Marketing Real People, Real Choices By Michael R. Solomon, Greg W. Marshall, Elnora W. Stewart TEST

Marketing: Real People, Real Choices, 11e (Solomon) Chapter 1 Welcome to the World of Marketing: Create and Deliver Value 1) A ________ is the ultimate user of a good or service.

A) stakeholder B) market C) target market D) marketer E) consumer Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 2) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

A) Demand satisfaction B) Competitive advantage building C) Marketing D) Total quality management E) Value chain management Answer: C Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 3) The ________ consists of the tools an organization uses to create a desired response among a set of predefined consumers.

A) sharing economy B) market position C) value proposition D) marketplace E) marketing mix Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

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4) Which of the following is NOT one of the four Ps of marketing?

A) price B) profit C) product D) promotion E) place Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 5) Which of the following is a true statement about the four Ps of the marketing mix?

A) A decision about one of the Ps affects every other marketing-mix decision.

B) Price is always the most important of the four Ps. C) Place is typically the least important of the four Ps. D) The four Ps have little effect on a product's market position.

E) The four Ps are used to determine a product's target market.

Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 6) Which of the following is part of the product element of the marketing mix?

A) a quality discount B) a store coupon C) a newspaper advertisement D) the packaging E) publicity releases Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 7) The customer's overall assessment of every interaction the customer has had with a business is known as ________.

A) the customer experience B) customer engagement C) e-commerce D) the marketing mix E) collaborative consumption Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 2 Copyright © 2022 Pearson Education, Inc.

8) ________ is the assignment of a product's value, or the amount the consumer must exchange to receive the offering.

A) Promotion B) Price C) Benefit D) Need E) Utility Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 9) The design and packaging of a good is included in which element of the marketing mix?

A) product B) place C) price D) distribution E) promotion Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 10) Marketing communication is also referred to as ________.

A) production B) selling orientation C) societal marketing D) exchange E) promotion Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 11) For an exchange to occur, ________.

A) at least two people or organizations must be willing to make a trade, and each must have something the other wants B) there must be one winner and one loser C) someone must make a financial profit D) the item that is exchanged must be a tangible product E) time utility must be created for the purchaser Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 3 Copyright © 2022 Pearson Education, Inc.

12) Which element of the marketing mix is most closely associated with a company's channel of distribution?

A) production B) place C) price D) profit E) promotion Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Reflective thinking 13) ________ are intangible products that we pay for and use but never own.

A) Consumer goods B) Services C) Industrial goods D) E-commerce products E) Value products Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 14) Items such as paper towels or sugar that are purchased for use by a family are considered ________.

A) consumer services B) consumer goods C) value propositions D) utilities E) industrial goods Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

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15) ________ marketing is the marketing of goods and services from one organization to another.

A) Distributive B) Consumer C) E-commerce D) Business-to-business E) Target Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 16) ________ are organizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members.

A) Consumer organizations B) Public organizations C) Private organizations D) Not-for-profit organizations E) For-profit organizations Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 17) Marketers first identify consumer needs and then provide products that satisfy those needs.

This practice is referred to as ________.

A) the stakeholder orientation B) the marketing concept C) total quality management D) collaborative consumption E) the marketing mix Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

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18) When a gap exists between a consumer's actual state and some ideal or desired state, the consumer has a ________.

A) benefit B) demand C) need D) value E) utility Answer: C Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 19) A ________ is a desire for a particular product a consumer uses to satisfy a need in a specific way that is culturally and socially influenced.

A) benefit B) demand C) value D) utility E) want Answer: E Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 20) A ________ delivered by a product is the outcome that motivates a customer's buying behavior.

A) benefit B) demand C) value D) need E) want Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 21) A customer's desire for a product coupled with the buying power or resources to obtain that product is called ________.

A) benefit B) demand C) need D) utility E) service Answer: B Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 6 Copyright © 2022 Pearson Education, Inc.

22) The usefulness or benefit that consumers receive from a product is ________.

A) utility B) TQM C) ROI D) e-commerce E) value Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 23) A glitzy shopping mall, a mail-order catalog, a television shopping network, and an e-commerce website are all examples of ________.

A) marketing concepts B) value chains C) monopolies D) marketplaces E) strategic business units Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 24) Consumers rent all types of goods that they aren't using, from barbecue grills to Halloween costumes, to other consumers who need them for a limited time on sites like Craigslist. This reflects ________.

A) the marketing mix B) value chains C) the attention economy D) collaborative consumption E) user-generated content Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 25) All of the following are forms of utility created by marketing processes EXCEPT ________.

A) form utility B) place utility C) time utility D) possession utility E) price utility Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 7 Copyright © 2022 Pearson Education, Inc.

26) When a dress manufacturer combines silk, thread, and a zipper to create a bridesmaid's gown, ________ utility occurs.

A) form B) place C) time D) possession E) price Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 27) Rent the Runway rents high-end designer dresses at one-tenth the retail cost, for four nights, shipping directly to the customer's doorstep. A prepaid envelope is provided for return shipping.

This is an example of ________ utility.

A) form B) place C) time D) possession E) price Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 28) ________ utility is the benefit marketing provides by allowing the consumer to own, use, and enjoy a product.

A) Form B) Place C) Time D) Possession E) Price Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

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29) Buyers, sellers, investors, and community residents are all considered ________ in a company.

A) stakeholders B) shareholders C) consumers D) channel of distribution members E) collaborative consumers Answer: A Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 30) When Tony rented a loft apartment where he would live for the summer, he acted as a ________.

A) consumer B) shareholder C) producer D) marketer E) retailer Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 31) Chris just landed her dream job but realizes that her college wardrobe is not going to work for her new professional position. In this situation, Chris has a(n) ________.

A) benefit B) exchange C) value D) need E) utility Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

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32) After saving a portion of several paychecks, Greg Williams now has the buying power to purchase the computer system he has wanted for the last six months. Greg's want has become a(n) ________.

A) need B) necessity C) demand D) exchange E) transaction Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 33) Ruth Terry is a realtor. In her ads, Terry offers the free use of a moving truck to every customer she helps either buy or sell a house. This free use of a moving truck is an example of ________.

A) a benefit B) a demand C) business-to-business marketing D) a need E) a marketplace Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 34) Which of the following is the best example of a consumer good?

A) the riding lawn mower purchased by the landscaping company B) the disposable diapers purchased by the new mother for her baby C) the paint purchased by the contractor D) the cookies purchased for the daycare center E) the art supplies purchased for the elementary school art center Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

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35) Which of the following is the best example of a service?

A) the medical examination Jonathon had yesterday B) the sheet music purchased by the piano teacher C) the software Monica purchased from the website D) the cleaning supplies purchased for the veterinarian's office E) the t-shirt you got for running in a 5K race Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 36) Alex paid for a(n) ________ when he took his car to the carwash to be washed and waxed.

A) service B) industrial product C) consumer good D) commercial good E) business product Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 37) Which of the following is an example of a transaction that might occur in business-to-business marketing?

A) Maurice buys a new razor on his way home from work.

B) The amateur gardener buys a new wheelbarrow.

C) The retail outlet buys athletic shoes to sell in its store.

D) The professional chef bakes a birthday cake for her son.

E) Robyn's mother hires a math tutor to help Robyn pass algebra.

Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

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38) Asad purchases air conditioners to provide HVAC systems for office buildings. He sells ________.

A) distributive goods B) consumer services C) consumer goods D) industrial goods E) intangible goods Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 39) Which of the following is an example of a not-for-profit organization that would use marketing principles?

A) a fast-food restaurant B) a manufacturer of bicycles C) a software developer D) a theme amusement park E) the local city zoo Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 40) A sign manufacturer who uses plastic, metal, and neon tubing to create a motel sign has performed the marketing benefit of creating ________ utility.

A) form B) place C) possession D) time E) creation Answer: A Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

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41) Shane pulled her car into the gas station just as the fuel gauge dropped below empty. In this example, Shane benefited from the ________ utility offered by the gas station.

A) creation B) place C) value D) marketing E) quality Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 42) Seth's mother didn't want to build a climbing wall as a permanent feature in her backyard, but it was certainly convenient to rent one from the company that catered Seth's 12th birthday party. The catering company created both ________ utility when it rented her the climbing wall.

A) form and place B) place and creation C) possession and price D) time and place E) creation and possession Answer: D Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 43) Kris traded Priya four hours of yardwork for a home-made dinner for four. This is an example of a(n) ________.

A) differential benefit B) promotion C) exchange D) collaborative consumption E) virtual trade Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking

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44) Zappos has focused on the customer's ease of navigating their website, the quality of the customer service calls, the expedited shipping, and providing free returns. Zappos is paying particular attention to the ________.

A) marketing mix B) people marketing C) collaborative consumption D) not-for-profit marketing E) customer experience Answer: E Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 45) Conveniently located vending machines around your college or university campus make it easy for you to buy a soda and a snack between classes. This is an example of the ________ element of the marketing mix.

A) production B) place C) price D) profit E) promotion Answer: B Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 46) Susannah owns a one-bedroom apartment in Manhattan that she posts for short-term weekend and summer rentals on Airbnb when she plans to be out of town. This is an example of ________.

A) not-for-profit marketing B) institutional marketing C) collaborative consumption D) people marketing E) consumer-generated marketing Answer: C Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 47) The principles of marketing apply only to goods and services.

Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 14 Copyright © 2022 Pearson Education, Inc.

48) The term "marketing" is synonymous with the term "advertising."

Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 49) Marketers define a need as the difference between a consumer's actual state and some ideal or desired state.

Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 50) Although having something to eat or drink may be a need, the desire for a specific brand name is referred to as a want.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 51) The marketing mix is commonly referred to as the four Ms. Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 52) Marketing doesn't just meet the needs of customers —it meets the needs of diverse stakeholders.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 53) For an exchange to occur, at least one party must agree on the value of the exchange and how it will be carried out.

Answer: FALSE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing

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54) Business-to-business marketing represents greater total sales than business-to-consumer marketing.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 55) E-commerce is the buying and selling of goods and services electronically.

Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 56) The price element of the marketing mix is the assignment of value.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 57) The promotion element of the marketing mix includes the design of the product.

Answer: FALSE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Written and oral communication 58) Place relates to a channel of distribution in the marketing mix.

Answer: TRUE Difficulty: Easy LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing 59) The sharing economy has been referred to as collaborative consumption.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 60) Ria, a college sophomore, has a YouTube channel and posts short videos that typically have over 50,000 viewers each week. Ria could be described as a microcelebrity.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 16 Copyright © 2022 Pearson Education, Inc.

61) In terms of marketing, a celebrity is considered a product.

Answer: TRUE Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 62) Discuss how the principles of marketing can be applied to people.

Answer: The principles of marketing apply to people in the same way that they apply to products and services. People market, or "sell," themselves all of the time, whether they are applying for a job, hoping to gain a promotion, or participating in online dating. People package and promote themselves through the clothes and accessories they choose, the cars they drive, the music they listen to, the books they read, and much more.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 63) How would an ice cream vendor create the four types of utility?

Answer: The ice cream vendor would create form utility by combining ingredients to make a milkshake or a sundae. Place utility would mean the ice cream is available where the customer wants it. Time utility would mean the ice cream is available when the customer wants it.

Possession utility refers to the enjoyment consumers have eating the ice cream.

Difficulty: Difficult LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 64) What does the phrase "exchange relationship" mean in relation to marketing?

Answer: An exchange occurs when something is obtained for something else in return. The buyer receives an object, service, or idea that satisfies a need, and the seller receives something she feels is of equivalent value. For an exchange to occur, at least two people or organizations must be willing to make a trade, and each must have something the other wants. Both parties must agree on the value of the exchange and how it will be carried out. Each party also must be free to accept or reject the other's terms for the exchange. An exchange is at the heart of every marketing act.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

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65) What is the difference between consumer goods and consumer services? Give an example of each.

Answer: Consumer goods are the tangible products that individual consumers purchase for personal or family use. Consumer services are intangible products that consumers pay for and use but never own. Examples will vary, but should reflect these definitions.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 66) Identify the four Ps in the following description: Rosa Alvarez markets 23 different varieties of salsa in 8-ounce and 12-ounce bottles at supermarkets in the southwestern United States. The 8-ounce bottle sells for $5.95, and the larger size sells for $7.95. Periodically, she sets up a table in one of the marketplaces that carries her salsa brand and offers customers a sample. She recently received considerable publicity for being the "Hispanic Entrepreneur of the Year."

Answer: The four P's are product, price, place, and promotion.

Product: 23 different varieties of salsa in 8-ounce and 12-ounce bottles Price: $5.95 for smaller size and $7.95 for larger size Place: supermarkets in southwestern United States Promotion: sampling and publicity Difficulty: Difficult LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 67) Provide a brief explanation of what marketing is.

Answer: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 68) Select one actual company located in your community. Identify at least four different types of stakeholders in this company.

Answer: Each student will present different information in responding to this question.

Stakeholders should include the company's customers, the company's employees, investors in the company, and residents of the community.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

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69) Can a consumer of a product be a stakeholder in the company that markets the product?

Briefly explain your answer.

Answer: Yes. A consumer is one type of stakeholder. A stakeholder can be a buyer, seller, or investor in a company; a community resident; or a citizen of the nation where the company's goods or services are made or sold. A consumer is the ultimate user of a good or service.

Therefore, a consumer could be a stakeholder who is also the ultimate consumer using the product.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 70) Briefly describe the collaborative consumption trend.

