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2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
1
1. The owner of a small company decides to stock a new product. Which business activity should the owner
use to inform potential customers about the new product?
A. Marketing
C. Management
B. Finance
D. Production
2. A company that needs cash to cover expenses until profits are realized might use the financing activity of
A. handling disbursements.
C. locating sources of capital.
B. recording money receipts.
D. monitoring credit transactions.
3. Which production activity issues work orders telling employees what their job assignments are?
A. Dispatching
C. Scheduling
B. Routing
D. Follow-up
4. A business's buying buildings, vehicles, and equipment is an example of money flowing out in order to
acquire
A. supplies.
C. staples.
B. products.
D. assets.
5. What is the name of the financial report that contains the company's assets, liabilities, and net worth?
A. Balance sheet
C. Accounts payable ledger
B. Profit-and-loss statement
D. Accounts receivable journal
6. With people at what level of management would a cashier in a quick-serve restaurant be most likely to
interact on a daily basis?
A. Top level
C. First-line
B. Middle level
D. Executive level
7. One of the most important ways that businesses use budgets is for
A. promotion.
C. research.
B. evaluation.
D. renovation.
8. One of the most important reasons why management often focuses on improving quality throughout the
organization is to
A. remain competitive.
C. implement change.
B. allocate resources.
D. delegate authority.
9. A characteristic of a sole proprietorship is that the owner
A. has access to unlimited funds.
C. transfers all the risk.
B. receives all the profit.
D. delegates all functions.
10. Which of the following is a reason why it is important for businesses to carry automobile insurance on
employees who drive their own cars on company business:
A. Customers may sue if they purchase faulty products.
B. Companies may fail if key employees resign.
C. Employees need benefits if injured on the job.
D. Businesses are liable if an accident occurs.
11. The aisles of a business should be kept free of clutter in order to prevent
A. customers from falling.
C. carpet wear.
B. spontaneous combustion.
D. shoplifting.
12. A business signed a contract with another business to use its facilities. The contract should be written so
that it is not
A. open to multiple interpretations.
C. based on forecasts.
B. full of technical terms.
D. longer than one page.
Copyright © 2006 by Marketing Education Resource Center®, Columbus, Ohio
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
2
13. What is the tax on imports that is designed to protect domestic industries from foreign competition and
preserve jobs?
A. Tariff
C. Sales tax
B. Quota
D. Value-added tax
14. Which of the following is a true statement about sales taxes:
A. Sales taxes are deferred if a business shows a loss.
B. Businesses collect sales taxes for government agencies.
C. Businesses pay sales taxes along with their income taxes.
D. Businesses forward a percentage of sales taxes to the government.
15. What is one reason why the federal government awards patents to businesses that have invented new
products or manufacturing processes?
A. To protect consumers
C. To restrict monopolies
B. To encourage research
D. To monitor advertising
16. Which of the following is a general guideline for answering the telephone in a businesslike manner:
A. Identify the firm or department and yourself
B. Address the caller by his/her first name
C. Take immediate action on the caller's request
D. Record the correct spelling of each caller's name
17. Which of the following is an example of persuasive messages that businesses write:
A. Electronic mail
C. Handwritten note
B. Collection letter
D. Interoffice memo
18. One of the purposes of staff communication is for managers to provide
A. customers with product information.
C. stockholders with financial reports.
B. employees with access to the grapevine.
D. employees with guidance and direction.
19. A supervisor explaining how to perform a job task to an employee should give the instructions in
A. rapid succession.
C. chronological order.
B. technical jargon.
D. abbreviated language.
20. A guideline for those who conduct staff meetings is to
A. allow staff members to speak as long as they wish.
B. sit at the head of the meeting table.
C. prevent any disagreements from occurring.
D. assign someone to take notes during the meeting.
21. A business that obtains private information about a customer's financial status and makes that
information public is behaving in an __________ manner.
A. immoral
C. illegal
B. unethical
D. impersonal
22. Spartan Trucking Company delivers goods to several small businesses in our city. This company is
engaged in
A. warehousing.
C. promotion.
B. leasing.
D. distribution.
23. Technological advancements have made it possible for some manufacturers to communicate directly with
customers, which reduces the need to use
A. suppliers.
C. intermediaries.
B. warehouse personnel.
D. freight carriers.
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
3
24. A manufacturer selling its products through a toll-free phone system, a company web site, and several
retailers is a legal example of
A. restricted sales territories.
C. tying agreements.
B. exclusive dealing.
D. dual distribution.
25. Businesses that buy products from suppliers who are not the authorized distributors for the products'
manufacturers are involved in the
A. gray market.
C. export business.
B. outlet industry.
D. discount trade.
26. In the following example, calculate the extensions for each item ordered and determine the total amount
of the invoice:
Item No.
395C
568A
245B
Quantity
15
9
11
A. $666.00
B. $660.50
Unit Price
$21.25
$14.75
$19.50
Total
C. $665.00
D. $656.25
27. Because of their strategic significance in providing place utility, it is usually easier to change price or
promotional efforts than to change
A. market strategies.
C. distribution channels.
B. target markets.
D. packaging.
28. Which two groups in the soft goods industry have experienced decades of conflict in their relationship in
the channel of distribution?
A. Manufacturers and retailers
C. Customers and retailers
B. Suppliers and customers
D. Manufacturers and suppliers
29. What is the direct channel strategy that a manufacturing company is using when it owns its own sales
outlets?
A. Multiple channel distribution
C. Backward integration
B. Forward integration
D. Indirect distribution
30. Which of the following are types of criteria that are often used to evaluate the performance of channel
members:
A. Economic goals
C. Liquid assets
B. Sales quotas
D. Resale prices
31. Sugar and flour that are purchased to make baked goods are classified as
A. installations.
C. supplies.
B. materials.
D. parts.
32. If the demand for a good or service is constant, even when the product's price changes, its demand is
A. inelastic.
C. low.
B. flexible.
D. elastic.
33. Which of the following is most likely to affect the selling price of roses:
A. A large number of rose bushes are killed by disease.
B. Plants and small shrubs are also sold at the flower shop.
C. The flower shop also carries silk flowers.
D. A reorder shipment of roses arrives.
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
4
34. Government tries to protect competition by
A. preventing all monopolies.
B. restricting the production of certain products.
C. controlling the prices of products.
D. regulating monopolies.
35. Money that is left after a business subtracts the cost of merchandise from sales income defines
A. gross profit.
C. inventory.
B. net sales.
D. cost of goods.
36. One of the benefits of competition to consumers is that competition encourages
A. businesses to limit their product lines.
C. government to fix prices.
B. businesses to develop new products.
D. government to finance business activity.
37. Which of the following is an advantage to a company of having a specialized labor force:
A. Decreased enthusiasm
C. Complicated training
B. Increased production
D. Increased obsolescence
38. What is the collective term for the phases of production—increasing, diminishing, and negative returns?
A. Marginal production
C. Revenue production
B. Stages of production
D. Marginal cost production
39. What often happens to an economy during a mildly inflationary period?
A. Increased growth
C. Decreased profits
B. Decreased prosperity
D. Increased unemployment
40. What credit legislation gives businesses specific deadlines to follow in responding to customers'
complaints about errors in their credit statements?
A. Equal Credit Opportunity Act
C. Truth-in-Lending Act
B. Fair Credit Billing Act
D. Fair Credit Reporting Act
41. Determine whether the following statement is true or false: Businesses engage in marketing-information
management only to assist in the development of new products and the identification of new customers.
A. False, it also helps companies keep track of current products and markets.
B. False, marketing-information management is only used for advertising purposes.
C. True, additional research is not needed when a product or company is successful.
D. True, research is too costly to conduct on products that have already been introduced.
42. To determine marketing-information needs, business owners often conduct a __________ analysis.
A. primary
C. secondary
B. relative
D. situational
43. Which of the following is an example of marketing information that a business could gather by surveying
its customers:
A. The company's current market share
C. Planned product improvements
B. Location of the company's market
D. Financial status of competitors
44. Computerized databases make it possible for marketing researchers to
A. limit their use of biographical databases.
B. obtain desired information immediately.
C. gain unrestricted access to statistical data.
D. reduce the use of off-line data collection methods.
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
5
45. When a business sends out general questionnaires to consumers and uses computers to analyze the
data, the business is conducting __________ marketing research.
A. descriptive
C. specific
B. complex
D. objective
46. When processing marketing information, assigning numeric value to different responses or types of data
is known as
A. editing.
C. coding.
B. interpreting.
D. formulating.
47. A business that conducts research and finds that most of its customers visit the business four times a
week has identified the
A. mean.
C. mode.
B. median.
D. range.
48. What product factor should a business consider when selecting a good or service to offer its customers?
A. Types of inventory control
C. Availability of credit
B. Channels of distribution
D. Level of quality
49. What is a negative financial possibility for international businesses that operate in countries where
military takeovers or revolutions are common?
