Download Chapter 9—Product Concepts

“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 9—Product Concepts
MULTIPLE CHOICE
1. A _____ is everything, both favorable and unfavorable, that a person receives in an exchange. It can be
tangible, intangible, a service, an idea, or a combination of these things.
a. brand equity
b. quality
c. warranty
d. transaction
e. product
ANS: E
PTS: 1
REF: 131
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-1 TYPE: Def
2. The _____ is the starting point in creating a marketing mix.
a. price
b. product
c. distribution channel
d. promotional media
e. production line
ANS: B
The product must be specified before other marketing mix variables can be planned.
PTS: 1
REF: 131
OBJ: 09-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
3. Why is creation of a product the starting point for the marketing mix?
a. The production department must know what to produce first.
b. Production strategy is the first of the four Ps listed in the marketing mix.
c. Determination of the price, promotional campaign, and distribution network cannot begin
until the product has been specified.
d. Product development takes the longest amount of time to complete.
e. Actually, the product does not have to be the starting point--promotional strategies are
often the starting point.
ANS: C
The product is the first decision around which the others are based.
PTS: 1
REF: 131
OBJ: 09-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Strategy
4. Which of the following is NOT an example of a product's tangible feature?
a. brand equity
b. packaging
c. color
d. weight
e. size
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: A
PTS: 1
REF: 131
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-1 TYPE: Def
5. In the long run, regardless of the effort put into the product management process, the most important
factor determining if a consumer product will succeed or fail is:
a. the product mix plan
b. the way the firm implements its production strategy
c. the marketing plan it selects for its products
d. how well the manufacturer satisfies its customers' needs
e. the competition encountered by the manufacturer
ANS: D
Products succeed because they deliver benefits and satisfy customer needs.
PTS: 1
REF: 131
OBJ: 09-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
6. When PaintingsDirect, an online seller of contemporary original art, markets its art to home decor
buyers for retailers, custom-framing stores, and intermediaries that supply furniture and home
furnishings retailers, it is selling _____ products.
a. specialty
b. consumer
c. business
d. convenience
e. unsought
ANS: C
Business products are purchased for (1) use in the production of other goods or services, (2) use in an
organization's operations, or (3) resale to other customers.
PTS: 1
REF: 131
OBJ: 09-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
7. The consumer product classification system is based on:
a. how the market is segmented
b. the way the products are manufactured
c. the way products are used
d. the physical attributes of the product
e. the amount of effort consumers spend to acquire the product
ANS: E
Products are classified by the amount of effort that is normally expended in the acquisition process.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
8. _____ products are purchased with little shopping effort. These products typically are purchased
regularly, usually with little planning, and require wide distribution.
a. Convenience
b. Specialty
c. Branded shopping
d. Unbranded shopping
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. Generic
ANS: A
PTS: 1
REF: 132
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-2 TYPE: Def
11. Which of the following is the best example of a convenience product?
a. the purchase of an engagement ring
b. the weekly purchase of a TV Guide
c. a one-of-a-kind bird bath for the garden
d. a piano stool for the new piano
e. the annual vacation cruise
ANS: B
This is a relatively inexpensive purchase. and if the individual habitually buys the magazine, she
probably did not do any comparison shopping.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
12. The convenience product marketing strategy includes:
a. wide distribution of the product
b. higher than ordinary prices
c. few retail outlets other than convenience stores
d. significantly lower promotion budgets
e. products that are not easily substitutable
ANS: A
To sell large amounts of products that consumers are unwilling to search for, there must be a large
number of retail outlets.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
13. Compared to the other classifications of consumer products, shopping products are:
a. widely available so they need little or no promotion
b. usually less expensive than convenience products
c. purchased without significant planning
d. usually more expensive than convenience products and are found in fewer stores
e. purchased immediately after the consumer realizes he or she needs them
ANS: D
Shopping products are typically items such as clothing, automobiles, and major appliances. Consumers
usually compare items across brands or stores.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
14. Harrison wanted a gas water heater. He watched newspaper ads until he found one on sale. For
Harrison the water heater is a(n) _____ product.
a. shopping
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
convenience
component
unsought
specialty
ANS: A
Harrison is comparing ads looking for a low price. This is shopping product behavior.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
15. Which of the following is the best example of a shopping product for most consumers?
a. a light bulb for the front porch fixture
b. Vital Radiance makeup by Revlon for women over 50
c. a ream of paper for your printer
d. a gas grill for the new patio
e. a copy of the Wall Street Journal
ANS: D
Shopping products are typically more expensive than convenience products and are found in fewer
shops. Vital Radiance describes a specialty product because of the specification of a brand name, as
does The Wall Street Journal
PTS: 1
REF: 132
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
16. The two types of shopping products are:
a. unsought and convenience
b. generic and family
c. exclusive and intensive
d. heterogeneous and homogeneous
e. consumer and business
ANS: D
PTS: 1
REF: 132
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-2 TYPE: Def
17. _____ are products consumers see as being basically the same, so consumers shop for the lowest price.
a. Low-prestige specialty products
b. Product equivalents
c. Heterogeneous shopping products
d. Generic convenience products
e. Homogeneous shopping products
ANS: E
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
18. Andrea needs to find a kennel for boarding her son’s dogs. There are several different kennels in her
community, and Andrea believes all of them to be basically alike. The only feature she is genuinely
concerned about is low price. For Andrea, the kennel for boarding dogs would be classified as a(n)
_____ product.
a. specialty
b. unsought
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. heterogeneous shopping
d. basic convenience
e. homogeneous shopping
ANS: E
Homogeneous products are products that consumers see as being basically the same, so consumers
shop for the lowest price.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
19. _____ products are seen by consumers to differ in quality, style, suitability, and lifestyle compatibility.
Comparisons between these products are often quite difficult because they may have unique features
and different levels of quality and price.
a. Product equivalents
b. Comparative convenience products
c. Homogeneous shopping products
d. Product counterparts
e. Heterogeneous shopping products
ANS: E
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
20. Which of the following products is most likely to be considered an example of a heterogeneous
shopping product?
a. an off-campus apartment
b. a package of pencils
c. a Rolex watch
d. a stapler
e. a flea collar
ANS: A
Heterogeneous shopping products are essentially different. Housing is one of the examples given in the
text.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
22. _____ products are searched for extensively, and substitutes are not acceptable. These products may be
quite expensive, and often distribution is limited.
a. Exclusive shopping
b. Homogeneous convenience
c. Branded shopping
d. Specialty
e. Heterogeneous convenience
ANS: D
PTS: 1
REF: 132
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-2 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
25. When deciding on distribution plans for specialty products, companies generally ensure that the items
are:
a. made available only as private brands
b. made available in a large number of stores in a geographic area
c. made available only through the mail
d. distributed to a considerable number of stores in a geographic area
e. distributed to only a few stores in the geographic area
ANS: E
Specialty products are searched for extensively, and substitutes are not acceptable. These products may
be quite expensive, and often distribution is limited.
PTS: 1
REF: 132
OBJ: 09-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Distribution
27. _____ products are products that are not known about or not actively searched for by consumers.
These products require aggressive personal selling and highly persuasive advertising.
a. Hidden
b. Specialty
c. Equity
d. Unsought
e. Shopping
ANS: D
PTS: 1
REF: 133
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-2 TYPE: Def
29. Unsought products typically are products that:
a. consumers purchase when they see them in a convenient location
b. consumers definitely don't want
c. only require reminder advertising to be successful
d. require little or no decision making by the buyer
e. consumers don't know about or don't actively look for
ANS: E
PTS: 1
REF: 133
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-2 TYPE: Def
30. Most people under the age of 25 have a strong belief in their own personal invincibility. An insurance
agency targeting this group for life insurance would find this market segment categorizes the insurance
as a(n) _____ product.
a. heterogeneous shopping
b. specialty
c. unsought
d. relationship
e. exclusive
ANS: C
The buyer does not actively seek to buy this product.
PTS: 1
REF: 133
OBJ: 09-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
31. A product line is a group of products that are closely related because the:
a. products share the same product managers
b. products all function in a similar manner and provide similar benefits
c. same company developed the idea for each product
d. products are all sold under the same brand name
e. products are all priced about the same
ANS: B
A product line is a group of closely related products offered by the organization that basically perform
the same tasks and provide the same benefits.
PTS: 1
REF: 133
OBJ: 09-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
35. Product mix width may be defined as:
a. the number of different product categories found within an industry
b. the average number of products within each product line in the company
c. the average number of products offered by the company
d. the number of different product lines an organization offers for sale
e. the extensiveness of the coverage of the line from high end (expensive) to low end
(inexpensive)
ANS: D
PTS: 1
REF: 133
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-3 TYPE: Def
38. Which of the following is an example of a product modification?
a. lowering the price of textbooks
b. dropping a product from the product line
c. changing the color of a laundry detergent
d. changing the amount of management time spent overseeing production
e. increasing the number of distribution outlets
ANS: C
Product modification entails changing one or more of a product's characteristics.
PTS: 1
REF: 134
OBJ: 09-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
47. A style modification is a(n):
a. change in the product's durability or dependability
b. safety improvement
c. aesthetic product change
d. way to add convenience
e. improvement in product versatility and effectiveness
ANS: C
PTS: 1
REF: 134
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-3 TYPE: D
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
62.
A(n) _____ refers to brands where at least 20 percent of the product is sold outside the home
country.
a. evoked set
b. global brand
c. equity brand name
d. master brand
e. ethnocentric trademark
ANS: B
PTS: 1
REF: 136
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-4 TYPE: Def
64. A consumer who consistently and repeatedly purchases the same brand is said to have:
a. brand loyalty
b. product equity
c. product loyalty
d. product repetition
e. store loyalty
ANS: A
Brand loyalty is the consistent preference of the same brand by the same consumer. Product loyalty
could easily involve a variety of brands.
PTS: 1
REF: 136
OBJ: 09-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
65. Brand loyalty can:
a. increase product diffusion
b. encourage competition
c. shorten the amount of time a product spends in the maturity stage
d. help ensure repeat sales
e. sell a bad product
ANS: D
Brand loyalty ensures repeat and regular sales.
PTS: 1
REF: 136
OBJ: 09-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
74. When a company markets several different products under the same brand name, it is referred to as
a(n) _____ brand.
a. family
b. generic
c. bargain
d. dealer
e. umbrella
ANS: A
PTS: 1
REF: 137
OBJ: 09-4 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Product
82. A _____ is a legal term indicating the owner's exclusive right to use a brand name or other identifying
mark.
a. trademark
b. patent
c. brand
d. private brand
e. right of warranty
ANS: A
PTS: 1
REF: 138-139
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-4 TYPE: Def
84. When a product name becomes generic,:
a. the firm must use black-and-white packaging
b. competitors are prohibited by law from using the trademark
c. the price will have to drop to appeal to lower-income consumers
d. the product name is no longer recognized as the exclusive property of one firm
e. a firm can reapply for exclusive trademark protection at the U.S. Patent Office
ANS: D
A generic product name can be used by any firm and is public property.
PTS: 1
REF: 139
OBJ: 09-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
86. Which of the following is NOT identified by the text as one of the major functions of packaging?
a. contain the product
b. guarantee product quality
c. protect the product
d. promote the product
e. facilitate product storage, use, and convenience
ANS: B
PTS: 1
REF: 140
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-5 TYPE: Comp
88. You have to convince your boss that packaging will be the key to increasing sales of the company's
new line of instant pudding mixes, so you tell him the packaging:
a. will cause no environmental damage
b. allows products to be shipped more easily
c. conforms to government regulations
d. can be used to help promote the product
e. will conforms to all ethical standards
ANS: D
Promotion is a prime function of packaging that can help stimulate sales.
PTS: 1
REF: 140
OBJ: 09-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
92. Which of the following statements about bar codes is true?
a. Bar codes are also called universal pricing codes (UPCs).
b. Bar codes were first used in 2000.
c. Bar codes can be read by optical scanners.
d. Bar codes cannot be used as a marketing research tool.
e. None of these statements about bar codes is true.
ANS: C
Bar codes are the same as universal product codes. They were first developed in 1974. Also bar codes
can be used in single-source research.
PTS: 1
REF: 141
OBJ: 09-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
93. The two types of package labeling in common usage today are:
a. informational and persuasive
b. promotional and nonpromotional
c. functional and persuasive
d. government-mandated and seller-controlled
e. motivational and required
ANS: A
PTS: 1
REF: 141
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 09-5 TYPE: Def
94. Labels that contain standard promotional claims like "new," "improved," and "super" are examples of
_____ labels.
a. descriptive
b. functional
c. repositioning
d. informational
e. persuasive
ANS: E
Persuasive labels primarily focus on a promotional theme or logo and try to sell the customer on a new
or changed feature.
PTS: 1
REF: 141
OBJ: 09-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
95. Mia's new raincoat contains a label that reads "Professional dry clean only." This is an example of a(n)
_____ label.
a. data
b. union mandated
c. persuasive
d. informational
e. functional
ANS: D
Informational labeling is designed to help consumers in making proper product selections and to lower
cognitive dissonance after the purchase. These labels often include care and use information and an
explanation of construction standards.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 141
OBJ: 09-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
96. Which of the following is NOT one of the functions of universal product codes (UPCs)?
a. allow scanners to match codes with brand names, package sizes, and prices
b. print product and price information on cash register tapes
c. assist retailers in preparing records of customer purchases
d. allow retailers to accurately track sales and control inventories
e. provide the detailed nutritional information required by the FDA
ANS: E
Universal product codes do not contain nutritional information.
PTS: 1
REF: 141
OBJ: 09-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
97. Which of the following does NOT need to be a branding and packaging consideration for companies
considering global marketing?
a. whether to use one brand name with no adaptation to local markets or to use one name but
adapt and modify it for each local market
b. translation or pronunciation problems with brand names
c. different currencies in each country, exchange rates, and final retail prices
d. whether to use different brand names in different markets for the same products
e. product labeling, package aesthetics, and climate considerations
ANS: C
Currency and pricing considerations are not the prime considerations when considering global
branding and packaging strategies.
PTS: 1
REF: 140-141
OBJ: 09-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
98. Which of the following is NOT an important consideration for a French manufacturer that wants to
market its products in Canada?
a. There may be aesthetic issues associated with developing a packaging strategy.
b. Alternative messages could be developed for promoting the brand.
c. Keeping the current brand names will allow the firm to capitalize on current domestic
brand equity.
d. Sturdy packaging will be needed to ship the products to Canada.
e. Unique labels may be required by the Canadian government.
ANS: C
Brand equity in France will mean little to most Canada buyers since they will be unaware of it.
PTS: 1
REF: 141-142
OBJ: 09-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
99. Three aspects of packaging that are especially important in international marketing are labeling,
aesthetics, and:
a. price
b. length of distribution channel
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. counterfeiting potential
d. warranties
e. climate considerations
ANS: E
PTS: 1
REF: 141-142
OBJ: 09-6 TYPE: Comp
TOP: AACSB Analytic | TB&E Model Product | TB&E Model Strategy
101. The label on Darwin's new blazer that reads "Will Not Shrink" is an example of a(n) _____ warranty.
a. descriptive
b. limited
c. implied
d. express
e. superfluous
ANS: D
An express warranty is any written guarantee.
PTS: 1
REF: 142
OBJ: 09-7 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
102. Realizing that its product needed a warranty to gain rapid market acceptance, the manufacturer of a
high-tech system for investigating accidents produced:
a. a statement for salespeople to read to prospective buyers
b. an acknowledgment of company responsibilities for salespeople to build into presentations
c. a label stating the product is of the highest quality and backed by years of manufacturing
experience
d. an advertisement stating that buyers would not perceive the purchase of this product as
risky
e. a written guarantee that the product would work as promised and that it is fit for the
purpose for which it was sold
ANS: E
A written guarantee is an express warranty. This guarantee states what is contained in an implied
warranty.
PTS: 1
REF: 142
OBJ: 09-7 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
103. The statement on the toothpaste box that brushing twice a day with this paste will remove 90 percent
of all tartar from the user's teeth is an example of a(n):
a. implied warranty
b. functional label
c. UPC disclaimer
d. express warranty
e. universal warranty
ANS: D
An express warranty is any written guarantee.
PTS: 1
REF: 142
OBJ: 09-7 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
104. Due to the existence of a(n) _____, Shannon had every reason to believe the antacid he purchased
would relieve his stomach problems if he followed the directions on the box.
a. implied warranty
b. functional label
c. persuasive label
d. express warranty
e. universal warranty
ANS: A
An implied warranty states that a product is fit for the purpose for which it was sold.
PTS: 1
REF: 142
OBJ: 09-7 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
105. Under the _____, all sales have an implied warranty.
a. Label Law
b. Lanham Act
c. Bill of Rights
d. Good Housekeeping Seal
e. Uniform Commercial Code
ANS: E
The Uniform Commercial Code regulates all sales.