Answer: In a trend called collaborative consumption, consumers rent out their belongings—tools, cars, homes, etc.—when they are not using them. This appeals to many consumers, particularly younger consumers, who would prefer to rent products rather than purchase and own them.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Analytical thinking 71) What is a marketplace? Provide three examples of marketplaces.

Answer: A marketplace is any location or medium used to conduct an exchange. Answers providing examples will vary. These may include face-to-face retailers, a phone app, mail-order catalogs or websites.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge 72) Explain the concept of business-to-business marketing and give an example of a business-to-business transaction.

Answer: Business-to-business marketing is the marketing of goods and services from one organization to another. Examples will vary, but should reflect this definition.

Difficulty: Moderate LO: 1.1: Explain what marketing is, the marketing mix, what can be marketed and the value of marketing AACSB: Application of knowledge

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73) In which kind of market would a production orientation be most successful?

A) a buyer's market in which supply exceeds demand B) a market in which there are more sellers than buyers C) a seller's market in which demand is greater than supply D) a market that sells only intangible products E) an e-commerce market Answer: C Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept 74) Companies that have a ________ orientation tend to be more successful at making one-time sales than at building repeat businesses.

A) consumer B) marketing C) selling D) societal E) relationship Answer: C Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept 75) A ________ orientation emphasizes the most efficient ways to manufacture and distribute products.

A) customer B) promotion C) selling D) production E) quality Answer: D Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept 76) The Zappos company-wide goal to "WOW" consumers is an example of which marketing orientation?

A) customer B) selling C) production D) total quality management E) triple-bottom line Answer: A Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept

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77) Companies placing a priority on sustainability are likely to have a ________ orientation.

A) triple-bottom-line B) production C) selling D) customer E) TQM Answer: A Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 78) What are the three components of the triple-bottom-line orientation?

A) the financial bottom line, the social bottom line, and the environmental bottom line B) the financial bottom line, the social bottom line, and the political bottom line C) the financial bottom line, the cultural bottom line, and the business bottom line D) the value bottom line, the service bottom line, and the business bottom line E) the product bottom line, the service bottom line, and the relationship bottom line Answer: A Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 79) ________ maintains that marketers must satisfy customers' needs in ways that also benefit society and are profitable to the firm.

A) Value propositioning B) Collaborative consumption C) The societal marketing concept D) A sales orientation E) Green marketing Answer: C Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 80) The Acme Company is concerned with meeting the unmet needs of its present customers without compromising the ability of future generations to meet their needs. This company focuses on ________.

A) the selling orientation B) the production orientation C) total quality management D) sustainability E) return on investment Answer: D Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 21 Copyright © 2022 Pearson Education, Inc.

81) Which of the following refers to marketing strategies that support environmental stewardship by establishing an environmentally founded differential benefit in the minds of consumers?

A) collaborative consumption B) green marketing C) triple-bottom-line orientation D) societal marketing E) corporate citizenship Answer: B Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 82) The direct financial impact of a firm's expenditure on marketing activities is called the ________.

A) value chain B) value proposition C) differential benefit D) return on marketing investment (ROMI) E) utility function Answer: D Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept 83) Which of the following grew in popularity shortly after WWII ended, prevailed in the 1950s but decreased because consumers did not like to be pushed?

A) mobile marketing B) corporate citizenship C) big data D) a selling orientation E) user-generated content Answer: D Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Reflective thinking 84) Interacting with consumers via portable technology such as smart phones, tablets, and wearable screens is referred to as ________.

A) mobile marketing B) social marketing C) societal marketing D) user-generated marketing E) branded marketing Answer: A Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept AACSB: Integration of real-world business experiences 22 Copyright © 2022 Pearson Education, Inc.

85) Which orientation works best in a seller's market when demand is greater than supply?

A) customer B) marketing C) selling D) production E) new era Answer: D Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Analytical thinking 86) Jolene's firm markets preplanning services for a mortician. She finds that most of her target market wants to avoid discussing future funeral needs, so she must somehow first get their attention. Jolene's firm most likely uses the ________.

A) production orientation B) sustainability concept C) selling orientation D) customer orientation E) societal marketing concept Answer: C Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Analytical thinking 87) Bombas donates one pair of socks to people without homes for every pair purchased.

Bombas has helped to solve the problem of socks being the most requested item for people without homes. Bombas is an example of which concept?

A) customer orientation B) sustainability concept C) societal marketing concept D) production orientation E) triple-bottom-line Answer: C Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Analytical thinking 88) Today, it's most likely that companies selling unsought goods will use a selling orientation.

Answer: TRUE Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept 89) Green marketing and sustainability are interchangeable terms describing the same concept.

Answer: FALSE Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 23 Copyright © 2022 Pearson Education, Inc.

90) The customer orientation prioritizes the satisfaction of customers' needs and wants.

Answer: TRUE Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 91) The direct financial impact of a firm's expenditure of a resource is referred to as ROI. Answer: TRUE Difficulty: Easy LO: 1.2: Explain the evolution of the marketing concept 92) Explain why and how a company would adopt a customer orientation.

Answer: A company might adopt a customer orientation to better identify and satisfy the needs and wants of customers. In the competitive marketplace of today, a company has to go beyond the selling and production orientations and consider the customer's desires. Following a customer orientation, marketers would conduct research to understand the needs of different customers and tailor products to the needs of these various groups.

Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Application of knowledge 93) Explain the concept of corporate citizenship and why it is important for companies today.

Answer: Corporate citizenship, also called corporate social responsibility, refers to a company's responsibility to the community in which it operates and to society in general. This concept of doing well by doing good is of growing importance, and is likely to continue to grow in importance, as more and more consumers reward companies who do "good" and punish those who are found to be irresponsible.

Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Ethical understanding and reasoning 94) Explain why it is often difficult to measure the value of marketing activities.

Answer: Marketing objectives are sometimes stated in vague terms, such as "increase product awareness." This lack of specificity in objectives makes it difficult to measure the impact of marketing.

Difficulty: Difficult LO: 1.2: Explain the evolution of the marketing concept AACSB: Application of knowledge

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95) Explain why branding is increasingly becoming a two-way communication between the brand and consumers.

Answer: With the rise of user-generated content, such as online reviews and use of social media to discuss brands, it will be critical for brands to create more personalized and far-reaching brand communications.

Difficulty: Moderate LO: 1.2: Explain the evolution of the marketing concept AACSB: Written and oral communication 96) When a consumer buys a pair of shoes, she considers the price and other benefits that each competing pair of shoes provides. Marketers communicate these benefits to the customer in the form of a ________.

A) product position B) market segment C) mass market D) value proposition E) target market Answer: D Difficulty: Easy LO: 1.3: Understand value from the perspectives of customers, producers, and society 97) The ratio of benefits to costs is one way to think of ________.

A) sustainability B) profits C) value D) competitive advantage E) distinctive competency Answer: C Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 98) A national lumber yard has estimated the amount a customer will spend year after year and then subtracted what it will cost to gain the customer and to retain the relationship for the period of years they expect the customer to continue to buy from them. The lumber yard is calculating ________.

A) customer lifetime value (CLV) B) MROI C) the differential advantage D) ROI E) brandfest Answer: A Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society

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99) A firm's capability that is superior to that of its competition is referred to as a(n) ________.

A) distinctive competency B) added value C) value proposition D) value chain E) social benefit Answer: A Difficulty: Easy LO: 1.3: Understand value from the perspectives of customers, producers, and society 100) The second step in developing a competitive advantage is to turn a distinctive competency into a ________ that is important to customers.

A) target market B) service C) marketing mix D) market position E) differential benefit Answer: E Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 101) A(n) ________ provides reasons for customers to pay a premium for a firm's products and exhibit a strong brand preference.

A) exchange B) differential benefit C) industrial good D) value chain E) customer lifetime value Answer: B Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 102) A ________ can generally come from a cost advantage or a differential advantage.

A) competitive advantage B) value proposition C) value chain D) production orientation E) market segment Answer: A Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society

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103) A ________ is a series of activities involved in designing, producing, marketing, delivering, and supporting any product.

A) value proposition B) production orientation C) value chain D) marketing concept E) market position Answer: C Difficulty: Easy LO: 1.3: Understand value from the perspectives of customers, producers, and society 104) In addition to marketing activities, the ________ includes business functions such as human resource management and technology development.

A) value chain B) marketing mix C) utility function D) customer relationship management process E) market position Answer: A Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 105) The main activities of value chain members include all of the following EXCEPT ________.

A) bringing in materials to make the product B) converting the materials into the final product C) providing customers with comparative information about competitors' products D) shipping out the final product E) servicing the product after purchase Answer: C Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 106) In the value chain, the ________ activity involves bringing in materials or component parts necessary to make the product.

A) inbound logistics B) outbound logistics C) operations D) marketing E) service Answer: A Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society

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107) The phenomenon of ________ includes consumers creating their own ads and buying and selling products on eBay. A) the production orientation B) the triple-bottom-line orientation C) consumer-generated value D) socially responsible marketing E) the marketing concept Answer: C Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Integration of real-world business experiences 108) Social networking is an integral part of which of the following?

A) the triple-bottom-line orientation B) lifetime value of a customer C) the value chain D) Web 2.0 E) Web 1.0 Answer: D Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Integration of real-world business experiences 109) Web 2.0 ________.

A) categorizes entries according to a strict taxonomy B) incorporates social networking and user interactivity via two-way communication between marketers and consumers C) is based on the open source model D) is based on the wisdom of crowds model E) improves as the number of users decreases Answer: B Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 110) According to the theory of the wisdom of crowds, under the right circumstances, ________.

A) a mass market approach is favorable to a target market approach B) a target market approach is favorable to a mass market approach C) groups are smarter than the smartest people in them D) companies can make money by giving their products away for free E) consumers can generate value Answer: C Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society

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111) ________ is a classification system that relies on users rather than preestablished systems to sort contents.

A) A social networking platform B) The Cloud C) The value chain D) Folksonomy E) The virtual marketplace Answer: D Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Integration of real-world business experiences 112) Alcoholism and cigarette smoking are both examples of ________.

A) anticonsumption behaviors B) "bait-and-switch" behaviors C) consumer addictions D) shrinkage E) consumer behaviors Answer: C Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Ethical understanding and reasoning 113) The deliberate defacement of products is referred to as ________.

A) bait-and-switch B) anticonsumption C) crowdsourcing D) shrinkage E) lifetime cost of a customer Answer: B Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Ethical understanding and reasoning 114) Product tampering and spray-painting graffiti on buildings are both examples of ________.

A) folksonomy B) exploitative consumption C) addictive consumption D) shrinkage E) anticonsumption Answer: E Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Ethical understanding and reasoning

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115) A new shampoo advertisement on television identifies all of the wonderful benefits the consumer will enjoy when using one company's shampoo as opposed to another company's shampoo. What is this company seeking to convey in this television commercial?

A) the product's time utility B) the product's distinctive competency C) the company's production orientation D) the company's marketing segmentation process E) the product's differential benefits Answer: E Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Analytical thinking 116) Kao Corp., which makes Ban deodorant, invited teenage girls to create an ad that would encourage other girls to buy the product. This program is an example of ________.

A) the wisdom of crowds B) the production concept C) the selling orientation D) folksonomy E) consumer-generated content Answer: E Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Analytical thinking 117) Terrible Tees is an online t-shirt company that invites consumers to enter their t-shirt designs in a monthly contest. All visitors to the site are invited to vote on their favorite design, and at the end of the month, the company produces and takes orders for the t-shirt design with the most votes. This is an example of ________.

A) the wisdom of crowds B) the production concept C) the selling orientation D) a folksonomy E) a brandfest Answer: A Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Analytical thinking 118) To calculate lifetime value, a company would estimate the amount of money a person would spend with the company over a lifetime and then subtract what it will cost the company to maintain this relationship.

Answer: TRUE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society

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119) A firm has a competitive advantage when it is able to outperform the competition, providing customers with a desired benefit not provided by the competition.

Answer: TRUE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 120) A haul video is an example of brandfest.

Answer: FALSE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 121) Crowdsourcing is a practice where firms outsource marketing activities to a community of users.

Answer: TRUE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society 122) Under the right circumstances, large numbers of consumers can predict successful products, according to the theory of the wisdom of crowds.

Answer: TRUE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Integration of real-world business experiences 123) A value proposition includes just the benefits of the product itself.

Answer: FALSE Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Analytical thinking 124) Why might a company try to determine the lifetime value of a customer? What must a company do to determine this information?

Answer: A company must look at how much a customer is really worth and how much profit it expects to make from a particular customer, including each and every purchase he will make from the company now and in the future. To calculate lifetime value, the company estimates the amount the person will spend and then subtracts what it will cost to maintain this relationship.

Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge

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125) What is a haul video and how is it used in marketing?

Answer: Haul videos are videos consumers post on YouTube that detail the latest stuff they bought. These have caused marketers to adjust their thinking about customers and to begin thinking of them as a community that is motivated to participate in both the production and the consumption of what companies sell. Customers are part of the brand communication process as they create their own videos, provide product reviews, and participate in blogs.

Difficulty: Difficult LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge 126) Why might a company invest in brandfests, and how is this related to the concept of lifetime value of a customer?

Answer: A brandfest is an event, such as the Jeep Jamboree, sponsored by a company to thank customers for their loyalty and to build lasting partnerships with customers. Activities such as brandfests are aimed at increasing the lifetime value of each customer, or the profit the company expects to gain from each customer. This is in line with the notion that retaining current customers is less expensive than attracting new customers.

Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Analytical thinking 127) Why should a firm be aware of its competitors' distinctive competencies?