A. Elimination of the workforce
C. Cultural change
B. Political corruption
D. Nationalization of property
50. The identification and selection of markets for a business or for a product is known as
A. a consumer market.
C. mass marketing.
B. target marketing.
D. an industrial market.
51. Which of the following is a technique that some businesses use in order to identify a target market for
their products:
A. Analyzing attitudes
C. Forecasting sales
B. Developing tests
D. Conducting surveys
52. Why do businesses develop marketing plans?
A. To attract the target customer
B. To expand the distribution system
C. To provide quality service
D. To prepare a revenue statement
53. When conducting an external environmental analysis, businesses often focus on
A. previous demand.
C. marketing goals.
B. industry growth.
D. financial costs.
54. One reason for conducting a SWOT analysis for use in the marketing-planning process is to identify a
business's ___________ strengths and weaknesses.
A. internal
C. regional
B. financial
D. external
55. Which of the following would be the most appropriate method of forecasting sales for a business with a
limited budget:
A. Quantitative
C. Bottom-up
B. Long-range
D. Qualitative
56. The marketing strategy component of a marketing plan should include a(n)
A. proposed annual budget.
C. detailed product description.
B. explanation of accounting methods.
D. list of current employees.
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
6
57. A factor that businesses consider when conducting marketing audits is marketing
A. strategies.
C. concepts.
B. research.
D. technology.
58. People with a mature attitude tend to believe in the __________ of other people.
A. equality
C. deficiency
B. inferiority
D. superiority
59. Jamie has been asked to join a group of students who are working together to establish a school store.
Jamie has been asked to be part of a
A. team.
C. strike.
B. boycott.
D. media channel.
60. Many businesses try to foster positive customer/client relations by encouraging employees to be
A. authoritative.
C. reserved.
B. talkative.
D. friendly.
61. Which of the following situations best displays a customer-service mindset:
A. A fast-food restaurant offering overtime pay to all its employees
B. A hotel chain offering its frequent guests the option of checking in as early as 9:00 a.m. and
checking out as late as 5:00 p.m.
C. An automobile dealership providing its employees with the option of attending a seminar on
improving their selling skills
D. A large corporation being open during normal business hours
62. Customers who have questions or complaints that are more complicated than the employees can handle
usually are referred to
A. managers.
C. the rack jobber.
B. the firm's president.
D. coworkers.
63. "I buy only the most expensive brands," is a statement that characterizes the __________ customer.
A. suspicious
C. domineering/superior
B. disagreeable
D. slow/methodical
64. Customers who feel their complaints have been handled poorly by a business
A. will not tell others about their experience.
C. usually have caused their own problems.
B. may not return to the business.
D. will probably purchase additional items.
65. Why do businesses often maintain several different personnel files for each employee?
A. To make record keeping easier
C. To organize general information
B. To protect employees' privacy
D. To be prepared for an emergency
66. An example of a company change that might create a need for its employees to have additional training
and development opportunities is
A. providing employees with a payroll savings plan.
B. installing a new computer network and additional software.
C. adding a canopy and carpet to the building's entrance.
D. offering dental insurance for employees and their families.
67. Which of the following training methods would involve having a trainee make quick decisions about a
series of hypothetical, but true-to-life, problems:
A. In-basket simulations
C. Junior boards
B. Job rotation
D. Understudy
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
7
68. A supervisor who schedules more employees than are needed for each job is likely to
A. reduce net profit.
C. be promoted.
B. improve employee morale.
D. meet demand better.
69. Which of the following is characteristic of a proactive business:
A. Watching for any changes in the external environment
B. Reacting to changes made by competitors
C. Using a creative promotional mix
D. Taking action to create marketing opportunities
70. The initial value of a good or service is usually stated in terms of
A. credit.
C. image.
B. money.
D. profit.
71. Competing businesses that agree to coordinate the discounts and credit terms that they offer their
customers are
A. unit pricing.
C. target pricing.
B. price planning.
D. price fixing.
72. A foreign company is selling a product for $333 in its own country, while charging $180 for the same
product in another country with the intention of driving rivals from the other country's market. This is an
example of
A. price negotiation.
C. price comparison.
B. limited competition.
D. predatory dumping.
73. The majority of businesses that use profit-oriented pricing want to
A. reduce their return on investment.
C. create a negative cash flow.
B. balance their financial statements.
D. earn a reasonable amount of profit.
74. A promise made in a specific statement concerning the quality of a product is called a(n) __________
warranty.
A. implied
C. full
B. express
D. limited
75. The development of the computer database impacts the way that a business manages products because it
A. protects information that is used to track promotional policies.
B. reduces the risk of error during the order-entry process.
C. compromises the employees' right to privacy.
D. provides quick and easy access to purchasing histories.
76. What tools are needed when using the synectics method of creative thinking?
A. Analogies and metaphors
C. Allegories and syntax
B. Syntax and antonyms
D. Metaphors and antonyms
77. Which of the following is a source that businesses use to develop standards:
A. Suppliers
C. Accountants
B. Lawyers
D. Advertisers
78. What product-mix strategy is being used when a company adds a new product to its product mix?
A. Expansion
C. Contraction
B. Trading-up
D. Positioning
79. For a single price, a business sells widgets, trains people to use the widgets, and arranges for the
delivery of the widgets. This is an example of
A. personal selling.
C. captive pricing.
B. brand positioning.
D. product bundling.
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
8
80. Advantages of quality product modification include all of the following except
A. creating customer loyalty for the quality product.
B. cutting costs in other areas to offset more expensive components.
C. enabling the business to charge a higher price for the product.
D. allowing the business to remain competitive.
81. A business that sets up a free telephone hot line to answer customers' questions is providing its
customers with a(n)
A. process.
C. service.
B. allowance.
D. opinion.
82. A business uses a strategy that positions a new product directly against a similar item made by another
company. To be successful in the marketplace, the business must first
A. create brand awareness outside the target market.
B. understand customer needs better than the competition.
C. identify potential items to include in line extensions.
D. implement a marketing plan that is similar to the competition.
83. The foundation of a brand is its
A. values and characteristics.
B. promotional elements.
C. name and logo.
D. product design.
84. Web-based businesses take advantage of technology by allowing customers to
A. purchase products over the telephone.
C. access information online.
B. hack into the business's web server.
D. return unwanted merchandise to a local store.
85. When developing strategies to position products, businesses should consider which
A. markets to target.
C. segments to identify.
B. differences to promote.
D. locations to develop.
86. The role that promotion plays in marketing is to
A. determine what consumers want and need to buy.
B. communicate the benefits of the products to buyers.
C. help businesses to keep their prices competitive.
D. ensure that businesses offer appropriate products.
87. A company's ad features the care it takes not to damage the environment with its manufacturing
methods. This is an example of what type of promotion?
A. Primary
C. Product
B. Institutional
D. Patronage
88. Which of the following is not part of the promotional mix:
A. Pricing
C. Selling
B. Publicity
D. Advertising
89. Advertising a product at an unusually low price to bring people into the business, and then attempting to
sell them a higher priced model by claiming that the advertised product is out of stock is a deceptive
practice called
A. partial disclosures.
C. false testimonial.
B. false promises.
D. bait and switch.
90. Which technological advancement has enhanced the efficiency and quality of photographs, copy, and
illustrations in printed promotional pieces?
A. Interactive viewing capabilities
C. Spreadsheet computer software
B. Graphic design software
D. Database tracking capabilities
2005 DECA Ontario December Provincials
Test 858
MARKETING MANAGEMENT
91. What is an excellent source for locating good mailing lists to use in a direct advertising campaign?
A. Postal service
C. An SRDS directory
B. The Yellow Pages
D. Thomas Register
92. The first step in developing a promotional plan is reviewing the business's
A. investments.
C. equipment.
B. objectives.
D. liabilities.
93. A discount business that selects low-priced products to advertise is trying to promote goods that are
compatible with its business
A. policy.
C. cycle.
B. image.
D. audit.
94. Joe is a salesperson who will sometimes forgo a sale in order to satisfy a customer's needs. Carol
always attempts to close a sale at all costs. Who is likely to be the more successful salesperson?
A. Joe, because he is a nice person
B. Carol, because Joe is too timid to close a sale
C. Joe, because he will get more repeat business
D. Carol, because she will make more sales
95. Selling policies concerned with pricing, product availability, and discounts are categorized as
__________ policies.
A. delivery
C. terms-of-sale
B. selling-activity
D. service
96. A salesperson who refuses to accept kickbacks or payoffs in order to make a sale is demonstrating
__________ behavior.
A. unsocial
C. special
B. legal
D. ethical
97. Which of the following is a sales practice that may be considered illegal:
A. Partnering
C. Showmanship
B. Persuasion
D. Reciprocity
98. An important reason that salespeople should know what products are featured in a business's
promotions is so they
A. will be able to evaluate the promotional effort.
B. can use the information in their selling efforts.
C. won't have to spend their time reading ads.
D. can tell customers to watch for upcoming promotions.
99. Asking and answering questions occurs during which of the following phases of the selling process:
A. Reaching closure
C. The entire selling process
B. Discovering client needs
D. Prescribing solutions to needs
100. An important part of a sales manager's job often includes responsibility for
A. routine selling.
C. training salespeople.
B. developing compensation.
D. recruiting customers.
9
Test 858
MARKETING MANAGEMENT — KEY
10
1. A
Marketing. The marketing process provides consumers with a variety of goods and services from which
to choose. Finance involves obtaining and using funds. The management process includes coordinating
necessary resources to meet the day-to-day business operations. Production includes combining the
human, natural, and capital resources to produce the desired goods or services.