PTS: 1
REF: 142
OBJ: 09-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 11—Services and Nonprofit Organization Marketing
MULTIPLE CHOICE
3. A(n) _____ is the result of applying human or mechanical efforts to people or objects.
a. application processor
b. profit intermediary
c. tangible product
d. service
e. nonprofit organization
ANS: D
PTS: 1
REF: 159
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-1 TYPE: Def
6. A service cannot be touched, seen, tasted, heard, or felt in the same manner in which goods can be
sensed and, therefore, is referred to as:
a. impervious
b. extraneous
c. synergistic
d. perishable
e. intangible
ANS: E
PTS: 1
REF: 159
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-2 TYPE: Def
9. A(n) _____ is a characteristic that can be easily assessed prior to purchase, such as the softness of a
mattress or the color of curtains.
a. search quality
b. intangible attribute
c. experience quality
d. credence quality
e. heterogeneity feature
ANS: A
PTS: 1
REF: 160
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-2 TYPE: Def
15. A(n) _____ is a characteristic that cannot easily be assessed even after purchase since the customers do
not have the knowledge or experience.
a. heterogeneity feature
b. perishable attribute
c. experience quality
d. search quality
e. credence quality
ANS: E
PTS: 1
REF: 160
TOP: AACSB Reflective Thinking | TB&E Model Customer
OBJ: 11-2 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
16. Which of the following services would be most likely to exhibit strong credence qualities?
a. a math tutorial service
b. the repair of a leaky drain
c. the preparation of a dead body for burial
d. tax return preparation
e. a landscaping service that mows lawns
ANS: C
A credence quality is a characteristic that cannot easily be assessed even after purchase and
experience.
PTS: 1
REF: 160
OBJ: 11-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product
18. LaVergne had her makeup professionally applied for her prom night. She went to the beauty salon,
watched as the makeup artist applied cosmetics to her face, and then went home feeling gorgeous.
LaVergne's makeover illustrates which service characteristic?
a. intangibility
b. inseparability
c. heterogeneity
d. perishability
e. flexibility
ANS: B
Inseparability is when services or goods are produced and consumed at the same time.
PTS: 1
REF: 160
OBJ: 11-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
20. There are fewer problems caused by the service characteristic of _____ when the service being
purchased requires little interaction between the service personnel and the customer.
a. perishability
b. inseparability
c. intangibility
d. heterogeneity
e. instability
ANS: D
PTS: 1
REF: 160
OBJ: 11-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Customer
21. It is difficult to achieve consistency and standardization of services because of which service
characteristic?
a. customization
b. simultaneous production and consumption
c. intangibility
d. perishability
e. heterogeneity
ANS: E
PTS: 1
REF: 160
OBJ: 11-2 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Product
23. Which of the following is NOT a method firms can use to reduce the inherent variability of services?
a. standardized preparation procedures
b. mechanizing the process
c. standardization
d. providing tangible cues
e. training of employees in performance standards
ANS: D
Providing tangible cues will not increase the consistency or reliability of the service itself.
PTS: 1
REF: 160-161
OBJ: 11-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
24. Due to service _____, services cannot be stored, warehoused, or inventoried.
a. tangibility
b. variability
c. intangibility
d. perishability
e. heterogeneity
ANS: D
PTS: 1
REF: 161
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-2 TYPE: Def
27. Which of the following is NOT a service component customers use to evaluate service quality?
a. validity
b. empathy
c. assurance
d. responsiveness
e. reliability
ANS: A
PTS: 1
REF: 161
OBJ: 11-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
39. If a hospital measured the service quality of its physician care in terms of the total number of people
who were attended to--even if patients appeared to want more individualized care--the hospital would
be exhibiting a gap between:
a. what customers want and what management thinks customers want
b. the service quality specifications and the service that is actually provided
c. what the company provides and what the customer is told it provides
d. what management thinks customers want and the quality specifications management
develops to provide the service
e. the service customers receive and the service they want
ANS: E
There is no indication in the question that the hospital is concerned about what customers want. Rather
the hospital cares more about its billable hours.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 162
OBJ: 11-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
40. Which of the following statements about developing marketing mixes for services is true?
a. The variability and perishability of services may require adjustments in marketing mix
elements.
b. Marketing mixes for services are often different than those for products.
c. Elements of the marketing mix must be adjusted for the unique characteristics of services.
d. The intangibility and simultaneous production and consumption of services may require
adjustments in marketing mix elements.
e. All of the statements about developing marketing mixes are true.
ANS: E
PTS: 1
REF: 162-164
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-4 TYPE: Comp
41. Which of the following is NOT an example of a type of service processing that can occur?
a. people processing
b. product processing
c. possession processing
d. information processing
e. mental stimulus processing
ANS: B
PTS: 1
REF: 163
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-4 TYPE: Def
42. Budget airlines are a new service in China. Neither their passengers nor the airlines themselves know
what to expect from each other. Shanghai-based Spring Airlines is a start-up service with a tight
budget. Spring Airlines would engage in _____ processing.
a. people
b. mechanical
c. possession
d. mental
e. information
ANS: A
People processing takes place when the service is directed at a customer.
PTS: 1
REF: 162
OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
43. Which of the following services is an example of possession processing?
a. a theatrical performance
b. an X-ray of a broken bone
c. an advertising agency
d. marriage counseling
e. heating system repair
ANS: E
Possessions processing occurs when the service is directed to the customers’ physical possessions.
PTS: 1
REF: 163
OBJ: 11-4 TYPE: App
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Product
45. Which of the following services is an example of mental stimulus processing?
a. taxi cab service
b. insurance
c. a professional tennis match
d. veterinarian care
e. a hair cut
ANS: C
PTS: 1
REF: 163
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-4 TYPE: App
46. Which of the following services is an example of information processing?
a. investment advice
b. a funeral service
c. pet neutering
d. the fitting of orthodontic braces
e. attendance at a Major League Baseball game
ANS: A
Information processing describes services that use brain power directed at a customer’s assets.
PTS: 1
REF: 163
OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer
52. _____ is the strategy that uses technology to deliver customized services on a mass basis.
a. Mass standardization
b. Aggregated services
c. Technological processing
d. Mass customization
e. Aggregated marketing
ANS: D
PTS: 1
REF: 163
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-4 TYPE: Def
53. The ability of each hotel guest to use his or her room’s television to check out of the hotel room and to
confirm additional charges on bills in the hotel's restaurants and gift shops is an example of:
a. a cooperative service
b. mass customization
c. aggregated standardization
d. a market development strategy
e. mental stimulus processing
ANS: B
PTS: 1
REF: 163
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-4 TYPE: App
56. Which of the following is NOT a key factor in the distribution strategy for services?
a. customization
b. convenience for customers
c. number of intermediaries and outlets
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
d. scheduling of service deliveries
e. location
ANS: A
Customization is a key factor in the product component of the service marketing mix.
PTS: 1
REF: 163-164
OBJ: 11-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Strategy
59. Promotion strategies for dealing with the unique features of services include all of the following
EXCEPT:
a. using personal sources of information
b. creating strong organizational images
c. stressing tangible cues
d. using postpurchase communication
e. satisfying patronage-oriented objectives
ANS: E
Patronage-oriented objectives are part of a service pricing strategy.
PTS: 1
REF: 164
OBJ: 11-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
60. A pest control company paints dead roaches on its trucks and uses similar graphics on its letterhead,
business cards, and all promotions. The pest control company is using what type of promotion
strategy?
a. stressing tangible cues
b. stressing homogeneity
c. using personal information sources
d. providing packaging cues
e. communicating service integration signals
ANS: A
PTS: 1
REF: 164
OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
61. You have just started a limousine service and strive for an image of quality and luxury. Your limos are
always spotlessly clean on the inside, freshly waxed, and stocked with flowers, champagne, free car
phones, and televisions. Your drivers are always immaculately dressed and are required to hold the
door open for patrons entering and leaving the car. Your promotional strategy is stressing:
a. patronage-oriented objectives
b. tangible cues
c. prestige prompts
d. intangible motivators
e. physiological prompts
ANS: B
PTS: 1
REF: 164
OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
64. The three categories of pricing objectives for services are:
a. sales-, quality-, and location-oriented
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
quality-, value-, and consumer-oriented
revenue-, operations-, and patronage-oriented
turnover-, volume-, and capacity-oriented
equity-, cost-, and revenue-oriented
ANS: C
PTS: 1
REF: 165
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-4 TYPE: Def
65. A focus on maximizing the surplus of income over costs is a(n) _____ pricing objective for service
firms.
a. revenue-oriented
b. operations-oriented
c. market-share-oriented
d. patronage-oriented
e. service-quality
ANS: A
PTS: 1
REF: 165
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-4 TYPE: Def
66. Determining costs can be extremely difficult for a service provider that has adopted a(n) _____ pricing
objective and may limit the usefulness of the objective.
a. market-share-oriented
b. operations-oriented
c. revenue-oriented
d. patronage-oriented
e. break-even
ANS: C
Revenue-oriented objectives require calculations of income and costs, which can be difficult for many
services.
PTS: 1
REF: 165
OBJ: 11-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
69. A continuing problem for most Minor League Baseball (MiLB) teams is low attendance. Event and
venue sponsors want to see fans in the stadiums, and the players appreciate fan support. Given this
information, which pricing strategy would you recommend MiLB teams use?
a. operations-oriented pricing
b. peak profitability pricing
c. patronage-oriented pricing
d. supply-demand pricing
e. revenue-oriented pricing
ANS: C
Patronage-oriented pricing tries to maximize the number of customers using the service.
PTS: 1
REF: 165
OBJ: 11-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing
70. A focus on maximizing the number of customers using a service is a(n) _____ pricing objective for
service firms.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
maximization of demand
patronage-oriented
profitability-oriented
operations-oriented
revenue-oriented
ANS: B
PTS: 1
REF: 165
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-4 TYPE: Def
72. Because many services involve a process of continuous interaction between the service organization
and the customer, _____ marketing is an important strategy.
a. interactive
b. relationship
c. patronage
d. nonprofit
e. affiliation
ANS: B
PTS: 1
REF: 166
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-5 TYPE: Def
73. Satisfied customers are likely to engage in positive word-of-mouth communication, thereby helping to
bring in new customers. Thus, a method for attracting, developing, and retaining customers is known
as _____ marketing.
a. interactive
b. affiliation
c. patronage
d. ambush
e. relationship
ANS: E
PTS: 1
REF: 166
TOP: AACSB Communication | TB&E Model Strategy
OBJ: 11-5 TYPE: Def
74. Unfortunately, many institutions of higher learning have focused efforts on population segments only
when they felt a segment could do something for them. For example, many schools have bombarded
pre-college students when they feel they are needed to fill classroom seats. Few have taken the
approach of trying to determine what the potential student really wants or needs. Often, once
graduated, a former student is only thought of as an alumnus or alumna, not as someone who can again
benefit from the services provided by the institution. This description suggests that _____ marketing
would be useful.
a. interactive
b. relationship
c. patronage
d. nonprofit
e. affiliation
ANS: B
Relationship marketing involves ongoing interaction between the service provider and the customer.
PTS: 1
REF: 166
OBJ: 11-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Customer
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
75. One of the main responsibilities of sport marketers is to keep their loyal customers as heavy users and
escalate lower-level users into loyal customers. An effective tool for accomplishing this goal would be
_____ marketing.
a. interactive
b. relationship
c. patronage
d. nonprofit
e. affiliation
ANS: B
Relationship marketing involves ongoing interaction between the service provider and the customer. It
is a means of attracting, developing, and retaining customer loyalty.
PTS: 1
REF: 166
OBJ: 11-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
76. The level of relationship marketing that is least likely to be effective in the long term because its
advantage is easily imitated by other firms is based on:
a. personal communications
b. social bonds
c. service delivery heuristics
d. pricing incentives
e. structural bonds
ANS: D
PTS: 1
REF: 166
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-5 TYPE: Def
78. A management consulting business stays in touch with its business customers with phone calls and
greeting cards. It periodically sends out needs-assessment questionnaires and designs new services to
meet the needs revealed in these surveys. This is an example of relationship marketing based on:
a. financial bonds
b. social bonds
c. service delivery
d. patronage bonds
e. structural bonds
ANS: B
Building social bonds includes staying in touch with customers, learning about their needs, and
designing services to meet those needs.
PTS: 1
REF: 166
OBJ: 11-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Customer
79. Building value-added services that are not readily available from other firms into the delivery system
defines relationship marketing based on the creation of:
a. financial bonds
b. social bonds
c. service delivery paradigms
d. personal communication channels
e. structural bonds
ANS: E
PTS: 1
REF: 166
OBJ: 11-5 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Strategy
81. Relationship marketing programs that are based on _____ bonds have the strongest potential for
sustaining long-term relationships with customers.
a. financial and individual
b. social and structural
c. financial, social, and structural
d. financial and patronage
e. financial and structural
ANS: C
Level-three marketing programs with all three components are the strongest relationship marketing
programs. See Review Learning Outcome 5.
PTS: 1
REF: 166
OBJ: 11-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Customer
82. Treating employees as customers and developing systems and benefits that satisfy their needs such as
training, stressing teamwork, and employee empowerment is known as _____ marketing.
a. organizational quality
b. relationship
c. internal
d. job-faceted
e. job-satisfaction
ANS: C
PTS: 1
REF: 166
TOP: AACSB Reflective Thinking | TB&E Model Customer
OBJ: 11-6 TYPE: Def
84. Global competition in the services arena is intense. _____ is the world's largest exporter of services.
a. Germany
b. Japan
c. The United States
d. China
e. Canada
ANS: C
PTS: 1
REF: 166
OBJ: 11-7 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model International
Perspective
86. A _____ seeks to achieve some goal other than the usual business goals of profit, market share, or
return on investment.
a. nonprofit organization
b. synergistic entity
c. company with no equity
d. service provider
e. patronage-oriented organization
ANS: A
PTS: 1
REF: 167
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-8 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
88. The predominant form of nonprofit organization in the United States is:
a. farms
b. arts museums and programs
c. private-sector volunteer organizations
d. social service firms
e. government
ANS: E
PTS: 1
REF: 167
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-8 TYPE: Def
90. _____ includes marketing activities conducted by individuals and organizations to achieve some goal
other than normal business goals, such as profit, market share, or return on investment.
a. Cause-related sponsorship
b. Nonprofit organization marketing
c. Marketing autonomy
d. Service marketing
e. Social marketing
ANS: B
PTS: 1
REF: 167
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-8 TYPE: Def
102. Nonprofit organizations face a unique challenge because the target market of the nonprofit
organization is often:
a. the community where it is located
b. the people who provide the funding
c. a paid administrator
d. the apathetic or strongly opposed individuals
e. the government
ANS: D
The target market for many nonprofit services is often apathetic, disinterested, or opposed individuals
who nonetheless may need the service. Alternatives a, b, and c are as likely to be targeted by forprofits as nonprofits.
PTS: 1
REF: 167
OBJ: 11-8 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
104. Which of the following statements describes how a nonprofit organization should design its product
offering?
a. The organization should try to create products it can inventory.
b. The organization should remember the product offering is not as crucial to organizational
success as the other elements of the service mix.
c. The product offering should be kept as simple as possible.
d. The organization will need to satisfy the needs of the target market or it will fail.
e. The product offering will have to be tangible.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: D
As with any type of product, to be successful the product must meet the needs of the target market.
PTS: 1
REF: 168
OBJ: 11-8 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
105. A local church formed a special committee to provide aid to the homeless in its county. The church
applied to the city and county governments for funding but was denied when it could not adequately
state what services it would offer. In this case, the special committee failed because it had not defined
its:
a. user market
b. target market
c. sponsoring organizations
d. donor market
e. product offering
ANS: E
PTS: 1
REF: 168
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 11-8 TYPE: App
107. If a benefit is indirect to the customer, the marketer may find a challenge in promoting a product with
little:
a. benefit complexity
b. feature charisma
c. benefit strength
d. personalization
e. benefit exchange
ANS: C
PTS: 1
REF: 168
OBJ: 11-8 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Promotion
110. Most governmental organizations are prohibited from:
a. using publicity in any form
b. engaging in personal selling
c. using public service announcements
d. advertising
e. direct marketing
ANS: D
PTS: 1
REF: 168-169
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 11-8 TYPE: Comp
112. _____ is an announcement in mass media for which no charge is made and which promotes programs,
activities, or services of federal, state, or local governments or the programs, activities, or services of
nonprofit organizations.
a. Nonsponsored advertising
b. Public service advertising
c. Societal marketing
d. Cause-related marketing
e. Social advertising
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: B
PTS: 1
REF: 169
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 11-8 TYPE: Def
114. In a nonprofit organization, _____ are often concerned with partially or fully defraying costs rather
than achieving a profit.
a. nonfiscal costs
b. pricing objectives
c. cause-related goals
d. equity earnings
e. liquidity fees
ANS: B
PTS: 1
REF: 169
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-8 TYPE: Def
115. In many nonprofit situations the consumer is not charged a tangible price yet must absorb time costs,
embarrassment costs, or effort costs. These costs are called the organization's:
a. liquidity fees
b. financial costs
c. fiscal prices
d. nonfinancial prices
e. retained earnings
ANS: D
PTS: 1
REF: 169
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 11-8 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 12—Marketing Channels and Supply Chain Management
MULTIPLE CHOICE
1. A _____ is a business structure of interdependent organizations that reaches from the point of product
origin to the consumer.
a. facilitating agency or place member
b. marketing mix intermediary
c. selective distribution channel
d. marketing channel or channel of distribution
e. transportation channel or channel of movement
ANS: D
PTS: 1
REF: 171
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
2. Marketing channels can achieve economies of scale through:
a. overcoming spatial discrepancies
b. contact expertise
c. specialization and division of labor
d. overcoming temporal discrepancies
e. overcoming discrepancies of quantity
ANS: C
PTS: 1
REF: 171-172
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
3. Distribution channels aid in overcoming barriers to exchange that are created in the production process
by overcoming all of the following types of discrepancies EXCEPT:
a. possession
b. assortment
c. quantity
d. spatial
e. temporal
ANS: A
Channels facilitate the end goal of possession of the goods, but they do not help to overcome a
discrepancy of possession.
