goal setting and decision making is known
as _____.
a) reinforcing behavior
b) participating as management
c) employee participation
d) management by objectives
23. An important step in the MBO process is:
a) managers setting goals for their employees.
b) managers planning actions for their employees.
c) managers and employees collaborate with their supervisors at all levels to set performance goals.
d) employees review their own performance.
24. _____ suggests that managers can motivate employees by controlling or changing their actions through behavior
modification.
a) Equity theory
b) Reinforcement theory
c) Expectancy theory
d) Management by objectives
25. _____ offers pleasant consequences for completing or repeating a desired action, whereas _____ allows people to
avoid unpleasant consequences by behaving in the desired way.
a) Behavior modification; negative reinforcement
b) Behavior modification; positive reinforcement
c) Negative reinforcement; positive reinforcement
d) Positive reinforcement; negative reinforcement
26. Which of the following is the most desirable method for motivating or changing the behavior of employees?
a) punishing behavior that is not wanted
b) ignoring the undesired behavior, hoping it will stop
c) ignoring the desired behavior, hoping it will continue
d) rewarding desired behavior
Keeping Pace with Today’s Workforce
27. Losing the valuable skills and knowledge of experienced employees is often referred to as _____.
a) migration
b) brain drain
c) immigration
d) emigration
28. _____ is the term generally used to describe periodic realignments or shakeups to match business needs more
precisely.
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a)
b)
c)
d)
Downsizing
Layoffs
Reengineering
Rightsizing
29. When Circuit City dismissed 3,900 of its highest-paid and most experienced salespeople in a single day, the
company was _____.
a) outsourcing
b) reengineering
c) rightsizing
d) downsizing
30. Which of the following is a way for managers to foster employee loyalty?
a) manage their companies with profit as their only goal
b) give employees a stake in the success of the firm (page 336, Level 3, Moderate)
c) enforce company rules without exception
d) downsize to keep a small core of employees at the top
31. Which of the following is a way to prevent employee burnout?
a) ghost work
b) overwork
c) flextime options
d) information overload
32. _____ is the overall environment that results from job and work conditions.
a) Job enrichment
b) Employee empowerrment
c) Quality of work life
d) Employee wellness
33. Genencor, a biotech company based in Palo Alto, California, provides on-site dry cleaning and offers loaner bikes
and cars so that employees who use public transportation to get to and from work can run errands during work
breaks. Genencor is making an effort to improve _____ for its employees.
a) transportation options
b) hygiene conditions
c) quality of work life
d) wellness
34. Jackson's employer has decided to train him not only to deliver copy machines to clients but also to set up the
equipment and to instruct customers on how to use the new features. Jackson's employer is using _____ to improve
QWL for Jackson.
a) benefits
b) job enrichment
c) job rotation
d) positive reinforcement
35. Designing a better fit between employees’ skills and their work to increase job satisfaction is called _____.
a) job enrichment
b) job rotation
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c) job redesign
d) flextime
36. A major challenge brought by workforce diversity is
a) tapping into a larger pool of talent.
b) better understanding of diverse markets.
c) a broader range of viewpoints and ideas.
d) fostering cooperation and harmony.
37. The workforce within the United States is _____.
a) remaining unchanged
b) growing older
c) growing younger
d) none of the above
38. In 1967 Congress passed the ______ to protect workers from age discrimination.
a) American with Disabilities Act
b) Civil Rights Act
c) Age Discrimination in Employment Act
d) Workers’ Family Protection Act
39. _____ is discrimination on the basis of gender.
a) Inequity
b) Sexism
c) Racism
d) Sexual harassment
40. Women from Wal-Mart stores across the country filed suit in 2004 alleging a consistent pattern of gender
discrimination at the company. This is an example of _____.
a) inequity
b) sexism
c) racism
d) sexual harassment
41. While women hold about half of administrative and managerial positions in the workforce, women have difficulty
attaining higher positions due to ______.
a) the glass ceiling
b) sexual harassment
c) sexism
d) inequities
42. _____ is defined as either an obvious request for sexual favors with an implicit reward or punishment related to
work, or the more subtle creation of a sexist environment in which employees are made to feel uncomfortable by
lewd jokes, remarks, or gestures.
a) Inequity
b) Sexism
c) Sexual harassment
d) Sex discrimination
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43. The majority of reported cases of sexual harassment are ______.
a) female employees who are being sexually harassed by female colleagues
b) female employees who are being sexually harassed by male colleagues
c) male employees who are being sexually harassed by women colleagues
d) male employees who are being sexually harassed by male colleagues
44. Most companies today have published sexual harassment policies to
a) allow an occasional off-color joke between a male supervisor and female employee.
b) exclude male-to-male harassment from protection.
c) encourage only more subtle forms of sexual harassment.
d) protect employees and protect themselves from lawsuits.
45. IBM established executive-led task forces to represent women, Asian Americans, African Americans, Hispanic
Americans, Native Americans, people with disabilities, and individuals who are gay, lesbian, bisexual, and
transgender. This is an example of IBM establishing _____.
a) sensitivity training
b) international opportunity programs
c) diversity initiatives
d) affirmative action programs
46. _____ is a scheduling system that allows employees to choose their own hours, within certain limits.
a) Job rotation
b) Job sharing
c) Flextime
d) Telecommuting
47. _____ can save companies money in equipment and office space costs while also offering the potential of expanding
the labor pool to include people who do not wish to relocate.
a) Flextime
b) Job redesign
c) Job sharing
d) Telecommuting
48. Mr. Smith and Mr. Jones work at Deep Dish Pizzeria. Mr. Smith works on Mondays and Tuesdays, while Mr. Jones
works on Thursdays and Fridays. Both employees come in on Wednesdays as their schedules overlap. This
arrangement is known as _____.
a) job rotation
b) job enrichment
c) job sharing
d) job redesign
Working with Labor Unions
49. _____ are organizations of employees formed to protect and advance their members’ interests.
a) Special-interest groups
b) Worker coalitions
c) Worker collectives
d) Labor unions
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50. _____ unions represent employees in a specific geographic area or facility, while _____ unions are nationwide
organizations composed of many local unions that represent employees in specific locations.
a) Local; national
b) National; local
c) Local; international
d) National; international
51. When UPS management works together with the union for UPS workers to negotiate work contracts, it is known as
______.
a) collective bargaining
b) arbitration
c) mediation
d) binding arbitration
52. UPS management and the union for UPS workers have reached an impasse in negotiations. They agree to bring in an
impartial third party to study the situation and make recommendations for resolution of their differences. The two
parties will enter _____.
a) arbitration
b) compulsory arbitration
c) mediation
d) binding arbitration
53. Which of the following are tactics used by labor unions when negotiations break down?
a) strikes
b) injunctions
c) strikebreakers
d) lockouts
54. Which of the following is a tactic used by management when negotiations break down?
a) strikes
b) slow downs
c) boycotts
d) lockouts
55. Union membership continues to decline, from more than a _____ of the workforce in the 1950s to less than _____
percent today.
a) quarter; 15
b) third; 20
c) third; 15
d) half; 20
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TRUE/FALSE QUESTIONS
Motivating Employees
56. Employees who are thoroughly engaged in their work generally exhibit high morale, a positive attitude toward both
their jobs and their employers.
57. Motivation is the combination of forces that moves individuals to take certain actions and avoid others in pursuit of
individual objectives.
58. In Frederick W. Taylor's opinion, workers are motivated almost exclusively by higher-level needs, such as
opportunities for advancement and personal growth.
59. According to Maslow's needs pyramid, an individual’s need for self-worth and integrity are the lowest-level needs
and the last to be fulfilled.
60. Hygiene factors are closely related to Maslow's lower-level needs, and motivators are closely related to Maslow's
higher-level needs.
61. A young, unskilled worker may need the support of strong hygiene factors to reduce dissatisfaction before a manager
is able to employ motivators to increase the worker's motivation.
62. As a Theory Y-oriented manager, Sandy "runs a tight ship" by controlling as many aspects of her employees' work
as possible because she generally believes workers are irresponsible and must be motivated by fear.
63. Promotions, salary increases, and benefit packages are examples of intrinsic rewards.
64. Theory Z is a leadership approach that emphasizes involving employees at all levels and treating them like family.
65. Expectancy theory contributes to the understanding of motivation by suggesting that employee satisfaction depends
on the perceived ratio of inputs to outputs.
66. Like equity theory, expectancy theory focuses less on the specific forces that motivate employees and more on the
process they follow to seek satisfaction in their jobs.
67. Reinforcement theory suggests the idea that goals can motivate employees.
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68. Reinforcement theory suggests that managers can motivate employees by controlling or changing their actions
through behavior modification.
Keeping Pace with Today’s Workforce
69. Losing the valuable skills and knowledge of experienced employees is often referred to as job displacement.
70. Work-life balance is the idea that employees, managers, and entrepreneurs need to balance the competing demands
of their professional and personal lives.