Answer: A distinctive competency is a firm's capability that is superior to the competition. A company must be aware of its competitors' distinctive competencies in order to successfully compete in the marketplace, shaping its own distinctive competencies into differential benefits that customers desire more than they desire the benefits offered by competitors.

Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge 128) What are two competitive advantages a customer may benefit from when buying a bottle of soda from a local corner convenience store versus a chain supermarket?

Answer: Answers may vary, but include the following. The customer may be able to park his car close to the door of the convenience store and make the purchase in only a few minutes. The parking lot of the chain store may require the customer to walk a distance before entering the store. The volume of customers in the supermarket may cause the purchase to take longer than the purchase at the convenience store.

Difficulty: Difficult LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge

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129) Explain how addictive consumption is a dimension of the "dark side" of marketing.

Answer: Consumer addiction is a physiological or psychological dependency on products or services. Many companies profit by providing addictive products or by selling solutions.

Consumers can use any product or service to relieve some problem to the point that reliance on it becomes extreme.

Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge 130) Briefly explain how the value chain is related to competitive advantage.

Answer: Every link, or activity, in the value chain is an opportunity to either remove value from or add value to the product the consumer eventually buys. A successful company creates a competitive advantage by performing one or more of the value chain activities better than its competitors.

Difficulty: Moderate LO: 1.3: Understand value from the perspectives of customers, producers, and society AACSB: Application of knowledge 131) ________ is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.

A) Total quality management B) Sustainability C) Return on investment D) Marketing E) Crowdsourcing Answer: D Difficulty: Moderate LO: 1.4: Explain the basics of market planning 132) Many experts believe ________ is the only way to stay in business for the long term.

A) disruptive marketing B) crowdsourcing C) green marketing D) collaborative consumption E) a sales orientation Answer: A Difficulty: Easy LO: 1.4: Explain the basics of market planning

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133) The first phase of market planning is to ________.

A) identify a target market B) calculate production costs C) develop a value chain D) determine a market position E) analyze the marketing environment Answer: E Difficulty: Moderate LO: 1.4: Explain the basics of market planning 134) ________ is the process of thinking strategically about the big picture and where the firm and its products fit within it.

A) Crowdsourcing B) Total quality management C) Market planning D) Customer relationship management E) Value proposition creation Answer: C Difficulty: Moderate LO: 1.4: Explain the basics of market planning 135) A ________ consists of all possible customers in a market regardless of the differences in their specific needs and wants.

A) popular culture B) value chain C) marketing mix D) marketing concept E) mass market Answer: E Difficulty: Easy LO: 1.4: Explain the basics of market planning 136) Which of these statements about mass marketing is true?

A) A mass marketing strategy is always preferable to a target marketing strategy.

B) The success of any organization's marketing efforts depends on its ability to engage in mass marketing.

C) Mass marketing can be cost effective.

D) Mass marketing allows marketers to develop products to satisfy the specific needs and wants of specific groups of customers.

E) Automakers typically use a mass marketing strategy.

Answer: C Difficulty: Moderate LO: 1.4: Explain the basics of market planning

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137) A ________ is a distinctive group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market.

A) market segment B) popular culture C) mass market D) market mix E) market position Answer: A Difficulty: Moderate LO: 1.4: Explain the basics of market planning 138) A ________ is defined as a market segment on which an organization focuses its marketing plan and toward which it directs its marketing efforts.

A) social network B) mass market C) marketplace D) value chain E) target market Answer: E Difficulty: Moderate LO: 1.4: Explain the basics of market planning 139) Marketers develop positioning strategies to ________.

A) limit the number of elements of the marketing mix used for one product B) identify the location where the organization will sell its products C) determine the specific means the organization uses to distribute its products D) create a desired perception of the product in consumers' minds in comparison to competitors' brands E) select metrics to determine the effectiveness of marketing planning Answer: D Difficulty: Moderate LO: 1.4: Explain the basics of market planning 140) When a firm analyzes the marketing environment, it is LEAST likely to look at which of the following?

A) the firm's current strengths B) the firm's current weaknesses C) the actions of competitors D) the state of the economy E) the firm's ideas for developing a new product Answer: E Difficulty: Moderate LO: 1.4: Explain the basics of market planning

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141) ________ is a process whereby marketers step "outside the box" to displace something well established.

A) Disruptive marketing B) Crowdsourcing C) Mass marketing D) Social networking E) Societal marketing Answer: A Difficulty: Moderate LO: 1.4: Explain the basics of market planning 142) A catalog retailer has identified African-American professionals between the ages of thirty-five and forty-five as the group of customers within the larger market that is a potential market for its products. The retailer plans to direct its marketing efforts toward this group of consumers. The retailer has identified a ________.

A) target market B) marketing mix C) product mix D) mass market E) social network Answer: A Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Analytical thinking 143) An organic farmer has identified three distinct groups who might be interested in his products: vegetarians, people who are concerned about chemicals in their foods, and people who consider themselves innovators and trendsetters. These three groups are examples of ________.

A) marketing mixes B) market segments C) product mixes D) mass markets E) market positions Answer: B Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Analytical thinking

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144) There are several different sports watches for cyclists. When compared to its competitors, the Bike Nashbar watch is the least expensive. The Acumen Basic is the only one designed for older cyclists who prefer a larger display. Sports Instrument is the most comfortable of all the available watches. This describes the ________ of the three sports watches.

A) marketing mixes B) mass marketing strategies C) positioning D) consumer orientations E) selling orientations Answer: C Difficulty: Difficult LO: 1.4: Explain the basics of market planning AACSB: Analytical thinking 145) Disruptive marketing means maintaining the status quo in how customers think of your company and the industry.

Answer: FALSE Difficulty: Moderate LO: 1.4: Explain the basics of market planning 146) A mass market is all possible customers in a market, regardless of their specific needs.

Answer: TRUE Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Application of knowledge 147) The terms "market segment" and "target market" represent the same concept.

Answer: FALSE Difficulty: Moderate LO: 1.4: Explain the basics of market planning 148) By selecting a mass market, a firm risks losing potential customers to competitors who instead try to meet the needs of specific target markets.

Answer: TRUE Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Application of knowledge 149) Write two questions that a firm would be likely to consider during the market planning stage.

Answer: Answers will vary, but should reflect an understanding of the "big picture" nature of market planning. Examples: What product benefits will our customers want in the near future?

What sets our firm apart from competitors? How will legal and regulatory issues affect our business?

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150) What is a market segment? Explain how an automaker might appeal to different market segments.

Answer: A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. An automaker offers different car models—sedans, sports cars, SUVs, station wagons, minivans, etc.—to appeal to different segments of the car-buying market.

Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Application of knowledge 151) What is disruptive marketing? Provide an example.

Answer: Disruptive marketing is a process whereby marketers, by understanding customer needs and identifying what is missing, step "outside the box" to displace something well established, such as filling a need with a totally new product. Examples will vary, but should include the elements of the definition.

Difficulty: Moderate LO: 1.4: Explain the basics of market planning AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 2 Global, Ethical, and Sustainable Marketing 1) ________ refers to the total value of all the exports and imports of the world's nations.

A) Countertrade B) International marketing C) Gross national product D) Gross domestic product E) World trade Answer: E Difficulty: Easy LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization 2) ________ occurs when goods are paid for with other items instead of cash.

A) Protectionism B) Competitive intelligence C) Gray marketing D) Countertrade E) Inflation Answer: D Difficulty: Easy LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization 3) Which of the following is the first step a firm should take when deciding whether or not to go global?

A) Develop marketing mix strategies for foreign markets.

B) Analyze whether it is in the firm's best interest to focus on the domestic market or to expand to international markets.

C) Identify the most attractive global markets for the firm's products.

D) Select a market-entry strategy that fits the firm's desired level of commitment.

E) Identify potential partners in international markets.

Answer: B Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization

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4) Exporting products overseas is an example of ________.

A) countertrade B) a market-entry strategy C) a marketing mix strategy D) fair trade E) a convertible trade Answer: B Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization 5) Azerbaijan imported wheat from Romania in exchange for crude oil, and Vietnam exchanged rice for Philippine fertilizer and coconuts. Both scenarios are examples of which of the following?

A) convertible trade B) tariffs C) quotas D) protectionism E) countertrade Answer: E Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization AACSB: Analytical thinking 6) The Teddy Bear Company is determining whether to build and run manufacturing facilities in other countries will result in a payoff worth the extra risk. In which stage of the international marketing process is the Teddy Bear Company?

A) deciding whether to go global B) deciding which global markets are most attractive C) deciding which market-entry strategy is best D) deciding on the marketing mix strategies for foreign markets E) deciding on the global marketing organization Answer: C Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization AACSB: Analytical thinking 7) The increase in greenhouse gases causes the Earth to get warmer, resulting in climate change.

Answer: TRUE Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization

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8) The result of the addition of carbon dioxide into our atmosphere while at the same time cutting down the rain forests (reducing oxygen) creates the greenhouse effect.

Answer: TRUE Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization 9) A country that barters for imported products rather than paying in cash likely does so because its currency is convertible.

Answer: TRUE Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization AACSB: Application of knowledge 10) Describe the four steps a firm should take when it is considering going global.

Answer: Management first needs to examine whether it is in the firm's best interest to focus exclusively on the home market or to move out into foreign markets. This is a "go" or "no go" decision. The second step, if the decision is "go," is to determine which global markets are most attractive for the firm. Some countries will hold greater opportunities than others. After attractive markets are identified, the third step is to determine which market-entry strategy, and thus which level of commitment, is best for the firm. Finally, management must consider marketing mix strategies for foreign markets, determining what mixture of standardization and localization will most benefit the firm.

Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization AACSB: Analytical thinking 11) What is a dark side to having increasing access to products in the global marketplace?

Answer: Our ever-increasing access to products from around the world does have a dark side: The growth in world trade in recent years has been accompanied a glut of unsafe products—many of which came from China.

Difficulty: Moderate LO: 2.1: Understand the big picture of international marketing and the decisions firms must make when they consider globalization AACSB: Reflective thinking

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12) ________ is the international treaty that reduced import tax levels and trade restrictions.

A) GATT B) WTO C) Brexit D) The World Bank E) IMFs Answer: A Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 13) Which of the following statements about the World Trade Organization (WTO) is true?

A) The WTO is a branch of the U.S. government.

B) An essential function of the WTO is stabilizing international money exchange rates.

C) Only developed nations are granted membership into the WTO. D) The WTO's main function is to help the least developed countries grow their economies.

E) The WTO is the only international organization that deals with the global rules of trade between nations.

Answer: E Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 14) When a government adopts a policy of ________, it enforces rules on foreign firms in order to give home companies an advantage.

A) gray marketing B) countertrade C) monopolistic competition D) economic sanctions E) protectionism Answer: E Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning

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15) A(n) ________ is an extreme quota that completely prohibits commerce and trade with a specific country.

A) tariff B) embargo C) economic community D) perfect monopoly E) forex rate Answer: B Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 16) ________ is the pricing of imports below production cost.

A) An embargo B) A tariff C) Protectionism D) Dumping E) Forex Answer: D Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 17) The purpose of a government-imposed ________ is to give domestic competitors an advantage in the marketplace by making foreign competitors' goods more expensive than domestic goods.

A) monopoly B) quota C) tariff D) countertrade E) embargo Answer: C Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning

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18) Which of the following countries is NOT a member of MERCOSUR? A) Brazil B) Paraguay C) Bolivia D) Uruguay E) Venezuela Answer: C Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization 19) A(n) ________ is a group of countries that have agreed to coordinate trade policies and ease restrictions on the flow of products and capital across members' borders.

A) monopoly B) free trade zone C) economic community D) oligopoly E) economic infrastructure Answer: C Difficulty: Easy LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization 20) Which of the following countries is a member of ASEAN? A) Singapore B) Venezuela C) Mexico D) France E) Canada Answer: A Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization

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21) USMCA is a(n) ________.

A) South American economic community B) common market for eastern and southern Africa C) economic community that includes Peru, Brazil, and China D) trade agreement that includes Canada, Mexico, and the United States E) eastern European economic community that competes with the EU Answer: D Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization 22) The exit of the United Kingdom from the EU is referred to as ________.

A) NAFTA B) MERCOSUR C) Brexit D) the WTO E) GATT Answer: C Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization 23) U.S. sugar import quotas have existed for more than 50 years and preserve about half of the U.S. sugar market for domestic producers. These quotas are examples of ________.

A) embargoes B) nationalization C) protectionism D) pirating E) balance of payments Answer: C Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Analytical thinking

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24) U.S. sugar import quotas have existed for more than 50 years and preserve more than half of the U.S. sugar market for domestic producers. Why might the United States continue to have these quotas?

A) to reduce competition for its domestic sugar industry B) to increase the cost of sugar C) to control the supply and demand for sugar D) to support a mass market for sugar E) to improve the promotion of sugar Answer: A Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Application of knowledge 25) In 2018, the United States imposed a tax on imported steel and aluminum in an effort to protect U.S. jobs in these industries. Another name for this levied tax is a(n) ________.

A) embargo B) gray tax C) tariff D) import quota E) boycott Answer: C Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Analytical thinking 26) Trusted Wholesalers is a company that purchases products produced in Mexico and sells them to companies based in the United States and Canada. Management at Trusted Wholesalers would most likely be interested in becoming experts in the agreements made by ________.

A) the EU B) USMCA C) COMESA D) SAARC E) MERCOSUR Answer: B Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Application of knowledge

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27) The goal of the World Bank is to improve economies and support sustainable development in order to reduce poverty and improve lives.