PTS: 1
REF: 172
OBJ: 12-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
4. A discrepancy of _____ is the difference between the amount of product produced and the amount an
end user wants to buy.
a. space
b. quantity
c. assortment
d. accumulation
e. possession
ANS: B
PTS: 1
REF: 172
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
6. If a retail outlet does not offer all the items necessary in order for the buyer to use or to receive full
satisfaction from a product purchased there, there is a:
a. discrepancy of assortment
b. discrepancy of quantity
c. spatial discrepancy
d. temporal discrepancy
e. discrepancy of possession
ANS: A
PTS: 1
REF: 172
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 12-1 TYPE: Def
7. A manufacturer may only produce one product, yet additional products may be required to actually use
the first product. This creates a:
a. discrepancy of quantity
b. discrepancy of assortment
c. spatial discrepancy
d. temporal discrepancy
e. discrepancy of possession
ANS: B
PTS: 1
REF: 172
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 12-1 TYPE: Def
10. A(n) _____ discrepancy is created when a product is produced but a consumer is not ready to purchase
it.
a. quantity
b. supply
c. possession
d. temporal
e. assortment
ANS: D
PTS: 1
REF: 172
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
13. Markets are often scattered over large geographic regions, yet a manufacturer may only have one
location in the country. This creates a(n) _____ discrepancy.
a. spatial
b. temporal
c. assortment
d. quantity
e. ownership
ANS: A
Several of those discrepancies are being partially overcome, but the MAIN one is spatial.
PTS: 1
REF: 172
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
15. Marketing channels make distribution simpler by reducing the number of transactions required to get
products from manufacturers to consumers. This is called:
a. forward integration
b. contact efficiency
c. elimination of temporal discrepancies
d. sorting
e. reciprocity
ANS: B
PTS: 1
REF: 172-173
OBJ: 12-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
16. The major characteristic that is used to differentiate between types of intermediaries is whether they:
a. install exchange barriers such as location, time, and quantity
b. prevent specialization of labor
c. decrease economies of scale
d. take title to the products they sell
e. raise profit margins for independent middlemen
ANS: D
Marketing channels increase the efficiency of the buying and exchange process by reducing the
number of contacts between buyers and sellers.
PTS: 1
REF: 173
OBJ: 12-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
17. Retailers and merchant wholesalers are examples of intermediaries that:
a. take title to a product
b. create temporal and spatial discrepancies
c. use consumer promotions
d. do not benefit from any economies of scale
e. are accurately described by all of these statements
ANS: A
Retailers and merchant wholesalers own the merchandise and control the terms of its ultimate sale.
PTS: 1
REF: 173
OBJ: 12-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
20. A(n) _____ is an institution that buys goods from manufacturers, takes title to these goods, and resells
them to businesses, government agencies, and/or other wholesalers or retailers.
a. merchant wholesaler
b. agent
c. drop shipper
d. channel cooperative
e. marketing cooperative
ANS: A
PTS: 1
REF: 173
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 12-2 TYPE: Def
21. Which of the following statements about merchant wholesalers is true?
a. Products typically carried by merchant wholesalers are technically simple.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b. Customers of merchant wholesalers are typically concentrated.
c. The buyer is generally satisfied with a long lead time when the merchant wholesaler is
acting as the facilitating intermediary.
d. Frequent ordering is commonplace with a merchant wholesaler.
e. Merchant wholesalers tend to carry products with low gross margin.
ANS: D
See Exhibit 12.2
PTS: 1
REF: 175
OBJ: 12-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
22. Agents and brokers:
a. have a great deal of control and risk invested in the goods
b. only represent manufacturers in sales situations
c. have a great deal of input on the terms of the sale
d. generally are on salary with the manufacturer
e. do not take title to merchandise
ANS: E
Agents and brokers represent retailers, wholesalers, or manufacturers in sales situations, but the agent
or broker generally has little input into the terms of the sale. Agents and brokers generally receive a fee
or commission and do not take title, control, or risk concerning the merchandise.
PTS: 1
REF: 175
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
23. _____ are wholesaling intermediaries who facilitate the sales of a product from producer to end user
by representing retailers, wholesalers, or manufacturers and providing little input as to the terms of the
sale.
a. Marketing facilitators
b. Channel cooperatives
c. Agents and brokers
d. Merchant wholesalers
e. Channel functionaries
ANS: C
PTS: 1
REF: 175
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
24. Generally, _____ determine what type of intermediary a manufacturer should use:
a. product characteristics, buyer consideration, and market characteristics
b. internal environmental characteristics only
c. competitive conditions and government regulations
d. all controllable marketing factors
e. only noncontrollable environmental factors
ANS: A
The correct answer combines both internal and external elements. The internal elements can be
controlled by the manufacturer, while external environmental factors cannot.
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
25. The three basic functions channel intermediaries perform are:
a. transactional, logistical, and facilitating
b. contacting, negotiating, and ownership
c. promoting, distributing, and bulk-breaking
d. assorting, accumulating, and allocating
e. financing, mediating, and storing
ANS: A
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
26. Transactional channel functions include all of the following activities EXCEPT:
a. contacting buyers
b. promoting the products to be sold
c. taking the risks associated with product inventories
d. negotiating the sale
e. physical distribution and sorting
ANS: E
See also Exhibit 12.2.
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Product
27. Marketing channels perform all of the following logistical activities EXCEPT:
a. sorting
b. storing
c. grading
d. risk taking
e. assorting products into homogeneous or heterogeneous collections
ANS: D
Risk taking is a transactional activity. See Exhibit 12.2
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
28. _____ includes managing the movement of raw materials and parts from their sources to production
sites; managing the movement of materials, semi-finished, and finished products within and among
plants, warehouses, and distribution centers; and the planning and coordinating of the physical
distribution of finished goods to intermediaries and final buyers.
a. Disintermediation
b. Logistics
c. Materials handling
d. Intermodal transportation
e. Contract logistics
ANS: B
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
29. _____ describes the process of strategically managing the efficient flow and storage of raw materials,
in-process inventory, and finished goods from point of origin to point of consumption.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
Contract logistics
Logistics
Cross-docking
Disintermediation
Channel facilitation
ANS: B
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
31. Which of the following is NOT a sorting activity?
a. assorting
b. accumulation
c. sorting out
d. allocation
e. possession
ANS: E
See Exhibit 12.2.
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
32. Breaking bulk at the wholesale level is called:
a. allocating
b. accumulation
c. storing
d. downsizing
e. grading
ANS: A
See Exhibit 12.2.
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Diversity | TB&E Model Distribution | TB&E Model International Perspective
33. Which of the following are examples of facilitating functions performed by wholesaling
intermediaries?
a. sorting and storing
b. risk taking and promotion
c. assorting, accumulating, grading, and allocating
d. researching and financing
e. financial management and storing
ANS: D
See Exhibit 12.2.
PTS: 1
REF: 174
OBJ: 12-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Research
34. Which of the following is NOT a channel member typically used by manufacturers as they route their
products to consumers?
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
retailer
agent/broker
industrial distributor
producer
wholesaler
ANS: C
Industrial distributors are used for distributing industrial, not consumer products. See also Exhibit 12.3
and Exhibit 12.4.
PTS: 1
REF: 175
OBJ: 12-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
35. One configuration of a marketing channel entails producers selling to consumers with no
intermediaries involved. This is called a:
a. limited distribution system
b. conventional channel
c. vertical marketing system
d. reciprocal channel
e. direct channel
ANS: E
See Exhibit 12.3 and Exhibit 12.4.
PTS: 1
REF: 175
OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution
37. A channel typically used for industrial products is the _____ channel.
a. direct
b. industrial distributor
c. wholesaler
d. retailer
e. extended
ANS: A
See Exhibit 12.4.
PTS: 1
REF: 175
OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
39. Companies selling standardized items of moderate or low value to other businesses (not to consumers)
often use:
a. retailers
b. industrial distributors
c. direct marketing organizations
d. agents and brokers
e. disintermediation
ANS: B
PTS: 1
REF: 175
OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
41. _____ distribution occurs when a producer selects two or more different channels to distribute the
same products to target markets.
a. Selective
b. Intensive
c. Multiple
d. Contractual
e. Cumulative
ANS: C
PTS: 1
REF: 176
OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
45. _____ use another manufacturer's already established channel and are used most often when the
creation of marketing channel relationships may be expensive and time-consuming.
a. Strategic channel alliances
b. Relationship channels
c. Reverse channels
d. Multiple distribution systems
e. Nontraditional channelization
ANS: A
PTS: 1
REF: 176
OBJ: 12-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Strategy
49. _____ coordinates and integrates all of the activities performed by channel members into a seamless
process, from the source to the point of consumption, resulting in enhanced customer and economic
value.
a. Yield management
b. Channel power
c. Materials handling
d. Supply chain management
e. Physical distribution
ANS: D
PTS: 1
REF: 176
TOP: AACSB Reflective Thinking | TB&E Model Customer
OBJ: 12-4 TYPE: Def
50. Which of the following statements about supply chain management is true?
a. Supply chain management is supply chain-driven.
b. Supply chain management focuses on pulling products into the marketplace.
c. Outsourcing is not used with supply chain management.
d. Supply chain management provides customers with maximum service levels.
e. Supply chain management focuses on pushing products into the marketplace.
ANS: B
Supply chain management is customer-driven. Outsourcing is one option for supply chain managers.
Supply chain management balances the costs of the supply chain with the level of service demands by
customers; thus, customers may not get the maximum level of service.
PTS: 1
REF: 176-177
OBJ: 12-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
51. Supply chain management:
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
is a physical flow process
is customer-driven
provides enhanced customer and economic value
plays the role of communicator of customer demand
is accurately described by all of these statements
ANS: E
PTS: 1
REF: 176-177
OBJ: 12-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
53. A large automotive after-market business wanted to improve its current situation, which is
characterized by excessive inventory, incomplete information, high logistics costs, slow reactions to
environmental change, and lost profits at the retail level. Would supply chain management be of any
help to the business?
a. Yes, supply chain management is designed to coordinate and integrate all the activities
from raw materials to product consumption.
b. No, supply chain management is only applicable to distribution strategies for products
being sold to the consumer market.
c. Yes, supply chain management would be very useful because it relies so heavily on
benchmarking.
d. Yes, supply chain management would alleviate all channel conflict.
e. No, supply chain management requires an expensive investment of time and resources to
make it worthwhile.
ANS: A
The correct answer contains the definition of supply chain management.
PTS: 1
REF: 176-177
OBJ: 12-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Distribution
54. Which of the following statements concerning how market factors affect channel decisions is true?
a. Industrial customers tend to buy in larger quantities and require more customer service.
b. Geographically concentrated target markets should be served with an indirect sales force.
c. Widely dispersed markets require fewer intermediaries.
d. New firms in extremely competitive markets will be more successful if they use indirect
channels.
e. A very large market requires fewer intermediaries.
ANS: A
Generally, a very large market requires more intermediaries, including wholesalers and retailers.
PTS: 1
REF: 178
OBJ: 12-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
59. _____ is distribution aimed at maximum market coverage. It is used for many convenience goods and
supplies that need to be available in every outlet where the potential customer might want to buy them.
a. Selective distribution
b. Channel franchising
c. Intensive distribution
d. Horizontal channeling
e. Exclusive distribution
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: C
PTS: 1
REF: 178
OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution | TB&E
Model Product
60. Toothpaste is sold in grocery stores, service stations, convenience stores, drugstores, discount stores,
and motel vending machines. This is a example of a(n) _____ distribution strategy.
a. exclusive
b. reciprocal
c. selective
d. horizontal
e. intensive
ANS: E
Intensive distribution is distribution aimed at maximum market coverage. It is used for many
convenience goods that need to be available in every outlet where the potential customer might want to
buy them.
PTS: 1
REF: 178
OBJ: 12-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Strategy
62. _____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic
area. Shopping goods and some specialty products that consumers are willing to search for are sold
this way.
a. Intensive
b. Selective
c. Exclusive
d. Dual
e. Controlled
ANS: B
PTS: 1
REF: 178
OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
66. The most restrictive form of market coverage, _____ distribution, entails establishing only one or a
few dealers within a given geographic area. Because buyers need to be willing to search or travel to
acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping
goods, and major industrial equipment.
a. selective
b. intensive
c. exclusive
d. dual
e. premium
ANS: C
PTS: 1
REF: 179
OBJ: 12-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
69. A channel leader is also called a(n):
a. intermediary leader
b. channel captain
c. channel facilitator
d. distribution supervisor
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. channel gatekeeper
ANS: B
PTS: 1
REF: 179
OBJ: 12-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
72. Channel conflict:
a. always has an adverse effect on the members of the channel
b. is not caused by ideological differences because such differences would prevent the
members from ever operating as a channel
c. is often caused by an inability of some channel members to keep up with the changing
times
d. can appear as either internal or external
e. does not occur when multiple distribution channels are used
ANS: C
In a broad context, channel conflict can be good for a channel. It is sometimes caused by ideological
differences. It appears as vertical or horizontal.
PTS: 1
REF: 179
OBJ: 12-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
75. Horizontal channel conflict occurs most often when manufacturers practice:
a. multiple distribution
b. trade loading
c. value-added pricing
d. exclusive distribution
e. channel partnering
ANS: A
Horizontal conflict occurs when more than one channel is used to handle the same brand.
PTS: 1
REF: 180
OBJ: 12-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
77. _____ is the joint effort of all channel members to create a supply chain that serves customers and
creates a competitive advantage.
a. Selective partnering
b. Direct distribution
c. Channel partnering
d. Intensive integration
e. Closed channel distribution
ANS: C
PTS: 1
REF: 180
OBJ: 12-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution
78. Which of the following is NOT a logistics component of the supply chain?
a. push marketing strategy
b. production scheduling
c. inventory control
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
d. warehousing and materials-handling
e. order processing
ANS: A
Supply chain management focuses on pulling products into the marketplace, so you would find a pull
strategy being used.
PTS: 1
REF: 180
OBJ: 12-7 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
82. Another name for just-in-time production (JIT) is:
a. supply/demand reciprocity
b. lean production
c. outsourcing
d. mass customization
e. disintermediation
ANS: B
PTS: 1
REF: 182
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 12-7 TYPE: Def
88. In which logistical component of the supply chain will you find electronic data interchange a common
feature?
a. production scheduling
b. transportation
c. order processing
d. materials-handling
e. all of these
ANS: C
PTS: 1
REF: 183
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
89. _____ is the direct electronic transmission, from computer to computer, of standard business forms
between two organizations. When this technique is used, orders can become virtually paperless, and
information about the order is available to both firms.
a. Business prioritizing
b. Electronic data interchange
c. Just-in-time inventory
d. Real-time inventory
e. Direct sourcing
ANS: B
PTS: 1
REF: 183
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 12-7 TYPE: Def
90. _____ is a method of developing and maintaining an adequate assortment of materials or products to
meet a manufacturer's or a customer's needs.
a. The materials-handling system
b. An inventory control system
c. Direct sourcing
d. Contract logistics
e. Warehousing
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: B
PTS: 1
REF: 183
OBJ: 12-7 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution
91. In which logistical component of the supply chain will you find distribution resource planning (DRP) a
common feature?
a. production scheduling
b. transportation
c. order processing
d. materials-handling
e. inventory control
ANS: E
PTS: 1
REF: 183-184
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
92. What kind of inputs are used in distribution resource planning?
a. sales forecasts
b. lead times
c. mode of transportation to be used
d. outstanding orders
e. all of these
ANS: E
PTS: 1
REF: 184
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
93. The goal of inventory control is to:
a. minimize inventory levels while maintaining an adequate supply to meet customer
demands
b. maximize inventory levels to prevent any possibility of stockouts
c. determine order timing and order quantity
d. estimate proper usage rates
e. integrate JIT to reduce risks of obsolescence, theft, and damage
ANS: A
Inventory decisions affect physical distribution costs and service levels. The goal is to balance
minimum inventory levels while meeting customer needs for stock.