71. By 2010, recent immigrants will account for half of all new U.S. workers.
72. The Equal Employment Opportunity Commission made it illegal for employers to practice sexism.
73. A lack of opportunities to advance into the top ranks is often referred to as the cement ceiling.
74. Recent surveys suggest that anywhere from 21 to 45 percent of women and 7 to 19 percent of men reported being
sexually harassed at work.
75. A company requiring everyone to be at work between 10:00 a.m. and 2:00 p.m., but employees may arrive or depart
whenever they want as long as they work a total of 8 hours every day, is using flextime.
76. Only 10 million U.S. employees now work from home at least part of the time.
77. Job sharing benefits businesses because positions are less likely to be empty due to an employee's illness or vacation.
Working with Labor Unions
78. Historically, labor unions have played an important role in U.S. employee-management relations and are largely
responsible for the establishment of worker’s compensation, child-labor laws, overtime rules, minimum-wage laws,
and severance pay.
79. In the United States, the second half of the 1800s and the Great Depression of the 1930s were formative events in the
history of unionization.
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80. The members in a local union are often referred to as the rank and file.
81. A national union is a nationwide organization composed of many local unions that represent employees in specific
locations.
82. Examples of a national union are the United Auto Workers of America and the United Steelworkers of America.
83. Employees who express interest in unionizing are sent information about the union along with a petition to sign.
84. The process by which a union is officially recognized by the National Labor Relations Board as the bargaining agent
for a group of employees is call authorization.
85. The process employees use to take away a union’s official right to represent them is known as decertification.
86. In a process known as collective bargaining, union and management negotiators work together to forge the human
resources policies that will apply to all employees covered by the contract.
87. Arbitration is the most common process for resolving labor-contract disputes.
88. The most powerful weapon that organized labor can use is the boycott.
89. Nonunion workers hired to do the jobs of striking workers are called strikebreakers.
90. Under the Taft-Hartley Act, the president of the United States has the right to obtain a temporary injunction to halt a
strike deemed harmful to the national interest.
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CHAPTER 11
Taking Care of Employees: Managing Human Resources
MULTIPLE CHOICE QUESTIONS
Understanding What Human Resources Managers Do
1. The specialized function of planning how to obtain employees, oversee their training, evaluate them, and compensate
them is called _____.
a) operations management
b) human resources management
c) marketing management
d) financial management
2. Among the tasks that human resources managers perform, is _______ .
a) attracting qualified employees from the available pool of entry level candidates.
b) determining how to punish a line employee for a supervisor
c) deciding how to keep top executives happy through stock option packages
d) providing orientation during downsizing
Planning for a Company’s Staffing Needs
3. Which of the following is a function of a human resources department?
a) administering compensation
b) planning for materials needs
c) setting strategic policies
d) interpreting the legality of accounting practices
4. Joe Somebody is a human resource manager at his company. He needs to determine the numbers and types of
employees who will be needed at various times. Joe is engaged in ______.
a) forecasting demand
b) hiring new employees
c) recruiting potential candidates
d) evaluating current employees
5. When human resources managers forecast demand, they are forecasting the _____.
a) amount of goods or services that employees must produce to meet market demand
b) amount and kinds of materials that employees will need to meet projected production targets
c) numbers and kinds of employees that a company will need at various times
d) potential market demand for a company's goods or services
6. Miller is an HR director. As his company expands, he must consider which of the following variables in making his
forecast?
a) the number and kinds of new stores needed
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b) the quotas for the company
c) the supply of available employees from outside the company
d) changing the existing union contract for each new employee
7. Workforce planning efforts that identify possible replacements for specific employees, usually senior executives, is
known as _____.
a) replacement charts
b) job analysis
c) succession planning
d) outplacement
8. A _____ identifies the most vital employees in the organization and any available information related to their
potential replacement.
a) replacement chart
b) succession planning
c) job analysis
d) job description
9. Temps, independent contractors, freelancers, or consultants are commonly referred to as _____.
a) displaced workers
b) contingent employees
c) rehired workers
d) permanent employees
10. Which of the following is an element of the human resources department that can be outsourced?
a) developing the compensation system
b) job analysis
c) strategic planning
d) payroll
11. Natasha's company is preparing for a major restructuring. Natasha's team of human resource managers must conduct
a survey for which existing employees will be asked about the purposes of their jobs, the tasks involved in them, and
the skills and qualifications needed for them. In this case, Natasha and her team are conducting a _____.
a) job analysis
b) performance appraisal
c) climate survey
d) skills inventory
12. A _____ is a statement of the tasks involved in a given job and the conditions under which the holder of the job will
work, while a _____ is a statement describing the kind of person who would be best for a given job.
a) job analysis; job description
b) job description; job specification
c) job specification; job analysis
d) job specification; job description
Recruiting, Hiring, and Training New Employees
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13. The process of attracting appropriate applicants for an organization’s jobs is called _____.
a) selecting
b) recruiting
c) evaluating
d) hiring
14. Which of the following is a common method used for locating job candidates?
a) prime-time network advertising
b) Internet searches
c) prospectors.
d) union stewards
15. Which of the following is one of the fastest-growing recruitment sources for both large and small businesses?
a) trade shows
b) public and private employment agencies
c) the Internet
d) union hiring halls
16. Which of the following is a form of training?
a) conducting the orientation program
b) interviewing each candidate to clarify qualifications
c) selecting a few qualified applicants from applications received
d) evaluating the candidates
17. Astrid is chair of a hiring committee in search of a professor of biomechanics at a private college. When conducting
background checks on the top three candidates, which of the following is Astrid most likely to investigate?
a) the number of children in the applicants’ families
b) checking into the candidates' credit card histories
c) whether the candidate has many friends
d) verifying all educational credentials and previous jobs
18. Which of the following is a question an employer is allowed to ask a job candidate?
a) whether a person has children
b) whether a person has job-related experience
c) whether a person is married
d) whether a person owns or rents a home
19. Which of the following is the most commonly used procedure for preemployment testing by companies?
a) drug testing
b) job-skills testing
c) psychological testing
d) stress testing
20. General Mills is one of a growing number of companies that send liberal arts graduates to a “business finishing
school” after graduation to learn business fundamentals before they report to work. This is an example of _____ at
General Mills.
a) intelligence testing
b) training
c) job-skills testing
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d) psychological testing
21. Ingra has just been hired as a programmer at a computer company. She will undergo a thorough orientation program.
Ingra is excited about this program because she has received materials ahead of time and the program includes
training about all of the following:
a) the organization’s skills inventory.
b) the organization’s list of companies it uses for outplacement.
c) the organization and its procedures.
d) the organization and its religious practices.
Appraising Employee Performance
22. An evaluation of an employee’s work according to specific criteria is called a _____.
a) skills inventory
b) job analysis
c) performance appraisal
d) self-evaluation
23. Gwyneth's supervisor has finished evaluating the work performance of all the employees in Gwyneth’s department.
The supervisor compares each employee's work to preset standards determined by the company. Gwyneth and her
colleagues have undergone a _____.
a) skills inventory
b) performance appraisal
c) performance evaluation
d) job analysis
24. The goals of performance appraisal are to
a) provide employees information on how to improve and to protect the company in cases of disputed termination.
b) provide 360-degree feedback to production workers.
c) provide employees information on disputed terminations.
d) provide information and protect employees.
25. _____ is a real-time, computer-based evaluation of employee performance.
a) Skills inventory
b) Job analysis
c) Electronic conferencing
d) Electronic performance monitoring
Administering Compensation and Employee Benefits
26. The law that sets guidelines for administering salaries and wages, a minimum wage, and overtime is the
a) Family Leave Act.
b) Americans with Disabilities Act.
c) Fair Labor Standards Act.
d) Equal Employment Opportunity Act
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27. _____ are cash payments paid to employees based upon the number of hours worked or number of units produced,
whereas _____ are fixed weekly, monthly, or yearly cash compensation for work performed.
a) Benefits; salaries
b) Salaries; benefits
c) Salaries; wages
d) Wages; salaries
28. Among the best-paid employees in the world are _____ of large U.S. corporations.
a) chief executive officers
b) presidents
c) senior vice presidents
d) corporate lawyers
29. In addition to offering lower wages than many traditional grocery and retail stores, Wal-Mart squeezes every
possible penny out of operating costs and is quick to import goods from China and other lower-cost countries when
U.S. suppliers cannot meet its cost demands. Wal-Mart is following a _____ policy.
a) “rank and file”
b) “rank and yank”
c) “race to the top”
d) “race to the bottom”
30. CEOs typically receive complex compensation packages that include
a) wages.
b) golden salaries.
c) commissions.
d) golden parachutes.