SOURCE: BA:002
SOURCE: MB LAP 10—Business Activities
2. C
Locating sources of capital. The financing function involves understanding the financial concepts used in
making business decisions. Locating possible sources of capital to cover expenses until profits can be
realized through sales is an important activity in the financing function. Recording money receipts,
handling disbursements, and monitoring credit transactions are other types of financing activities that do
not involve obtaining cash to cover expenses.
SOURCE: BA:004
SOURCE: MB LAP 2—Marketing Functions
3. A
Dispatching. Dispatching is issuing orders for production to start. These are usually written orders that tell
employees what their job assignments are, when to move materials to the work area, or which tools and
equipment to assemble. Scheduling establishes the timetable to be followed in production. Routing is the
production activity that determines the sequence for the steps in the production process. Follow-up
makes sure that production was carried out according to plan and that the products met company
standards.
SOURCE: BA:013
SOURCE: BA LAP 1—Nature of Production
4. D
Assets. Business owners must spend money to obtain assets, which are anything of value that the
business owns. This results in money flowing out of a business. Some examples of business assets
include land, buildings, vehicles, and equipment. Supplies are industrial goods that are constantly being
purchased and used up in the operation of a business. Products are goods and services. Staples are
goods for which there is constant demand.
SOURCE: BA:016
SOURCE: MN LAP 60—Cash Flow
5. A
Balance sheet. A balance sheet captures the financial condition of the business at that particular
moment. This financial report contains the company's assets: that which it owns such as merchandise
inventory; liabilities: that which it owes such as accounts payable (the monies owed to vendors); and its
net worth. By subtracting the liabilities from the assets, the net worth or equity is determined. The formula
used in a balance sheet is Assets - Liabilities = Equity (or Capital). The profit-and-loss statement is a
summary of business transactions that shows net profit before and after taxes by analyzing sales,
purchases, cost of goods sold, and operating expenses for a specified period. Accounts payable are the
monies that the company owes to its vendors and other creditors and are recorded in the accounts
payable ledger. Accounts receivable are the monies that are owed to the company by its customers and
are recorded in the accounts receivable journal.
SOURCE: BA:018
SOURCE: Longenecker, J.G., Moore, C.W., & Petty, J.W. (2003). Small business management: An
entrepreneurial emphasis (12th ed.) [p. 294]. Cincinnati: Thomson/South-Western.
6. C
First-line. First-line managers are the supervisors who work directly with the employees who carry out the
business's routine work. Middle level managers are managers who report to top-level management and
who have supervisors who report to them. Top-level, or executive, managers are responsible for the
entire company and would rarely interact with lower level employees.
SOURCE: BA:022
SOURCE: BA LAP 6—Manage This!
Test 858
MARKETING MANAGEMENT — KEY
11
7. B
Evaluation. Budgets are critical for evaluation of a business. When businesses want to know if they are
accomplishing their goals, budgets show where they are on target and where they are not. By comparing
original budget figures to actual figures, businesses can see specifically what cost more than expected or
less than expected and make accommodations to meet their goals. One of the business's goals might be
renovation. Businesses do not use budgets for research or for promotion, although they often allocate a
certain amount of money in the budget for these items.
SOURCE: BA:024
SOURCE: FI LAP 3—Money Tracks (Nature of Budgets)
8. A
Remain competitive. Business today is highly competitive, and one way for a business to compete
successfully is to provide quality throughout the organization. Businesses try to provide quality products
that meet customers' needs and provide customers with quality service. If all other factors are the same,
quality is often what makes customers select one business over another. Businesses may implement
change to improve quality. Allocating resources and delegating authority are not reasons why
management focuses on improving quality throughout the organization.
SOURCE: BA:026
SOURCE: DuBrin, A.J. (2003). Essentials of management (6th ed.) [pp. 246-247]. Mason, OH: SouthWestern.
9. B
Receives all the profit. This is a characteristic of a sole proprietorship. Since there is only one person
involved in the business, the amount of available money is usually limited to what the owner has or can
borrow. The owner cannot transfer all the risk and assumes many of the losses. The owner may need to
perform all, or most of, the functions—particularly if s/he cannot afford to hire trained workers.
SOURCE: BA:028
SOURCE: BA LAP 7—Own It Your Way
10. D
Businesses are liable if an accident occurs. Businesses whose employees drive their own cars on
company business carry automobile liability and physical-damage insurance because the businesses are
liable if an accident occurs. Businesses are responsible for the activities of their employees while the
employees are acting on behalf of the business. If an employee is responsible for an automobile accident
while on company business, the company is liable for the damages and needs insurance to cover the
expenses. Businesses carry other types of insurance to provide benefits for injured employees, to protect
themselves from product liability, and to protect themselves from financial loss if key employees resign.
SOURCE: BA:038
SOURCE: About.com. (n.d.). Business insurance checklist: Make sure all of your assets are properly
covered. Retrieved October 14, 2005, from
http://insurance.about.com/od/business/a/checklist.htm
11. A
Customers from falling. Cluttered aisles are a safety hazard for both customers and employees.
Employees should try to prevent falls by maintaining a clean work area. Spontaneous combustion is a fire
that starts under such circumstances as when oily, dirty rags are left in a pile. Not all aisles have carpet.
Keeping the aisles free of clutter will not prevent shoplifting.
SOURCE: BA:046
SOURCE: RM LAP 2—Following Safety Precautions
Test 858
MARKETING MANAGEMENT — KEY
12
12. A
Open to multiple interpretations. The terms of the contract must be clearly worded so that each party is
protected. Often, this requires the use of technical legal terms. To ensure that the contract is enforceable,
its development should be guided by legal counsel. The contract should be as many pages as need be
for the terms to be clearly and completely spelled out. Often, businesses base the terms of their contracts
on forecasts.
SOURCE: BA:054
SOURCE: Kaser, K., & Oelkers, D.B. (2001). Sports and entertainment marketing (p. 276). Mason, OH:
South-Western.
13. A
Tariff. Tariffs are taxes on imported goods used to protect domestic industries and preserve jobs. Quotas
limit the amount of a good that can be imported or exported during a specific time frame. The sales tax is
a tax on retail sales made by many state and local governments. The value-added tax is a form of sales
tax used by many nations.
SOURCE: BA:057
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 101-102]. Woodland Hills, CA: Glencoe/McGraw-Hill.
14. B
Businesses collect sales taxes for government agencies. A business acts as an agent for state and local
government agencies by collecting sales tax on purchases and remitting the funds to the appropriate
agency. The business does not keep part of the tax, and it is due whether or not the business is
profitable. Income taxes are paid separately to the federal government.
SOURCE: BA:096
SOURCE: Stull, W.A. (1999). Marketing and essential math skills: Teacher's edition (p. 135).
Cincinnati: South-Western Educational.
15. B
To encourage research. A patent is legal protection of an invention or a process granted by government
to its owners for a certain number of years. A patent gives a business the sole right to make, use, or sell
its invention within that period of time. One of the reasons why the federal government awards patents is
to encourage businesses to do research and continue to develop new ideas and products. If businesses
have the sole right to profit from their inventions, they are more likely to continue investing money in
research and development. Patents protect the business that invented the product rather than the
consumer. A patent actually gives a business a monopoly on the invention for a number of years. Patents
are not a method of monitoring advertising.
SOURCE: BL:001
SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)
[pp. 171-172]. Cincinnati: South-Western.
16. A
Identify the firm or department and yourself. General guidelines for answering a business telephone
include greeting the caller, identifying yourself and the business or department, and asking how you can
be of assistance to the caller. It is not always necessary to get the correct spelling of the caller's name.
Immediate action may also not be required. Callers should not be called by their first names unless they
are personal acquaintances of the individual answering the telephone.
SOURCE: CO:114
SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (p. 681). Tinley Park, IL:
Goodheart-Willcox.
Test 858
MARKETING MANAGEMENT — KEY
13
17. B
Collection letter. A collection letter is a type of persuasive message that many businesses write to
customers who are delinquent in making payments on their accounts. The purpose of the collection letter
is to persuade customers to send payment or to contact the business to make some type of arrangement.
Collection letters should not offend customers but should convince them to respond immediately. Many
businesses write electronic mail, handwritten notes, and interoffice memos, but these types of messages
are not necessarily persuasive.
SOURCE: CO:031
SOURCE: Hyden, J.S., Jordan, A.K., Steinauer, M.H., & Jones, M.J. (1999). Communicating for
success (2nd ed.) [pp. 340-342]. Cincinnati: South-Western Educational.