PTS: 1
REF: 183
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Distribution
94. _____ provides time utility to buyers and sellers and aids manufacturers in managing supply and
demand.
a. Containerization
b. Distribution
c. Storage
d. Direct sourcing
e. Channelization
ANS: C
PTS: 1
REF: 184
OBJ: 12-7 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
96. The goal of any effective materials-handling system is to:
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
reduce the time of the order-processing system
optimize the inventory control system
increase safety procedures
move items quickly with minimal handling
reduce the length of time a product is in the transportation subsystem
ANS: D
PTS: 1
REF: 184
OBJ: 12-7 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
98. The mode of transportation that provides the most accessibility is:
a. pipelines
b. airfreight
c. truck freight
d. water transport
e. railroad
ANS: C
Motor carriers (trucks) can go to more locations than any of the other modes of transportation.
PTS: 1
REF: 185
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
100. One major advantage of pipelines over other modes of transportation is:
a. availability
b. points served
c. flexibility
d. speed
e. dependability
ANS: E
Pipelines are rarely interrupted by weather, traffic, or labor disputes.
PTS: 1
REF: 185
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
101. Which of the following describes a disadvantage associated with water transportation?
a. cannot be used for international trade
b. high cost
c. capability
d. lack of speed
e. product weight restrictions
ANS: D
Shipping via water is the slowest mode of transportation.
PTS: 1
REF: 185
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
102. Which of the following transportation modes can most easily determine the location of a package en
route between shipper and receiver?
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
air
truck
rail
pipe
water
ANS: A
In addition to speed, air transport offers an important additional benefit to shippers, the ease of tracing
shipments. See Exhibit 12.5.
PTS: 1
REF: 185
OBJ: 12-7 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
103. The Canadian lobster harvest requires special handling coupled with rapid transportation to ensure the
cargo reaches destinations alive. The favored transportation mode would be:
a. air
b. water
c. truck
d. pipeline
e. rail
ANS: A
Air transportation ensures the speed necessary for lobster delivery. (Air Canada has developed special
handling and shipping techniques for the lobsters.)
See Exhibit 12.5.
PTS: 1
REF: 185
OBJ: 12-7 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Distribution
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 13—Retailing
MULTIPLE CHOICE
1. _____ is defined as all activities directly related to the sale of goods and services to the ultimate
consumer for personal, nonbusiness use or consumption.
a. Wholesaling
b. Retailing
c. Business
d. Franchising
e. Distribution
ANS: B
PTS: 1
REF: 189
OBJ: 13-1 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
3. A retail store can be classified according to its:
a. distribution method
b. inventory control
c. product assortment
d. management style
e. decor and atmosphere
ANS: C
A retail establishment can be classified according to its ownership, level of service, product
assortment, price, and gross margin.
PTS: 1
REF: 189
OBJ: 13-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product
4. Around the world, most retailers are _____, operating one or a few stores in their community, owned
by a single person or partnership and not operated as part of a larger retail institution.
a. independent retailers
b. chain stores
c. franchise outlets
d. specialty clubs
e. product assortment stores
ANS: A
PTS: 1
REF: 190
OBJ: 13-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
5. Small neighborhood florists, shoe stores, and ethnic food markets are most likely to be:
a. supercenters
b. franchise outlets
c. membership clubs
d. chain stores
e. independent retailers
ANS: E
Most retailers are independent retailers operating one or a few stores in their community.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 190
OBJ: 13-2 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Distribution
6. Retail stores that are owned and operated as a group by a single organization are called _____. Under
this form of ownership, administrative and purchasing tasks are handled by the home office.
a. home base stores
b. independent retailers
c. franchisees
d. chain stores
e. strip centers
ANS: D
PTS: 1
REF: 190
OBJ: 13-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
9. Which of the following types of stores has a high gross margin, a narrow product assortment, and a
high level of service?
a. supermarket
b. warehouse club
c. convenience store
d. full-line discount store
e. specialty store
ANS: E
See Exhibit 13.1.
PTS: 1
REF: 191
OBJ: 13-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
10. _____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is
subtracted.
a. Net income
b. Retained earnings
c. Profitability
d. Net equity
e. Gross margin
ANS: E
See Exhibit 13.1.
PTS: 1
REF: 190 | 191
OBJ: 13-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
11. As a general rule of thumb, a retailer that has a high gross margin will have:
a. m-commerce capabilities
b. an inventory management system
c. low prices
d. salespeople trained in cross-selling techniques
e. high prices
ANS: E
The level of gross margin and the price level generally match. See Exhibit 13.1.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 192
OBJ: 13-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
12. Housing several departments under one roof, a _____ carries a wide variety of shopping and specialty
goods and provides a high level of service.
a. supermarket
b. specialty store
c. convenience store
d. super club
e. department store
ANS: E
PTS: 1
REF: 191
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
13. Applying what you have learned about retailing, which type of retail store would typically have the
highest labor costs?
a. warehouse club
b. department store
c. off-price store
d. off-price retailer
e. discount store
ANS: B
A department store carries a wide variety of shopping and specialty goods in several departments and
provides a high level of service, all of which is labor intensive and adds to the cost of doing business.
PTS: 1
REF: 191
OBJ: 13-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
14. Each department in a department store is usually headed by a _____ who selects the merchandise mix
for the department and may also choose the promotional devices and personnel for that department.
a. franchisee
b. financial broker
c. comptroller
d. human resources manager
e. buyer
ANS: E
PTS: 1
REF: 191
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Promotion
15. The buyer who heads a department in a department store is responsible for the:
a. store's exchange and return policies
b. store's credit policies
c. chain's expansion efforts
d. merchandise mix in that department
e. store's advertising program
ANS: D
Each department in a department store is usually headed by a buyer who selects the merchandise mix
for the department and may also choose the promotional devices and personnel for that department.
PTS: 1
REF: 191
OBJ: 13-3 TYPE: Comp
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Product
17. A _____ is not only a type of store, but also a method of retail operations. This type of retailer
specializes in a given type of merchandise with a deep but narrow assortment.
a. warehouse club
b. convenience store
c. factory warehouse store
d. specialty store
e. general store
ANS: D
PTS: 1
REF: 191
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 13-3 TYPE: Def
18. Which of the following statements about specialty stores is true?
a. Customers usually consider price to be the most important factor in their selection of a
specialty store.
b. Customers at specialty stores are not concerned with the distinctiveness of the
merchandise or the store's physical appearance.
c. Specialty stores typically avoid price wars.
d. Specialty stores are ineffective test markets.
e. A typical specialty store carries a wider assortment of specialty merchandise than
department stores.
ANS: C
Customers usually consider price to be of secondary importance in their selection of a specialty store.
Customers at specialty stores are very concerned with the distinctiveness of the merchandise or the
store's physical appearance. Specialty stores provide a low-risk testing ground for new products. A
typical specialty store carries a narrower assortment of specialty merchandise than department stores.
PTS: 1
REF: 191
OBJ: 13-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
21. A manufacturer wants to introduce a line of hand-smocked children's clothing to the growing number
of professional women who are now having babies. The least expensive of these outfits will be $75.
Which of the following types of stores would most likely support an effective product launch?
a. off-price retailer
b. specialty store
c. full-discount store
d. general store
e. warehouse club
ANS: B
Small specialty stores provide a low-risk testing ground for many new product concepts.
PTS: 1
REF: 191
OBJ: 13-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Pricing
22. _____ are large, departmentalized, self-service retailers that specialize in wide assortments of
foodstuffs and a few nonfood items.
a. Supermarkets
b. Convenience stores
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. Membership wholesale clubs
d. Discount stores
e. Assortment merchandisers
ANS: A
PTS: 1
REF: 191-192
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 13-3 TYPE: Def
30. _____ carry a limited line of high-turnover, high-priced goods and resemble miniature supermarkets.
These self-service stores are typically located near residential areas and are open long hours, seven
days a week.
a. Specialty stores
b. Wholesale stores
c. Convenience stores
d. Factory outlets
e. General stores
ANS: C
PTS: 1
REF: 192
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Pricing
32. Prices are usually higher in convenience stores than in supermarkets because convenience stores offer:
a. more specialty goods
b. a wider variety of products
c. a higher level of customer services
d. better location, longer hours, and faster service
e. higher quality goods
ANS: D
Convenience stores carry a limited amount of high-turnover, high-priced goods and resemble
miniature supermarkets. Customers patronize these stores because of convenience.
PTS: 1
REF: 192
OBJ: 13-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
33. _____ are retailers that compete on the basis of low prices, high turnover, and high volume.
a. Convenience outlets
b. Discount stores
c. General stores
d. Department stores
e. Specialty stores
ANS: B
PTS: 1
REF: 192
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 13-3 TYPE: Def
34. Discount stores:
a. compete on the basis of low prices, high turnover, and high volume
b. offer more SKUs than department stores
c. sell high-priced, low-turnover products
d. provide their customers with full service
e. compete on the basis of assortment and depth
ANS: A
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Discount stores have a wider range of merchandise than department stores but less depth in any
category
PTS: 1
REF: 192
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Pricing
35. _____ carry a broad assortment of nationally branded hard goods (broader than a department store)
and offer customers very limited service. National chains dominate this segment.
a. Full-line discount stores
b. Discount specialty stores
c. Factory outlets
d. Fashion stores
e. Specialty supercenters
ANS: A
PTS: 1
REF: 192-193
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Product
36. _____ is the retailing strategy of using moderate to low prices on large quantities of products and
lower service to stimulate a high turnover of inventory.
a. Specialty store positioning
b. Merchandise positioning
c. M-store retailing
d. The wheel of retailing
e. Mass merchandising
ANS: E
PTS: 1
REF: 193
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Product
39. _____ are single-line stores that offer a nearly complete selection of one line of merchandise and use
self-service, discount prices, high volume, and high turnover of merchandise to their advantage.
a. Specialty discount stores
b. Factory outlets
c. Mass merchandisers
d. Membership clubs
e. General stores
ANS: A
A specialty discount store is also called a category killer.
PTS: 1
REF: 193
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Pricing
43. _____ sell a limited selection of brand-name appliances, household items, and groceries, usually in
bulk on a cash-and-carry basis to members only.
a. Super outlets
b. Factory outlets
c. Wholesale discounters
d. Off-price discount retailers
e. Warehouse membership clubs
ANS: E
PTS: 1
REF: 194
OBJ: 13-3 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Product
44. A warehouse membership club:
a. only sells to ultimate consumers
b. is a type of category specialist
c. offers a medium level of customer service
d. tends to have more educated and more affluent customers than other retail establishments
e. has extensive merchandise depth, which it uses to create demographic positioning
ANS: D
Warehouse clubs sell to small businesses and ultimate consumers. They maintain low inventory
holding costs because they carry a limited assortment of fast-moving items.
PTS: 1
REF: 194
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer
46. Off-price retailers:
a. are often able to take advantage of manufacturers' faulty sales forecasting
b. very often offer a consistent assortment of merchandise
c. seldom stock brand-name merchandise
d. are owned by the manufacturer of the products they sell
e. offer very deep assortments
ANS: A
Off-price retailers buy manufacturers' overruns at cost or even less.
PTS: 1
REF: 194
OBJ: 13-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing
52. Which of the following statements about nonstore retailing is true?
a. The nature of the communications between the retailer and the customer is the same in all
forms of nonstore retailing.
b. Nonstore retailing is currently growing faster than in-store retailing.
c. More than 80 percent of all sales are made through nonstore retailing.
d. The high growth rate for nonstore retailing is due to the growth of TV home shopping.
e. Nonstore retailing is increasing at a rate lower than in-store retailing.
ANS: B
Nonstore retailing refers to shopping without visiting a store; convenience is playing a major role in
the growth of nonstore business.
PTS: 1
REF: 195
OBJ: 13-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
53. _____ is a low-profile, yet important, form of retailing in which consumers get products out of
automated machines, and it accounts for $40 billion worth of sales each year in the United States.
a. Automatic vending
b. Party-plan selling
c. Direct marketing
d. A pyramid scheme
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. Professional selling
ANS: A
PTS: 1
REF: 195
OBJ: 13-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product
56. To counter decreasing sales, U.S. direct sales retailers are:
a. exploring sales opportunities in other countries
b. selling at workplaces in addition to the more traditional at-home sales
c. setting up kiosks in malls in which to sell their products
d. using direct mail and telemarketing
e. doing all of these
ANS: E
PTS: 1
REF: 196-197
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 13-4 TYPE: Comp
57. _____ refers to the techniques used to get consumers to buy from their home. Those techniques
include direct mail, catalogs and mail order, telemarketing, and electronic retailing.
a. Nonstore vending
b. In-home retailing
c. Franchising
d. Direct marketing
e. Direct retailing
ANS: D
PTS: 1
REF: 196-197
OBJ: 13-4 TYPE: Def
TOP: AACSB Diversity | TB&E Model Strategy | TB&E Model Customer
58. Irina Gomez has decided to sell a sourcebook of Hispanic American suppliers to southeastern
businesses in predominantly Hispanic areas. She plans to call prospective customers and try to sell to
them over the phone. Gomez will be using which of the following retailing techniques?
a. m-commerce
b. indirect retailing
c. franchising
d. vending
e. direct-response marketing
ANS: E
Direct-response marketing (also called direct marketing) techniques include direct mail, catalogs,
telemarketing, and electronic retailing.
PTS: 1
REF: 196-197
OBJ: 13-4 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Customer
59. Marketers can precisely target their customers according to demographics, geographics, and
psychographics with:
a. direct mail
b. vending machines
c. franchise stores
d. specialty retail outlets
e. electronic selling
ANS: A
PTS: 1
REF: 196
OBJ: 13-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Customer
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
60. _____ is the use of a telephone to sell directly to customers.
a. Telemarketing
b. Two-way vending
c. Teleprompting
d. Indirect marketing
e. Phone vending
ANS: A
PTS: 1
REF: 196-197
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 13-4 TYPE: Def
61. Telemarketing can consist of either unsolicited _____ sales calls, or _____ sales calls, which allow
companies to receive orders through toll-free telephone numbers.
a. order placement; lead generation
b. push strategy; pull strategy
c. systematic; synergistic
d. qualifying; finalizing
e. outbound; inbound
ANS: E
Outbound telemarketing is generally used for unsolicited selling, while inbound calls are from
customers placing orders.
PTS: 1
REF: 196-197
OBJ: 13-4 TYPE: Def
TOP: AACSB Technology | TB&E Model Strategy
62. Sunni received a phone call last night during supper. The caller wanted her to subscribe to a travel
magazine. Since Sunni had never thought of purchasing this type of magazine before she received the
call, this is obviously an example of _____ telemarketing.
a. outbound
b. field sales
c. qualifying
d. inbound
e. relationship
ANS: A
Outbound telemarketing is generally used for unsolicited selling.
PTS: 1
REF: 196
OBJ: 13-4 TYPE: App
TOP: AACSB Technology | TB&E Model Strategy
65. Which of the following statements about online retailing is true?
a. Online retailing is also called e-merchandising.
b. After a rapid increase in sales, the popularity of online retailing has declined over the last
decade.
c. Most traditional retailers are using online retailing to move merchandise that can be
purchased at their stores.
d. The earliest use of online retailing was for Internet auctions.
e. All of these statements about online retailing are true.
ANS: C
Online retailing is called either electronic retailing or e-tailing. Online shopping has been and is
growing at an astonishing rate. Internet auctions are a fairly new phenomenon.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 197
OBJ: 13-4 TYPE: Comp
TOP: AACSB Technology | TB&E Model Online/Computer
66. A(n) _____ is a continuing relationship in which an individual or business grants business rights to
operate or sell a product to another individual or business.
a. leasing contract
b. alliance for profit
c. brokered partnership
d. franchise
e. countertrade
ANS: D
PTS: 1
REF: 198
OBJ: 13-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
67. Which of the following is NOT a reason why individuals may be tempted to buy a franchise business
rather than develop their own independent business?
a. the individual can try his or her own personal innovative product and service ideas in the
business
b. to obtain a well-known product or service name
c. management training requirements
d. the business’s established image
e. existence of product uniformity standards
ANS: A
The ties to the franchisor's policies may be very restrictive for an innovative businessperson because
certain products and procedures must be adhered to.
PTS: 1
REF: 198
OBJ: 13-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product
73. The first task of developing a retail strategy is to:
a. create a buying organization
b. decide what to buy
c. define the target market
d. create a promotional strategy
e. define the pricing policies
ANS: C
The target market's wants and needs form the foundation for a successful retail strategy.