31. Bob is a sales engineer at a software company. He receives a salary along with a year-end payment based on his
sales performance. Bob’s annual payment is called a _____.
a) wage
b) salary
c) commission
d) bonus
32. _____ are a form of compensation that pays employees a percentage of sales made.
a) Salaries
b) Wages
c) Commissions
d) Gain sharing
33. Expeditors International, a freight forwarding firm with offices in 182 countries around the world, allots 20 percent
of each office’s net income into a system that rewards employees for staying with the company. Expeditors
International has set up _____ for its employees.
a) profit sharing
b) gain sharing
c) merit pay
d) pay for performance
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34. Which of the following is a typical incentive program used by companies?
a) vacations
b) insurance coverage
c) bonuses
d) retirement benefits
35. Hamish is an elementary school teacher. He is taking courses toward a master’s degree. In Hamish’s district, he
receives salary advancement through earned credits. This is an example of _____.
a) bonuses
b) gain sharing
c) knowledge-based pay
d) profit sharing
36. A cafeteria plan
a) is a form of insurance for employees.
b) is a retirement benefit
c) allows employees to select from among a group of benefits offered
d) offers family bonus benefits
37. In the United States, over _____ million people currently cannot afford basic health coverage.
a) 55
b) 50
c) 45
d) 40
38. _____ are company-sponsored programs for providing retirees with income.
a) Employee benefits
b) Profit sharing
c) Compensation plans
d) Retirement plans
39. _____ was created by the federal government following the Great Depression of the 1930s to provide basic support
to those who could not accumulate the retirement money they would need later in life.
a) Medicare
b) Social Security
c) Medi-Cal
d) Welfare
40. Retirement plans are regulated by the _____.
a) Employees’ Retirement Income Security Act
b) Fair Labor Standards Act
c) Federal Unemployment Tax Act
d) Social Security Act
41. Company-sponsored retirement plans can be categorized as either _____ or _____.
a) 401(k); Social Security
b) defined contribution plans; 401(k)
c) defined contribution plans; defined benefit plans
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d) Social Security; defined benefit plans
42. _____ generally refer to traditional, defined benefit retirement plans.
a) Retirement plans
b) Cafeteria plans
c) Pension plans
d) Social Security
43. Which of the following is a program enabling employees to become partial owners in a company?
a) employee stock-ownership plan
b) pension plan
c) option plan
d) 401(k) plan
44. Which of the following is a problem with stock options?
a) Stock options cost little.
b) Stock options motivate employees to work harder.
c) Stock options perform well during all economic cycles.
d) Stock options can generate great profit in the stock market.
45. Stock options typically “vest” over five years, at a rate of _____ percent annually.
a) 10
b) 15
c) 20
d) 25
46. The Family Medical and Leave Act requires employers with 50 or more workers to provide up to _____ weeks of
unpaid leave per year for childbirth, adoption, or the care of oneself, a child, a spouse, or a parent with serious
illness.
a) 6
b) 9
c) 12
d) 15
47. Nearly _____ of all companies now offer some sort of childcare assistance.
a) one-quarter
b) half
c) two-thirds
d) all
48. Which of the following benefits encourages company loyalty and reduces turnover?
a) paid holidays
b) sick pay
c) paid vacations that increase with longevity
d) minimum wage
49. Private and confidential counseling to employees who need help with issues related to drugs, alcohol, domestic
violence, finances, stress, family issues, and other personal problems is provided through _____.
a) human resources
b) employee assistance programs
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c) industrial psychologists
d) health insurers
Overseeing Changes in Employment Status
50. _____ are the termination of employees for economic or business reasons unrelated to employee performance.
a) Layoffs
b) Wrongful discharges
c) Mandatory retirements
d) Voluntary retirements
51. To help ease the pain of layoffs, many companies provide laid-off employees with job hunting assistance, known as
_____.
a) outplacement
b) outreach
c) retraining
d) retooling
52. Ross was fired from his job because he filed a worker’s compensation claim. Ross will probably file a _____ lawsuit
against his employer.
a) sexual harassment
b) negligence
c) wrongful discharge
d) discrimination
53. The _____ outlawed discrimination against anyone between the ages of 40 and 65, with subsequent amendments
outlawing _____.
a) Labor-Management Relations Act; wrongful discharge
b) Age Discrimination in Employment Act; mandatory retirement
c) Employee Retirement Income Security Act; mandatory retirement
d) Fair Labor Standards Act; wrongful discharge
54. Inducing workers to retire by offering them financial incentives is known as a _____.
a) golden parachute
b) golden handshake
c) gift bonus
d) worker buyout
55. Which of the following statements about the advantages of a worker buyout is true?
a) Worker buyouts are more expensive than firing or laying off employees.
b) Worker buyouts reduce chances for promotion for younger workers.
c) Worker buyouts reduce the morale of the remaining employees.
d) Worker buyouts increase the risk of age-discrimination lawsuits.
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TRUE/FALSE QUESTIONS
Understanding What Human Resources Managers Do
56. Human resources management is the specialized function of planning how to obtain employees, oversee their
training, evaluate them, and compensate them.
Planning for a Company’s Staffing Needs
57. One of the six functions of the human resources department is to groom executives.
58. The percentage of the workforce that leaves every year is the turnover rate.
59. HR managers work with the board of directors to identify potential replacements in the event that the CEO decides to
leave with no forewarning, a process known as succession planning.
60. To ensure a steady supply of experienced employees for new opportunities and to maintain existing operations,
successful companies focus heavily on employee retention.
61. More and more businesses are saving money and increasing flexibility by using contingent employees.
62. A special category of foreign temporary workers, usually known as “H-1B” workers, has generated its own
controversy in recent years.
63. Through the process of work specialization, employers try to identify both the nature and the demands of each
position within the firm and the optimal employee profile to fill each position.
64. Job specification is a statement of the tasks involved in a given job and the conditions under which the holder of the
job will work.
Recruiting, Hiring, and Training New Employees
65. Hiring is the process of attracting appropriate applicants for an organization’s jobs.
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66. Corporate “headhunters” are outside agencies that specialize in finding and placing employees.
67. One of the fastest-growing recruitment resources for both large and small companies is the Internet.
68. Normally, the hiring process begins by interviewing each candidate to clarify qualifications and to fill in any missing
information.
69. Background checks are particularly important for jobs in which employees are in a position to harm others or handle
large amounts of cash.
70. Roughly a third of U.S. employers now conduct criminal background checks, and roughly 70 to 80 percent conduct
credit checks.
71. Asking questions about unrelated factors such as citizenship, marital status, age, and religion violates the Equal
Employment Opportunity Commission’s regulations because such questions are misleading.
72. Many companies rely on preemployment testing to determine whether applicants are suited to the job and whether
they will be worth the expense of hiring and training.
73. Hewlett-Packard conducts drug testing on all its employees, whereas Dell believes that such testing is a sign of
disrespect toward employees.
74. Training always begins before new hires start working.
Appraising Employee Performance
75. While the goal of performance reviews is to improve employee performance, the ultimate goal of performance
appraisals is to judge employee performance.
76. The ultimate in multidimensional reviews is the 360-degree review, in which a person is given feedback from peers
only.
77. In addition to formal, periodic performance evaluations, many companies evaluate some workers’ performance
continuously, using electronic data interchange.
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Administering Compensation and Employee Benefits
78. The distinction between exempt employees and nonexempt employees is based on job responsibilities and pay.
79. With the average compensation of CEOs at large U.S. companies now in the $15 million range, it is not uncommon
for CEOs to earn several hundred times more than their lowest-paid employees.
80. The success of incentive programs often depends on how closely incentives are linked to actions within employees’
control.
81. Perhaps no other issue illustrates the challenging economics of business today than Social Security.
82. When most people speak of pension plans, they are referring to traditional defined benefit plans, in which employers
promise to pay their employees a benefit upon retirement based on the employee’s retirement age, final average
salary, and years of service.
83. Defined benefit plans are similar to savings plans that provide a future benefit based on annual employer
contributions, voluntary employee matching contributions, and accumulated investment earnings.
84. Stock options grant employees the right to purchase a set number of shares of employer’s stock at a specific price,
called the grant or exercise price, during a certain time period.
85. The Family Medical Leave Act requires companies with 50 or more workers to provide employees with six weeks of
paid leave per year for childbirth, adoption, or the care of a sick person in the immediate family.
Overseeing Changes in Employment Status
86. Every company experiences some level of attrition, when employees are forced to leave for any reason.
87. Enterprise Rent-A-Car, one of the nation’s largest employers of new college graduates, has used its strong tradition
of “promoting from within” as a major selling point to potential employees.
88. Companies are free to make layoffs in any manner they choose, just as long as they provide outplacement services to
laid-off workers.
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89. The concept of at-will employment means that companies are free to fire nearly anyone they choose.
90. One of the newest and most controversial trends in employee termination is known as rank and yank, in which a
company ranks the performance of all its employees, then fires the bottom 5 to 10 percent in an effort to improve
overall corporate performance.