Answer: TRUE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 28) The WTO member nations account for approximately 98 percent of world trade.

Answer: TRUE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 29) Governments use tariffs to give domestic competitors an advantage in the marketplace by making foreign competitors' goods more expensive.

Answer: TRUE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 30) The International Monetary Fund controls fluctuations in exchange rates in order to prevent severe balance of payments problems.

Answer: TRUE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Ethical understanding and reasoning 31) Stabilizing exchange rates can help prevent severe balance of payments problems.

Answer: FALSE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization

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32) The only member countries of the USMCA are the United States, Canada, and Mexico.

Answer: TRUE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization 33) Bolivia, Colombia, Ecuador and Peru are members of SAARC. Answer: FALSE Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Analytical thinking 34) Describe the function of the World Trade Organization (WTO) and explain how it originated.

Answer: The objective of the WTO is to help world trade flow as smoothly, freely, and predictably as possible. It accounts for about 98 percent of world trade and has moved toward creating a single open world market. Many negotiations in recent years have focused on issues related to economic development. It was created in 1984 during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which was established in the aftermath of World War II. Difficulty: Difficult LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Analytical thinking 35) What is protectionism and why might a government adopt it as a policy? Explain how three examples of protectionism function.

Answer: A country that has a policy of protectionism enforces rules on foreign firms in order to give home companies an advantage. Examples of protectionism include tariffs, embargoes, and import quotas. Import quotas are set on foreign goods in order to reduce competition for domestic industries. This can make goods more expensive within a country because the absence of cheaper foreign goods reduces pressure on domestic firms to lower prices. An embargo is an extreme quota that completely prohibits trade with a specified country. Tariffs are taxes on imported goods, making foreign goods more expensive and giving domestic goods a price advantage.

Difficulty: Difficult LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Application of knowledge

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36) Describe the function of an economic community and explain how its policies can be advantageous to marketers. Give two examples of important economic communities.

Answer: When countries band together to promote trade among themselves and make it easier for member nations to compete elsewhere, they form an economic community. These communities of countries coordinate trade policies and ease restrictions on the flow of products and capital across their borders. Economic communities are important to marketers because they set policies in such areas as product, package labeling, and advertising regulations that influence strategic decisions for marketers in these regions. The European Union (EU) and the United Sates-Mexico-Canada Agreement (USMCA) are two of the most powerful economic communities.

Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Application of knowledge 37) How might a nation's strict import quotas on particular products negatively affect consumers in that country?

Answer: Import quotas are designed to reduce competition for domestic industries. With reduced competition and the absence of less expensive foreign products, domestic industries may feel less pressure to lower their prices and consumers may have to pay more than if foreign competition were a larger part of the market.

Difficulty: Moderate LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Analytical thinking 38) The U.S. government proposed a tariff on some Chinese textiles and clothing when the trade deficit with China reached $103 billion. Explain what the United States was trying to achieve through this action.

Answer: Governments use tariffs on imported goods to give domestic competitors an advantage in the marketplace by making foreign competitors' goods more expensive than their own goods.

By placing a tariff on certain items imported from China, the U.S. government was trying to give U.S. consumers a financial incentive for buying products made within the United States.

Difficulty: Difficult LO: 2.2: Explain how international organizations such as the World Trade Organization (WTO), the World Bank, the International Monetary Fund (IMF), economic communities and individual country regulations facilitate and limit a firm's opportunities for globalization AACSB: Application of knowledge

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39) Marketers need to understand the ________ environment of a country from two perspectives: the overall level of development of a country and the current stage of its business cycle.

A) political and legal B) sociocultural C) economic D) technological E) natural Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 40) Which of the following is NOT a key element of the external environment?

A) sustainable environment B) economic environment C) competitive environment D) technological environment E) sociocultural environment Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 41) The most commonly used measure of a country's economic health is the country's ________.

A) gross domestic product (GDP) B) gross national product (GNP) C) foreign exchange rate D) cost of living E) purchasing power parity (PPP) Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 42) Which of the following measures is often a good indicator of a country's economic health because it is adjusted for the population size of each country?

A) per capita GDP B) GDP C) purchasing power parity D) standard of living E) inflation rate Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets

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43) Which of the following is NOT considered part of the firm's sociocultural environment?

A) human rights issues B) demographics C) social norms D) ethnocentrism E) values Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 44) The quality of a country's distribution, financial, and communication systems is referred to as the country's ________.

A) level of economic development B) standard of living C) gross domestic product (GDP) D) economic infrastructure E) business cycle Answer: D Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 45) The ________ is the price of a nation's currency in terms of another currency.

A) gross domestic product (GDP) B) inflation rate C) import quota D) purchasing power parity E) foreign exchange rate Answer: E Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 46) A country's ________ indicates the average quality and quantity of goods and services consumed within the country.

A) economic infrastructure B) standard of living C) gross domestic product (GDP) D) gross national product (GNP) E) business cycle Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets

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47) In most cases, which of the following is true about a least developed country (LDC)?

A) It has an economy based on agriculture.

B) It is landlocked.

C) It has a viable middle class.

D) It has high literacy levels.

E) It has an advanced economic infrastructure.

Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 48) When determining a country's ________, economists look at how the country is attempting to reduce poverty, inequality, and unemployment in addition to considering the country's GDP. A) forex rate B) competitive environment C) economic infrastructure D) level of economic development E) purchasing power parity Answer: D Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 49) The collective name for the group of more than 4 billion consumers throughout the world who live on less than $2 a day is ________.

A) the bottom of the pyramid B) developing countries C) the BRICS countries D) the Group of 7 E) GSP Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 50) Which of the following best explains why marketers are attracted to the BRICS countries?

A) These countries have long-established upper classes that form a strong market for luxury goods.

B) These countries are quickly moving from being least developed to developing countries.

C) These countries have masses of consumers who are not yet wealthy but are quickly moving to economic prosperity.

D) These countries offer large markets with no language or cultural barriers.

E) These countries wield the most power in the G7.

Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 14 Copyright © 2022 Pearson Education, Inc.

51) What are the terms the UN adopted reflecting the "levels of economic development" in countries?

A) preindustrial, agricultural, and post-industrial countries B) least developed, developing, and developed countries C) low income, middle income, and high income countries D) industrial developed, emerging market, and frontier market countries E) emerging market, transition economy, and fully developed economy countries Answer: B Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 52) The United States, the United Kingdom, Canada, France, Italy, Germany, and Japan are all members of ________.

A) the BRICS countries B) the G7 C) the EU D) NAFTA E) MERCOSUR Answer: B Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 53) What term refers to the overall patterns of change in the economy that affect consumer and business purchasing power?

A) the microenvironment B) the business cycle C) the technological environment D) the legal environment E) social norms Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets

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54) Which of the following occurs when prices and the cost of living rise while money loses its purchasing power?

A) prosperity B) recovery C) inflation D) deflation E) depression Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 55) Through ________ activities, a firm gathers and analyzes publicly available information about rivals.

A) economic infrastructure B) competitive intelligence C) demographic D) perfect competition E) business cycle Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 56) ________ income is the amount of money an individual has left to spend after paying for necessities such as housing, utilities, food, and clothing.

A) Discretionary B) Gross product C) Standard of living D) Inflationary E) Per capita Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 57) Through ________ competition, competitors offer different goods and services that attempt to satisfy the same consumers' needs and wants.

A) perfect B) product C) brand D) monopolistic E) oligopolistic Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 16 Copyright © 2022 Pearson Education, Inc.

58) Planet Fitness and Gold's Gym engage in ________ competition when they both try to attract customers to buy their fitness center services.

A) discretionary income B) product C) brand D) monopolistic E) oligopolistic Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 59) The seller is "the only game in town" and feels little pressure to keep prices low or to produce quality goods or services in a(n) ________ structure.

A) monopoly B) oligopoly C) monopolistic competition D) perfect competition E) natural competition Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 60) Which industry structure most often exists in an industry that requires substantial investments in equipment or technology to produce a product?

A) monopoly B) oligopoly C) monopolistic competition D) perfect competition E) natural competition Answer: B Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets

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61) In a(n) ________ structure, there are many sellers, each offering slightly different products and each having only a small share of the market.

A) monopoly B) oligopoly C) monopolistic competition D) perfect competition E) natural competition Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 62) In a(n) ________ structure, there are many small sellers, each offering similar products, and each unable to have a significant impact on the quality, price, or supply of a product.

A) monopoly B) oligopoly C) monopolistic competition D) perfect competition E) natural competition Answer: D Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 63) The use of drones or unmanned aerial vehicles to deliver packages to consumers' homes would represent a change in the ________.

A) sociocultural environment B) economic environment C) legal environment D) technological environment E) microenvironment Answer: D Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Integration of real-world business experiences

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64) ________ is the legislation developed to eliminate monopolies and to guarantee free competition.

A) The Sherman Antitrust Act B) The Federal Trade Commission Act C) The Robinson-Patman Act D) The USA Freedom Act E) The Lanham Trademark Act Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 65) Expropriation occurs when a government ________.

A) seizes a foreign-owned asset, normally with some compensation (often not for the full value) B) reimburses a foreign company that has lost facilities due to natural causes C) refuses to allow its businesses to engage in exporting D) takes over a foreign operation and provides the seized operation with no reimbursement E) imports more than it exports Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 66) Nationalization occurs when a government ________.

A) reimburses a foreign company for its assets after taking over the company B) reimburses a foreign company that has lost facilities due to natural causes C) refuses to allow its businesses to engage in exporting D) takes over a business enterprise, natural resource, or other asset and justifies this action as being in the best interest of the country (reimbursement not required) E) imports more than it exports Answer: D Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning

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67) The ________ revised the FTC Act and made deceptive and misleading advertising illegal.

A) Sherman Antitrust Act B) Consumer Credit Protection Act C) Robinson-Patman Act D) Wheeler-Lea Amendment E) Lanham Trademark Act Answer: D Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 68) The ________ was established by the Federal Trade Commission in 2003 to allow consumers to limit the number of telemarketing calls they receive.

A) National Do Not Call Registry B) Child Protection Act C) Federal Communications Commission D) Consumer Products Safety Commission Act E) USA Freedom Act Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 69) The ________, a U.S. regulatory agency, regulates telephone, radio, television, and the use of the Internet.

A) Consumer Product Safety Commission B) Environmental Protection Agency C) Federal Communications Commission D) Federal Trade Commission E) Interstate Commerce Commission Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning

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70) Which U.S. regulatory agency enforces laws and regulations on foods, drugs, cosmetics, and veterinary products?

A) FDA B) EPA C) CFPB D) FTC E) CPSC Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 71) Which of the following is a form of protectionism?

A) joint ventures B) bribery C) extortion D) collectivism E) local content rules Answer: E Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 72) Through the U.S. Generalized System of Preferences (GSP), developing countries may export goods duty-free to the United States if they ________.

A) demonstrate progress toward protecting the natural environment B) demonstrate progress toward improving the rights of their workers C) agree to exempt U.S. imports from local content rules D) belong to the World Trade Organization (WTO) E) refuse to participate in expropriation Answer: B Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning

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73) The ________ environment refers to the characteristics of a society, the people who live in the society, and the culture that reflects the values and beliefs of the society.

A) political and legal B) sociocultural C) economic D) technological E) natural Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 74) The first step toward understanding the characteristics of a society is to look at its ________.

A) demographics B) norms C) cultural dimensions D) standards E) mores Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 75) Every society has a set of deeply held beliefs about right and wrong ways to live, which are referred to as ________.

A) demographics B) social norms C) cultural dimensions D) cultural values E) customs Answer: D Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 76) In a(n) ________ culture, people tend to subordinate their personal goals to those of a stable community.

A) collectivist B) individualist C) democratic D) demographic E) ethnocentric Answer: A Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments 22 Copyright © 2022 Pearson Education, Inc.

77) The culture of the United States, with its tendency to attach more importance to personal goals than to the needs of the larger community, reflects a(n) ________ culture.

A) collectivist B) individualist C) democratic D) demographic E) sociocultural Answer: B Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments 78) The local customs that dictate that Europeans do not begin dinner until around 9 pm are ________.

A) demographics B) cultural values C) cultural dimensions D) social norms E) ethnocentric standards Answer: D Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments 79) Many Americans believe that French wine is better than what is produced in California vineyards. This is an example of consumer ________.

A) nationalization B) ethnocentrism C) domestication D) expropriation E) xenocentrism Answer: E Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments

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80) The management team at Home Help, a consumer products manufacturer, is considering entering several different foreign markets and is in the process of analyzing each potential market's economic environment. Which of the following would best help the management team understand the typical quality and quantity of goods and services purchased in the country?

A) the inflation rate B) the economic infrastructure C) the per capita gross domestic product (GDP) D) the standard of living E) the gross domestic product (GDP) Answer: D Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge 81) The population of Djibouti is approximately 830,000. To serve the communication needs of this nation, there are two FM radio stations, one AM radio station, and one television station.

There are only 22,000 telephone lines in the whole country. This is a partial description of Djibouti's ________.

A) political environment B) business cycle C) economic infrastructure D) standard of living E) gross domestic product (GDP) Answer: C Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 82) Kyrgyzstan is a small mountainous country with a predominantly agricultural economy.

Cotton, wool, and meat are the main agricultural products and exports. Thirty-two percent of the population lives below the poverty line. Kyrgyzstan is an example of a(n) ________.