PTS: 1
REF: 199
OBJ: 13-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
74. Retailers control the six Ps of the retailing mix. The six Ps include the marketing mix plus:
a. personnel and presentation
b. production and people
c. potential and perception
d. personality and persuasion
e. positioning and purchasing
ANS: A
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
See Exhibit 13.2.
PTS: 1
REF: 199-200
OBJ: 13-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Strategy
76.
a.
b.
c.
d.
e.
The merchandise mix:
is the term used for price-bundled merchandise
is the term for the marketing communications used by retailers
refers to the six levels in a buying organization
describes the composition of a traditional shopping center
is the retailer's product offering
ANS: E
PTS: 1
REF: 200
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 13-6 TYPE: Def
77. Data mining:
a. is a relatively new method of inventory control
b. uses complex mathematical models to help retailers make better product mix decisions
c. is a computerized technique for making site location decisions
d. determines the level of quality and service desired by customers
e. measures levels of services and identifies inadequate service
ANS: B
PTS: 1
REF: 200
TOP: AACSB Technology | TB&E Model Strategy
OBJ: 13-6 TYPE: Def
82. Why is the selection of a retail location so critical to a store's success?
a. Location affects pricing decisions but does not affect store image.
b. Customers will not drive out of their way to find a store.
c. A location decision ties up funds that will not appreciate or gain in value.
d. A location decision typically requires long-term commitment of resources.
e. Employee density is affected by the area in which the store is located.
ANS: D
One critical point about location choice is that it ties up a large amount of resources and is difficult to
change.
PTS: 1
REF: 201
OBJ: 13-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
83. When opening a new retail operation, the retailer needs to consider all of the following factors
EXCEPT:
a. traffic flow
b. employee density
c. nature of the competition
d. land costs
e. area growth
ANS: B
Employee density is concerned with the amount of employees per 1,000 square feet in the store--not in
the neighborhood. The other four factors are to be considered when deciding on a location.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 202 | 203
OBJ: 13-6 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
84. Which of the following statements about a retailer's promotion strategy is true?
a. The design of the promotion strategy would be done separately from the creation of the
retailing mix.
b. The goal of a retail store's promotion mix is to position the store in consumers' minds.
c. Most advertising for retailers is carried out at the national level.
d. Retailers find direct-mail marketing inefficient.
e. Retail promotion strategy does not include public relations activities.
ANS: B
Promotion is part of the retailing mix. Most advertising for retailers is carried out at the local level.
Retailers have been very successful with direct marketing.
PTS: 1
REF: 199
OBJ: 13-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Promotion
91. A specialty store is considering locating a retail store in a regional shopping mall. Which of the
following is NOT a likely benefit associated with a location in a mall?
a. anchors that attract customers
b. ample parking
c. unified image of mall
d. ability to target different demographics groups
e. inexpensive leases
ANS: E
Leases are usually expensive.
PTS: 1
REF: 201
OBJ: 13-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Distribution
92. The newest generation of shopping centers is:
a. regional malls
b. shopping business districts
c. lifestyle centers
d. franchised centers
e. strip malls
ANS: C
PTS: 1
REF: 202
OBJ: 13-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
93. Which group is the targeted market by lifestyle centers?
a. teenagers who don't drive
b. consumers on a fixed income
c. laggards
d. upper-income consumers with an aversion for “the mall”
e. people who engage in cocooning
ANS: D
PTS: 1
REF: 202
TOP: AACSB Reflective Thinking | TB&E Model Customer
OBJ: 13-6 TYPE: Comp
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
95. Another name for an anchor store is a _____.
a. mass merchandiser
b. generator store
c. host store
d. shopping center pillar
e. destination store
ANS: B
PTS: 1
REF: 202
OBJ: 13-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
96. Anchor stores (or generator stores):
a. are the stores within the mall that sell services rather than products
b. are often large department stores that are located at opposite ends of a mall to create a
heavy pedestrian traffic flow
c. usually specialize in high-priced items like furniture
d. is the generic name given to supermarkets that are located within shopping malls
e. is a term for retail stores that "drop off" to freestanding locations
ANS: B
Anchors are the large stores at the ends of shopping malls and may sell a variety of products
PTS: 1
REF: 202
OBJ: 13-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Distribution
101. The main element of a store's presentation is its _____, or the overall impression conveyed by the
store's physical layout, decor, and surroundings.
a. merchandise depth
b. location
c. price strategy
d. atmosphere
e. total merchandise mix
ANS: D
PTS: 1
REF: 202-203
TOP: AACSB Reflective Thinking | TB&E Model Creativity
OBJ: 13-6 TYPE: Def
109.
Interactivity is one of the new developments in retailing. In retailing, interactivity refers to:
a. the use of improved communications with customers
b. a new form of customer relationship marketing
c. entertainment for customers to get them involved
d. the use of information kiosks
e. the creation of a static atmosphere
ANS: C
PTS: 1
REF: 205
TOP: AACSB Technology | TB&E Model Strategy
OBJ: 13-7 TYPE: Def
111. One of the new developments in retailing is m-commerce. M-commerce refers to the ability to:
a. use unique communication techniques to send advertising messages
b. create situations in which the AIDA technique is effective
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. more efficiently manage customer demand with inventory
d. shop using wireless mobile devices
e. motivate consumers to buy more by creating more feedback channels
ANS: D
PTS: 1
REF: 205
TOP: AACSB Technology | TB&E Model Strategy
OBJ: 13-7 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 14—Integrated Marketing Communications
MULTIPLE CHOICE
1. _____ is communications by marketers that inform, persuade, and remind potential buyers of a product
in order to influence an opinion or elicit a response.
a. Distributive communication
b. Perceptual communication
c. Statistically provable advertising
d. Promotion
e. Publicity
ANS: D
PTS: 1
REF: 207
TOP: AACSB Communication | TB&E Model Promotion
OBJ: 14-1 TYPE: Def
4. The main function of a promotional strategy is to:
a. convince the target customers that a firm's products offer competitive advantages over
those of its competition
b. find a niche in the marketplace for the firm and its products
c. provide the firm with research information about the success of its marketing effort
d. create efficient distribution channels
e. guarantee control over the length of the stages of the product life cycle
ANS: A
The function of a promotional strategy is to convince the target customers that the goods and services
offered provide a competitive advantage over the competition.
PTS: 1
REF: 207
OBJ: 14-1 TYPE: Comp
TOP: AACSB Communication | TB&E Model Customer | TB&E Model Promotion
5. A _____ is defined as a set of unique features of a company and its products perceived by the target
market as significant and superior to the competition.
a. comparative differentiation
b. competitive advantage
c. marketing mix
d. special benefit
e. promotional plan
ANS: B
PTS: 1
REF: 207
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 14-1 TYPE: Def
10. Marketers use public relations to:
a. earn public understanding and acceptance
b. communicate with the community in which they operate
c. educate the public about company goals
d. introduce new products
e. do all of these things
ANS: E
PTS: 1
REF: 208
TOP: AACSB Communication | TB&E Model Promotion
OBJ: 14-2 TYPE: Comp
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
11. The promotional mix consists of:
a. advertising, publicity, direct marketing, and personal selling
b. public relations, direct marketing, personal selling, and publicity
c. product, promotion, price, and place
d. advertising, personal selling, sales promotion, and public relations
e. advertising, telemarketing, public relations, and sales promotions
ANS: D
PTS: 1
REF: 207-210
TOP: AACSB Communication | TB&E Model Promotion
OBJ: 14-2 TYPE: Def
12. The four major promotional tools (advertising, personal selling, sales promotion, and public relations)
are known collectively as the:
a. communication model
b. advertising campaign
c. marketing mix
d. publicity four
e. promotional mix
ANS: E
PTS: 1
REF: 208
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-2 TYPE: Def
14. _____ is any form of sponsor-identified, impersonal paid mass communication.
a. Advertising
b. Publicity
c. Promotion
d. Public relations
e. Nonpaid communication
ANS: A
PTS: 1
REF: 208
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-2 TYPE: Def
16. Which of the following statements about advertising is true?
a. The total costs of advertising are typically low.
b. The signs on the outsides of buses and taxis are not a form of advertising.
c. The cost per contact in advertising is low.
d. Innovative media are not used in advertising.
e. Advertising is any form of communication in which the sponsor is identified.
ANS: C
The total costs of advertising are typically high even though the cost of contact is low. To be
advertising, the communication must be paid for. Innovative media are used in advertising. The signs
are a form of advertising because they are paid for and they identify their sponsors.
PTS: 1
REF: 208
OBJ: 14-2 TYPE: Comp
TOP: AACSB Communication | TB&E Model Promotion
18. The marketing function that evaluates public attitudes, identifies areas within the organization that are
of public interest, and executes a program of action to gain public understanding is:
a. public relations
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
advertising
implicit communications
personal selling
sales promotion
ANS: A
PTS: 1
REF: 208
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-2
20. Public information about a company, good, or service appearing in the mass media as a news item is:
a. personal selling
b. advertising
c. mass communications
d. publicity
e. sales promotion
ANS: D
PTS: 1
REF: 208-209
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 14-2 TYPE: Def
21. Publicity:
a. will never damage a company because it performs the information task of promotion
b. is free communication
c. is not persuasive with customers
d. has to be purchased from the mass media
e. has many internal costs to the company associated with it
ANS: E
A firm may have to hire a public relations firm to prepare new releases and persuade media personnel
to print or broadcast the news. This can be expensive.
PTS: 1
REF: 208-209
OBJ: 14-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
23. Which of the following statements about sales promotions is true?
a. Public relations cannot effectively be used with sales promotions.
b. Sales promotion is a type of direct marketing.
c. Marketers view sales promotions as more effective when they are created as long-term
stimulation tools.
d. Trade shows, coupons, premiums, and vacation giveaways are types of sales promotions.
e. All sales promotions must be aimed outside the organization.
ANS: D
Sales promotions can be used to improve the effectiveness of advertising and public relations
activities. Sales promotions are most effective as short-term tools. Sales promotions are commonly
directed at the organization's employees as well as to consumers and dealers.
PTS: 1
REF: 209
OBJ: 14-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
24. _____ consists of all marketing activities that stimulate consumer purchasing such as coupons,
contests, free samples, and trade shows.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
Sales promotion
Publicity
Personal selling
Advertising
Sponsorship
ANS: A
PTS: 1
REF: 209
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-2 TYPE: Def
28. _____ is a purchase situation in which two or more people communicate in an attempt to influence
each other.
a. Implicit communication
b. Personal selling
c. Mass communication
d. Public relations
e. Synergistic communication
ANS: B
PTS: 1
REF: 209-210
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-2 TYPE: Def
31. _____ is the process by which we exchange or share meanings through a common set of symbols.
People also assign meanings to feelings, ideas, facts, and attitudes.
a. Feedback
b. Promotion
c. Advertising
d. Publicity
e. Communication
ANS: E
PTS: 1
REF: 210
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-3 TYPE: Def
32. While talking to Mr. and Mrs. Knighton, the appliance salesperson described the refrigerator as "a real
money saver" and "a true bargain," but he also kept looking down at his feet and shuffling around. His
nonverbal cues:
a. create subservient selling
b. create differential disadvantages
c. are part of how he communicated to the Knightons
d. are a type of marketing mix feedback
e. will not effect interpersonal communications
ANS: C
Communication is the process by which we exchange or share meanings through a common set of
symbols.
PTS: 1
REF: 210
OBJ: 14-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Promotion
33. Interpersonal communication is:
a. nonpaid information such as publicity
b. paid communication placed in personal media
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. long-distance communication between a business and its target market
d. direct face-to-face communication between two or more people
e. noise-free communication
ANS: D
PTS: 1
REF: 210
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-3 TYPE: Def
34. The two major categories of communications are:
a. verbal and nonverbal
b. direct and indirect
c. long term and short term
d. mass and interpersonal
e. informative and persuasive
ANS: D
PTS: 1
REF: 210
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-3 TYPE: Def
45. Encoding is the:
a. creation of the original ideas and thoughts of a message
b. conversion of the sender's ideas and thoughts into a message
c. transmission of a message
d. receipt and comprehension of a message
e. deciphering and understanding of a message
ANS: B
PTS: 1
REF: 210
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-3 TYPE: Def
47. A channel in communication is:
a. the only source of noise
b. the same as in distribution
c. usually an ad agency or public relations firm
d. someone who places advertising into media
e. any communication medium
ANS: E
A channel is the transmitter of the message such as a voice, gesture, radio, newspaper, or any other
communication medium.
PTS: 1
REF: 211
OBJ: 14-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
50. _____ is anything that interferes with, distorts, or slows the transmission of information.
a. Media communication
b. Feedback
c. Static
d. Nonpaid communication
e. Noise
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: E
PTS: 1
REF: 211
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-3 TYPE: Def
52. Within the communication process for a car dealer’s ad, which of the following would be an example
of noise?
a. competing ads
b. news stories in the newspaper
c. the physical surroundings in which the individual reading the ad is located
d. the presence of other people while the ad is being read
e. all of these
ANS: E
Noise is anything that interferes with, distorts, or slows the transmission of information.
PTS: 1
REF: 211
OBJ: 14-3 TYPE: App
TOP: AACSB Communication | TB&E Model Customer
54. _____ is the interpretation of the language and symbols sent by the source through a channel.
a. Encoding
b. Perceiving communication
c. Decoding
d. Channeling
e. Semiotics
ANS: C
PTS: 1
REF: 211-212
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-3 TYPE: Def
55. The most successful global marketing managers realize that:
a. senders of messages can communicate effectively with other cultures even if they know
nothing of the other culture
b. any message can be considered uniform by easily translating the message into all the other
languages
c. consumers' cultural environments do not play a large role in the communication process
and affect decoding
d. it is imperative that every message be completely customized to each subculture
e. translation and possible miscommunication of their promotional messages can occur
ANS: E
PTS: 1
REF: 212
OBJ: 14-3 TYPE: Comp
TOP: AACSB Diversity | TB&E Model International Perspective
56. For communication to be effective:
a. marketing managers should use both interpersonal and mass communications
b. all steps of the communications process model must take place
c. marketing managers must ensure a proper match between the message to be conveyed and
the target market's attitudes and ideas
d. advertising messages must be general enough to cover all ages, social classes, and
education levels
e. marketers should use televised instead of print communication
ANS: C
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Common understanding between two communicators is required for effective communication.
PTS: 1
REF: 212
OBJ: 14-3 TYPE: Comp
TOP: AACSB Communication | TB&E Model Customer | TB&E Model Promotion
59. The receiver's response to a message is _____ to the source.
a. decoded
b. noise
c. feedback
d. channeled
e. static filled
ANS: C
PTS: 1
REF: 212
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-3 TYPE: Def
64. Which of the following statements about the characteristics of the elements in the promotional mix is
true?
a. The speed of feedback is delayed in sales promotion, advertising, and personal selling.
b. Message flexibility is greatest with advertising.
c. The message flow is two-way in public relations, sales promotions, and personal selling.
d. The most feedback is available with personal selling.
e. The sponsor is identified in public relations, advertising, and personal selling.
ANS: D
The speed of feedback is delayed in sales promotion and advertising. Message flexibility is greatest
with personal selling. The message flow is one-way in public relations and sales promotions. The
sponsor is not identified in public relations. See Exhibit 14.3.
PTS: 1
REF: 212
OBJ: 14-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
65. Which of the following statements about the characteristics of the elements in the promotional mix is
true?
a. Control over message content is greatest when public relations is used.
b. A large audience is best reached with personal selling.
c. The fastest feedback occurs with personal selling.
d. The mode of communication for sales promotion is usually direct and personal.
e. The message flow with advertising is two-way.
ANS: C
There is little control over message content with public relations. Personal selling reaches large
audiences slowly. Sales promotions are usually indirect and impersonal. The message flow with
advertising is one-way. See Exhibit 14.3.
PTS: 1
REF: 213
OBJ: 14-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
68.
What are the three basic tasks of promotion?
a. informing, persuading, and convincing
b. persuading, convincing, and reminding
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. informing, convincing, and reminding
d. informing, persuading, and reminding
e. persuading, comparing, and reminding
ANS: D
PTS: 1
REF: 214
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-4 TYPE: Def
69. Which of the following is one of the basic tasks typically performed by promotion?
a. managing
b. organizing
c. rewarding
d. persuading
e. perceiving
ANS: D
PTS: 1
REF: 214
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-4 TYPE: Def
70. Informative promotion is generally used:
a. when memory stimulus is needed
b. when the brand name is well-known to consumers
c. during the early stages of the product life cycle
d. during an attempt to gain the immediate action of a consumer
e. when advertising a simple, nontechnical, mature product
ANS: C
Informative promotion is a necessary ingredient for increasing demand for a product category and is
used when the product is introduced.