CHAPTER 12
CONNECTING WITH CUSTOMERS:
THE ART AND SCIENCE OF MARKETING
Multiple Choice Questions
Marketing in a Changing World
1. The American Marketing Association defines _____ as planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational
objectives.
a) management
b) economics
c) finance
d) marketing
2. The Kingston Tourist Board has a website designed to attract tourists and business investments. Information on the
website furnishes a detailed description of the town’s natural and cultural attractions along with its attractive
business climate. This is an example of _____ marketing.
a) cause-related
b) database
c) place
d) relationship
3. Avon has raised money and awareness for breast cancer screening and research through such activities as the Avon
Walk for Breast Cancer. This is an example of _____ marketing.
a) cause-related
b) person
c) place
d) relationship
4. You experience a _____ anytime there is a difference or a gap between your actual state and your ideal state, while
your _____ are entities that are desirable in light of your experiences, culture, and personality.
a) want; needs
b) desire; wants
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c) need; wants
d) demand; needs
5. An act of obtaining a desired object or service from another party by offering something of value in return is called
_____, while an exchange between parties is called _____.
a) a trade; a transaction
b) the exchange process; a transaction
c) a transaction; the exchange process
d) bartering; trading
6. _____ is the power of a good or service to satisfy a human need.
a) Gratification
b) Desire
c) Utility
d) Want
7. Overnight couriers such as Airborne Express create _____ utility.
a) form
b) place
c) possession
d) time
8. Coffee carts in office buildings and ATM machines in shopping malls create _____ utility.
a) time
b) possession
c) place
d) form
9. Nokia combines plastic, computer chips, and other materials to make digital phones. This is an example of _____
utility.
a) possession
b) place
c) time
d) form
10. First Union Mortgage offers loans that allow people to buy homes they could otherwise not afford. First Union is
creating _____ utility.
a) possession
b) time
c) form
d) place
11. The _____ is the idea that companies should respond to customers’ needs and wants while seeking long-term
profitability and coordinating their own marketing efforts to achieve the company’s long-term goals.
a) product concept
b) production concept
c) marketing concept
d) selling concept
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12. Anthony’s company is focused on satisfying customer needs and wants, selecting target markets, seeking long-term
profitability, and integrating the marketing function. Anthony’s company is using the _____ as an approach to
business management.
a) product concept
b) marketing concept
c) production concept
d) selling concept
13. A focus on developing and maintaining long-term relationships with customers, suppliers, and distribution partners
for mutual benefit is known as _____.
a) value marketing
b) target marketing
c) relationship marketing
d) mass marketing
14. The degree to which customers continue to buy from a particular retailer or buy the product of a particular
manufacturer or service provider is called _____.
a) customer loyalty
b) brand equity
c) brand awareness
d) relationship marketing
15. Sony should be the top dog in portable music players, not Apple. However, Sony’s insistence on using its own
digital file format, rather than the formats that the market has already accepted, has kept it a minor player in the new
world of digital music players. Sony’s approach is an example of pursuing the _____.
a) marketing concept
b) selling concept
c) production concept
d) product concept
16. Websites that let visitors sign up for specific e-mail newsletters with the promise that they will not be bombarded
with information they do not care about, is an example of _____.
a) viral marketing
b) target marketing
c) permission-based marketing
d) catalog marketing
17. When a marketer sends people into public places to use particular products in a conspicuous manner and then discuss
them with strangers or pays consumers to promote products to their friends without telling them it is a form of
advertising, the marketer is using an approach known as _____.
a) permission-based marketing
b) stealth marketing
c) retention marketing
d) target marketing
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Understanding Today’s Customers
18. Getting good information about what customers want is challenging because today’s customers _____.
a) are similar
b) demand perfection
c) don’t value quality
d) are diverse
19. A(n) _____ market is made up of individuals or households that buy goods and services for personal use, while a(n)
_____ market is composed of both companies and a variety of noncommercial institutions that purchase goods and
services for use in their operations.
a) organizational; consumer
b) industrial; consumer
c) consumer; organizational
d) reseller; institutional
20. _____ is the behavior exhibited by individuals as they consider, select, and purchase goods and services for their
own use and that of their households.
a) Consumer buying behavior
b) Rational buying behavior
c) Organizational buying behavior
d) Routine buying behavior
21. Which of the following is the most common sequence of steps consumers take in making purchase decisions?
a) gather information; identify need; evaluate alternatives; select an alternative; evaluate choice
b) gather information; evaluate alternatives; identify need; select an alternative; evaluate choice
c) identify need; gather information; evaluate alternatives; select an alternative; evaluate choice (page 405, Level 2,
Moderate)
d) identify need; evaluate alternatives; select an alternative; gather information; evaluate choice
22. _____ occurs when a person’s beliefs do not match his or her behaviors.
a) Negative generalization
b) Selective perception
c) Risk minimization
d) Cognitive dissonance
23. Sharon buys a new car. Shortly after making her car purchase, Sharon comes to the awful realization that she is
dissatisfied with the car and regrets making the purchase. This is an example of _____.
a) buyer’s remorse
b) negative generalization
c) selective distortion
d) selective perception
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24. New research suggests that _____ percent of the decision-making process is subconscious and that sensory cues play
a much larger role than objective information.
a) 70
b) 80
c) 90
d) 95
25. Which of the following is an influence commonly affecting consumer purchase decisions?
a) market research
b) reference groups
c) contra seasonal fads
d) college class
26. Levi Strauss has lost billions of dollars of business in the past decade because it failed to pay attention to the
emergence of hip-hop fashion. Levi Strauss failed to take into account shifts in _____.
a) attitude
b) beliefs
c) culture
d) habits
27. Jason is a pitcher on his college’s baseball team. He and the other players on the team regularly share information
about athletic shoes and other sports gear. Jason is a member of a _____.
a) social class
b) subculture
c) clique
d) reference group
28. Sarah is the CEO for a global advertising agency. Sarah has an M.B.A. from an Ivy League university, lives in an
affluent community, and earns a seven-figure salary. These descriptors could be used to define Sarah’s _____.
a) subculture
b) social class
c) circumstances
d) culture
29. Which of the following is considered a situational factor that influences consumers’ buying behavior?
a) social class
b) being in a hurry
c) cultural background
d) reference group
30. Celebrities frequently appear as product endorsers so that consumers will incorporate part of these celebrities’ public
image into their _____.
a) situational factors
b) reference groups
c) self-images
d) social classes
31. Which of the following is a way in which organizational purchasing differs from consumer purchasing?
a) an emphasis on emotional factors
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b) a formal buying process
c) the motivation of only the individual purchaser
d) short-term, transactional relationships between buyers and sellers
32. _____ is the collection and analysis of information for making marketing decisions.
a) Marketing research
b) Marketing intelligence
c) Marketing planning
d) Marketing mix
33. _____ is the process of recording and analyzing customer interactions, preferences, and buying behavior for the
purpose of contacting and transacting with customers.
a) Viral marketing
b) Direct marketing
c) Database marketing
d) Target marketing
34. Margaret is a market researcher working for an Internet-based company. She is responsible for recording and
analyzing customers’ buying preferences and purchasing patterns. Margaret is most likely involved in _____.
a) direct marketing
b) database marketing
c) catalog marketing
d) direct-response advertising
35. _____ involve a small number of people guided by a facilitator while being observed or recorded by researchers.
a) Observations
b) Surveys
c) Focus groups
d) Experiments
36. _____ involve controlled scenarios in which researchers adjust one or more variables to measure the affect these
changes have on customer behavior.
a) Observations
b) Experiments
c) Surveys
d) Interviews
37. Marcia received a phone call from a marketing research firm. The interviewer asked Marcia if she could spare a few
minutes to respond to questions about her customer service experience while having her car serviced at a local
dealership. Marcia is participating in a(n) _____.
a) survey
b) experiment
c) focus group
d) mall intercept.