18. D
Employees with guidance and direction. Communicating the business's objectives to employees and
giving them guidance about doing their work in a manner that will help the firm to achieve those
objectives is an important function of effective staff communication. Employees circulate rumors and
information among themselves, and this communication is called the grapevine. Staff communication is
not addressed to customers or stockholders.
SOURCE: CO:014
SOURCE: Lesikar, R.V., Pettit, J.D., Jr., & Flatley, M.E. (1999). Lesikar's basic business communication
(8th ed.) [pp. 4-5]. Boston: Irwin/McGraw-Hill.
19. C
Chronological order. Supervisors explaining job tasks should give instructions in the order in which they
are to be performed by the employee. Most employees are better able to understand instructions that are
presented in a step-by-step manner. Supervisors can explain tasks chronologically by using a first,
second, third, etc., approach to giving instructions. Because an employee might misunderstand what the
supervisor is saying, the supervisor should avoid using technical jargon or abbreviated language when
giving instructions. Giving instructions in rapid succession without adequate explanation may cause
confusion.
SOURCE: CO:139
SOURCE: Hyden, J.S., Jordan, A.K., Steinauer, M.H., & Jones, M.J. (1999). Communicating for
success (2nd ed.) [p.125]. Cincinnati: South-Western Educational.
20. D
Assign someone to take notes during the meeting. It is important to have a record of what was discussed
at the meeting. These notes, or minutes, should be written up as soon as possible and distributed to all
staff members who attended the meeting and to those staff members who were absent, so that everyone
has the same information about the meeting. It is impossible to prevent all disagreements, but the person
conducting the meeting should keep the differences of opinion from getting out of control. Staff members
should be encouraged to participate, but not to take as much time as they wish. The leader of the
meeting should not sit at the head of the table or stand above the staff because it often creates a
communication barrier.
SOURCE: CO:140
SOURCE: Ricketts, C. (1997). Leadership: Personal development and career success (p. 293).
Albany, NY: Delmar.
21. B
Unethical. Most businesses gather a wide variety of information about their customers that often includes
their financial status and credit rating. How businesses use this information or provide it to others is a
matter of ethics, which are the basic principles that govern behavior. Customers have the right to assume
that the financial or private information they provide to a business will remain confidential. If a business
violates that confidence and makes private financial information available to the public, it is behaving in
an unethical manner. Although disclosing private financial information is unethical, it is not immoral or
impersonal. Such practices are not illegal at present; however, legislation governing this type of behavior
is possible for the future.
SOURCE: CO:043
SOURCE: Lehman, C.M., & DuFrene, D.D. (1999). Business communication (12th ed.) [pp. 244-245].
Cincinnati: South-Western College.
Test 858
MARKETING MANAGEMENT — KEY
14
22. D
Distribution. Distribution is all the activities involved in moving, storing, locating, and/or transferring the
ownership of goods or services. Leasing is contracting to use property which belongs to someone else
for a specific period of time and a specific rate of payment. Promotion is a marketing function which
communicates information about goods, services, images, or ideas to achieve a desired outcome.
Warehousing is placing goods in safe locations until they are needed or are ready to be sold.
SOURCE: DS:001
SOURCE: DS LAP 1—Distribution
23. C
Intermediaries. Intermediaries are distribution channel members operating between the producer and the
consumer or industrial users to help in the movement of goods and services. For example, businesspeople can book flight reservations through Internet services. Prior to the Internet, the reservations were
generally made through a travel agent who booked the flight through other agencies or the airline.
Technological advancements have not reduced the need for suppliers. Manufacturers still need raw
materials to produce their goods. Technological advancements have not necessarily reduced the need to
use warehouse personnel and freight carriers in relation to communicating with customers.
SOURCE: DS:054
SOURCE: Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics: A
supply chain perspective (7th ed.) [p. 460]. Mason, OH: South-Western.
24. D
Dual distribution. When a manufacturer uses more than one channel to reach consumers, it is known as
dual distribution. Dual distribution is legal as long as it promotes competition. When a supplier requires
an intermediary to purchase other products in its line as well as the initial purchase, it is known as a tying
agreement. Exclusive dealing occurs when a manufacturer forbids an intermediary from carrying a
competitor's product. Restricted sales territories prohibit intermediaries from selling products outside a
designated area.
SOURCE: DS:058
SOURCE: Pride, W.M., & Ferrell, O.C. (2000). Marketing: Concepts and strategies (pp. 366-367).
Boston: Houghton Mifflin.
25. A
Gray market. The gray market involves buying goods from suppliers who are not the authorized
distributors for the manufacturers. This practice is considered unethical and even illegal because the
suppliers do not have the right to sell the goods. Businesses often are able to buy goods for lower prices
on the gray market, which enables them to sell the goods for less. Exporting is the process of selling
goods and services to businesses in other countries. Outlet stores usually sell overruns and seconds.
Discount stores sell regular merchandise at lower prices than those found in department stores.
SOURCE: DS:059
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 600-601].
Upper Saddle River, NJ: Prentice Hall.
26. A
$666.00. An extension is the total cost of each quantity of item purchased and is calculated by multiplying
the quantity purchased by the price per unit. In order to calculate the extensions in the example, multiply
the quantity of each item purchased by the unit price ($21.25 x 15 = $318.75, $14.75 x 9 = $132.75,
$19.50 x 11 = $214.50). Add the extensions to determine the total amount of the invoice ($318.75 +
$132.75 + $214.50 = $666.00).
SOURCE: DS:030
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 279-280]. Woodland Hills, CA: Glencoe/McGraw-Hill.
Test 858
MARKETING MANAGEMENT — KEY
15
27. C
Distribution channels. Long-term commitments are made to channel members to insure reliable flow of
products to consumers. It is often difficult to change distribution channels without disrupting the flow of
goods. Price, promotion, or packaging have no impact on the consumer if the product is not available.
Target markets are the consumers and may change if the product changes. Market strategies are
designed to be adaptive to current market input.
SOURCE: DS:048
SOURCE: Pride, W.M., & Ferrell, O.C. (2000). Marketing: Concepts and strategies (p. 350).
Boston, MA: Houghton Mifflin.
28. A
Manufacturers and retailers. The channel of distribution performs all the functions required to move
products from the producer to the consumer. Channel relations are economic in nature and are important
to both the supplier and the retailer. Power for leadership and conflict has been the most common
dimension of the struggle between the two groups. Retailers represent the means through which
suppliers can get their product to the consumer, thus, making their relationship critical. Because retailers
can buy lower cost imports, many are doing so. In the process, they gain power over the suppliers and
can make even more demands on manufacturers; therefore, suppliers feel the impact of lost sales.
Suppliers and customers, customers and retailers, and manufacturers and suppliers have not
experienced decades of conflict.
SOURCE: DS:049
SOURCE: Dickerson, K.G. (1999). Textiles and apparel in the global economy (3rd ed.) [pp. 462-463].
Upper Saddle River, NJ: Prentice-Hall.
29. B
Forward integration. Forward integration is a direct channel strategy used by producers to acquire control
of the distribution channel. In this situation, the company produces and sells its own product. This helps
to insure the goals of the company's marketing mix. Backward integration is similar except the retailers
own the suppliers. Multichannel and indirect distribution channels involve intermediaries.
SOURCE: DS:028
SOURCE: Czinkota, M.R., & Kotabe, M. (2001). Marketing management (2nd ed.) [p. 347]. Mason, OH:
South-Western.
30. B
Sales quotas. Sales quotas are sales goals, or targets, that specify desired performance levels. Sales
quotas are a type of criteria that producers often use to evaluate the performance of channel members.
Producers may set sales quotas that their intermediaries are expected to achieve and then evaluate them
on their ability to perform. If intermediaries do not perform well, they may be replaced. Channel members
are not evaluated on the basis of economic goals, liquid assets, or resale prices.
SOURCE: DS:051
SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [p. 370].
Upper Saddle River, NJ: Prentice Hall.
31. B
Materials. Materials are items that will become part of a finished product after they have been processed.
Sugar and flour need additional processing before they become baked goods. Parts are items that will
become part of a finished product without any additional processing. Installations are high-cost, longlasting items that are used to produce other goods and services. Supplies are items that are constantly
being purchased and used up in the operation of a business.
SOURCE: EC:002
SOURCE: EC LAP 10—Goods and Services
32. A
Inelastic. Inelastic demand is a form of demand in which changes in price do not affect demand. Products
that are considered necessities usually have inelastic demand. Elastic demand exists when the demand
for a good or service changes when there are changes in the item's price.
SOURCE: EC:005
SOURCE: EC LAP 11—Supply and Demand
Test 858
MARKETING MANAGEMENT — KEY
16
33. A
A large number of rose bushes are killed by disease. This would reduce the supply of roses and increase
the price of the flowers. Any factor which causes changes in supply and demand will also cause changes
in prices. The assortment carried does not affect the price of the other flowers.
SOURCE: EC:006
SOURCE: EC LAP 12—Price
34. D
Regulating monopolies. A monopoly is a business that influences the entire production of a particular
good or service. Controlling product prices and restricting production of certain products are actions that
monopolies can take to increase product prices. The government does not prevent all forms of
monopolies since it allows natural monopolies that are in the best interest of the public.