PTS: 1
REF: 214
OBJ: 14-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
75. The goal of persuasive promotion is to:
a. stimulate a purchase or other action
b. increase brand awareness
c. describe available services
d. remind the consumers of where to buy the product
e. maintain top-of-mind consumer awareness
ANS: A
Persuasion generally attempts to motivate a consumer to purchase a product.
PTS: 1
REF: 214
OBJ: 14-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
76. Persuasion normally becomes the primary promotion goal when:
a. a firm is trying to increase brand awareness
b. the product enters the growth stage of the product life cycle
c. selling a highly technical product
d. reminding consumers where to buy the product
e. new products are in early stages of the product life cycle
ANS: B
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Persuasion attempts to motivate a consumer to purchase a particular product. It is useful after the
product has been made known through informational advertising during introduction.
PTS: 1
REF: 214
OBJ: 14-4 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
78. _____ promotion is used to keep a familiar brand name in the public's mind and is prevalent during the
maturity stage of the product life cycle.
a. Influence
b. Amusement
c. Informative
d. Persuasive
e. Reminder
ANS: E
PTS: 1
REF: 214-215
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-4 TYPE: Def
81. Which of the following outlines a sequential four-step process for achieving promotional goals?
a. communication model
b. hierarchy of impacts
c. AIDA concept
d. Maslow's hierarchy of needs
e. Schramm's model
ANS: C
PTS: 1
REF: 215
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-5 TYPE: Def
82. The AIDA concept:
a. proves promotional effectiveness is an insignificant abstract term
b. demonstrates that buyers go through nine stages on the way to making a decision
c. is a model effectively showing that advertising can move people to the purchase stage
d. is a model for reaching promotional objectives that outlines a sequential process for
effective promotion
e. is a budget plan based on the effectiveness of various promotional mixes in achieving
certain objectives
ANS: D
PTS: 1
REF: 215
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-5 TYPE: Def
83. AIDA stands for:
a. Attitude-Interest-Demand-Activity
b. Attention-Interest-Desire-Action
c. Awareness-Intent-Demand-Action
d. Avoidance-Interest-Desire-Acceptance
e. Attitudes-In-Developing-Acquisitions
ANS: B
PTS: 1
REF: 215
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-5 TYPE: Comp
84. According to the AIDA concept, the first step a marketer must achieve with potential customers is:
a. attention
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
attitude alignment
action
adaptation
adoption
ANS: A
PTS: 1
REF: 215
TOP: AACSB Reflective Thinking | TB&E Model Customer
OBJ: 14-5 TYPE: Def
87. Point-of-purchase displays in grocery stores, coupons, premiums, and trial-size packages are most
useful when the consumer is near the _____ stage of the AIDA model.
a. liking
b. awareness
c. action
d. preference
e. knowledge
ANS: C
These extras are the sales promotion techniques that often push the complacent consumer into the
purchase stage.
PTS: 1
REF: 215
OBJ: 14-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
89. Which of the following statements about the AIDA model is true?
a. The AIDA model explains why public relations is the most important element in the
promotional mix.
b. Advertising is most effective at the purchase stage of the AIDA model.
c. Certain promotional tools are more effective at certain stages of the AIDA model.
d. Sales promotion is not helpful during the attention stage of the AIDA model.
e. The promotional mix should not be influenced by the AIDA model.
ANS: C
A helpful concept for marketing managers is that as the customer moves from awareness to purchase,
different promotional tools are more effective at certain points.
PTS: 1
REF: 215
OBJ: 14-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
90. The AIDA concept:
a. assumes that the second step in the purchase-decision process is inertia
b. does not explain how all promotions influence purchase decisions
c. assumes that consumers regularly go through each stage of the process during all
purchases
d. indicates that the purchase decision is the same for high-involvement and low-involvement
products
e. is accurately described by none of the choices
ANS: B
The second step in the AIDA concept is interest. Customers typically do not go through all stages for a
low-involvement product.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 215
OBJ: 14-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
93. In terms of the AIDA concept, sales promotion is most effective at creating:
a. strong desire and purchase intent
b. positive attitudes toward a brand
c. awareness of a product
d. long-term interest
e. awareness of a product and purchase intent
ANS: A
PTS: 1
REF: 216
TOP: AACSB Communication | TB&E Model Promotion
OBJ: 14-5 TYPE: Comp
95. Which of the following is LEAST likely to be a factor that would determine the nature of the
promotional mix?
a. stage in the product life cycle
b. target market characteristics
c. funds available for promotion
d. use of a push or pull strategy
e. size of the company
ANS: E
Size of the company may or may not affect the promotional mix, depending on other factors such as
available funds or product type.
PTS: 1
REF: 216
OBJ: 14-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
97. The promotional mix elements that should be emphasized for products moving into the growth stage of
the product life cycle are:
a. public relations and reminder advertising
b. sales promotion and public relations
c. personal selling and persuasive advertising
d. sales promotion and personal selling
e. informational advertising and publicity
ANS: C
During the growth stage, advertising and public relations remain strong, sales promotion declines in
importance, and personal selling is used. Advertising is persuasive.
PTS: 1
REF: 217-218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
98. Because automobile tires are in the maturity stage of their product life cycle, the promotional mix
element _____ should NOT be emphasized in the marketing of this product.
a. public relations
b. persuasive advertising
c. sales promotion
d. reminder advertising
e. personal selling
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: A
During the maturity stage, persuasive and reminder advertising are emphasized, as well as sales
promotion. Personal selling is maintained, while the usefulness of public relations is doubtful.
PTS: 1
REF: 218
OBJ: 14-6 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Promotion
99. For products like audio cassette tapes, which are in the decline stage of the product life cycle,:
a. persuasive advertising is commonly used
b. heavy public relations is used to maintain brand loyalty
c. personal selling should be used to obtain distribution
d. sales promotion is used to build market share
e. none of these is true
ANS: E
See Exhibit 14.5.
PTS: 1
REF: 218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Communication | TB&E Model Product | TB&E Model Promotion
101. When a product is in the growth stage of its product life cycle:
a. all elements of the promotional mix are equally important
b. heavy advertising is used to build brand loyalty
c. persuasive and reminder advertising is decreased
d. personal selling is ineffective
e. personal selling and sales promotions are the major elements of the promotional mix used
ANS: B
Heavy advertising and decreased use of sales promotions are common during the growth stage.
Reminder advertising is used when the product/brand reaches the maturity stage. During the growth
stage, personal selling is used to maintain distribution.
PTS: 1
REF: 217-218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
102. What is the most effective promotional mix to use with products that are convenience goods and
purchased routinely?
a. personal selling and advertising
b. public relations and personal selling
c. personal selling and sales promotion
d. advertising and public relations
e. sales promotion and advertising
ANS: E
For routine buying decisions, the most effective promotional tools are advertising and sales promotion.
PTS: 1
REF: 218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Promotion
103. Which of the following elements of the promotional mix would be most effective for helping highly
involved consumers make complex buying decisions?
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
personal selling
reminder advertising
sales promotion
public relations
informative advertising
ANS: A
PTS: 1
REF: 218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Communication | TB&E Model Promotion | TB&E Model Customer
104. _____ is probably the most important factor in determining the promotional mix.
a. The advertising agency
b. The need for feedback
c. Money
d. Media availability
e. Message flexibility
ANS: C
Without available funds, the promotional mix is severely limited.
PTS: 1
REF: 218
OBJ: 14-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
107. An ad in a trade magazine targeted to veterinarians urges them to prescribe Hepato for cats and dogs
with damaged livers. This ad was placed by the product's manufacturer. This ad is an example of how
manufacturers use a(n) _____ strategy.
a. kinetic
b. pull
c. inertia
d. advertorial
e. push
ANS: E
A push strategy is a marketing strategy that uses trade advertising to convince a retailer (in this case
the veterinarian) to carry and sell particular merchandise.
PTS: 1
REF: 218-219
OBJ: 14-6 TYPE: App
TOP: AACSB Communication | TB&E Model Strategy
112. A manufacturer using the _____ promotional strategy focuses its promotional efforts on the consumer.
a. reinforcement
b. personal selling
c. push
d. pull
e. kinetic
ANS: D
PTS: 1
REF: 219
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-6 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
118. _____ is the careful coordination of all promotional activities to produce a consistent, unified message
that is customer focused.
a. Interpersonal and mass communications (IMC) approach
b. Promotional mixing
c. Integrated marketing communications
d. Creative selling
e. Relationship marketing
ANS: C
PTS: 1
REF: 219-220
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 14-7 TYPE: Def
120. Why is the concept of integrated marketing communications (IMC) growing in popularity?
a. The proliferation of thousands of media choices beyond the traditional media has made
promotion a complicated task.
b. The mass market has fragmented.
c. Critics of promotion have suggested that uncoordinated promotion is wasteful and
inefficient.
d. Marketers have slashed their advertising spending in favor of promotional techniques that
generate immediate sales responses and have more easily measured effects.
e. All of these statements help to explain why IMC is growing in popularity.
ANS: E
PTS: 1
REF: 219-220
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 14-7 TYPE: Comp
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 15—Advertising and Public Relations
MULTIPLE CHOICE
1. _____ is any form of impersonal, sponsor-paid, one-way mass communication.
a. Publicity
b. Advertising
c. Promotion
d. Public relations
e. Direct marketing
ANS: B
PTS: 1
REF: 223
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-1 TYPE: Def
3. Advertising expenditures in the United States:
a. are large, but the industry is small with fewer than 400,000 employees
b. are staying level with little or no increase year to year
c. are completely controlled by the 200,000 advertising agencies in the United States
d. exceed $250 billion per year in the huge industry that employs over three million people
e. are dominated by the millions of small firms competing for business through price wars
ANS: A
Advertising is a visible but small industry. Advertising spending is increasing and is dominated by the
largest firms.
PTS: 1
REF: 223
OBJ: 15-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
5. Why do many brands with a large market share spend proportionally less on advertising compared to
brands with small market share?
a. Beyond a certain volume of promotion, diminishing returns set in.
b. Certain industries have a practice of spending a low amount of dollars, relative to sales, on
advertising.
c. There is no minimum level of exposure for advertising to have an effect on sales.
d. Advertising will not stimulate economic growth for the industry.
e. The firms with large market share do not understand the advertising-to-sales relationship.
ANS: A
There is a saturation point for advertising.
PTS: 1
REF: 223
OBJ: 15-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
6. The advertising response function helps marketers:
a. create ads that will be noticed by consumers each time the ad runs
b. use their advertising budgets wisely
c. calculate the break-even points for each product being advertised
d. determine the reach and frequency of specific media
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. select an executional appeal appropriate to the product being advertised
ANS: B
The advertising response function is a phenomenon in which spending for advertising and sales
promotion increases sales or market share up to a certain level but then produces diminishing results.
PTS: 1
REF: 224
OBJ: 15-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
7. Why do companies with new brands that have a small market share tend to spend proportionately more
for advertising and sales promotions compared to those with a large market share for existing
products?
a. as a result of experiential marketing research
b. to create the appropriate level of institutional advertising
c. to determine which executional appeal is the most effective
d. to achieve a certain minimum level of exposure to measurably affect purchase habits
e. to prevent product cannibalization
ANS: D
There are two reasons why companies with new brands with small market share tend to spend
proportionately more for advertising and sales promotions compared to those with existing products
and large market share. The first reason is in response to the advertising response function. The second
reason is to create product awareness in the minds of the target audience.
PTS: 1
REF: 224
OBJ: 15-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
9. How does advertising affect consumers?
a. changes cultural practices and conventions
b. changes strongly held values
c. manipulates society against its will
d. changes negative attitudes to positive ones
e. makes people buy things they do not want
ANS: D
Advertising can affect attitudes but cannot alter values or force people to do things they do not want to
do or believe are wrong.
PTS: 1
REF: 224
OBJ: 15-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Customer
12. _____ advertising is designed to enhance a company's image rather than promote a particular product.
a. Publicity
b. Institutional
c. Pioneering
d. Selective
e. Image
ANS: B
PTS: 1
REF: 224
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-2 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
14. A unique form of institutional advertising called _____ advertising is a means for corporations to
express their viewpoints on various controversial issues.
a. advocacy
b. persuasive
c. issue
d. comparative
e. image
ANS: A
PTS: 1
REF: 224
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-2 TYPE: Def
17. Unlike advertising that establishes or maintains a company's identity, _____ advertising touts the
benefits of a specific good or service.
a. selective
b. cooperative
c. advocacy
d. image
e. product
ANS: E
PTS: 1
REF: 225
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-2 TYPE: Def
19. _____ advertising is used to stimulate demand for a new product or product category and is heavily
utilized during the introductory stage of the product life cycle.
a. Comparative
b. Innovative
c. Focused
d. Image
e. Pioneering
ANS: E
PTS: 1
REF: 225
OBJ: 15-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
22. The goal of _____ advertising is to influence demand for a specific brand of good or service. Such
advertising is less informational and more emotional. The emphasis is on brand name, recall, and
favorable attitude toward the brand.
a. pioneering
b. objective-specific
c. competitive
d. institutional
e. comparative
ANS: C
PTS: 1
REF: 225
OBJ: 15-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
23. Comparative advertising is:
a. like a mirror because it compares all negative and positive features of both products
b. like a shotgun in that it compares multiple features of two products
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. like a rifle in that it only compares a single benefit or advantage
d. only used by companies at the highest level of the pyramid of corporate responsibility
e. is accurately described by none of these
ANS: E
Comparative advertising compares two or more competing brands on one or more specific attributes.
FTC monitoring of comparative advertising indicates that it is sometimes used unethically.
PTS: 1
REF: 225
OBJ: 15-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
25. _____ advertising compares two or more specifically named or shown competing brands on one or
more specific attributes.
a. Contrasting
b. Comparative
c. Pioneering
d. Superlative
e. Differentiational
ANS: B
PTS: 1
REF: 225
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-2 TYPE: Def
30. The first step in the advertising campaign decision process is to:
a. make media decisions
b. evaluate the campaign
c. determine campaign objectives
d. develop advertising copy
e. make creative decisions
ANS: C
PTS: 1
REF: 225-226
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-3 TYPE: Def
31. An advertising campaign:
a. may contain a wide variety of themes and slogans
b. extends for a defined period of time
c. continues for the life of the product
d. starts with determining which media will be used
e. rarely has a specific budget
ANS: B
The advertising campaign is a series of related advertisements that focus on a common theme, slogan,
and set of advertising appeals and extend for a defined period of time.
PTS: 1
REF: 225
OBJ: 15-3 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
33. One method used for setting advertising objectives is:
a. campaign budgeting
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
objective and task
the DAGMAR approach
percentage of sales
contribution margin
ANS: C
PTS: 1
REF: 226
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-3 TYPE: Def
34. DAGMAR is an acronym for:
a. defining and achieving goals means advertising reach
b. developing aggressive markets
c. designing advertising with market research
d. defining advertising goals for measured advertising results
e. developing aggressive growth markets and revenues
ANS: D
PTS: 1
REF: 226
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-3 TYPE: Def
35. When the conservative New England Banking Company hired Campbell & Cook advertising agency
to launch a new advertising campaign, the agency's first step was to:
a. determine that the goal of the ads was to emphasize the bank's customer service
b. set its marketing budget
c. decide what executional style to use in the ads
d. see if sales promotion was superior to other tools within the promotional mix
e. hire a spokesperson
ANS: A
The first step in any advertising campaign is to set advertising objectives.
PTS: 1
REF: 226
OBJ: 15-3 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
42. When making creative decisions for the advertising campaign, the advertising manager may consider
all of the following EXCEPT:
a. how to develop advertising appeals
b. identification of the product's benefits
c. the selection of advertising objectives
d. the selection of a unique selling proposition
e. the advertising message
ANS: C
Determining advertising objectives must be done before creative decisions are made.
PTS: 1
REF: 226
OBJ: 15-3 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
43. In advertising, the goal is to sell the product's _____, not its _____.
a. benefits; attributes
b. characteristics; appeals
c. values; traits
d. competitive edge; virtues
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. differential advantage; properties
ANS: A
A well-known rule of thumb in advertising is "Sell the sizzle, not the steak."
PTS: 1
REF: 226
OBJ: 15-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
46. An effective advertising appeal must:
a. be unbelievable
b. make a positive impression on the target market
c. be familiar
d. be inexpensive
e. be similar to its competitors' advertising appeals
ANS: B
An effective advertising appeal must be believable, unique, and differ from competitors. Cost is not a
concern when selecting ad appeals.
PTS: 1
REF: 226
OBJ: 15-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
50. _____ is the way the advertisement portrays its information.
a. Message execution
b. Appeal formation
c. Focus selection
d. Audience selection
e. Benefit determination
ANS: A
PTS: 1
REF: 227
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-3 TYPE: Def
67. Which of the following statements about postcampaign evaluation is true?
a. Evaluating an advertising campaign can be the most demanding task facing advertisers.
b. Testing ad effectiveness can be done either before or after the campaign.
c. Most advertising campaigns aim to create an image for the product instead of asking for
action.
d. Even if an ad campaign has been particularly successful, advertisers will typically conduct
a postcampaign evaluation.
e. All of the statements about postcampaign evaluation are true.