38. _____ is any method of collecting data during the course of other business tasks, including warranty registration
cards, gift and loyalty program card usage, and customer service interactions.
a) Survey
b) Experiment
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c) Process data collection
d) Interview
Planning Your Marketing Strategies
39. _____ is a process of examining an organization’s current marketing situation, assessing opportunities and setting
objectives, then developing a marketing strategy to reach those objectives.
a) Strategic marketing planning
b) Marketing research
c) Target marketing
d) Database marketing
40. Jacob is the senior vice president of marketing at his company. He is regularly involved in the strategic marketing
planning process. Which of the following tasks is Jacob most likely to perform during the planning process?
a) assessing the company's losses
b) examining the company's current marketing situation
c) developing the media mix to reach marketing objectives
d) evaluating initial results of the marketing strategy
41. Most companies record the results of their planning efforts in a document called the _____.
a) strategic plan
b) marketing plan
c) tactical plan
d) operational plan
42. Which of the following is included in an examination of a company’s current marketing situation?
a) developing marketing strategies
b) analyzing the external environment
c) creating the promotion mix
d) repositioning the product
43. As part of the marketing planning process, Sally must review the history of the marketing performance at her
company. During her analysis, she observes that sales have slowed in the past year and profits have dipped. Sally is
involved in _____.
a) analyzing the external environment
b) examining internal strengths and weaknesses
c) evaluating competition
d) reviewing performance
44. If you own a Burger King franchise, you need to watch what McDonald’s and Wendy’s are doing, as well as Taco
Bell, KFC, Pizza Hut, and other restaurants. Paying attention to the activities of other companies involves _____.
a) examining the external environment
b) analyzing internal strengths and weaknesses
c) evaluating competition
d) reviewing past performance
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45. When Steven Nichols purchased the K-Swiss sneaker company, he did not try to update the basic 40-year-old shoe
designs to the leading edge of contemporary fashion. Instead, he went with its retro appeal and played up the
conservative angle for people who do not want the flashy design of Nike and other market leaders. In making this
decision, Nichols probably examined his company’s _____.
a) internal strengths and weaknesses
b) internal opportunities and threats
c) marketing progress
d) product packaging
46. Isabelle is a brand manager for a large food manufacturer. In the course of examining the current marketing
situation, Isabelle must analyze a number of environmental factors, including economic conditions, social and
cultural trends, and the natural environment. Isabelle is involved in _____.
a) analyzing the external environment
b) evaluating competition
c) managing competition
d) developing the marketing strategy
47. When a company seeks to sell existing products to new markets, it is opting to use _____.
a) market penetration
b) product development
c) market development
d) diversification
48. In _____, a company sells more of existing products to current markets, whereas _____ involves creating new
products for sale in current markets.
a) market penetration; product development
b) product development; market penetration
c) market development; diversification
d) market development; product development
49. Ginger is the marketing director for a small women’s apparel company. Using the company’s current marketing
situation and marketing objectives, she builds the overall plan for marketing the company’s new cruisewear line.
Ginger is involved in _____.
a) developing a marketing strategy
b) examining the current marketing situation
c) analyzing the external environment
d) evaluating the competition
50. _____ is the division of a diverse market into smaller, relatively homogenous groups with similar needs, wants, and
purchase behaviors.
a) Market segmentation
b) Market positioning
c) Market targeting
d) Market share
51. Which of the following is a common factor marketers use to identify market segments?
a) positioning
b) laws and regulations
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c) psychographics
d) situational factors
52. Dividing the United States into 40 neighborhood types, with labels such as “Blue Blood Estates" and "Old Yankee
Rows," is a goal of _____.
a) behavioristics
b) positioning
c) geodemographics
d) psychographics
53. In _____ marketing, companies ignore differences among buyers and offer only one product or product line to
satisfy the entire market, whereas _____ marketing involves selling a variety of products to several target groups.
a) undifferentiated; differentiated
b) differentiated; concentrated
c) undifferentiated; concentrated
d) differentiated; undifferentiated
54. In the buyer’s mind, BMW is associated with performance, Mercedes-Benz with luxury, and Volvo with safety.
These associations are examples of ______.
a) differentiated advertising
b) positioning
c) target marketing
d) product-differentiated marketing
55. Which of the following is an element of the marketing mix?
a) media
b) positioning
c) price
d) demographics
TRUE/FALSE QUESTIONS
Marketing in a Changing World
56. According to the AMA, management is the planning and execution of the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
57. Cause-related marketing promotes a cause or a social issue, such as physical fitness, cancer awareness, recycling, or
highway safety, while also promoting a company and its products.
58. The difference between a person’s actual state and his or her ideal state is called a want.
59. The act of obtaining a desired object or service from another party by offering something of value in return is called
a transaction.
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60. When Nokia combines plastic, computer chips, and other materials to make digital phones, the company is providing
possession utility.
61. Marketers try to make their products available when and where customers want to buy them, creating time utility and
place utility, respectively.
62. One of the most significant goals of relationship marketing is customer loyalty.
63. Many of today’s companies try to embrace the selling concept, the idea that companies should respond to customers’
needs and wants while seeking long-term profitability and coordinating their own marketing efforts to achieve the
company’s long-term goals.
64. One recent survey suggests that customers generally give a company one more chance after a bad experience, but
after two mistakes, they are ready to take their business elsewhere.
65. Online technology has changed the way people think, feel, and behave, changing the very nature of business and
making marketing no longer about choices, beliefs, and emotions of human beings.
66. ShopforChange.com asks customers who register on its website whether they would like to receive e-mails about
new products and discounted items, which is a practice known as permission-based marketing.
67. A common momentum marketing technique is sending people into public places to use particular products in a
conspicuous manner and then discussing them with strangers—as though they were just regular people on the street,
when in fact they are employed a by marketing firm.
Understanding Today’s Consumers
68. The first step toward understanding customers is recognizing the different purchase and ownership habits of the
consumer market and the organizational market.
69. The first step in the consumer decision process is gathering information.
70. When a consumer regrets the purchase of a product sometimes immediately after making the purchase, he or she is
experiencing a form of cognitive dissonance known as buyer’s remorse.
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71. The term tribal marketing is sometimes used to describe efforts to present products to groups that are organized
around a specific lifestyle element, such as skateboarding or cruising the highways on Harley-Davidson motorcycles.
72. Demonstrating the sensitive nature of culture in advertising, hundreds of Scion owners complained to the company
after it ran a commercial on the reality show “The Bachelor,” which the owners said “contaminated the brand.”
73. The purchasing behavior of organizations is harder to understand than the purchasing behavior of consumers since it
is less clearly driven by rational factors.
74. Understanding customer purchase behavior is one of the many goals of marketing research.
75. Capital One has become a leading credit card company largely because of its effective use of database marketing.
76. A marketing research technique in which a small number of people is guided by a facilitator while being observed or
recorded by researchers is known as observation.
Planning Your Marketing Strategies
77. The first step in the strategic marketing planning process is assessing your opportunities and setting your objectives.
78. A Burger King franchisee should only evaluate the competition that sells hamburger meals.
79. Failing to watch the horizon for potential competitors resulted in Kraft and General Mills suddenly losing business to
little known companies like Atkins Nutritionals when the low-carbohydrate diets caught on.
80. Marketers are greatly affected by trends in interest rates, inflation, unemployment, personal income, and savings
rates.
81. When a sneaker maker sells more of its existing line of sneakers in its current markets, it is using market
development.
82. When a cereal maker comes out with new brands for its current markets, it is using product development.
83. Segmenting a market according to characteristics such as age, gender, income, race, occupation, and ethnic group is
called behavioral segmentation.
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84. Using geographic segmentation, the U.S. Census Bureau responded to changes in small towns across the country by
creating the “micropolis,” a designation for boom towns that are near major metropolitan centers but are so selfcontained that many residents no longer need to travel into the city for shopping and employment.
85. Psychographic analysis focuses on why people behave the way they do by examining such issues as brand
preferences, media preferences, reading habits, values, and self-concept.
86. When retailer Best Buy identified a segment of customers that was costing the company through relentless bargain
hunting, a high rate of product returns, and frequent calls for technical support, it had found a particular target
market which they wanted to discourage from shopping their stores.
87. The biggest advantage of concentrated marketing is that it allows a company to focus all its time and resources on a
single type of customer.
88. Positioning describes efforts to market to geographical areas ranging from neighborhoods to entire countries.
89. The firm’s marketing mix, often called the four Ps, consists of product, price, place, and purchase.
90. Of the four components in a firm’s marketing mix, promotion is perhaps the one most often associated with
marketing.
CHAPTER 13
DEFINING THE EXCHANGE: PRODUCT AND PRICING STRATEGIES
MULTIPLE CHOICE QUESTIONS
Characteristics of Products
1. The _____ indicates the relative amounts of tangible and intangible components in a product.
a) product concept
b) product mix
c) product life cycle
d) product continuum
2. Candy bars, toothpaste, and blue jeans are examples of _____, while basketball teams, amusement parks, and TV
programs are examples of _____.
a) services; products
b) services; tangible objects
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c) tangible objects; intangible objects
d) intangible objects; tangible objects
3. Products that are primarily sold to consumers for personal consumption are known as _____ products.
a) consumer
b) industrial
c) general
d) generic
4. Jake is shopping for an affordable new car. He is spending countless hours doing price comparisons and evaluating
vehicles on the basis of desired attributes. In this case, Jake is making the purchase of a(n) _____ product.
a) convenience
b) specialty
c) unsought
d) shopping
5. Jessica stopped at the grocery store to pick up milk, bread, and toothpaste. What types of products did Jessica buy?
a) convenience products
b) specialty products
c) unsought goods
d) shopping products
6. Tony is shopping for a Rolex watch. He is checking out different watch styles at local jewelers authorized to sell
Rolexes. What type of product is Tony shopping for?
a) convenience product
b) specialty product
c) unsought good
d) shopping product
7. Jonathan sells life insurance to individuals and business owners. What type of product does Jonathan sell?
a) shopping product
b) specialty product
c) unsought good
d) convenience good
8. _____ are generally purchased by firms in large quantities and are used for further processing or in conducting a
business.