SOURCE: EC:008
SOURCE: EC LAP 16—Government and Business
35. A
Gross profit. This is one step in determining the business's financial situation. Cost of merchandise, or
goods, is the amount of money a business pays for the products it sells. Net sales refer to the total
amount or value of products sold. Inventory is the goods that a business has on hand.
SOURCE: EC:010
SOURCE: EC LAP 2—Risk Rewarded
36. B
Businesses to develop new products. Competition encourages the development of products that satisfy
consumers' needs. Government does not finance business activity. Price fixing is an illegal activity that
would not benefit consumers, and is prohibited by law. When businesses limit their product lines, they
often create dissatisfaction among customers.
SOURCE: EC:012
SOURCE: EC LAP 8—Ready, Set, Compete!
37. B
Increased production. The more familiar employees are with their jobs, the faster they will be able to do
them. Employees who have specialized skills and perform certain tasks all the time tend to be more
productive. This increases the output or production rates for the company. The specialized labor force
often is able to increase production and generate additional profit for the company. When the labor force
is specialized, training is simplified and enthusiasm is increased. A disadvantage of a specialized labor
force is the possible increase in obsolescence.
SOURCE: EC:014
SOURCE: EC LAP 7—Specialization of Labor
38. B
Stages of production. Businesses need to determine the best number of variable units to be used in
production because it directly affects output. The stages of production—increasing returns, diminishing
returns, and negative returns—are based on the way in which output changes as variable inputs are
added. Marginal production is a fictitious term; however, marginal product refers to the extra output
generated by adding one more unit of variable output. Likewise, both revenue production and marginal
cost production are fictitious terms. Marginal cost, however, is a valid cost, referring to the extra cost
incurred when a business produces one additional unit of a product.
SOURCE: EC:023
SOURCE: Clayton, G.E. (1995). Economics: Principles and practices (pp. 114-115).
New York: Glencoe/McGraw-Hill, 1995.
Test 858
MARKETING MANAGEMENT — KEY
17
39. A
Increased growth. During a mildly inflationary period, wages usually increase more slowly than the prices
of goods. Therefore, the cost of the goods sold is higher than the cost of labor. As a result, businesses
earn more profits which enables them to expand and hire more employees. The economy grows because
more people are working and have income to spend. This situation occurs only during a mildly
inflationary period because if inflation rises to a higher level, the economy experiences a decrease in
prosperity. High inflation also causes increased unemployment and decreased profits for businesses.
SOURCE: EC:043
SOURCE: Wilson, J.H., & Clark, J.R. (1997). Economics (pp. 445-446). Cincinnati: South-Western
Educational.
40. B
Fair Credit Billing Act. This legislation requires businesses to respond within 30 days to any customer
complaint or inquiry concerning a credit billing error. The business must correct the error or
misunderstanding within 90 days. The Fair Credit Reporting Act gives consumers the right to inspect,
correct, and update their credit files. The Truth-in-Lending Act requires that businesses give customers
specific credit information. The Equal Credit Opportunity Act prohibits the denial of credit based on the
applicant's gender, race, age, marital status, or national origin.
SOURCE: FI:002
SOURCE: FI LAP 2—Credit and Its Importance
41. A
False, it also helps companies keep track of current products and markets. One aspect of marketinginformation management involves monitoring competitors and evaluating customer preferences. This
information can assist a company in making changes to its marketing plan that will help to assure its
continued success. Marketing-information management is used for other purposes than just to develop
advertising. A company needs to continually stay on top of current situations in order to maintain its
success. Although research is costly, it can be well worth it if it helps the business's existing products to
stay profitable or become even more so.
SOURCE: IM:012
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 505-506]. Woodland Hills, CA: Glencoe/McGraw-Hill.
42. D
Situational. A situational analysis is a study of a business's current circumstances. Factors such as
financial standing, sales, staffing resources, and competition are often factors that must be evaluated.
When determining what type of data a business needs to operate efficiently and profitably, business
owners should look at these variables to determine what data should be collected and retained. For
example, the owner might review the standard invoice to ascertain if changes are needed (e.g., adding
data) that might help the management staff to track customer sales. Primary, relative, and secondary are
not types of analyses.
SOURCE: IM:182
SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach
for the new millennium (p. 61). Boston: Irwin/McGraw-Hill.
43. B
Location of the company's market. By surveying customers, the business can determine where the
people who are interested in buying its products are located. Information about the company's market
share and plans to improve current products can be obtained from the company's own records. The
financial status of competitors is only available if they operate as a corporation and must report their
finances to shareholders, or they are in a situation that requires them to disclose their financial resources.
SOURCE: IM:001
SOURCE: IM LAP 2—Marketing-Information Management
Test 858
MARKETING MANAGEMENT — KEY
18
44. B
Obtain desired information immediately. Businesses often use computers to store large amounts of
information. Computerized databases help businesses operate in an efficient manner. For example, a
customer placing an order over the telephone might not know the appropriate account number. By
accessing the company's computer database, the sales representative can key in other data (e.g., zip
code) to locate the account number. Many times, the information is retrieved while the sales
representative is speaking with the customer. Businesses using manual databases may have to call
customers back or put them on hold to find necessary information to process an order, which can be time
consuming. Computerized databases do not necessarily reduce the need for businesses to use off-line
data collection methods. Other methods, such as focus groups, are often the most appropriate way to
collect the desired information. The research objectives determine how the information is collected and
what data is needed to identify or solve a problem. Therefore, it cannot be assumed that the use of
computerized databases limits researchers' use of biographical or statistical data. In addition, many
businesses often control or manage data by restricting access to the information.
SOURCE: IM:183
SOURCE: Malhotra, N.K. (1999). Marketing research: An applied orientation (3rd ed.) [pp. 122-123].
Upper Saddle River, NJ: Prentice Hall.
45. B
Complex. When a business not only gathers information, but uses computers to analyze that data, the
business is conducting complex marketing research. If the data pertained to a specific subject, the
research would then be called descriptive, not specific. Whether the research is objective depends upon
whether the opinions expressed are influenced by bias or prejudice.
SOURCE: IM:010
SOURCE: IM LAP 5—Nature of Marketing Research
46. C
Coding. Coding is the process of assigning a numeric value to the various responses on a marketing
questionnaire or survey. Once the responses are coded, researchers are able to tabulate the responses,
rate the agreement to each answer, and compute a total score. Coding helps researchers to determine
the importance of various responses or types of data. Editing, interpreting, and formulating do not involve
assigning numeric value to marketing information.
SOURCE: IM:062
SOURCE: Zikmund, W. (1997). Business research and methods (5th ed.) [pp. 508-513].
Cincinnati: Thomson Learning.
47. C
Mode. The mode represents the number that occurs the most often. In this example, the mode is four
because most of the business's customers visit the business four times a week. The mean is the average
number of times customers visit the business. The median is the middle number which indicates that half
of the customers visit more often and half of the customers visit less often. Range is the distance
between the fewest number of visits and the most number of visits.
SOURCE: IM:191
SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach
for the new millennium (pp. 526-527). Boston: Irwin/McGraw-Hill.
48. D
Level of quality. Businesses should consider the level of quality of the product being offered because this
will affect price, promotion, and place. Channels of distribution and inventory are elements of distribution.
Availability of credit is an element of financing.
SOURCE: IM:194
SOURCE: IM LAP 7—Pick the Mix (Marketing Strategies)
Test 858
MARKETING MANAGEMENT — KEY
19
49. D
Nationalization of property. When a country nationalizes property, the government takes ownership, and
the owners generally get nothing in return. This could be financially devastating considering the fact that
businesses routinely invest millions of dollars in buildings and equipment. Political corruption and cultural
change would not necessarily result in negative financial consequences. The workforce might be
depleted, but it would not be eliminated.
SOURCE: IM:195
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 109].
Woodland Hills, CA: Glencoe/McGraw-Hill.
50. B
Target marketing. In order for businesses to satisfy their customers, they need to determine who the
market is for their products. Businesses, therefore, use target marketing in order to plan effective
marketing activities. Mass marketing is designing products and directing marketing activities in order to
appeal to the whole market. A consumer market is composed of individuals who purchase goods or
services to satisfy their personal desires. An industrial market is composed of businesses that purchase
items for use in the operation of the business, for resale, or for making other goods.
SOURCE: IM:196
SOURCE: IM LAP 9—Have We Met? (Market Identification)
51. D
Conducting surveys. Some businesses conduct surveys in order to identify their target market, which is
the group of consumers on whom the businesses focus their marketing efforts. There are several types of
surveys that businesses can use including mail surveys, telephone surveys, and personal surveys. The
reason a business conducts surveys is to find out which segment of the population is most likely to want
and need its products. Once the business obtains this information, it focuses on targeting its marketing
efforts to that specific market. Businesses do not develop tests in order to identify a target market.
Businesses might use survey data to forecast sales and analyze consumer attitudes.
SOURCE: IM:160
SOURCE: Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd ed.)
[pp. 125-127]. Boston: Irwin/McGraw-Hill.