A) BRICS country B) least developed country (LDC) C) industrializing country D) developed country E) G7 country Answer: B Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking

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83) In Vin del Mar, Chile, there are a dozen stores specializing in selling the same quality of seafood products on one street. An individual store dare not charge more than the going price without the risk of losing business to the other stores that are selling the fish at a common price.

This is an example of what type of market?

A) perfect competition B) monopolistic competition C) oligopolistic competition D) a monopoly E) an oligopoly Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 84) The one-use sachet package for shampoo and cleaning products produced for consumers by Procter & Gamble and Unilever are marketed primarily to consumers living on less than $2 a day. These companies are marketing to ________.

A) the bottom of the pyramid B) BRICS countries C) developed countries D) economies in transition E) the Group of 7 Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 85) Self-driving (autonomous) vehicles are an example of a game-changing innovation in which environment?

A) technological B) economic C) sociocultural D) political/legal E) demographic Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge

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86) For most Americans, punctuality is a ________.

A) cultural value B) social norm C) measure of economic health D) legal requirement E) custom Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 87) U.S. marketing campaigns that stress the desirability of "Made in America" products reflect ________.

A) consumer ethnocentrism B) individualistic cultures C) collectivist cultures D) consumer xenocentrism E) disruptive marketing Answer: A Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge 88) The most commonly used measure of economic health is a country's GDP. Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 89) Per capita gross domestic product (GDP) may be a deceiving economic measure because the wealth of a country may be concentrated among just a small percentage of the population.

Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 90) A country that is shifting from an industrial-based economy to an agricultural-based economy is known as a developing country.

Answer: FALSE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets

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91) The gross domestic product (GDP) is the overall pattern of changes or fluctuations of an economy, such as prosperity, recession, and recovery.

Answer: FALSE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 92) The business cycle is especially important to marketers because of its effect on customer purchasing behavior.

Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 93) Oligopolies most often exist in industries that require little investment in equipment, technology, or materials to produce a product.

Answer: FALSE Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 94) In a monopolistic competition market structure, each seller is very conscious of other sellers' actions, since there are very few sellers in the industry.

Answer: FALSE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 95) The macroenvironment's competition includes understanding the overall structure of the industry.

Answer: TRUE Difficulty: Easy LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets 96) In Thailand and Turkey, most people subordinate their personal goals to those of a stable community. These countries are examples of collectivist cultures.

Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments

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97) Poland has a growing middle class and boasts a large skilled labor force. Poland is most likely categorized as a developing country.

Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 98) On the Upper West Side of Manhattan, there are hundreds of independent restaurants offering different specialties, services, and prices. The market for restaurants in this neighborhood is in a state of monopolistic competition.

Answer: TRUE Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 99) Describe the group of consumers known as the bottom of the pyramid and explain an opportunity and challenge of marketing to this group.

Answer: The bottom of the pyramid refers to the more than 4 billion consumers worldwide, living in least developed countries and developing countries, who live on less than $2 per day.

They represent an incredible opportunity because of their size and total purchasing power, which is expected to grow in developing countries. They represent a challenge because they have limited discretionary money, so they are unlikely to purchase "inventory" products, such as a whole bottle of shampoo or soap. Marketers have introduced one-use sachet packaging to meet the needs of these consumers.

Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge 100) Describe and compare the three basic levels of economic development.

Answer: A country's level of economic development is a broad picture that looks past GDP to include an assessment of the country's standard of living and the steps the country is taking to improve its economic health. A least developed country (LDC) in most cases has an agricultural-based economy. People grow what they need and barter for the rest. These countries are attractive markets for staples and inexpensive items. Developing countries usually have a viable middle class that is growing. Developing countries are moving away from an emphasis on agriculture to an emphasis on industry, and standards of living, education, and the use of technology are on the rise. These countries are the future market for consumer goods. Developed countries have sophisticated marketing systems, strong private enterprises, and bountiful market potential for many goods and services. Such countries are economically advanced and offer a wide range of opportunities for international marketers.

Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 28 Copyright © 2022 Pearson Education, Inc.

101) Explain the difference between consumer xenocentrism and consumer ethnocentrism.

Answer: Consumer xenocentrism refers to the belief that products produced in another country are superior to those produced in one's own. Consumer ethnocentrism refers to consumers feeling that products from their own country are superior or that it is wrong to buy products produced in another country.

Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments 102) What are the two purposes of the laws governing American business? Describe how at least two regulatory agencies fulfill these purposes.

Answer: Business laws in the United States have two purposes. The first purpose is to make sure that businesses compete fairly with each other. The second purpose is to make sure that businesses don't take advantage of consumers.

The Consumer Product Safety Commission serves to protect consumers from businesses by regulating and testing potentially hazardous products. The Environmental Protection Agency also protects consumers by developing and enforcing regulations that protect the natural environment from production activities. The Federal Trade Commission protects consumers against deceptive advertising and product labeling. It also protects businesses against unfair advantages competitors could gain through deceptive advertising. The Food and Drug Administration protects consumers from dangerous ingredients in foods, drugs, and cosmetics.

Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 103) Companies need to understand the differences in the cultures in which they operate. Explain the terms cultural values and social norms, giving an example of each.

Answer: Cultural values are general but deeply held beliefs about good and bad behaviors, such as the importance of cleanliness or protecting the environment. A social norm dictates specific behavior such as division of labor in a household, how holidays are celebrated, and how animals are treated.

Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Diverse and multicultural work environments

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104) The telephone system in Argentina is still developing, with only 20 of every 100 individuals having a private phone. Long distance service is limited, and many areas of the country regularly experience outages. What does this tell a marketer about Argentina, and why would a marketer need to know this?

Answer: A country's communication system is part of its economic infrastructure. Marketers should assess the economic infrastructure of a country when deciding whether a country's economic environment makes for an attractive market.

Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge 105) How has the Group of Seven (G7) recently expanded the issues it discusses in its annual summits?

Answer: The G7 discusses topics concerning world trade and the world economy, but it has also recently focused on issues that indirectly affect world trade, such as energy, terrorism, the information highway, arms control, and the environment.

Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 106) Briefly describe the three stages of the business cycle that all economies go through.

Answer: All economies go through the cycles of prosperity (with high levels of demand, income, and employment), recession (with falling demand, income, and employment), and recovery (with gradual improvement in production, lowering unemployment, and increasing income).

Difficulty: Moderate LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Analytical thinking 107) Toyota opened manufacturing plants in the United States and hires local workers to run these locations. Explain what the local content rules have to do with Toyota increasing its presence in the United States.

Answer: Local content rules are a form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community. Toyota wants to be able to market its products within the boundaries of NAFTA, which it can achieve by opening manufacturing facilities in the United States and hiring local residents.

Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Application of knowledge

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108) The Federal Trade Commission (FTC) ordered KFC to stop running ads with false claims that its fried chicken is compatible with certain weight loss programs. What law gives the FTC the authority to stop KFC's marketing program and what law was KFC violating?

Answer: The FTC gets its authority from the Federal Trade Commission Act (1914). KFC was violating the Wheeler-Lea Amendment to the FTC Act (1938) that prohibits deceptive and misleading advertising as illegal.

Difficulty: Difficult LO: 2.3: Understand how factors in a firm's external business environment influence marketing strategies and outcomes in both domestic and global markets AACSB: Ethical understanding and reasoning 109) Which of the following is the market entry strategy that avoids the difficulties of producing some products in other countries and may limit growth opportunities?

A) licensing B) franchising C) joint venture D) exporting E) direct investment Answer: D Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets 110) What are the two contractual agreements in foreign markets?

A) contract manufacturing and contract marketing B) contract manufacturing and strategic alliances C) joint ventures and franchising D) warehousing and financing E) licensing and franchising Answer: E Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets 111) In a ________, a firm gives another firm the right to produce and market its product in a specific country or region in return for royalties on goods sold.

A) licensing agreement B) strategic alliance C) joint venture D) marketing mix alliance E) direct investment Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets

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112) ________ is a form of licensing involving the right to adapt an entire system of doing business.

A) Importing B) Exporting C) Franchising D) Joint venture E) Direct investment Answer: C Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets 113) Which of the following is true about the market entry strategy of direct investment?

A) It allows a foreign firm to take advantage of a domestic company's political savvy and market position in the host country.

B) It relies on export merchants to analyze the local market.

C) It provides the lowest level of risk for a firm.

D) It relies on intermediaries to represent the company in a target country.

E) It provides the lowest level of control for a firm.

Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 114) A straight extension strategy reflects product ________.

A) nationalization B) standardization C) localization D) expropriation E) ethnocentrism Answer: B Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Diverse and multicultural work environments 115) When considering the four Ps in international marketing, advocates of ________ focus on the unique characteristics of cultures and argue for products and promotional messages tailored to each culture.

A) nationalization B) standardization C) localization D) expropriation E) ethnocentrism Answer: C Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Diverse and multicultural work environments 32 Copyright © 2022 Pearson Education, Inc.

116) A firm would be most likely to use backward invention in which of the following situations?

A) when it needs to offer a less complex product in a foreign market than it sells elsewhere B) when it has decided to rely on a straight extension strategy C) when it first markets a product internationally D) when it participates in a free trade zone E) when it relies on the practice of dumping Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets 117) When a firm allows global subsidiaries or distributors to set their own prices on its products, based on their understanding of the local market environment and without concern for the products' prices in other markets, it is using a(n) ________ pricing strategy.

A) extension B) ethnocentric C) polycentric D) geocentric E) free trade Answer: C Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets 118) A ________ exists when an unauthorized party imports products and then sells them for a fraction of the price of authorized products.

A) gray market B) geocentric system C) polycentric system D) black market E) dumping ground Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Ethical understanding and reasoning 119) Many countries outlaw ________, a practice in which a company prices its products lower than they are priced at home.

A) gray marketing B) backward invention C) black marketing D) dumping E) countertrading Answer: D Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Ethical understanding and reasoning 33 Copyright © 2022 Pearson Education, Inc.

120) The ViVi brand is a line of designer clothing for pregnant businesswomen. Its owner believes that professional women in other countries have a need for professional maternity wear.

She has decided to enter the international market, but wants to control the quality of the product and keep the risk low. Which market entry strategy is ViVi likely to adopt?

A) franchising B) licensing C) exporting D) joint venture E) direct investment Answer: C Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Application of knowledge 121) In the British Isles, Guinness brewery was given the right to produce and market Budweiser beer by Anheuser-Busch, its U.S. brand owner. Because Guinness pays Anheuser-Busch royalties for the use of its brand, this is an example of a(n) ________.

A) licensing agreement B) export merchant C) joint venture D) product invention E) direct investment by Anheuser-Busch Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 122) The Tim Hortons chain has more than 3,000 donut and coffee stores in Canada. The chain's red-and-white store banners are fixtures in many Canadian communities. In 2001, the first Tim Hortons appeared in the United States through a contractual agreement allowing an independent operation to adopt Tim Hortons' entire way of doing business. This agreement is an example of a(n)________.

A) direct investment B) franchise C) export merchant D) strategic alliance E) joint venture Answer: B Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking

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123) To enter the European market, Starbucks joined in a cooperative venture with Bon Appetit Group A.G. in Switzerland. Bon Appetit has the recognized brand name, and Starbucks has the product and the expertise to run coffeehouses. This is an example of a(n) ________.

A) direct investment B) franchise agreement C) backward invention D) strategic alliance E) expropriation agreement Answer: D Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 124) Wrigley's chewing gum is the same product whether you buy it in Japan, Great Britain, Brazil, or the United States. Wrigley's sells the same products around the world. It has adopted a(n) ________ strategy.

A) product adaptation B) localization C) straight extension D) product invention E) ethnocentric Answer: C Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 125) To successfully market the Corvette to the European market, General Motors had to make the automobile shorter and narrower. GM chose to use a ________ strategy with the Corvette.

A) product adaptation B) standardization C) straight extension D) product invention E) backward invention Answer: A Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking

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126) A maker of cash registers had to develop hand-crank-operated cash registers to sell to Latin American and African markets where access to reliable electricity is limited. The company used a ________ strategy to enter those global markets.

A) product adaptation B) standardization C) straight extension D) backward invention E) nationalization Answer: D Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 127) Sony found that Japanese commuters had difficulty using standard laptops on crowded rush-hour trains since standing commuters have no laps, so it created the U as a "standing computer." The U includes a touch screen and small keyboard that can be used while standing or on the move. This is an example of ________.

A) straight product extension B) product invention C) product adaptation D) backward invention E) standardization Answer: B Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 128) Polycentric pricing is a pricing strategy where the firm sets a single price for a product around the globe.

Answer: FALSE Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking 129) SeaFood Family markets its frozen seafood products to the domestic United States market and to several Central American countries. The price of SeaFood Family's products varies from country to country, as regional distributors set the price based on each market. This is an example of ethnocentric pricing.

Answer: FALSE Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Application of knowledge

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130) What is the relationship between the level of control and the level of risk in each type of market entry strategy?

Answer: The market entry strategy with the lowest level of control, exporting, presents the lowest level of risk. The market entry strategy with the greatest level of control, direct investment, presents the greatest amount of risk.

Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Application of knowledge 131) Why are companies often eager to form joint ventures?

Answer: Joint ventures are entities owned by two or more firms. They allow partners to pool their resources for common goals and provide companies with easy access to new markets, especially because these partnerships often bring with them preferential treatment in the partner's home country.

Difficulty: Moderate LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Application of knowledge 132) Eastman Kodak accused Japanese rival Fujifilm of selling color photographic paper in the United States for as little as a quarter of what it charges in Japan. What unethical and often illegal practice was Kodak accusing Fujifilm of implementing? Explain your answer.