ANS: E
PTS: 1
REF: 228
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-3 TYPE: Comp
68. Which of the following statements about developing an advertising campaign is true?
a. Advertisers use DAGMAR to determine the product's appeal.
b. The last stage in the process is to execute the message.
c. The product's unique selling proposition is identified early so that advertising objectives
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
can be efficiently set.
d. Evaluating results of an advertising campaign helps marketers to adjust objectives for
future campaigns.
e. In developing an advertising campaign, it is more important for the advertiser to identify
the attributes than the benefits.
ANS: D
DAGMAR is used to set advertising objectives. The last stage of the process is campaign evaluation.
The unique selling proposition is identified after benefits (not attributes) are defined.
PTS: 1
REF: 226
OBJ: 15-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
69. Creative work in an advertising campaign cannot be completed without knowing which message
channel will be used to convey the message to the target market. The message channel is the:
a. medium
b. product network
c. attribute
d. appeal
e. executor
ANS: A
PTS: 1
REF: 228
TOP: AACSB Communication | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
70. _____ is the series of decisions advertisers make regarding the selection and use of media that will
optimally and cost-effectively communicate the message to the target audience.
a. Promotional implementation
b. Marketing mix planning
c. Media planning
d. Media reach and frequency strategy
e. Media targeted selection
ANS: C
PTS: 1
REF: 228
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
71. Which of the following statements about the selection of media for advertising is true?
a. Creative planning for an ad that goes on a billboard is the same as the planning for an ad
that runs on television.
b. The media selection is typically unrelated to the advertising objectives.
c. The appeal and executional style of the ad strongly affect the media selection.
d. Creative work is finished before the media are selected.
e. None of these statements about the selection of media for advertising is true.
ANS: C
Advertising objectives strongly affect the media that are selected as does the creative work, which
cannot be finished until the media selection is made.
PTS: 1
REF: 228
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
72. _____ advertising has the advantages of being both timely and geographically flexible.
a. Television
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
Newspaper
Outdoor
Magazine
Catalog
ANS: B
Newspapers are often used by local retailers because they are current and flexible and directed to a
local but wide market.
PTS: 1
REF: 229
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
74.
_____ advertising is an arrangement under which a manufacturer pays a percentage of the
advertising cost for an ad that a retailer places for the manufacturer's brand.
a. Advocacy
b. Comparative
c. Institutional
d. One-to-one
e. Cooperative
ANS: E
PTS: 1
REF: 229
TOP: AACSB Reflective Thinking | TB&E Model Promotion
OBJ: 15-4 TYPE: Def
75. One of the reasons why a retailer might avoid the use of newspaper advertising is:
a. absence of geographic selectivity
b. short lead time
c. year-round readership
d. little demographic selectivity
e. high individual market coverage
ANS: D
See Exhibit 15.3.
PTS: 1
REF: 229
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
76. One of the advantages of television advertising is:
a. short life of message
b. long lead time
c. commercial clutter
d. high costs
e. ability to reach wide and diverse audience
ANS: E
See Exhibit 15.3.
PTS: 1
REF: 229
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
77. Which of the following statements about Internet advertising is true?
a. It is easy to measure ad effectiveness with this medium.
b. It is a medium to which all consumers have access.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. It is the fastest growing of all the advertising media.
d. There is a long lead time required for creating Internet ads.
e. By its very nature, this medium reaches a broad, diverse audience.
ANS: C
See Exhibit 15.3.
PTS: 1
REF: 229 | 231
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Online/Computer
78. One of the main advantages of _____ advertising is its extreme market selectivity.
a. television
b. newspaper
c. magazine
d. radio
e. outdoor
ANS: C
Magazines are available for almost every market segment and can be highly specialized
PTS: 1
REF: 230
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
79. Which of the following is NOT an advantage offered by radio to its advertisers?
a. billions of listeners
b. relatively low cost
c. targeting power
d. ability to change spots quickly
e. timelines and geographic flexibility
ANS: A
Radio stations are often local and do not reach the widest audiences.
PTS: 1
REF: 230
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
80. Advertising in the form of a 30-minute advertisement that resembles a TV talk show is called a(n):
a. infomercial
b. extended sales pitch
c. mega-mercial
d. ad expander
e. prolonged advertisement
ANS: A
PTS: 1
REF: 230
TOP: AACSB Reflective Thinking | TB&E Model Promotion
82. Outdoor advertising:
a. is often used to sell specialty products
b. is a flexible low-cost medium that can take many forms
c. is a high-cost medium
d. can be used to reach a narrow, selective target market
e. is not affected by noise
OBJ: 15-4 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: B
Outdoor advertising is a low-cost medium, that reaches a broad and varied audience, but may be
subject to many distractions (noise). It often advertises convenience and shopping products.
PTS: 1
REF: 231
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
85. Which of the following is NOT identified in the text as a factor that influences media selection?
a. audience selectivity
b. cost per contact
c. use of cooperative advertising
d. media flexibility
e. reach
ANS: C
If cooperative advertising is available, manufacturers usually allow use of these dollars in any media.
PTS: 1
REF: 232
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion
87. _____ usually is NOT used as a basis used for making media mix decisions.
a. Media schedule
b. Cost per thousand
c. Reach
d. Frequency
e. Audience selectivity
ANS: A
The media schedule will be the result AFTER the media mix decisions are made, based on the other
four factors
PTS: 1
REF: 232 | 234
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
89. Advertisers categorize ads on shopping carts at grocery stores and ads at gas station pumps as
examples of:
a. communications networks
b. alternative media
c. distribution channels for ads
d. outdoor advertising
e. direct advertising
ANS: B
PTS: 1
REF: 232
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
90. Why are advertisers looking to alternative media to advertise their products?
a. guaranteed profits
b. maximum advertising exposure
c. to cut through the clutter of traditional media
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
d. to minimize problems associated with reach
e. to maximize noise levels
ANS: C
PTS: 1
REF: 232
OBJ: 15-4 TYPE: Def
TOP: AACSB Communication | TB&E Model Strategy | TB&E Model Promotion
92. _____ measures the number of different target consumers who are exposed to a commercial at least
once.
a. Noise level
b. Frequency
c. Reach
d. Synchronization
e. Cost per contact
ANS: C
PTS: 1
REF: 232
OBJ: 15-4 TYPE: Def
TOP: AACSB Communication | TB&E Model Strategy | TB&E Model Promotion
93. _____ is a measure of the number of times an individual is exposed to a brand message. It is used to
measure the intensity of a specific medium's coverage.
a. Synchronization
b. Reach
c. Cost per contact
d. Media scheduling
e. Frequency
ANS: E
PTS: 1
REF: 232
TOP: AACSB Communication | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
94. A medium's ability to reach a precisely defined market is its:
a. audience selectivity
b. market singularity
c. geographic selectivity
d. noise filtering ability
e. life span
ANS: A
PTS: 1
REF: 232-233
TOP: AACSB Communication | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
97. Billboard advertisements often have to compete for a driver's attention with traffic, passengers, radio,
or other billboards. Billboard advertising would be described as:
a. lacking any geographic selectivity
b. the most flexible advertising medium
c. having a high noise level
d. having a low noise level
e. being a great channel for informative ads
ANS: C
Noise level is the amount of distractions--other advertisements, people, competing sounds in the
environment, or news stories--involved with a type of medium. Outdoor advertising such as billboards
suffers from a great deal of competing noise.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 233
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy
98. Advertisers are often concerned with the noise level in a medium. The medium that is assumed to have
the lowest noise level is:
a. radio
b. television
c. direct mail
d. newspaper
e. magazines
ANS: C
Noise level is the amount of distractions—other advertisements, people, competing sounds in the
environment, or news stories—involved with a type of medium.
PTS: 1
REF: 233
OBJ: 15-4 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
100. Advertising researchers today are discussing the qualitative factors that should be present during media
selection. Which of the following is an example of one of those qualitative factors for placing
television advertising?
a. how well the program is liked by potential consumers
b. the kind of noise filtration system used by the network
c. the clarity of the picture
d. whether the medium is satellite- or cable-based
e. all of the choices
ANS: A
The text discusses how audience behavior should be considered when making media selections.
PTS: 1
REF: 233
OBJ: 15-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
101. Products in the latter stages of the product life cycle, which are advertised on a reminder basis use,
a(n) _____ media schedule.
a. intermittent
b. bursting
c. continuous
d. trailing
e. unremitting
ANS: C
PTS: 1
REF: 234
OBJ: 15-4 TYPE: Def
TOP: AACSB Communication | TB&E Model Strategy | TB&E Model Product
102. With a(n) _____ media schedule, the advertiser may schedule the ads heavily every other month to
achieve a greater impact with an increased frequency and reach at those times.
a. intermittent
b. flighted
c. periodic
d. unremitting
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. alternating
ANS: B
PTS: 1
REF: 234
OBJ: 15-4 TYPE: Def
TOP: AACSB Communication | TB&E Model Strategy | TB&E Model Promotion
103. A(n) _____ media schedule combines continuous scheduling throughout the year with a flighted
schedule during the best sales periods.
a. pulsing
b. bursting
c. unremitting
d. rhythmic
e. vibrating
ANS: A
PTS: 1
REF: 234
TOP: AACSB Communication | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
104. Which of the following products is most likely to use a pulsing media schedule?
a. romance novels
b. gasoline
c. band instruments
d. baking soda
e. ceiling fans
ANS: C
Band instruments would be most heavily advertised just prior to the opening of the new school year.
PTS: 1
REF: 234
OBJ: 15-4 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy | TB&E Model Product
106. A(n) _____ designates the vehicles, specific publications or programs, and the insertion dates of
advertising.
a. advertising plan
b. media schedule
c. promotion strategy
d. ad outline
e. promotional profile
ANS: B
PTS: 1
REF: 234
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-4 TYPE: Def
111. Products such as surfboards, swimsuits, lawn mowers, allergy medication, and flower seeds are most
likely to be advertised with a _____ media schedule.
a. flighted
b. pulsing
c. seasonal
d. continuous
e. consecutive
ANS: C
Products that are used more during certain times of the year tend to follow a seasonal strategy.
PTS: 1
REF: 234
OBJ: 15-4 TYPE: App
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Communication | TB&E Model Strategy
112. _____ is the promotional mix element that evaluates public attitudes, identifies issues that may elicit
public concern, and executes programs to gain public understanding and acceptance.
a. Personal selling
b. Advertising
c. Mass communications
d. Public relations
e. Sales promotion
ANS: D
PTS: 1
REF: 234
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-5 TYPE: Def
116. Tools for the public relations manager include all of the following EXCEPT:
a. press relations
b. product publicity
c. lobbying
d. sales promotions
e. corporate communications
ANS: D
Sales promotions are not part of public relations.
PTS: 1
REF: 234-235
OBJ: 15-5 TYPE: Comp
TOP: AACSB Communication | TB&E Model Strategy
124. Companies that show support for recycling efforts and other examples of green marketing through
advertising are engaged in:
a. event publicity
b. public relations profiling
c. consumer intimidation
d. sponsorship
e. advocacy publicity
ANS: D
Green marketing is an important way for companies to build loyalties by promoting a popular issue.
PTS: 1
REF: 235
OBJ: 15-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
125. How do public relations professionals use Internet Web sites?
a. to introduce new products
b. to promote existing products
c. to obtain consumer feedback
d. to showcase upcoming events
e. to do all of these things
ANS: E
PTS: 1
REF: 236
OBJ: 15-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Online/Computer
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
126. _____ is used by public relations specialists to handle the effects of unfavorable publicity.
a. Media planning
b. Crisis management
c. Message power
d. Damage control
e. Communication narrowcasting
ANS: B
PTS: 1
REF: 237
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 15-5 TYPE: Def
127. A newspaper article revealed that hazardous wastes buried in an on-site landfill at a paper
manufacturer were leaking into the local water supply. Even though the company quickly stopped the
leak and paid for an additional water purification system for the town, it still received some very
negative publicity. The company should have:
a. begun a pulsing advertising campaign
b. implemented its crisis management plan
c. used an ad campaign based on a fear appeal
d. done nothing until the actual damage levels were determined
e. ignored the publicity and assumed it would go away
ANS: B
Crisis management is used to handle the effects of unfavorable publicity.
PTS: 1
REF: 237
OBJ: 15-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
Chapter 17—Pricing Concepts
MULTIPLE CHOICE
1. According to the text, price is best described as:
a. the perceived value of a good or service
b. money exchanged for a good or service
c. the psychological results of purchasing
d. the cost in dollars for a good or service as set by the producer
e. the value of a barter good in an exchange
ANS: A
PTS: 1
REF: 255
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-1 TYPE: Def
2. Revenue:
a. equals quantity sold times profit margin
b. equals price minus costs
c. equals return on investment
d. is synonymous with profit
e. equals price of goods times quantity sold
ANS: E
PTS: 1
REF: 255
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-1 TYPE: Def
3. _____ pay for every activity of the company.
a. Revenues
b. Investments
c. Retained earnings
d. Profits
e. Prices
ANS: A
Revenue is price times units sold, or the total inflow of capital that is available to pay for the costs of
manufacturing the good and running the business.
PTS: 1
REF: 255
OBJ: 17-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
4. Money that is left over after paying for company activities is called:
a. return on investment
b. a contribution margin
c. profit
d. net worth
e. a current asset
ANS: C
PTS: 1
REF: 255
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-1 TYPE: Def
6. Which of the following statements about price is true?
a. Price can relate to anything with perceived value, not just money.
b. Price is that which is given up in an exchange to acquire a product.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
c. Customers are interested in obtaining a perceived reasonable price.
d. The price paid is based on the satisfaction consumers expect to receive from a product.
e. All of these statements about price are true.
ANS: E
PTS: 1
REF: 255
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-1 TYPE: Comp
7. Which of the following statements about price is true?
a. Price and revenue are synonyms.
b. Price always equals some monetary figure.
c. Price is not necessarily based on the satisfaction consumers receive from a product.
d. High prices result in high profits.
e. All of these statements about price are true.
ANS: C
Price can relate to anything with perceived value, not just money. The price paid is based on the
satisfaction consumers expect to receive from a product, not necessarily what they actually receive.
PTS: 1
REF: 255
OBJ: 17-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
9.
Why are marketing managers finding it more difficult to set prices in today's environment?
a. Inflationary and recessionary periods have made customers less price-sensitive.
b. Fewer dealer and generic brands are available because the competition has been
eliminated.
c. The high rate of new-product introductions has led to careful reevaluation by consumers.
d. Marketing managers are finding it difficult to compare prices between suppliers.
e. Buyers are less informed and are less price-sensitive.
ANS: C
With constant new-product introductions, consumers have many alternative goods to choose from, and
selecting the right price becomes a very complicated task for the marketing manager.
PTS: 1
REF: 256
OBJ: 17-1 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
10. For convenience, pricing objectives can be divided into three categories. They are:
a. refundable, competitive, and attainable
b. perceived, actual, and unique-situational
c. differentiated, niche, and undifferentiated
d. profit oriented, sales oriented, and status quo
e. monopolistic, fixed, and variable
ANS: D
PTS: 1
REF: 256-258
OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
11. An organization is using _____ when it sets its prices so that total revenue is as large as possible
relative to total costs.
a. profit maximization
b. market share pricing
c. demand-oriented pricing
d. sales maximization
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. status quo pricing
ANS: A
PTS: 1
REF: 256
OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
14. _____ measures the overall effectiveness of management in generating profits with its available assets.
a. Return on investment
b. Economic order quantity
c. Target-on-sales
d. Retained earnings
e. Efficiency maximization
ANS: A
PTS: 1
REF: 256
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-2 TYPE: Def
18. A company using market share pricing has a _____ pricing objective.
a. profit-oriented
b. sales-oriented
c. demand-oriented
d. supply-oriented
e. status quo
ANS: B
PTS: 1
REF: 257
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-2 TYPE: Def
19. Under which of the following conditions will companies with low market share be most likely to fail?
a. competing in a slow-growth industry
b. competing in an industry that makes frequently purchased items
c. competing in an industry with few product changes
d. competing in an industry requiring market power and economies of scale
e. competing in none of these industries
ANS: D
A larger market share is required to boost economies of scale and market power.
PTS: 1
REF: 257
OBJ: 17-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
23. As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off
excessive inventory.
a. profit maximization
b. profit-oriented pricing
c. status quo pricing
d. sales maximization
e. market share pricing
ANS: D
Sales maximization pricing is a short-term price reduction to increase sales.