52. A
To attract the target customer. A marketing plan is a set of procedures or strategies for attracting the
target customer to a business. The target market is the group of people identified and selected as the
primary users of a product. Each business has a specific target market and develops a marketing plan for
the purpose of reaching that market. Providing quality service and expanding the distribution system are
marketing strategies that a business might use to attract the target customer. Businesses do not develop
marketing plans for the purpose of preparing revenue statements.
SOURCE: IM:197
SOURCE: Kotler, P. (2000). Marketing management (10th ed.) [pp. 89-93].
Upper Saddle River, NJ: Prentice Hall.
53. B
Industry growth. Many businesses focus on industry growth when conducting an external environmental
analysis because the marketing strategies that a business develops often depend on how fast the
industry is growing. If an industry is growing rapidly, a business needs to develop a marketing plan to
attract and maintain customers and deal with increasing competition. If the industry is at the saturation
level, a business can only grow if it develops a marketing plan to try to take customers away from
competitors. A business conducts an environmental analysis to determine the current situation rather
than to focus on previous demand. Conducting an environmental analysis helps a business to determine
its marketing goals and the financial costs involved in meeting those goals.
SOURCE: IM:140
SOURCE: Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd ed.)
[pp. 98-99]. Boston: Irwin/McGraw-Hill.
Test 858
MARKETING MANAGEMENT — KEY
20
54. A
Internal. A SWOT analysis is the systematic evaluation of a business's internal strengths and
weaknesses and external opportunities and threats. It is important for a business to consider its internal
strengths and weaknesses in order to make marketing decisions that take advantage of external
opportunities or prevent external threats. For example, if a business is financially sound, it will be able to
produce more products when the opportunity for growth presents itself. Also, if a business identifies a
shortage of trained workers, it can take steps to solve the problem before it becomes a threat. A
business's financial situation can be either an internal strength or an internal weakness. Regional is not a
type of strength or weakness. Strengths and weaknesses are internal rather than external.
SOURCE: IM:141
SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an
e-commerce world (7th ed.) [pp. 41-42]. Mason, OH: South-Western.
55. D
Qualitative. Qualitative forecasting is based on expert opinion and personal experience. Qualitative
forecasting can provide the business with a variety of viewpoints at minimal cost since people's thoughts
are freely given. Quantitative methods are based on numerical market data, and the costs of gathering
and analyzing the data are higher than the costs of qualitative methods. A business with a limited budget
would need to know immediate income from sales rather than long-range figures. A bottom-up approach
to forecasting is used by large businesses that prepare forecasts for sections of the business and
combine these into a company forecast.
SOURCE: IM:003
SOURCE: IM LAP 3—Nature of Sales Forecasts
56. C
Detailed product description. An effective marketing plan contains several components, and one of them
deals with marketing strategy, which is the plan of action for achieving marketing goals and objectives.
An important part of the marketing strategy section is a detailed description of the business's product.
This description should explain the product and the features and benefits it provides customers. Before a
business can develop strategies to market a product, it needs to have a clear understanding of its
product and why customers will want or need it. Once it understands the product, a business can
determine the appropriate price to charge and how to make the product available to customers. The
marketing strategy component of a marketing plan does not include a list of current employees, an
explanation of accounting methods, or a proposed annual budget.
SOURCE: IM:198
SOURCE: U.S. Small Business Administration. (n.d.). Marketing plan components: Marketing objectives
and strategies. Retrieved October 17, 2005, from
http://www.sba.gov/starting_business/marketing/marketingobj.html
57. A
Strategies. Marketing strategies are the plans of action for achieving marketing goals and objectives.
Examining the existing marketing strategies is an important part of a marketing audit because a business
needs to know if its strategies are effectively achieving its goals. If the business finds that its strategies
are unclear or not appropriate based on the state of the economy, it can plan corrective action. Marketing
research is the systematic gathering, recording, and analyzing of data about a specific issue, situation, or
concern. The marketing concept is a philosophy of conducting business that is based on the belief that all
business activities should be aimed toward satisfying consumer wants and needs while achieving
company goals. Businesses do not consider technology when conducting marketing audits.
SOURCE: IM:162
SOURCE: Kotler, P. (2000). Marketing management (10th ed.) [pp. 709-711].
Upper Saddle River, NJ: Prentice Hall.
58. A
Equality. People with a mature perspective tend to believe in a philosophy of equality and mutual respect.
They do not feel that others are inferior or superior to themselves or that other people are deficient in
some way.
SOURCE: IS:003
SOURCE: HR LAP 9—Positive Working Relationships
Test 858
MARKETING MANAGEMENT — KEY
21
59. A
Team. A team is a group of people who work cooperatively together to achieve common goals. In the
example, establishing a school store is the common goal of the team that Jamie has been asked to join.
A boycott is a union strategy in which union members refuse to buy a company's products. A strike is a
union strategy in which employees stop working and leave their jobs. A media channel is an individual
medium that transmits a message to the public (e.g., radio, television, newspaper).
SOURCE: IS:004
SOURCE: HR LAP 26—Teamwork
60. D
Friendly. Positive customer/client relations are important to the success of the business because they
help to create repeat business. Many businesses encourage employees to adopt a friendly, helpful
attitude toward customers as part of their efforts to create positive relations. Being reserved could
prevent employees from offering appropriate help and might be interpreted as coldness. Being talkative
may offend customers or prevent employees from identifying their needs. Being authoritative is only
appropriate when providing the customer with technical or factual information.
SOURCE: IS:005
SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 52-54).
Mason, OH: South-Western.
61. B
A hotel chain offering its frequent guests the option of checking in as early as 9:00 a.m. and checking out
as late as 5:00 p.m. This situation best fits a customer-service mindset since it supports the belief that
good service should be a top priority. A corporation open during normal business hours is something
generally expected of businesses. A business providing a seminar or overtime to its employees does not
directly benefit customers.
SOURCE: IS:006
SOURCE: HR LAP 32—Customer-Service Mindset
62. A
Managers. Employees generally handle customers' routine questions or problems for which businesses
have developed specific guidelines, but managers are expected to handle the more serious situations
concerning customer relations. The firm's president would not ordinarily be involved in customer
problems. Coworkers are other employees with the same level of authority. A rack jobber is a type of
vendor who not only delivers items to the business but puts them in racks or other locations for the
business.
SOURCE: IS:008
SOURCE: Rokes, B. (2000). Customer service: Business 2000 (p. 109). Mason, OH: South-Western.
63. C
Domineering/Superior. Domineering/Superior customers often appear overly self-confident and pushy by
boasting about their purchases. Since these customers usually know what they want, they convince or
sell themselves. Disagreeable customers are unpleasant and hard to help because they are
argumentative, complaining, irritable, moody, insulting, impatient, and/or have a leave-me-alone attitude.
Suspicious customers question everything and want facts and proof before being convinced to buy.
Slow/Methodical customers require a lot of time to make a purchase because of shyness or difficulty in
making a choice or buying decision.
SOURCE: IS:013
SOURCE: EI LAP 1—Making Mad Glad
Test 858
MARKETING MANAGEMENT — KEY
22
64. B
May not return to the business. Customers who feel they had a legitimate complaint that the business
handled poorly will not only stop patronizing the business but will probably tell their friends about the
problem. This can be very damaging to a business's reputation. In some cases, customers are difficult
and cause or aggravate problems, but businesses must be prepared to deal with these customers in an
effective manner in order to retain their patronage.
SOURCE: IS:015
SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 12-13). Mason, OH: SouthWestern.
65. B
To protect employees' privacy. Businesses are required to maintain certain information about employees,
and a lot of this information is personal or sensitive in nature. To protect employees' privacy, businesses
often maintain several different personnel files for each employee. Certain categories of information are
kept in each file, and these files may be accessed only by authorized staff. For example, a current file
might contain information that the business needs on a regular basis such as emergency contact,
address, and phone number. Another file might contain confidential information such as references and
performance evaluations, while another file might contain information about medical claims and benefits.
Then, only the current file is available unless an authorized staff person needs to review another file for a
specific reason, such as to consider the employee for a promotion. Businesses do not maintain several
different personnel files for each employee to make record keeping easier, to organize general
information, or to be prepared for an emergency.
SOURCE: MN:033
SOURCE: Mathis, R.L., & Jackson, J.H. (2003). Human resource management (10th ed.) [pp. 520-522].
Cincinnati: Thomson/South-Western.
66. B
Installing a new computer network and additional software. Employees would need additional training
and development to use and to understand this new technology. Payroll-deducted savings and dental
insurance are employee benefits to be explained, rather than skills to be taught. A canopy and carpet at
the entrance are conveniences for employees and customers.
SOURCE: MN:019
SOURCE: MN LAP 42—Training/Human Resource Development
67. A
In-basket simulations. With the in-basket method, the trainee is given a number of hypothetical, but trueto-life, problems that s/he is asked to solve during the fixed time of the simulation. For example, the
trainee might be given a letter from an irate customer, a notification that a shipment has been canceled,
and be given a labor-management problem to resolve. Understudy, job rotation, and junior boards involve
actual business situations rather than hypothetical ones.