Answer: Eastman Kodak was accusing Fujifilm of the practice known as dumping, in which a company prices its products lower in the international markets than in its home country. The rationale for this practice is to remove excess supplies of the product from the home market to help keep prices high there.

Difficulty: Difficult LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Application of knowledge 133) Compare the three product strategy choices a large organization such as General Electric or Frito Lay has when selling in foreign markets.

Answer: The three choices are a straight extension strategy, a product adaptation strategy, and a product invention strategy. The straight extension strategy retains the same product for domestic and foreign markets. In other words, the product is standardized. The product adaptation strategy recognizes that in many cases people in different cultures do have strong and different product preferences. Therefore, the product is modified, in small or significant ways, for each market.

The product invention strategy means the company develops a new product to fit the specific needs of new foreign markets. This is a policy of localization.

Difficulty: Difficult LO: 2.4: Explain some of the strategies and tactics that a firm can use to enter global markets AACSB: Analytical thinking

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134) Which ethical philosophy advocates a decision that treats all human beings equally?

A) utilitarian approach B) rights approach C) fairness or justice approach D) common good approach E) virtue approach Answer: C Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 135) Which of the following suggests that what is ethical in one culture is not necessarily ethical in another culture?

A) protectionism B) nationalization C) ethnocentrism D) ethical relativism E) localization Answer: D Difficulty: Easy LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 136) By using which ethical philosophy would a marketer make the decision which best serves the community as a whole, not just some members?

A) utilitarian approach B) rights approach C) fairness or justice approach D) common good approach E) virtue approach Answer: D Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 137) The Foreign Corrupt Practices Act of 1977 bars U.S. businesses overseas from engaging in ________ .

A) nationalization B) dumping C) bribery D) expropriation E) extortion Answer: C Difficulty: Easy LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 38 Copyright © 2022 Pearson Education, Inc.

138) ________ occurs when someone in authority extracts payment under duress.

A) Nationalization B) Dumping C) Bribery D) Expropriation E) Extortion Answer: E Difficulty: Easy LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 139) Which of the following is NOT among the ethical values identified in the American Marketing Association's Ethical Norms and Values for Marketers?

A) transparency B) citizenship C) equality D) honesty E) responsibility Answer: C Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 140) The marketing team at Connected.com, a social networking site aimed at connecting job seekers with employers, must decide how much to charge for different levels of membership and access to those using the site. By using which ethical philosophy would they make their decision based on best serving the needs of the whole community of users, even if it means treating some users unequally?

A) utilitarian approach B) rights approach C) justice approach D) common good approach E) virtue approach Answer: C Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning

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141) While deciding whether or not to begin a construction project overseas, BuildBest learned that they would not be able to get permits for demolition until they paid a local city official a sizable fee in addition to the fees the city charges for the permit. This is an example of ________.

A) bribery B) nationalization C) extortion D) fair trade E) ethnocentrism Answer: C Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Analytical thinking 142) Ethical relativism suggests that what is ethical in one culture is not necessarily the same as in another culture.

Answer: TRUE Difficulty: Easy LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 143) The rights approach advocates a decision that provides the most good or the least harm.

Answer: FALSE Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 144) Explain the difference between the ethical philosophies of a rights approach and a justice approach.

Answer: Using a rights approach, the best decision is the one that does the best job of protecting the moral rights of all those affected. The justice approach is more focused on treating all human beings equally.

Difficulty: Difficult LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning 145) Why is it important for marketers to understand the idea of ethical relativism?

Answer: Ethical relativism suggests that what is ethical in one culture is not necessarily ethical in another culture. This is an important idea for marketers, who must understand the cultural values and norms of the various markets, both domestic and international, in which their products are sold.

Difficulty: Moderate LO: 2.5: Understand the importance of ethical marketing practices AACSB: Ethical understanding and reasoning

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146) Which of the following is NOT a way in which firms are moving toward greater sustainability?

A) increasing operational efficiencies B) decreasing their use of raw materials C) conserving energy D) increasing the use of recycled materials E) increasing profit margins Answer: E Difficulty: Easy LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning 147) Consumers who are most likely to actively look for and buy products that are environmentally friendly are referred to as ________.

A) green customers B) consumed consumers C) societal consumers D) fair traders E) locavores Answer: A Difficulty: Easy LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning 148) A ________ supplier pledges to pay producers in developing countries a price sufficient to ensure that the workers who produce the goods receive a fair wage and that the manufacturers use environmentally sustainable practices when possible.

A) green B) societal C) common good D) fair trade E) utilitarian Answer: D Difficulty: Easy LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning

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149) Which of the following is the trend of many shoppers actively looking for and purchasing food grown or raised within 50 to 100 miles of where they live?

A) utilitarianism B) green washing C) fair trading D) collectivism E) locavorism Answer: E Difficulty: Easy LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning 150) Which of the following is NOT true of firms that have adopted a triple-bottom-line orientation?

A) They focus on how they can enter the global market.

B) They focus on the environmental bottom line.

C) They focus on the social bottom line.

D) They are concerned with creating sustainable business practices.

E) They focus on how they contribute to their communities.

Answer: A Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning 151) BeneBag is a marketer of reusable shopping bags made from 100% recycled materials. The side of each BeneBag reads "Helping you do your part for Mother Earth." BeneBag is most likely trying to target which of the following?

A) locavores B) ethical relativists C) bottom-of-the-pyramid customers D) ethnocentrism E) green customers Answer: E Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Analytical thinking 152) Today, many believe that sustainability is no longer an option, but it is necessary and will continue to be a part of strategic planning.

Answer: TRUE Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning

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153) Consumers can be an important part of sustainable marketing practices when they become knowledgeable about environmental concerns and environmentally friendly products.

Answer: TRUE Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning 154) Explain the marketer's role in motivating sustainable customer behavior.

Answer: A sustainability approach doesn't end with an improvement in manufacturing processes. Marketers also need to motivate customers to seek out, pay for, and use sustainable options. Consumers can be an important part of sustainable marketing practices when they become knowledgeable about environmental concerns and environmentally friendly products.

Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Application of knowledge 155) Describe three ways in which a firm could move toward greater sustainability.

Answer: There are many ways a firm could move toward sustainability, including increasing the efficiency of operations so less energy is consumed, decreasing the use of raw materials, increasing the use of recycled materials, and preventing the discharge of wastes into the environment.

Difficulty: Moderate LO: 2.6: Explain the role of sustainability in marketing planning AACSB: Ethical understanding and reasoning

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 3 Strategic Market Planning 1) A business plan ________.

A) is a document that outlines marketing strategies step by step B) identifies how a company will measure and control specific marketing strategies C) is another name for a marketing plan D) includes the decisions that guide the entire organization or its business units E) is another name for a SWOT analysis Answer: D Difficulty: Easy LO: 3.1: Explain business planning and its three levels 2) Which of the following is true about business planning?

A) Business planning involves taking action before developing objectives.

B) Business planning is an ongoing process.

C) Business planning is concerned with the long term but not the short term.

D) Business planning is concerned with the short term but not the long term.

E) Business planning takes place after development of the marketing plan.

Answer: B Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 3) A(n) ________ is a document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement the strategies.

A) marketing plan B) communications plan C) business plan D) operational plan E) financial plan Answer: A Difficulty: Easy LO: 3.1: Explain business planning and its three levels 4) ________ is a decision process that concentrates on developing detailed plans for strategies and tactics for the short term.

A) Strategic planning B) Functional planning C) Operational planning D) Product development E) Business planning Answer: B Difficulty: Easy LO: 3.1: Explain business planning and its three levels

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5) ________ is the third, or "nuts-and-bolts," level of planning.

A) Strategic planning B) Functional planning C) Operational planning D) Product development E) Business planning Answer: C Difficulty: Easy LO: 3.1: Explain business planning and its three levels 6) The three levels of business planning are ________.

A) managerial, operational, and promotional B) strategic, functional, and operational C) portfolio, strategic, and functional D) SWOT, strategic, and tactical E) operational, functional, and tactical Answer: B Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 7) ________ is the managerial decision process that matches the organization's resources and capabilities to its market opportunities for long-term growth.

A) Operational planning B) Strategic planning C) Portfolio analysis D) SWOT analysis E) Budgeting Answer: B Difficulty: Easy LO: 3.1: Explain business planning and its three levels 8) The CEO, president, and top executive officers are responsible for ________ in the strategic plan.

A) operational planning B) developing the details of the pricing strategy C) designing ad campaigns D) defining the firm's purpose E) determining employee benefits Answer: D Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Interpersonal relations and teamwork

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9) SBU stands for ________.

A) strategic buying utilities B) successful business utilities C) strategic business units D) standard business units E) successful business units Answer: C Difficulty: Easy LO: 3.1: Explain business planning and its three levels 10) Strategic planning for a large firm, such as Disney, with several SBUs probably occurs ________.

A) only in its corporate headquarters B) only at the individual business unit level C) at both the overall corporate level and at the individual SBU level D) as needed based upon the success of each division E) at each location on a quarterly basis Answer: C Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 11) Areas of business within a firm that are distinct enough to have their own missions, business objectives, resources, managers, and competitors are referred to as ________.

A) strategic business units B) market development units C) market penetration units D) standard business units E) competitive intelligence units Answer: A Difficulty: Easy LO: 3.1: Explain business planning and its three levels 12) Market planning is a type of ________.

A) day-to-day planning B) financial planning C) strategic planning D) independent planning E) functional planning Answer: E Difficulty: Moderate LO: 3.1: Explain business planning and its three levels

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13) The Vice Presidents or Directors of Marketing, Finance and Human Resources are likely to manage the process of ________.

A) functional planning B) market planning C) operational planning D) business planning E) strategic planning Answer: A Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 14) At which level of planning is the business portfolio generally established?

A) SBU planning B) strategic planning C) operational planning D) functional planning E) market planning Answer: B Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Interpersonal relations and teamwork 15) Which of the following types of managers would be most likely to engage in operational planning on a regular basis?

A) the company's CEO B) the company's sales manager C) the company's vice president of product research and development D) the company's vice president of human resources E) the company's chief financial officer Answer: B Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Interpersonal relations and teamwork 16) A detailed quarterly plan that states how many units of product each salesperson on the team needs to sell per month is an example of a(n) ________.

A) business plan B) financial plan C) strategic plan D) functional plan E) operational plan Answer: E Difficulty: Moderate LO: 3.1: Explain business planning and its three levels

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17) Kimball Gardens is a company that operates as two distinct businesses: one that sells lawn and garden products and one that markets booklets. Each business is called a ________.

A) separate entity B) strategic business unit (SBU) C) cash cow D) star E) business portfolio Answer: B Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking 18) A P & G manager develops plans for a social media marketing campaign to promote a new product pre-release via Instagram. This is an example of a(n)________ plan.

A) strategic B) functional C) operational D) product development E) human resources Answer: C Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking 19) Orkin Pest Control Service knows homeowners skimp on maintenance such as pest control during recessions. It also knows that the more consumers know about bugs, the more likely they are to buy the company's services. So Orkin teamed with the Smithsonian Institution on the Insect Safari, a traveling exhibit designed to teach people about the critters. The Safari truck visited 108 cities during one year, leaving a wake of creeped-out insectophobes reaching for the phone numbers of the local Orkin franchise. Business increased in each city the Safari truck visited. Decisions on which cities to visit and what kinds of promotion to use in each city visited are both examples of ________ plans.

A) functional B) portfolio C) operational D) strategic E) control Answer: C Difficulty: Difficult LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking

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20) Columbia Sportswear makes nylon activewear. Its marketing manager set a goal to increase sales 12 percent over the next three years through the introduction of a new line of comfortable, lightweight clothing for people who fish. The marketing manager is engaged in ________.

A) operational planning B) strategic planning C) control planning D) portfolio planning E) functional planning Answer: E Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking 21) Columbia Sportswear has introduced a new line of comfortable, lightweight clothing for people who fish. An example of ________ is the decision to run a full-page ad in Field & Stream magazine in May to get potential customers to ask their sporting goods stores to carry the new products.

A) operational planning B) strategic planning C) business planning D) portfolio planning E) brand extension Answer: A Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking 22) In large firms like IBM, Ford, or Amazon that operate in many markets, planning is a complex process involving a few top level executives from corporate headquarters.

Answer: FALSE Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 23) All business planning is an integrated activity.

Answer: TRUE Difficulty: Easy LO: 3.1: Explain business planning and its three levels 24) A business plan includes the decisions that guide the entire organization.

Answer: TRUE Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 25) Strategic planning is also referred to as functional planning.

Answer: FALSE Difficulty: Easy LO: 3.1: Explain business planning and its three levels 6 Copyright © 2022 Pearson Education, Inc.

26) Strategic business units (SBUs) are individual units representing different areas of business within a firm that have their own missions, business objectives, resources, managers, and competitors.

Answer: TRUE Difficulty: Easy LO: 3.1: Explain business planning and its three levels 27) Strategy is the execution of the elements of a plan based on goals and objectives to bring about a desired future.

Answer: TRUE Difficulty: Moderate LO: 3.1: Explain business planning and its three levels 28) A manager's decision to run a quarter-page ad in the business section of the local newspaper to promote goodwill toward his company is part of an operational plan.

Answer: TRUE Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking 29) Explain how business planning helps managers in a firm.

Answer: Business planning is an ongoing process of making decisions that guide the firm both in the short term and for the long haul. Planning identifies and builds on a firm's strengths, and it helps managers at all levels make informed decisions in a changing business environment.