a) Consumer products
b) Unsought products
c) Shopping products
d) Industrial products
9. Which of the following is an industrial product?
a) raw materials
b) unsought products
c) shopping products
d) specialty products
10. The four basic stages through which a product progresses is called the _____.
a) product life cycle
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b) product mix
c) product concept
d) product continuum
11. Which of the following represent the correct sequence in the product life cycle?
a) introduction, maturity, aging, obsolescence
b) introduction, growth, maturity, decline
c) development, penetration, saturation, decline
d) development, growth, harvest, decline
12. Which of the following is the stage during which a company must decide whether to keep it and cut costs or to
discontinue it?
a) introduction
b) decline
c) maturity
d) growth
13. During the _____ stage, marketing staffs prepare promotional materials, train sales staff, complete packaging,
finalize the price, and wrap up countless other tasks.
a) introductory
b) maturity
c) growth
d) decline
14. The opening weekend for a movie often determines its success or failure—a tremendously stressful scenario for
people who may have invested years and many millions of dollars making it. A movie release is an example of the
_____ stage of the product life cycle.
a) introductory
b) growth
c) maturity
d) decline
15. The _____ stage is marked by a rapid jump in sales and, usually, an increase in the number of competitors and
distribution outlets.
a) introductory
b) maturity
c) growth
d) decline
16. Of the following, which stage is the longest in the product life cycle?
a) introductory
b) maturity
c) growth
d) decline
17. During the _____ stage, sales begin to level off or show slight decline.
a) introductory
b) growth
c) maturity
d) decline
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18. In the _____ stage, sales and profits slip and then fade away.
a) introductory
b) maturity
c) growth
d) decline
19. Changing demographics, shifts in popular tastes, product competition, and advances in technology are explanations
for a product entering the _____ stage.
a) introductory
b) growth
c) maturity
d) decline
20. When Rolling Stone began to lose readers to Spin and Blender and “lad mags,, publisher Jann Wenner launched a
major redesign of the publication to make it more relevant and more appealing to contemporary audiences. This is an
example of a _____.
a) product modification
b) product makeover
c) product improvement
d) product repositioning
The New-Product Development Process
21. A series of stages through which a product idea passes is known as the _____.
a) product life cycle
b) product mix
c) product concept
d) product-development process
22. The stage in the new product development process that comes up with ideas to satisfy unmet needs is
a) idea generation.
b) screening.
c) business analysis.
d) advertising.
23. A new-product development committee is creating a few test samples of a new product, including packaging. The
product is probably in the _____ stage of the product-development process.
a) business analysis
b) prototype development
c) test marketing
d) commercialization
24. In the _____ stage of the product-development process, the company reviews the sales, costs, and profit projections
to see if they meet the company’s objectives.
a) test marketing
b) idea screening
c) business analysis
d) commercialization
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25. A snack food manufacturer introduces a new corn chip in selected areas of the country and monitors consumer
reactions to it. This is an example of _____.
a) business analysis
b) prototype development
c) test marketing
d) commercialization
26. The large-scale production and distribution of products that have survived the testing process is referred to as _____.
a) business analysis
b) market penetration
c) market development
d) commercialization
Product Identities
27. _____ is a name, term, sign, symbol, design, or combination of those used to identify the products of a firm and to
differentiate them from competing products.
a) Brand
b) Trademark
c) Copyright
d) Label
28. The Nike “swoosh” symbol is a unique identifier on every Nike product. This is an example of a _____.
a) product specification
b) brand
c) product concept
d) product prototype
29. Branding helps
a) ensure that product quality standards have been met.
b) provide customers with a way of recognizing and specifying a particular product.
c) provide protection during shipping.
d) create control systems for the product.
30. The value that a company has built up in a brand is called _____.
a) brand loyalty
b) brand equity
c) brand awareness
d) brand preference
31. When Shirley needs to buy cosmetics, she returns to her favorite brand, Estee Lauder, over and over again. Shirley
expresses a high degree of _____ toward this cosmetic maker.
a) brand loyalty
b) brand awareness
c) brand preference
d) brand equity
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32. At which level of brand loyalty are people likely to buy a product because they are familiar with it?
a) brand equity
b) brand preference
c) brand awareness
d) brand insistence
33. Deidre prefers Crest toothpaste over other brands, and she purchases Crest whenever it is available. If Deidre cannot
find Crest, she is willing to experiment with something else. At which level of brand loyalty is Deidre in?
a) brand awareness
b) brand preference
c) brand insistence
d) brand substitution
34. Carol will buy only Starbucks coffee. At which level of brand loyalty is she currently in?
a) brand awareness
b) brand preference
c) brand insistence
d) brand substitution
35. Jeep, Apple, and Levi’s 501 are _____, while McDonald’s golden arches and the Nike “swoosh” are _____.
a) brand marks; brand names
b) brand names; brand marks
c) brand symbols; brand words
d) brand words; brand symbols
36. A brand that has been given legal protection so that its owner has exclusive rights to its use is known as a _____.
a) brand
b) brand name
c) brand mark
d) trademark
37. Proctor & Gamble’s Tide detergent and Pampers disposable diapers are examples of _____.
a) national brands
b) private brands
c) generic products
d) licensed brands
38. DieHard batteries and Kenmore appliances are sold by Sears. These are examples of _____.
a) national brands
b) private brands
c) generic products
d) licensed brands
39. Which of the following is packaged in plain containers and bear only the name of the product?
a) national brands
b) private brands
c) generic products
d) licensed brands
40. Kellogg’s Pop Tarts made with Smucker’s jam is an example of _____.
a) family branding
b) national branding
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c) licensing
d) co-branding
41. Thousands of children now ride in Jeep and Land Rover strollers. This is an example of _____.
a) family branding
b) national branding
c) licensing
d) co-branding
42. A function of packaging is
a) to reduce shoplifting.
b) to blend in well with other similar products.
c) decreases product uniqueness.
d) always to increase access to the product.
43. Labels do all of the following except:
a) it communicates with consumers.
b) protect manufacturers from product liability lawsuits because product information is furnished.
c) monitor product performance and inventory by manufacturers and retailers.
d) provide grading information about the product along with ingredient information.
44. Universal Product Codes do all of the following except:
a) help with inventory control.
b) measure promotional effectiveness.
c) enhance product convenience.
d) track product movement.
Product-Line and Product-Mix Strategies
45. A _____ is a collection of goods or services offered for sale, while a(n) _____ is a group of products that are similar
in terms of use or characteristics.
a) product line; product mix
b) product mix; product line
c) product mix; augmented product
d) product line; augmented product
46. Kraft has extended its Jell-O product line with new products such as gelatin in a cup, pudding in a cup, and
cheesecake snacks in a cup. This is an example of _____.
a) line filling
b) line extension
c) brand extension
d) family branding
47. _____ is putting the brand for an existing product category into a new category, while _____ is creating a new
variation of a basic product.
a) Line filling; line stretching
b) Line extension; brand extension
c) Brand extension; line extension
d) Line stretching; line filling
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48. Abdul’s company has decided to sell the same product to everyone and use the same promotional strategy
everywhere as the firm goes global. Abdul’s company has decided to _____.
a) standardize the marketing mix
b) customize the marketing mix
c) regionalize the marketing mix
d) marginalize the marketing mix
Pricing Strategies
49. Which of the following influences pricing?
a) marketer perceptions
b) consumer supply
c) government pricing
d) consumer perceptions
50. A measure of the sensitivity of demand to changes in prices is called _____.
a) break-even point
b) price point
c) price elasticity
d) variable pricing
51. In _____ pricing, companies start with the cost of producing a good or a service and then add a markup to the cost of
the product to produce a profit.
a) skim
b) cost-based
c) penetration
d) dynamic
52. _____ is a tool companies use to determine the number of units of a product they must sell at a given price to cover
all manufacturing and selling costs.
a) Cost-based pricing
b) Price-based pricing
c) Break-even analysis
d) Dynamic pricing
53. Under _____, the product’s price is based on an analysis of a product’s competitive advantages, the users’ perception
of the item, and the market being targeted.
a) cost-based pricing
b) price-based pricing
c) discount pricing
d) dynamic pricing
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54. _____ pricing is charging a high price for a product during the introductory stage and lowering the price later,
whereas _____ pricing is introducing a new product at a low price in hopes of building sales volume quickly.
a) Cost-based; price-based
b) Skim; penetration
c) Penetration; skim
d) Price-based; cost-based
55. _____ is charging different prices depending on individual customers and situations.
a) Dynamic pricing
b) Skimming pricing
c) Penetration pricing
d) Discount pricing
TRUE/FALSE QUESTIONS
Characteristics of Products
56. Digital music players such as the Apple iPod involve product elements that are strictly tangible.
57. Marketers frequently classify products on the basis of tangibility and use.
58. The intangibility of services makes them more difficult to demonstrate in advertisements.
59. Music players, computers, refrigerators, and college educations are examples of specialty goods.
60. Life insurance, cemetery plots, and new products are examples of unsought goods.
61. Raw materials, components, supplies, and equipment are examples of industrial products.
62. Most products go through a product life cycle.
63. Brands tend to have the longest life cycles, whereas product forms tend to have shorter life cycles.
64. The first stage in the product life cycle is product development.
65. The growth stage is marked by a rapid jump in sales and, usually, an increase in the number of competitors and
distribution outlets.