SOURCE: MN:024
SOURCE: MN LAP 50—Manager/Supervisor Training
68. A
Reduce net profit. Assigning too many employees to jobs wastes the business's financial resources
because it must pay more wages, which reduces net profits. It also does not improve the business's
ability to meet customer demand. Having too many people on a job is more likely to reduce employee
morale than to improve it, since some workers will be bored from not having enough to do. This kind of
supervisor is not likely to be promoted because s/he is not supervising to the best advantage of the
business.
SOURCE: MN:016
SOURCE: MN LAP 56—Employee Role in Expense Control
Test 858
MARKETING MANAGEMENT — KEY
23
69. D
Taking action to create marketing opportunities. Being proactive is the process of adapting to the
environment in advance of the occurrence of events. This means taking advantage of opportunities rather
than reacting to changes or problems that occur. A proactive business is engaged in continuous planning
rather than watching for changes or reacting to competitors' changes. A proactive business may use a
creative promotional mix, but that is not a proactive characteristic.
SOURCE: MN:035
SOURCE: MN LAP 43—External Planning Considerations
70. B
Money. When a good or service is sold, the buyers and sellers have agreed on a value for the product.
The initial value is usually stated in terms of money. At that point, the buyer has decided that s/he is
willing and able to pay a certain amount of money to obtain the good or service. Credit is the ability to
obtain products or money based on a promise to pay later. Profit is the monetary reward business
owners receive for taking the risks involved in investing in a business. Image is the way people view a
business or an organization.
SOURCE: PI:001
SOURCE: PI LAP 2—Pricing
71. D
Price fixing. Price fixing is an illegal business arrangement in which businesses agree on prices of their
goods or services, resulting in little choice for the consumer. Businesses that agree to coordinate the
discounts and credit terms that they offer their customers are guilty of fixing the price of those services. If
all the competing businesses in one area agree to offer the same discounts and credit terms, the
customers have no choice in selecting a business that offers a different price. In target pricing, prices are
set to provide a certain rate of return on an investment. The decisions a business makes concerning
which prices to charge is price planning. Unit pricing is a pricing technique that gives the consumers the
price per unit for products.
SOURCE: PI:015
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 596-597].
Upper Saddle River, NJ: Prentice Hall.
72. D
Predatory dumping. Predatory dumping is a pricing strategy solely designed to drive rivals from a market.
Selling a product to a foreign market at prices lower than marginal cost of production is an illegal form of
price discrimination. Most governments have antidumping regulations to inhibit this practice. Limited
competition, price negotiation, and price comparison are not forms of price discrimination.
SOURCE: PI:017
SOURCE: Bearden, W.O., Ingram, T.N., & LaForge, R.W. (2001). Marketing: Principles and
perspectives (3rd ed.) [pp. 255-256]. New York: Irwin/McGraw-Hill.
73. D
Earn a reasonable amount of profit. Most businesses that use profit-oriented pricing want to recover their
costs and make a reasonable amount of profit. A financial statement is a summary of accounting
information. Businesses do not generally use profit-oriented pricing for the purpose of balancing their
financial statements. Most businesses want to have a positive cash flow and to increase their return on
investment.
SOURCE: PI:002
SOURCE: PI LAP 3—Factors Affecting Selling Price
74. B
Express. An express warranty may be in written form or expressed verbally. An implied warranty is an
unwritten warranty that is understood by the consumer and the seller that the product will perform as
expected. Not enough information is given to determine if the promise covers the entire product (a full
warranty) or specific parts of the product (a limited warranty).
SOURCE: PM:001
SOURCE: PP LAP 4—Warranties and Guarantees
Test 858
MARKETING MANAGEMENT — KEY
24
75. D
Provides quick and easy access to purchasing histories. Before technological advancements such as the
PC and the Internet, many companies collected data that had to be stored and sorted manually.
Information stored on a computer can show an inventory control analyst past buying practices or provide
a business service representative with a customer's ordering history very quickly. Databases do not
necessarily reduce order-entry errors. Promotional policies can be written and stored on a computer.
However, computers don't necessarily provide added protection. Written policies are not usually
documented in a database format. Most documents are in a word-processing format. Using a computer
database to manage goods and services does not generally compromise employees' privacy rights.
SOURCE: PM:039
SOURCE: Hoffman, K., & Bateson, J. (2002). Essentials of services marketing: Concepts, strategies,
& cases (2nd ed.) [pp. 123-124]. Orlando, FL: Harcourt.
76. A
Analogies and metaphors. Synectics refers to a creative-thinking technique that utilizes processes for
making connections between seemingly unrelated items or concepts. An analogy is the comparison of
two things that may possess some similar and some different characteristics. A metaphor is a figurative
expression that compares or likens unrelated objects or ideas. An antonym is a word that means the
opposite of another word (e.g., happy is the opposite of sad). Syntax refers to order or manner in which
words are put together in terms of grammar. An allegory uses symbolism to convey an idea or concept.
SOURCE: PM:127
SOURCE: PM LAP 11—Unleash Your Oh! Zone
77. A
Suppliers. Suppliers are the vendors from whom businesses buy their goods and services. Often, they
have contact with many companies. Therefore, they have a broad view of what is acceptable in an
industry. Their broad view of the business environment can be helpful to businesses in developing their
own standards. Lawyers, accountants, and advertisers usually are not involved in developing standards
for businesses.
SOURCE: PM:019
SOURCE: PM LAP 8—Grades and Standards
78. A
Expansion. Expansion is when a company adds additional product items or lines to its product mix. An
example would be a new detergent added to Procter & Gamble's product mix. Contraction is a productmix strategy in which a company removes or deletes product items or lines. The positioning strategy is
how a company attempts to dictate how the consumer sees its product. Trading-up is when a company
decides to add a higher priced product or product line to its product mix.
SOURCE: PM:003
SOURCE: PP LAP 3—Product Mix
79. D
Product bundling. Product bundling involves combining several products and selling them for one allinclusive price. Selling a product, plus delivery, and the training to use the product as a single unit is an
example of product bundling. In many cases, businesses sell the bundled product for less than the total
cost of each item or service sold separately. Brand positioning involves creating a certain image or
impression of a brand as compared to those of competitors' brands. Captive pricing involves setting a
price for support products that must be used with a main product. Personal selling is the form of
promotion that determines client needs and wants and responds through planned, personalized
communication that influences purchase decisions and enhances future business opportunities.
SOURCE: PM:041
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [p. 629].
Upper Saddle River, NJ: Prentice Hall.
Test 858
MARKETING MANAGEMENT — KEY
25
80. B
Cutting costs in other areas to offset more expensive components. A disadvantage of improving the
quality of a product occurs only if the business cuts costs in other areas to compensate for more
expensive components or production processes. Modifications can be made to improve quality without
cutting costs in other areas. Quality improvements are necessary to remain competitive. Higher prices
are often associated with quality products and provide an avenue to maintain profits on modifications.
Quality products mean customer satisfaction and increased customer loyalty.
SOURCE: PM:006
SOURCE: Pride, W.M. & Ferrell, O.C. (2000). Marketing: Concepts and strategies (2000e)
[pp. 272-273]. Boston: Houghton Mifflin.
81. C
Service. A service is an intangible object that can be sold or provided to customers free of charge. A
telephone hot line to answer questions is an example of a service that some businesses provide their
customers. Many businesses that sell tangible goods also offer services in order to attract customers and
increase sales. For example, a business that sells expensive computer software might provide a free
telephone hot line to answer technical questions about installation or operating problems. Customers
may buy from that business specifically because of the free service. An opinion is a personal point of
view. An allowance is a reduction in price for goods that are damaged or defective. A process is a series
of functions or a way of operating.
SOURCE: PM:036
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 328-333].
Upper Saddle River, NJ: Prentice Hall.
82. B
Understand customer needs better than the competition. Before a product is developed, businesses must
conduct an extensive analysis to know what the customers want and need. Once marketers understand
customer needs and how the competition is meeting or not meeting these needs, businesses can
implement strategies to emphasize product uniqueness in relation to the competition. A marketing plan is
not developed until a customer needs and competition analysis has been conducted. Marketers work to
create brand awareness for a product within its target market. Line extensions are new products in a
specific product category. Businesses should understand customer needs before they develop line
extensions.
SOURCE: PM:042
SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [pp. 220-221].
Upper Saddle River, NJ: Prentice Hall.
83. A
Values and characteristics. These form the very foundation for every successful brand and are the
blueprint for how the business or product performs and interacts with the customer. Product design,
promotional elements, and the name and logo are all aspects of a brand that are derived from the brand
foundation—its values and characteristics.
SOURCE: PM:021
SOURCE: PM LAP 6—It's a Brand, Brand, Brand World!
84. C
Access information online. The wonderful thing about web-based businesses (e.g., e-tailing) is that
customers can serve themselves by accessing important information online, including the answers to
Frequently Asked Questions and product information. A web-based business puts security measures into
place so that people won't hack into its web site and cause all kinds of damage. Although being able to
return unwanted merchandise to the business's local store is a beneficial service, it does not take
advantage of technology. Web-based businesses encourage customers to buy online rather than over
the telephone by making it easy to buy within three clicks or less.