Planning means the company develops objectives before it takes action.

Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Application of knowledge 30) Compare and contrast strategic planning and operational planning.

Answer: Strategic planning is the managerial decision process that matches the firm's resources and capabilities to its market opportunities for long-term growth. In a strategic plan, top management defines the firm's purpose and specifies what the firm hopes to achieve. Operational planning focuses on the day-to-day execution of the functional plans and includes detailed annual, semiannual, or quarterly plans. Operational planning is done by supervisory managers.

Strategic planning is big picture, while operational planning is nuts-and-bolts.

Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Analytical thinking

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31) How is business planning different in a large firm in comparison to business planning in a small company?

Answer: In a large firm, business planning is a more complex process that involves people from many different areas, such as marketing and human resources, and different levels, such as the CEO, directors, and managers. In a smaller firm, fewer people will be involved in business planning. In a very small business, the three levels of planning may be the responsibility of one person.

Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Interpersonal relations and teamwork 32) Why is it important for all business planning to be integrated?

Answer: For the strategic, functional, and operational plans to work together for the benefit of the whole company, planning must be integrated through all layers. Functional and operational plans should be guided by the company's strategic plans.

Difficulty: Moderate LO: 3.1: Explain business planning and its three levels AACSB: Interpersonal relations and teamwork 33) In firms with multiple SBUs, the first step in strategic planning is for top management to ________.

A) recruit and hire the right personnel B) examine historical data C) establish a mission for the entire corporation D) allocate resources to the company's various SBUs E) establish marketing's short-term objectives Answer: C Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 34) Questions such as "What business are we in?" and "What customers should we serve?" are typically addressed in which step of strategic planning?

A) define the mission, vision, and values B) evaluate the internal and external environment C) set organizational or SBU objectives D) establish the business portfolio E) develop growth strategies Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning

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35) A formal document that describes the organization's overall purpose and what it hopes to achieve in terms of its products, resources, and customers is a(n) ________.

A) mission statement B) vision statement C) strategic plan D) market plan E) situation analysis Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Written and oral communication 36) "To be the world's most loved, most efficient, and most profitable airline" is Southwest's ________.

A) vision statement B) mission statement C) strategic plan D) market plan E) situation analysis Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Written and oral communication 37) The second step in strategic planning is to ________.

A) formalize a mission statement B) establish the business portfolio C) set SBU and department-level objectives D) set organizational objectives E) assess the organization's internal and external environments Answer: E Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 38) Analysis of a firm's internal environment identifies the firm's ________.

A) strengths and weaknesses B) strengths and opportunities C) opportunities and threats D) weaknesses and threats E) strengths and threats Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning

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39) A situation analysis is also known as a(n) ________.

A) environmental analysis B) portfolio analysis C) market review D) growth strategy review E) action plan Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 40) A firm's internal business environment does NOT include its ________.

A) employees B) patents C) products D) technologies E) customers Answer: E Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 41) Analysis of the external environment of an organization identifies the organization's ________.

A) strengths and weaknesses B) strengths and opportunities C) opportunities and threats D) weaknesses and threats E) strengths and threats Answer: C Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 42) Each year, a media company asks every department manager to rate his or her department's strengths and weaknesses as well as those of the other departments with which the department interacts. Then each department manager is asked what he or she sees as the greatest threats and opportunities for the company. The media company is asking its department managers to engage in a ________.

A) SWOT analysis B) portfolio analysis C) market analysis D) functional planning session E) compatibility assessment Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Interpersonal relations and teamwork

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43) In early 2020, within a few weeks, the videoconferencing providers had to rapidly adapt not only to increased volume but also to widely varying uses of their technologies. To successfully fulfill demand for the critical virtual communication channels required, the providers engaged in a(n) ________.

A) strategic pivot B) SWOT analysis C) portfolio analysis D) diversification E) divestiture Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Written and oral communication 44) Within a larger corporation, each SBU ________.

A) has its own business portfolio B) has access to equal resources C) has separate shareholders D) is a separate profit center E) is dependent upon central management for a mission statement Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 45) ________ is a tool management uses to assess the potential of a firm's business portfolio. It helps management decide how to allocate resources among the firm's current SBUs. A) SWOT analysis B) Portfolio analysis C) A PERT chart D) An operational plan E) A promotional strategy Answer: B Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 46) The growth-market share matrix developed by the Boston Consulting Group (BCG) is a type of ________.

A) SWOT analysis B) portfolio analysis C) value chain D) situational analysis E) compatibility assessment Answer: B Difficulty: Easy LO: 3.2: Describe the steps in strategic planning

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47) Which of the following is NOT one of the different types of SBUs as identified in the BCG growth-market share matrix?

A) exclamation points B) stars C) cash cows D) question marks E) dogs Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 48) The BCG growth-market share matrix measures which of the following?

A) the depth and breadth of a firm's different product lines B) a firm's internal strengths and external opportunities C) a firm's internal weaknesses and external threats D) the market growth rate and the relative market share of a firm's SBUs E) opportunities for growth in markets and the relative risk of different investments Answer: D Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning 49) According to the BCG growth-market share matrix, ________ are strategic business units with products that have a dominant market share in a high-growth market.

A) problem children B) exclamation points C) cash cows D) stars E) question marks Answer: D Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 50) According to the BCG growth-market share matrix, cash cows are strategic business units with products that have a ________ market share in a ________ market.

A) low; fast-growth B) low; low-growth C) small; slow-growth D) dominant; high-growth E) dominant; low-growth Answer: E Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning

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51) According to the BCG growth-market share matrix, ________ are strategic business units with products that have low market shares in fast-growth markets.

A) dogs B) exclamation points C) cash cows D) stars E) question marks Answer: E Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 52) Businesses that offer specialized products in limited markets that are not likely to grow quickly are classified as ________ according to the BCG growth-market share matrix.

A) dogs B) exclamation points C) cash cows D) stars E) question marks Answer: A Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 53) An SBU fits into the ________ category of the BCG model when sales have been steady and the firm has a large market share it can sustain with minimal funding.

A) exclamation point B) dog C) cash cow D) star E) question mark Answer: C Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 54) The use of the BCG growth-share matrix helps managers make good decisions about ________.

A) how the firm should grow B) which technology to abandon C) how to grow a specific product's market share D) which target market is more lucrative E) how to advertise specific products Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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55) A growth strategy that attracts users of competitive brands is called a ________ strategy.

A) market development B) product penetration C) market penetration D) diversification E) product development Answer: C Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 56) When Amazon acquired Whole Foods, the brick-and-mortar supermarket, the company was pursuing a ________ strategy.

A) market development B) product penetration C) market penetration D) diversification E) product development Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 57) Which of the following is NOT one of the growth strategies identified in the product-market growth matrix?

A) market plan B) market penetration C) market development D) product developments E) diversification Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 58) When a firm expands into a new geographic area and reaches a new customer segment within an existing geographic market, it is following a ________ strategy.

A) diversification B) market penetration C) market development D) product development E) cash cow Answer: C Difficulty: Easy LO: 3.2: Describe the steps in strategic planning

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59) ________ strategies emphasize both new products and new markets to achieve growth.

A) Diversification B) Market penetration C) Market development D) Product development E) Cash cow Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 60) Annie's Homegrown markets organic prepared and easy-to-prepare foods and snacks, from macaroni and cheese to their signature bunny crackers. The company's ________ is "to cultivate a healthier and happier world by spreading goodness through nourishing foods, honest words and conduct that is considerate and forever kind to the planet."

A) market penetration strategy B) marketing development strategy C) business portfolio D) value-delivery network E) mission Answer: E Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 61) When an organization states its mission is to "make customers happy" or "deliver high-quality products," their mission is defined too ________.

A) narrowly B) realistically C) specifically D) broadly E) socially Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 62) Understanding how the COVID-19 global crisis has impacted marketing in a firm has helped firms appreciate that these opportunities and threats can come from any part of the ________.

A) external environment B) internal environment C) competitive intelligence D) diversification strategies E) market development strategies Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 15 Copyright © 2022 Pearson Education, Inc.

63) Biopure is a company that manufactured and marketed oxygen therapeutics. Its products were Hemopure for human use and Oxyglobin for animal use. Both were developed as alternatives to red blood cell transfusions. Which of the following was part of Biopure's internal environment?

A) approval by the U.S. Food and Drug Administration to allow veterinarians to use Oxyglobin B) the global market for the raw materials needed to make Hemopure and Oxyglobin C) the patented manufacturing process that Biopure uses to produce Hemopure and Oxyglobin D) a competitor developing a similar product E) changes in patent law Answer: C Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 64) Serengeti makes lightweight sunglasses with 100 percent UV protection for people who love to hunt, hike, and bike ride. Its long-term plans include the development of lenses that, in addition to protecting users from UV rays, will also have effective water-sheeting action to reduce lens spotting. This new feature will be valuable to people who fish. In terms of a SWOT analysis, the company believes it can use the ________ of its reputation as a sunglasses manufacturer for a specialized market in combination with its current manufacturing facilities and labor force to enter this new market.

A) weight B) strength C) mission D) opportunity E) trend Answer: B Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 65) Serengeti makes lightweight sunglasses with 100 percent UV protection for people who love to hunt, hike, and bike ride. Its long-term plans include the development of lenses that, in addition to protecting users from UV rays, will also have effective water-sheeting action to reduce lens spotting. This new feature will be valuable to people who fish. Serengeti has determined that fishing is one of the fastest growing sports in the United States. In terms of a SWOT analysis, Serengeti has recognized a market ________.

A) weakness B) strength C) threat D) opportunity E) diversification Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 16 Copyright © 2022 Pearson Education, Inc.

66) Which of the following is NOT true of a SWOT analysis??

A) It identifies the portfolio of businesses.

B) It enables a firm to develop strategies that match strengths and opportunities.

C) It enables a firm to avoid threats.

D) It is the synthesis of the situation analysis.

E) It provides a clear focus of the firm's strengths, weaknesses, opportunities, and threats.

Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 67) The market for two-way radios is disappearing. A company with a small share of the two-way radio market would be considered a ________ in terms of the BCG growth-market share matrix.

A) problem child B) dog C) cash cow D) star E) question mark Answer: B Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 68) Zoom, WebEx, and Microsoft Teams are organizations in the videoconferencing industry that were able to change very rapidly as COVID-19 shut down business travel during 2020.

These organizations are examples of ________.

A) nimble organizations B) question marks C) SBUs D) scrum E) leading indicators Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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69) Unilever makes Rexona, a leading brand of deodorant and antiperspirant. Because the worldwide market for deodorants and antiperspirants is growing rapidly, Rexona would be classified as a ________ on the BCG growth-market share matrix.

A) problem child B) dog C) cash cow D) star E) question mark Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 70) Argo is the world's leading brand of small vehicles that are designed to be driven on all types of terrain and in all types of weather. The vehicles can carry up to six passengers. The market for such vehicles is no longer growing due to the recent economic downturn. In terms of the BCG growth-market share matrix, Argo would be classified as a ________.

A) problem child B) dog C) cash cow D) star E) question mark Answer: C Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 71) The management of an SBU is addressing the issue of whether through investment and a new strategy it can be transformed into a star. According to the BCG growth-share matrix, this SBU is ________.

A) a question mark B) a dog C) using a product development strategy D) cash cow E) using a market development strategy Answer: A Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge

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72) John H. Harland Company is a large company with 5,200 employees and almost $800 million in annual sales. The company is best known for printing personal and business checks.

Harland Analytical Services is a technology company that produces software that enables banks to gauge the behavior of their customers by tracking their spending habits. In addition, Harland owns Scantron, a computerized testing and assessment company. The ________ for John H. Harland Company includes its check-printing business, its financial software business, and its testing and assessment business.

A) business portfolio B) marketing mix C) market penetration D) functional plan E) market classification Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 73) When General Mills urged consumers to lower their cholesterol by eating Cheerios twice a day over the course of six weeks, the aim was to increase usage among current customers.

General Mills used a ________ strategy.

A) market development B) product penetration C) market penetration D) diversification E) product development Answer: C Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 74) A donut shop chain opened its first store outside of North America with the opening of a shop in Australia. The donut company used a ________ strategy.

A) market development B) product penetration C) market penetration D) cash cow E) product development Answer: A Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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75) Edy's is a brand of high quality ice cream. Edy's introduced Godiva ice cream and Starbucks ice cream to tempt ice cream lovers to eat even more ice cream. Edy's used a ________ strategy.

A) market development B) product penetration C) market penetration D) diversification E) product development Answer: E Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 76) Amazon's acquisition of Whole Foods moved the company into the supermarket brick-and-mortar space. Amazon engaged in which strategy?

A) market penetration B) market development C) diversification D) divesting E) product development Answer: C Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 77) One objective of a small regional marketer of office supplies is to enter new markets. Which of the following most accurately identifies a weakness of this objective?

A) It is not sustainable.

B) It is not attainable.

C) It is not realistic.

D) It is not specific.

E) It is not aspirational.

Answer: D Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 78) Employee morale, promotion strategies, and competitors' reactions are all aspects of a company's internal environment.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Interpersonal relations and teamwork

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79) A SWOT analysis is the outcome of an analysis of a firm's internal and external environment.

Answer: TRUE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 80) An analysis of a firm's internal environment reveals its opportunities and threats.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 81) To be effective, objectives need to be specific, measurable, attainable, and sustainable over time.

Answer: TRUE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 82) Managers use the Boston Consulting Group growth-market share matrix to tell them how to make the required growth happen.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 83) On the BCG growth-market share matrix, question marks are also referred to as problem children.