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66. The longest stage in the product life cycle is growth.
67. Eastman Kodak phased out the sale of its film cameras because of continued losses, marking the decline of this
product line.
68. A marketer can pull a product from the brink of decline by giving it a product makeover.
The New-Product Development Process
69. The first step in the new-product development process is idea screening.
70. The firm creates and tests a few samples, or prototypes, of the product during the final stage of new-product
development process.
71. During test marketing, the firm introduces the product in selected areas of the country and monitors consumer
reactions.
72. Commercialization, also referred to as a product launch, requires the coordination of many activities like
manufacturing, packaging, distribution, pricing, and promotion.
Product Identities
73. The notion of value of a brand is also called family branding.
74. The first level of brand loyalty is brand insistence.
75. Botox Cosmetic, Jeep, Levi’s 501, and iPod are brand names.
76. The Lanham Trademark Act prohibits the unauthorized use of a trademark on goods or services when the use would
likely confuse consumers as to the origin of those goods and services.
77. National brands carry a wholesaler’s or a retailer’s brand.
78. Kellogg’s Pop Tarts made with Smucker’s jam is an example of successful co-branding.
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79. Packaging plays a limited role in a product’s marketing strategy.
80. Labels do more than communicate with consumers, as they are used by manufacturers and retailers as a tool for
monitoring product performance and inventory.
Product-Line and Product-Mix Strategies
81. A product line is a collection of goods or services offered for sale.
82. When Kraft extended its Jell-O product line with new products such as gelatin in a cup and pudding in a cup, it was
using a strategy known as family branding.
83. Using a line extension, movie star Jackie Chan is applying his name to a variety of product lines, including healthy
cookies and clothing.
84. Building on the name recognition of an existing brand cuts the risks of introducing new products.
85. Standardization is one of the key changes that companies need to consider when moving into other countries.
Pricing Strategies
86. Raw materials, shipping costs, and supplies consumed during production are examples of fixed costs.
87. The break-even point is the minimum sales volume the company must achieve to avoid losing money.
88. At Ikea, a company using price-based pricing, the price literally comes first.
89. Charging a high initial price for a new product during the introductory stage and lowering the price later is a practice
known as penetration pricing.
90. Auctions are a form of dynamic pricing.
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CHAPTER 14
DELIVERING VLAUE: DISTRIBUTION STRATEGIES
MULTIPLE CHOICE QUESTIONS
Understanding the Role of Marketing Intermediaries
1. A _____ is an organized network of firms that work together to get goods and services from producer to customer.
a) distribution strategy
b) marketing intermediary
c) distribution channel
d) distribution mix
2. The company's overall plan for moving products to buyers is called the _____.
a) distribution channel
b) distribution strategy
c) distribution objective
d) distribution mix
3. As Shannon selects firms and organizes them into a collaborative network that will move her skincare line from her
manufacturer to her customer, she is establishing her _____.
a) distribution channels
b) distribution mix
c) distribution strategy
d) distribution objective
4. _____ primarily sell products directly to consumers for personal use, whereas _____ sell products to other firms for
resale or for organizational use.
a) Jobbers; retailers
b) Retailers; jobbers
c) Retailers; wholesalers
d) Wholesalers; retailers
5. Marketing intermediaries create which of the following forms of utility?
a) place utility
b) price utility
c) purpose utility
d) form utility
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6. Which of the following is a distribution function performed by wholesalers and retailers?
a) providing contract manufacturing
b) creating form utility
c) providing promotional and sales support
d) creating risks
7. Supervalu’s grocery wholesaling operation is the intermediary between some 500 producers and more than 4,000
retailers. Supervalu is a _____.
a) merchant wholesaler
b) rack jobber
c) drop shipper
d) broker
8. _____ are full-service merchant wholesalers that set up displays in retail outlets, stock inventory, and mark prices on
merchandise displayed in a particular section of a store.
a) Brokers
b) Agents
c) Rack jobbers
d) Drop shippers
9. Natural resources such as lumber, grain, and coal are usually marketed through a class of limited-service wholesalers
called _____.
a) brokers
b) agents
c) rack jobbers
d) drop shippers
10. _____ never take title to the products they handle, and they perform fewer services.
a) Rack jobbers
b) Commission merchants
c) Drop shippers
d) Agents and brokers
11. _____ is the policy of carrying merchandise that is ordinarily sold in a different type of outlet.
a) Retailing
b) Discounting
c) Scrambled merchandising
d) Wholesaling
12. The evolutionary process by which stores that feature low prices gradually upgrade until they no longer appeal to
price-sensitive shoppers and are replaced by new low-price competitors is known as the _____.
a) retailing mix
b) retail life-cycle
c) wheel-of-retailing
d) marketing myopia
13. Tamara owns and operates a sporting goods store. She carries a limited number of product lines but an extensive
selection of brands, models, sizes, and colors within each line. What type of retail store does Tamara operate?
a) category killer
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b) discount store
c) convenience store
d) specialty store
14. In the United States, Bloomingdale’s, Macy’s, Nordstrom’s, Dillard’s, Marshall Field, Kohl’s, Sears, and J.C.
Penney are examples of _____.
a) discount stores
b) specialty stores
c) department stores
d) off-price retailers
15. The Home Depot, Staples, and Bed, Bath and Beyond are well-known _____.
a) discount stores
b) category killers
c) off-price retailers
d) department stores
16. Discount stores, such as Wal-Mart, can challenge category killers because _____.
a) discounters can compensate for price cuts in certain categories by selling other profitable merchandise
b) discounters generally charge more per item than category killers do, which brings in higher-end customers
c) discounters offer fewer high-end, slow-moving goods than category killers do
d) discounters order larger quantities of goods than category killers do
17. Stores such as Amazon.com and BlueNile.com, which sell exclusively online, are sometimes known as _____
Internet retailers.
a) brick-and-mortar
b) click-only
c) click-and-brick
d) click-and-mortar
18. _____ are companies that sell products through catalogs and ship them directly to customers.
a) Catalog showrooms
b) Telemarketers
c) Mail-order firms
d) Distributors
19. The integration of offline and online operations is a good example of _____, a term for any coordinated effort to
reach customers through more than one retail channel.
a) hybrid retail formats
b) multichannel retailing
c) pop-up stores
d) retail theatre
20. Staples, the leading category killer in office suppliers, now has “Staples aisles” in more than 500 Stop & Shop and
Giant-Landover grocery stores. This is an example of a _____.
a) pop-up store
b) retail theater
c) hybrid retail format
d) multiple channel
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21. Vacant is a store that appears for anywhere from one week to a month in an unadvertised location, selling trendy
clothing and footwear brands. Vacant is an example of a _____.
a) pop-up store
b) hybrid retail format
c) retail theater
d) boutique
Setting Distribution Strategies
22. The combination of intermediaries and distribution channels a company uses is called the ______.
a) distribution channel
b) distribution mix
c) distribution strategy
d) marketing channel
23. Which of the following is a factor considered in shaping the distribution mix?
a) customer communication facilities
b) copyright laws
c) cellular manufacturing
d) competitor’s distribution channels
24. Dell is an excellent example of a company using a _____ channel.
a) producer-to-consumer
b) producer-to-retailer-to-consumer
c) producer-to-wholesaler-to-retailer-to-consumer
d) producer-to-agent/broker-to-wholesaler-to-retailer-to-consumer
25. Penelope is writing a business plan for a trendy juice bar. Penelope should choose a _____ approach for her new
business.
a) producer-to-consumer
b) producer-to-retailer-to-consumer
c) producer-to-wholesaler-to-retailer-to-consumer
d) producer-to-agent/broker-to-wholesaler-to-retailer-to-consumer
26. Which of the following is a channel for consumer goods such as agricultural products, that require specialists to
negotiate transactions or interim functions such as sorting or grading the goods?
a) producer to consumer
b) producer to retailer to consumer
c) producer to wholesaler to retailer to consumer
d) producer to agent to wholesaler to retailer to consumer
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27. Weber grills, Benjamin Moore, and GE light bulbs are typical of products distributed using the _____ approach.
a) producer-to-consumer
b) producer-to-retailer-to-consumer
c) producer-to-wholesaler-to-retailer-to-consumer
d) producer-to-agent/broker-to-wholesaler-to-retailer-to-consumer
28. Most manufacturers of supermarket and pharmaceutical items rely on longer ________channels when selling to such
retailers as Albertsons, Safeway, and Walgreens.
a) producer-to-consumer
b) producer-to-retailer-to-consumer
c) producer-to-wholesaler-to-retailer-to-consumer
d) producer-to-agent/broker-to-wholesaler-to-retailer-to-consumer
29. Some companies, such as Dell Computers and Amazon.com have used _________ channels to create a competitive
advantage.
a) producer-to-agent-retailer-consumer
b) producer-to-retailer-to-consumer
c) producer-to-wholesaler-to-retailer-to-consumer
d) producer-to-consumer
30. _____ is the number of wholesalers or retailers that will carry a product.
a) Marketing intermediary
b) Marketing channel
c) Marketing coverage
d) Distribution channel
31. _____ distribution tries to place a product in as many outlets as possible, whereas _____ distribution offers products
in only one outlet in each market.
a) Exclusive; intensive
b) Intensive; exclusive
c) Selective; exclusive
d) Selective; intensive
32. Inexpensive convenience goods or organizational supplies such as computer paper and pens sell best if they are
available in as many outlets as possible. This is an example of _____ distribution.
a) exclusive
b) selective
c) blanket
d) intensive
33. The appropriate marketing coverage strategy for shopping goods such as Sub-Zero refrigerators is _____
distribution.
a) exclusive
b) intensive
c) limited
d) selective
34. Auto manufacturers have traditionally relied on _____ distribution agreements to sell through one dealership in each
local area.