SOURCE: PM:013
SOURCE: PM LAP 1—Customer Service Supersized!
Test 858
MARKETING MANAGEMENT — KEY
26
85. B
Differences to promote. When developing strategies to position products, not all product differences are
worth promoting. Businesses need to determine which product differences are important, distinctive, or of
use to customers. To make the product stand out and develop a competitive advantage, businesses
should promote specific differences that are clear to customers. For example, the size of a product may
be a difference, but it might be a difference that is not important to customers. Therefore, a business
would not promote size as part of its positioning strategy. Businesses usually consider which markets to
target, which segments to identify, and which locations to develop before developing strategies to
position products.
SOURCE: PM:043
SOURCE: Kotler, P., & Armstrong, G. (1997). Marketing: An introduction (4th ed.) [pp. 230-231].
Upper Saddle River, NJ: Prentice Hall.
86. B
Communicate the benefits of the products to buyers. Promotion provides a number of tools businesses
can use to communicate with buyers. These include advertising, publicity, sales promotion, and personal
selling. Promotion does inform consumers about prices, which helps businesses to be competitive, but it
does not help businesses to set prices. It also does not ensure that the business's marketing mix is
appropriate. Determining what consumers want and need to buy is a function of marketing research.
SOURCE: PR:001
SOURCE: PR LAP 2—Promotion
87. B
Institutional. Institutional promotion aims to create a certain image in the eyes of consumers. This ad is
intended to build goodwill with the public by portraying the company as having concern for the
environment. Product promotion aims to persuade consumers to buy a good or service. Primary
promotion is intended to stimulate demand for an entire class of goods or services. Patronage promotion
is designed to promote a firm's features or prestige.
SOURCE: PR:002
SOURCE: PR LAP 4—Types of Promotion
88. A
Pricing. Price is an element of the marketing mix, along with promotion, distribution, and product. The
elements of the promotional mix include advertising, selling, sales promotion, and publicity.
SOURCE: PR:003
SOURCE: PR LAP 1—Promotional Mix
89. D
Bait and switch. Bait and switch is advertising items at a low price to bring people into the business and
then "switching" them to higher priced models. False promises are making advertising promises that
cannot be kept such as "restores youth" or "prevents cancer." False testimonial is implying that a product
has the endorsement of a celebrity who is not a bona fide user. Partial disclosures are stating certain
facts about the advertised product but omitting other important material information.
SOURCE: PR:099
SOURCE: Arens, W.F. (1996). Contemporary advertising (6th ed.) [p. 44]. New York: Irwin/McGraw-Hill.
90. B
Graphic design software. Graphic design software consists of programs that instruct computers on how
to create text, graphics, layouts, backgrounds, and other design components. As the technology evolves,
the quality of printed products (e.g., brochures) continues to improve. An example of interactive viewing
technology is videoconferencing capabilities. Participants in interactive communication control the
content and pace of the message content. Printed promotional pieces are not considered interactive
forms of communication. Spreadsheet software is used to calculate and analyze numerical data.
Database tracking technologies are usually used in market-research efforts.
SOURCE: PR:100
SOURCE: Arens, W.F. (1999). Contemporary advertising (7th ed.) [p. 376]. Boston: Irwin/McGraw-Hill.
Test 858
MARKETING MANAGEMENT — KEY
27
91. C
An SRDS directory. Standard Rate and Data Service (SRDS) publishes the Direct Marketing List Source
directory. This classic directory is available in most libraries. The Thomas Register is a listing of
manufacturing companies and their products. The Yellow Pages may or may not list mailing-list
companies but will not categorize their available lists. The postal service will assist with mailings but does
not provide mailing lists.
SOURCE: PR:089
SOURCE: Gordon, K.T. (1999, November). Hit list: No-fail direct mail. Retrieved October 18, 2005, from
http://www.entrepreneur.com/Magazines/MA_SegArticle/0,1539,231267——1-,00.html
92. B
Objectives. Businesses consider their objectives, the goals that they want to attain, before developing
promotional plans. Businesses look at their present standing in the marketplace and where they want to
go in order to develop promotional plans that will help them achieve these objectives. Investments are
purchases of stocks, bonds, and other securities or other allocations of funds intended to earn revenues.
Equipment is the industrial goods used in the operation of a business. Liabilities are the debts that a
business owes.
SOURCE: PR:073
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 513-514].
Upper Saddle River, NJ: Prentice Hall.
93. B
Image. A business's image, the view that customers have about it, often affects the type of goods that a
business selects to promote. Businesses promote the type of goods that are compatible with the image
they have created in the minds of their customers. Discount businesses often promote low-priced
products because their customers expect bargains and reduced prices. A business policy is a general
rule or statement the business follows. A business cycle is a period of expansion or contraction in
economic activities. An audit involves the investigation of a company's business records by an outside
organization.
SOURCE: PR:076
SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 268-269).
Tinley Park, IL: Goodheart-Willcox.
94. C
Joe, because he will get more repeat business. In the long run, Joe will be more successful because he
makes a sincere effort to satisfy the customer's needs, which will establish repeat clients. He will not
establish repeat clients just because he is nice. Joe is not too timid to close a sale; he just has the
customer's best interests in mind. Because sales situations differ, attempts to close a sale do not always
result in a sale. Carol may get more sales initially, but will probably have very little repeat business.
SOURCE: SE:017
SOURCE: SE LAP 117—Selling
95. C
Terms-of-sale. Selling policies dealing with pricing, product availability, and discounts are categorized as
terms-of-sale policies. These are the policies about which customers are usually the most concerned and
are at the heart of a sale. Service policies are designed to govern the support a company provides to
customers after the sale, while selling-activity policies focus on providing salespeople with guidelines for
activities involving interaction with customers. Delivery policies are an example of terms-of-sale policies.
SOURCE: SE:932
SOURCE: SE LAP 121—Selling Policies
Test 858
MARKETING MANAGEMENT — KEY
28
96. D
Ethical. Ethics are the basic principles that govern a person's behavior. People who follow those
principles and standards are behaving ethically. Refusing to accept kickbacks or payoffs in order to make
a sale is considered ethical behavior. Accepting kickbacks and payoffs is not necessarily illegal and is a
common business practice in certain countries. Refusing to accept kickbacks and payoffs is not an
example of special or unsocial behavior.
SOURCE: SE:106
SOURCE: Manning, G.L., & Reece, B.L. (1998) Selling today: Building quality partnerships (pp. 73-78).
Upper Saddle River, NJ: Prentice Hall
97. D
Reciprocity. Reciprocity occurs when one company buys goods or services from a second company only
if the second company agrees to buy goods or services from the first company. This sales practice may
be illegal if it eliminates competition and prevents the second company from buying from a vendor of its
choice. Most salespeople avoid discussing reciprocal deals because of the possibility that they may be
illegal. Partnering involves a salesperson building a strong relationship with a customer. Salespeople
often use persuasion to encourage customers to buy. Showmanship is the use of dramatic techniques to
show the product's features.
SOURCE: SE:108
SOURCE: Futrell, C.M. (1999). Fundamentals of selling: Customers for life (6th ed.) [p. 94].
Boston: Irwin/McGraw-Hill.
98. B
Can use the information in their selling efforts. Salespeople should make sure they know what products
the business is promoting because promotions often create selling opportunities. Customers who inquire
about products the business is promoting expect the salesperson to be familiar with the products and to
be able to answer their questions. Salespeople, therefore, should spend time reading the business's ads.
Salespeople may tell customers to watch for upcoming promotions, but that is not an important reason for
being familiar with the promotions. It is not usually part of the salesperson's responsibility to evaluate the
promotional effort.
SOURCE: SE:062
SOURCE: Ingram, T.N., LaForge, R.W., Avila, R.A., Schwepker, C.H., & Williams, M.R. (2004).
Professional selling: A trust-based approach (2nd ed.) [p. 40]. Mason, OH: South-Western.
99. C
The entire selling process. Questioning the customer and answering the customer's questions are not
confined to any one phase of the selling process. They are essential to establishing a relationship with
customers/clients, discovering client needs, prescribing solutions to needs, reaching closure, and
reaffirming buyer-seller relationships.
SOURCE: SE:048
SOURCE: SE LAP 126—The Selling Process
100. C
Training salespeople. Sales managers are responsible for making sure that salespeople know what they
are expected to do and how to do it. As a result, they are often responsible for training salespeople and
helping them to develop the skills they need to be productive. Sales managers make sure that
salespeople possess the necessary product information and selling tools. They may conduct on-the-job
training with new or inexperienced salespeople. The business, rather than sales managers, usually
develops compensation plans. Salespeople recruit customers and are responsible for routine selling.
SOURCE: SE:079
SOURCE: Stanton, W.J., & Spiro, R. (1999). Management of a sales force (10th ed.) [p. 347].
Boston: Irwin/McGraw-Hill.