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
PTS: 1
REF: 258
OBJ: 17-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
24. If a company's pricing objective is to meet the competition or to maintain existing prices, it is using
_____ pricing.
a. head-on
b. target return on investment
c. status quo
d. market share
e. demand-oriented
ANS: C
PTS: 1
REF: 258
OBJ: 17-2 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
25. Which of the following statements describes an advantage of status quo pricing?
a. Status quo pricing is derived from actual costs of manufacturing.
b. Status quo pricing maintains the organization's differential advantage.
c. Status quo pricing is active, not reactive.
d. Status quo pricing causes price wars.
e. Status quo pricing requires little planning.
ANS: E
Status quo pricing requires little planning because it involves just copying the competitions' pricing
policies.
PTS: 1
REF: 258
OBJ: 17-2 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
27. Although many factors can influence price, the primary determinants are:
a. costs of manufacturing and distribution
b. the demand for the good and the cost to the seller
c. demand by the consumer and perceived quality
d. distribution and promotion strategies
e. stage of the product life cycle and costs to the consumer
ANS: B
PTS: 1
REF: 258
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-3 TYPE: Def
28. _____ is defined as the quantity of a product that will be sold at various prices for a specified period.
a. Market share
b. Demand
c. Supply
d. Value
e. Revenue
ANS: B
PTS: 1
REF: 258
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-3 TYPE: Def
29. The price of the good or service is a key decision for a marketer because it most significantly and
directly affects the product's:
a. distribution
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
b.
c.
d.
e.
costs
demand
promotion
quality
ANS: C
The quantity of a product that people will buy depends on its price.
PTS: 1
REF: 258
OBJ: 17-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
30. The quantity of a product that people will buy/demand is most dependent on its:
a. distribution strategy
b. supply
c. promotion strategy
d. quality parameters
e. price
ANS: E
PTS: 1
REF: 258
OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer
34. Most demand curves slope:
a. horizontally
b. upward and to the right
c. downward and to the left
d. vertically
e. downward and to the right
ANS: E
For most products when prices increase, demand will decrease.
PTS: 1
REF: 258
OBJ: 17-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
35. The _____ is the quantity of a product that will be sold in the market at various prices for a specified
time period, and _____ is the quantity of a product that will be offered to the market by suppliers at
various prices for a specified period.
a. demand; equity
b. demand; supply
c. supply; demand
d. inventory; demand
e. inventory; supply
ANS: B
PTS: 1
REF: 258-259
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-3 TYPE: Def
36. _____ is defined as the quantity of product offered to the market by suppliers at various prices for a
specified period.
a. Supply
b. Demand
c. Equity
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
d. Liquidity
e. Current asset
ANS: A
PTS: 1
REF: 258
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-3 TYPE: Def
38. The point at which there is no inclination for the price to rise or fall is called price:
a. equilibrium
b. stability
c. leverage
d. symmetry
e. status quo
ANS: A
PTS: 1
REF: 259
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-3 TYPE: Comp
40. The responsiveness or the sensitivity of consumer demand to changes in price is referred to as _____
and occurs when consumers buy more or less of a product when the price changes.
a. the break-even point
b. the point of equilibrium
c. unitary revenue
d. asymmetrical demand
e. elasticity of demand
ANS: E
PTS: 1
REF: 259
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-3 TYPE: Def
41. When consumers are sensitive to price changes, _____ occurs.
a. inelastic demand
b. elastic supply
c. elastic demand
d. inelastic supply
e. unitary elasticity
ANS: C
PTS: 1
REF: 259
OBJ: 17-3 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer
42. What happens when demand is elastic?
a. As price goes up, revenue goes down.
b. As price goes down, revenue goes down.
c. As price goes up, revenue goes up.
d. As price goes up, revenue does not change.
e. As price goes down, revenue does not change.
ANS: A
If demand is elastic, price increases will decrease demand by a larger amount, reducing total revenue.
PTS: 1
REF: 259
OBJ: 17-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
43. While shopping, Anita found a "gardening kit" containing a pair of work gloves, a trowel, and a hand
rake handsomely arranged in a clay flower pot. The items, which were sold together, retailed at
$24.50, but had been marked down to $12.99. The retailer sold only one for $24.50 and six at the
$12.99 price. Demand for the gardening kit package is:
a. unitary
b. predictable
c. synergistic
d. inelastic
e. elastic
ANS: E
If demand is elastic, price increases will decrease demand by a larger amount, reducing total revenue.
PTS: 1
REF: 259-260
OBJ: 17-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
44. A bakery supply catalog sells 5-pound bags of moist apricots and cranberries, sweet dates, bits of
pineapple, and candied cherries to be used in fruitcakes. Each bag costs $24.95. If the price of
cranberries were to increase by 5 percent, it would have no effect on the price of the fruit mix because
cranberries are only one of several fruits in the package. The demand for cranberries for this particular
use is:
a. elastic
b. derived
c. synergistic
d. inelastic
e. joint
ANS: D
The decrease in the price will not significantly influence the price of the fruit mix.
PTS: 1
REF: 259-260
OBJ: 17-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
47. _____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains
exactly the same.
a. Inelastic demand
b. Functional elasticity of demand
c. Unitary elasticity
d. Highly elastic demand
e. Fixed elasticity
ANS: C
PTS: 1
REF: 260
TOP: AACSB Reflective Thinking | TB&E Model Strategy
49. When price decreases and total revenue falls, demand is:
a. elastic
b. inelastic
c. absolute
d. unitary
e. stable
OBJ: 17-3 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: B
PTS: 1
REF: 260
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-3 TYPE: Def
51. Critics claim bank ATMs take advantage of the _____ of customers who suffer a poverty of time and
have a strong need for convenience.
a. elasticity of demand
b. inelastic demand schedule
c. unitary supply and demand
d. ROI characteristics
e. supply characteristics
ANS: B
Customers are paying a premium for the convenience of ATM use.
PTS: 1
REF: 260
OBJ: 17-3 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Customer
53. Which of the following factors does NOT directly affect the elasticity of demand?
a. the other uses of a product
b. the inputs needed to manufacture the product
c. the availability of substitute goods
d. the price relative to a consumer's purchasing power
e. a product's durability
ANS: B
Inputs at time of manufacture only indirectly affect the demand, if at all.
PTS: 1
REF: 260
OBJ: 17-3 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing
54. _____ use complex mathematical software to profitably fill unused capacity.
a. Yield management systems
b. Capacity correlation systems
c. Service forecasting tools
d. Service management systems
e. Capacity management software
ANS: A
PTS: 1
REF: 261
OBJ: 17-4 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Online/Computer
55. Yield management systems are used to:
a. determine the availability of product substitutes in complex industries that are
experiencing rapid change
b. profitably fill unused capacity
c. predict necessary service levels to achieve revenue goals
d. determine whether it is financially more feasible to buy a new product or repair a broken
one
e. create elastic demand for low-involvement products
ANS: B
PTS: 1
REF: 261
OBJ: 17-4 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Online/Computer
57. Which of the following statements about yield management systems (YMS) is true?
a. The first use of YMS was in the U.S. car industry as it looked for ways to compete with
imports.
b. YMS eliminate the problem of simultaneous production and consumption from services.
c. YMS cannot be used by any other businesses but services.
d. YMS are complex pricing systems used to set equilibrium pricing points.
e. YMS are mathematically complex systems to make use of underutilized capacity and
reduce the cost of perishability.
ANS: E
YMS was first used in the airline industry, but it is now used by automobile manufacturers to make use
of underutilized capacity.
PTS: 1
REF: 261
OBJ: 17-4 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Online/Computer
58. Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,
herbs, and seasonings to consumers?
a. annual lease on mixer used to blend seasonings
b. executive salaries
c. rent for building where spices and herbs are repackaged for consumers
d. workers' insurance
e. postage for shipping spices and herbs
ANS: E
Postage is the only item that varies depending upon the amount of units sold.
PTS: 1
REF: 261
OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
59. A cost that changes with the level of output is called a(n) _____ cost.
a. liquidity
b. variable
c. fixed
d. asset
e. elastic
ANS: B
PTS: 1
REF: 262
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
61. _____ costs do not change as output is increased or decreased.
a. Asset
b. Variable
c. Fixed
d. Symmetrical
e. Status quo
ANS: C
PTS: 1
REF: 262
OBJ: 17-5 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
TOP: AACSB Reflective Thinking | TB&E Model Strategy
63. Mitch owns a pet boarding kennel. The monthly payment on the land he purchased for his kennel, the
mortgage on his small office building, and his business license are all examples of _____ costs.
a. marginal
b. variable
c. fixed
d. promotional
e. demand
ANS: C
Fixed costs do not change as output changes.
PTS: 1
REF: 262
OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Strategy
65. _____ cost is the change in total costs associated with a one-unit change in output.
a. Variable
b. Intermittent
c. Elastic
d. Marginal
e. Flex
ANS: D
PTS: 1
REF: 262
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
66. When a seller determines the selling price by adding to cost an amount for profit and expenses not
previously accounted for, the seller is using _____ pricing.
a. profit maximization
b. demand-oriented
c. break-even
d. target return
e. markup
ANS: E
PTS: 1
REF: 262
OBJ: 17-5 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
67. The most popular method used by wholesalers and retailers in establishing a sales price is _____
pricing.
a. markup
b. status quo
c. formula
d. marginal revenue
e. break-even
ANS: A
PTS: 1
REF: 262
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
69. An independent retailer of specialty kitchen items wants to determine what price she should put on a
set of plastic wine glasses. They cost her $7. She desires a markup of 30 percent based on selling price.
Which of the following is closest to the price she should charge her customers?
a. $19
b. $12
c. $15
d. $10
e. $18
ANS: D
Price = Cost + Markup
Price = 7.00 + .3
Price = $10
PTS: 1
REF: 262
OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing
70. An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45, what
is the markup based on the selling price?
a. 15 percent
b. 20 percent
c. 25 percent
d. 33 percent
e. 50 percent
ANS: D
Price - Cost = Markup
$45 - $30 = $15
$15 ÷ $45 = 33% markup
PTS: 1
REF: 262
OBJ: 17-5 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing
71. A distributor of bakery suppliers sells 5-pound bags of moist apricots and cranberries, sweet dates, bits
of pineapple, and candied cherries for $24.95 to be used in fruitcakes. Since the amount of cranberries
purchased depends on how many bags of fruit are demanded, the cost of the cranberries is a:
a. variable cost
b. marginal contributor
c. fixed cost
d. variable revenue
e. joint cost
ANS: A
PTS: 1
REF: 262
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: App
72. What is the biggest advantage associated with markup pricing?
a. its simplicity
b. its inability to be decoded by customers
c. the way that the technique considers demand
d. the fact that merchandise is never underpriced with this technique
e. its reliance on marginal costs
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
ANS: A
What could be easier than adding a percentage to cost to get a price?
PTS: 1
REF: 262
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
73. Which of the following describes a disadvantage associated with markup pricing?
a. how difficult it is to implement
b. its failure to explicitly consider product demand
c. its dependence on marginal costs
d. too many factors influence it
e. none of these
ANS: B
Because the method does not explicitly consider demand, overpricing and/or underpricing can occur.
PTS: 1
REF: 262
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
74. _____ is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).
a. Margin pricing
b. Keystoning
c. Mark-on adding
d. Formula doubling
e. Symmetrical pricing
ANS: B
PTS: 1
REF: 262
TOP: AACSB Reflective Thinking | TB&E Model Pricing
OBJ: 17-5 TYPE: Def
76. Profit maximization occurs when:
a. total costs equals average fixed revenue
b. average variable costs are larger than average total costs
c. total costs equal total variable costs
d. marginal variable costs equal average revenues
e. marginal revenue equals marginal cost
ANS: E
PTS: 1
REF: 263
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
77. _____ is the extra revenue associated with selling an additional unit of output.
a. Average revenue
b. Marginal revenue
c. Marginal cost
d. Net profit
e. Average variable cost
ANS: B
PTS: 1
REF: 263
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
78. As long as the revenue of the last unit produced and sold is greater than the cost of the last unit
produced and sold, a firm should:
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
a.
b.
c.
d.
e.
continue manufacturing
not use formula pricing
continue using price equilibrium
consider using sales maximization pricing
reach its break-even point very shortly
ANS: A
Diminishing returns have not set in, so the firm should continue manufacturing.
PTS: 1
REF: 264
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
79. The point at which marginal cost and marginal revenue are equal always results in:
a. maximization of elasticity
b. maximization of revenue
c. maximization of costs
d. maximization of profits
e. break-even equilibrium
ANS: D
Until the point where MC = MR, each unit of sales has contributed to additional profit; therefore,
profit, not revenue or costs, has been maximized at MC = MR.
PTS: 1
REF: 263-264
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
80. _____ determine what sales volume must be reached for a product before the company's total costs
equal total revenue and no profits are earned.
a. Marginal revenue estimates
b. Price equilibrium analyses
c. Break-even analyses
d. Average total cost (ATC) figures
e. Marginal costs of goods sold
ANS: C
PTS: 1
REF: 264
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
81. Keystoning is:
a. the practice of marking up prices by 100 percent
b. a method used for determining the point of elasticity
c. a plan for reducing marginal costs
d. the practice of maintaining variable costs at one-half of total fixed costs
e. a method of changing consumers' perceptions about price
ANS: A
PTS: 1
REF: 263
TOP: AACSB Reflective Thinking | TB&E Model Strategy
82. The typical break-even model assumes a given fixed cost and a:
a. variable per unit cost
b. constant inventory turnover
c. markup cost attained through keystoning
d. constant production schedule
OBJ: 17-6 TYPE: Def
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. constant average variable cost
ANS: E
PTS: 1
REF: 264
TOP: AACSB Reflective Thinking | TB&E Model Strategy
OBJ: 17-5 TYPE: Def
90. Which of the following statements describes a limitation associated with break-even analysis?
a. It is sometimes difficult to ascertain whether a cost is fixed or variable.
b. It requires the calculation of marginal revenue.
c. It strictly considers demand.
d. It assumes variable cost per item, which is difficult to calculate.
e. It can only be expressed as a break-even point in dollar amounts.
ANS: A
Not all costs are easily categorized because a cost may be fixed when viewed in the short term but
variable when considered over a longer period of time.
PTS: 1
REF: 265
OBJ: 17-5 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Strategy
94. In the mature and highly competitive furniture industry, you would expect furniture manufacturers to
engage in:
a. a price war
b. price escalation
c. prestige pricing
d. above-market pricing
e. geographical pricing
ANS: A
In the maturity stage, with heavy competition, below-market pricing leads to price wars.
PTS: 1
REF: 266
OBJ: 17-6 TYPE: App
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Product
99. Shopping bots:
a. encourage a more creative use of advertising
b. link manufacturers, suppliers, and customers
c. create opportunities for prestige pricing
d. provide a means for comparison shopping
e. create inelastic demand
ANS: D
PTS: 1
REF: 267
OBJ: 17-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Online/Computer | TB&E
Model Strategy
101. When pricing is used as part of a promotion strategy, it:
a. can be effectively used in trade promotions
b. cannot be used as a public relations tool
c. must be accompanied by personal selling
d. eliminates problems associated with the service characteristic of homogeneity
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. makes the establishment of a price to quality relationship unnecessary
ANS: A
PTS: 1
REF: 268
OBJ: 17-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Promotion
103. Many consumers, especially when faced with an uncertain purchase decision, think that a high price:
a. is a signal of quality
b. is an indication that consumers are being ripped off
c. will always lead to major price discounts to wholesalers and retailers that distribute it
d. is a sign of the company's overall market share
e. indicates that the brand was slipping into the decline stage of the product life cycle but has
had a sudden resurgence of growth
ANS: A
Numerous studies have shown that consumers equate high price with high quality.
PTS: 1
REF: 268-269
OBJ: 17-6 TYPE: Comp
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Product
104. Marketing managers who attempt to raise the quality image of their product by selling it at high prices
are following a(n) _____ strategy.
a. profit maximization
b. market share
c. maintained markup pricing
d. prestige pricing
e. investment asset
ANS: D
Prestige pricing strategy sets high prices to connote high product quality.
PTS: 1
REF: 269
OBJ: 17-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
106. Prestige pricing:
a. equalizes supply and demand
b. uses high prices to promote a high-quality product
c. is the practice of marking up prices by 100 percent
d. is also called leader pricing
e. emphasizes the monetary nature of price
ANS: B
Actually, prestige pricing emphasizes all the intangible considerations buyers make when purchasing.
PTS: 1
REF: 269
OBJ: 17-6 TYPE: Def
TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
107. The dimensions of quality that are important to consumers include:
a. versatility
b. serviceability
c. performance
d. ease of use
“MARKETING MIX” POOL ITEMS (Chs. 9, 11, 12, 13, 14, 15 (NOT 16) 17 (NOT 18
e. all of the choices
ANS: E
PTS: 1
REF: 269
TOP: AACSB Reflective Thinking | TB&E Model Product
OBJ: 17-6 TYPE: Comp