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a)
b)
c)
d)
exclusive
extensive
intensive
selective
35. Which of the following about the cost factors in determining channel selection for small or new companies is true?
a) They can afford to hire a large sales force.
b) They must build small warehouses.
c) They can afford to buy trucks to transport their goods.
d) They cannot afford to hire a large sales force.
36. Longer distribution channels mean _____ control for producers.
a) more
b) same
c) less
d) maximum
37. Shorter distribution channels give producers _____ control over how the goods are sold in the market.
a) more
b) same
c) less
d) minimum
38. A designer of high-priced purses, such as Kate Spade or Louis Vuitton, generally limits distribution to exclusive
boutiques or high-end retail stores such as Neiman Marcus in order to protect the firm’s _____.
a) image
b) reputation
c) positioning
d) brand equity
39. When individual channel members disagree on the roles each should play, these disagreements create _____.
a) channel harmony
b) channel efficiency
c) channel conflict
d) channel bottlenecks
40. Which of the following significantly reduces channel conflict?
a) companies selling products in multiple channels that compete for customers
b) limited numbers of retailers
c) markets becoming oversaturated with channel intermediaries
d) suppliers providing inadequate support
41. When Levi Strauss decided to sell its jeans on the company website, they caused a reaction among its intermediaries
known as _____.
a) channel bottlenecks
b) channel disruptions
c) channel disharmony
d) channel conflict
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42. Goodyear angered many of the independent dealers that carried its tires for years when it tried to increase sales by
adding Wal-Mart, Sam’s Club, and other discounters to its distribution mix. This is an example of _____.
a) channel bottlenecks
b) channel disruptions
c) channel disharmony
d) channel conflict
Managing Physical Distribution
43. _____ are all the activities required to move finished products from producer to the consumer.
a) Logistics management
b) Physical distribution
c) Operations management
d) Supply chain management
44. PC Connection promises same-day delivery to consumers who place their orders before 2:45 a.m. PC Connection is
using _____ to achieve a competitive edge.
a) physical distribution
b) materials handling
c) supply chain management
d) operations management
45. Which of the following physical distribution activities involves preparing orders for shipment and receiving orders
when shipments arrive?
a) forecasting
b) order processing
c) supply chain management
d) materials handling
46. _____ is the planning, movement, and flow of goods and related information throughout the supply chain.
a) Physical distribution
b) Materials handling
c) Order processing
d) Logistics
47. To combat duplication and inefficiency in physical distribution channels, many executives are placing _____ at the
top of their corporate agendas.
a) logistics
b) materials handling
c) order fulfillment
d) inventory control
48. The components of the distribution process can be divided into _____.
a) forecasting and order processing
b) in-house operations and outbound transportation
c) inventory control and materials handling
d) order processing and warehousing
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49. Which of the following is used in projecting future sales?
a) supply chain data
b) impact of unusual events
c) logistics
d) materials handling
50. Which of the following is an order-processing activity?
a) determining choice of storage method
b) forecasting
c) adjusting the inventory records
d) cashing the customer’s check
51. In an ideal world, a company would _____.
a) have a low inventory on hand and place customer orders on back order
b) have plenty of inventory on hand to fill any order at anytime
c) have just the right amount of goods on hand to fill the orders it receives
d) have just enough inventory to get by during peak levels of demand
52. Companies use _____ to store goods for long periods of time, and _____ as command posts for moving products to
consumers.
a) distribution centers; warehouses
b) warehouses; distribution centers
c) warehouses; hypermarkets
d) hypermarkets; warehouses
53. If Josiah were in charge of materials handling for his company, he would be mainly concerned with ____ and _____.
a) transportation; tracking inventory
b) tracking inventory; storage methods
c) storage methods; tracking inventory
d) tracking inventory; order fulfillment
54. Which of the following is a common form of outbound transportation for door-to-door delivery?
a) rail
b) air
c) truck
d) ship
55. Jack is an order processing manager for his company. He needs to ship computer components to a customer on the
West Coast as quickly as possible. In choosing a mode of transportation, Jack should evaluate _____.
a) financing
b) inventory size
c) sales revenues
d) company standards for filling orders within a specified period
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TRUE/FALSE QUESTIONS
Understanding the Role of Marketing Intermediaries
56. Getting products to consumers is the role of the product element of a firm’s marketing mix.
57. Distribution strategy is the organized network of firms that work together to move goods and services from producer
to consumer.
58. Most companies that create products do not sell these goods directly to final users.
59. Producers in many industries work with marketing intermediaries to bring their products to market.
60. Intermediaries can be grouped according to wholesalers and distributors.
61. Retailers predominately sell to organizational customers.
62. When a marketing intermediary is selling to individual consumers, it is functioning as a wholesaler; when an
intermediary sells to any type of organization, from a mom-and-pop store to the Pentagon, it is functioning as a
retailer.
63. The majority of wholesalers are merchant wholesalers.
64. Natural resources like lumber, grain, and coal are usually marketed through limited-service merchant wholesalers.
65. Agents and brokers take legal title to the products they handle, and they perform many services as they bring buyers
and sellers together.
66. Jeff’s store carries necessity-type groceries, ready-to-eat pizza and hot dogs, a limited clothing line, and a video
rental section, a practice known as scrambled merchandising.
67. Many stores begin as discount operations and then upgrade their product offerings to become more like department
stores in appearance, merchandise, and price, a store evolutionary process known as the wheel of retailing.
68. The basic merchandising strategy of a specialty shop is to offer a wide range of product lines but a limited selection
of brands, styles, sizes, models, colors, materials, and prices within each line.
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69. The Home Depot, Staples, and Bed, Bath and Beyond are well-known category killers.
70. Larger discount stores such as Wal-Mart and Kmart are often called mass merchandisers.
71. Online sales are still less than 10 percent of U.S. retail sales.
72. Macy’s, Nordstrom, and other stores that sell both online and offline are often called pure-play Internet retailers.
73. The integration of offline and online operations is a good example of hybrid formats.
Setting Distribution Strategies
74. The ideal distribution mix varies widely from industry to industry and even from company to company within the
same industry.
75. The channels for consumer goods are usually shorter and less complex than the channels for industrial goods.
76. Most manufacturers of supermarket and pharmaceutical items rely on shorter channels when selling to such retailers
as Albertson’s, Safeway, and Walgreens.
77. The best market coverage strategy for shopping goods such as Sub-Zero refrigerators is intensive distribution.
78. If producers of expensive specialty or technical products do not sell directly to customers, they will likely choose
exclusive distribution.
79. Longer distribution channels mean more control for producers, while shorter distribution channels give producers
less control over how the goods are sold in the market.
80. Channel conflict may arise when producers provide inadequate support to their channel partners, when markets are
oversaturated with intermediaries, or when producers try to expand sales by adding additional channels.
81. When Levi Strauss decided to sell its jeans on the company website, it created channel conflict by selling directly to
end customers via the Internet.
Managing Physical Distribution
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82. Physical distribution is getting easier in spite of the surge of globalized manufacturing driven by outsourcing.
83. The objective of the physical distribution process is to provide a target level of customer service at the lowest overall
cost.
84. The key to success in managing physical distribution is to coordinate the activities of everyone involved.
85. To control the flow of product through the distribution system, a firm must have an accurate estimate of demand.
86. Order processing is the planning and movement of goods and information throughout the supply chain.
87. In an ideal world, a company would have a large inventory on hand to fill orders it receives.
88. Products held in inventory are physically stored in a warehouse, which is always owned by the manufacturer.
89. In materials handling, the choice of storage method depends on how the product is shipped, in what quantities, and to
which locations.
90. The cost of transportation is typically the smallest single item in the overall cost of physical distribution.
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