Answer: TRUE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning 84) Market development strategies can mean expanding into a new geographic area or it may mean reaching new customer segments within an existing geographic market.

Answer: TRUE Difficulty: Easy LO: 3.2: Describe the steps in strategic planning 85) Runnerz is a company that makes running shoes. The company has defined its mission as follows: "At Runnerz, we make great running shoes." By defining itself in terms of its product, Runnerz has created a mission statement that adequately describes the organization's purpose.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge

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86) ESPN's recent underperformance on profits has prompted parent company Disney to consider the business as a question mark according to the BCG matrix.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 87) Movie production companies sometimes re-release classic films to theaters to give people who enjoyed them the first time a chance to see the movies again. This is an example of a market penetration strategy.

Answer: TRUE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 88) Hershey introduced edible Valentine cards when it launched Hugs & Kisses Friendship Exchange and packaged one white chocolate and one brown chocolate Kiss with write-on "To" and "From" areas. This is an example of a market development strategy.

Answer: FALSE Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 89) Define strategic planning. Discuss the steps involved.

Answer: The process of matching a firm's resources and capabilities to its market opportunities is called strategic planning. At the outset, beginning at the corporate level, each company must define its overall mission. What is our business? Who is the customer? How should we develop our company's capabilities and focus its efforts? Answers to these questions are crucial in writing a clear mission statement. Missions should not be too broad, too narrow, or too shortsighted. The next step in strategic planning is evaluating the internal and external environment of the firm.

After conducting a SWOT analysis, top management needs to translate the firm's mission statement into organizational or SBU-level objectives. These objectives should be specific, measurable, attainable, and sustainable. The fourth step is to establish the business portfolio. The final step in strategic planning is to develop growth strategies, such as market penetration strategies, product development strategies, market development strategies, and diversification strategies.

Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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90) What is a SWOT analysis? Considering Starbucks, give an example of a possible element in each category of the SWOT analysis.

Answer: SWOT stands for strengths, weaknesses, opportunities, and threats. A firm's strengths and weaknesses focus on the company's internal environment, while the opportunities and threats focus on external environmental issues. A SWOT analysis enables a firm to develop strategies that make use of what the firm does best in seizing opportunities for growth, while at the same time avoiding external threats that might hurt the firm's sales and profits. Student responses will vary on examples, but should reflect the internal and external environmental components.

Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 91) Jay Minkoff at First Flavor may use the Boston Consulting Group (BCG) matrix to help him make decisions for his firm. What does he need to understand about the purpose of the matrix and the four categories of the BCG growth-market share matrix?

Answer: The BCG model focuses on determining the potential of a firm's existing SBUs to generate cash that the firm can then use to invest in other businesses. By categorizing SBUs as stars, cash cows, questions marks, or dogs, the matrix helps managers make good decisions about how the firm should grow. Stars are SBUs with products that have a dominant market share in high-growth markets. Cash cows have a dominant market share in a low-growth potential market. Question marks, also called problem children, are SBUs with low market shares in fast-growth markets. Dogs are SBUs with low market share in low-growth markets.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 92) When analyzing its portfolio of businesses with the Boston Consulting Group model, Disney views its movie brand as a star. What does this mean?

Answer: A star SBU means that Disney's movies have a dominant market share in a high-growth market. Stars generate large revenues, but also require large amounts of funding to keep up with production and promotion demands. Disney invests heavily in franchise players like Star Wars to gain large shares of loyal customers to generate profits that can be reallocated to other parts of the company.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge

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93) The BCG matrix is a useful approach to evaluate current businesses. Describe a tool that you could use at a firm to decide how to make growth happen.

Answer: The product-market growth matrix is a useful device for analyzing different growth strategies. There are four strategies available to companies: market penetration, market development, product development, and diversification. Market penetration entails making more sales to current customers without changing products. Market development involves identifying and developing new markets for a company's products. New markets include demographic groups and geographic regions, among others. Companies can also consider product development, offering modified or new products to current markets. Diversifying companies might consider acquiring or starting new businesses unrelated to their core competencies.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 94) Provide an example of an effective SBU objective. Explain why it is effective using the four important qualities of an objective.

Answer: Student responses will vary. The explanation of why the objective is effective should include how it is specific, measurable, attainable, and sustainable. It is important for objectives to be specific and measurable so that firms can tell when they are (or aren't) meeting them.

Objectives that aren't attainable will cause unnecessary employee and stakeholder frustration. It is important for objectives to be sustainable so that the firm doesn't sacrifice long-term success for short-term growth. Students should use these criteria to "test" the effectiveness of their examples.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 95) Briefly describe the purpose of a portfolio analysis.

Answer: The portfolio analysis is a tool management uses to assess the potential of a firm's business portfolio. It helps management decide which of its current SBUs should receive more or less of the firm's resources and which of its SBUs are most consistent with the firm's overall mission.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 96) The ACME Company is conducting an analysis of its internal environment. What elements might it analyze?

Answer: In analyzing the internal environment, the ACME Company should examine all the controllable elements inside the firm that influence how well the firm operates. Internal elements include a firm's structure, organizational culture, its people, its facilities, how it does things that influence its operations, and all sorts of assets — financial and otherwise.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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97) What type of strategy should a company use to manage its cash cows?

Answer: Because a cash cow generates cash without much investment, a company should use the profits to support other SBUs. Difficulty: Difficult LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 98) How do product development strategies create growth? Give an example of how a company could use a product development strategy.

Answer: Product development strategies create growth by selling new products in existing markets. Product development may mean that the firm improves a product's performance, or it may mean extending the firm's product line by developing new variations of the item. Examples will vary.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 99) Define a strategic pivot. Provide an example.

Answer: A strategic pivot is the operationalization of a rapid demand to change a firm's business model, business direction, product line, or market focus, including the ability to rapidly increase output, to satisfy unexpected new and/or different demand. While student responses will vary, they should capture the rapid response to a changing environment.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Application of knowledge 100) Campbell's Soup advertised new uses for soup in lunches and dinners to encourage customers to eat more soup. The company also conducted promotions aimed at attracting users of competing soup brands. What growth strategy was Campbell's implementing? Explain.

Answer: Campbell's implemented the market penetration strategy. It tried to increase sales of existing products to existing markets such as current users, nonusers, and users of competing brands.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 101) During past years, the Oreo cookie has undergone many changes. It is no longer just a cookie. Oreo cookies now appear in breakfast cereals, ice cream, pie crust, cake mix, frosting, brownies, and granola bars. These are all examples of which type of growth strategy?

Answer: Changes to the Oreo cookie fall within the guidelines of the product development strategies. One aspect of this strategy is extending the product line by developing new variations of the item.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking

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102) After initially targeting young game-playing consumers with its Wii home gaming system, Nintendo introduced the Wii system to older consumers in retirement homes for light exercise.

Explain the kind of growth strategy Nintendo used.

Answer: Market development strategies introduce existing products to new markets. This can mean reaching new customer segments within an existing geographic market, or it may mean expanding into new geographic areas. Nintendo's Wii target market was originally the young game-playing consumer.

Difficulty: Moderate LO: 3.2: Describe the steps in strategic planning AACSB: Analytical thinking 103) An important distinction between strategic planning and market planning is that marketing professionals focus much of their planning efforts on issues related to ________.

A) the marketing mix B) sustainability C) profits D) ethics E) portfolio analysis Answer: A Difficulty: Easy LO: 3.3: Describe the steps in market planning 104) Which of the following is NOT one of the steps in market planning?

A) Define and articulate the mission and values.

B) Perform a situation analysis.

C) Set marketing objectives.

D) Develop marketing strategies.

E) Implement and control the marketing plan.

Answer: A Difficulty: Easy LO: 3.3: Describe the steps in market planning 105) The first step of the market planning process involves closely examining the ________.

A) marketing strategies B) product development process C) marketing controls D) marketing environment E) marketing team Answer: D Difficulty: Moderate LO: 3.3: Describe the steps in market planning

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106) In which step of developing a marketing plan would managers examine external elements that specifically affect the marketing plan?

A) situation analysis B) development of marketing objectives C) development of operational plan D) development of marketing strategies E) implementation of the marketing plan Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning 107) The last step of the marketing planning process is to ________.

A) perform a situation analysis B) set marketing objectives C) define a marketing mission D) implement and control the marketing plan E) develop a marketing mix Answer: D Difficulty: Easy LO: 3.3: Describe the steps in market planning 108) In a marketing plan, the ________ state what the marketing function must accomplish to achieve overall business objectives.

A) situation analyses B) strategic plans C) marketing objectives D) market development strategies E) marketing controls Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 109) In which step of the market planning process are decisions made concerning what markets to target and what marketing mix strategies to use?

A) perform a situation analysis B) develop marketing strategies C) implement the marketing plan D) control the marketing plan E) develop marketing metrics Answer: B Difficulty: Easy LO: 3.3: Describe the steps in market planning

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110) In the ________ stage of market planning, marketers must determine how they want consumers to think of their product in comparison to competing products.

A) develop a mission statement B) perform a situation analysis C) develop marketing strategies D) develop distribution strategies E) implement the plan Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 111) Which component of the marketing mix addresses how, when, and where the firm will make the product available to targeted customers?

A) place B) product C) price D) promotion E) profit Answer: A Difficulty: Easy LO: 3.3: Describe the steps in market planning 112) ________ refers to a company's estimate of the number of consumers who are willing and able to pay for a product.

A) The market segment B) Potential demand C) Return on marketing investment D) Market share E) The mass market Answer: B Difficulty: Moderate LO: 3.3: Describe the steps in market planning 113) ________ decisions identify how marketing will accomplish its objectives in the target markets by using product, price, promotion, and place.

A) Marketing metrics B) Strategic business unit C) Return on marketing investment D) Marketing mix E) Strategic planning Answer: D Difficulty: Moderate LO: 3.3: Describe the steps in market planning

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114) The ________ is the most fundamental part of the marketing mix.

A) product B) distribution C) price D) production E) profit Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning 115) Alaska Airlines decided to fly a model of the Boeing 737 with overhead bins with significantly increased luggage space. This is an example of a ________ for Alaska Airlines.

A) target market selection strategy B) pricing strategy C) control process D) product strategy E) marketing metric Answer: D Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 116) A firm's ________ determines how much a firm charges for a product.

A) Gantt chart analysis B) PERT chart analysis C) pricing strategy D) product strategy E) return on marketing investment Answer: C Difficulty: Easy LO: 3.3: Describe the steps in market planning 117) In recent years, airlines have used debundling strategies, charging fees for perks such as checked baggage that had previously been included in the ticket price. This is an example of a ________ strategy.

A) product B) pricing C) promotional D) place E) production Answer: B Difficulty: Moderate LO: 3.3: Describe the steps in market planning

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118) Marketers communicate a product's value proposition to the target market by implementing a ________.

A) product segment B) promotional strategy C) pricing strategy D) distribution strategy E) marketing metric Answer: B Difficulty: Easy LO: 3.3: Describe the steps in market planning AACSB: Written and oral communication 119) Advertising, sales promotion, public relations, publicity, direct marketing, and personal selling are all parts of the ________.

A) target market strategy B) pricing strategy C) product strategy D) promotional strategy E) distribution strategy Answer: D Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Written and oral communication 120) Singapore Airlines offers "Ultra-Lux Suites" with stowable beds and leather armchairs. The targeted messaging and imagery used to inform this discerning segment of customers is an example of a ________ strategy.

A) target market B) pricing C) product D) promotional E) distribution Answer: D Difficulty: Easy LO: 3.3: Describe the steps in market planning 121) Many airlines now sell tickets almost exclusively through online third-party vendors. This is an example of a ________ strategy.

A) distribution B) pricing C) marketing control D) product E) promotional Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning 30 Copyright © 2022 Pearson Education, Inc.

122) After marketing strategies are developed, the next step in market planning is ________.

A) development of marketing objectives B) strategic planning C) implementation D) situation analysis E) pricing development Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 123) Measuring actual performance, comparing this performance to the estimated marketing objectives and making adjustments to the objectives are the steps in which process?

A) market analysis B) control C) implementation D) situation analysis E) SWOT analysis Answer: B Difficulty: Easy LO: 3.3: Describe the steps in market planning 124) As a part of the ________ process of market planning, managers need to look carefully at why a company isn't meeting its objectives.

A) diversification B) market development C) brand competition D) marketing mix E) control Answer: E Difficulty: Moderate LO: 3.3: Describe the steps in market planning 125) Making adjustments to the marketing plan is part of which stage of market planning?

A) SWOT analysis B) portfolio analysis C) implementation and control of the marketing plan D) situation analysis E) development of marketing objectives Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning

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126) Specific measures that help marketers watch the performance of their marketing campaigns, initiatives, and channels, and when appropriate, serve as a control mechanism are ________.

A) operational plans B) marketing metrics C) action plans D) marketing objectives E) pricing strategies Answer: B Difficulty: Easy LO: 3.3: Describe the steps in market planning 127) Which of the following is the best example of an activity metric?

A) the volume of sales made during a month B) the volume of a competitors' sales during a month C) the number of sales calls made by a salesperson during a month D) the value of a firm's stock over a given month E) the total profit made by a firm over a given month Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 128) Measurements focused on measuring and tracking specific events identified as key business results from marketing processes are ________.

A) outcome metrics B) activity metrics C) action plans D) objectives E) strategies Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning 129) Which of the following quantifies how an investment in marketing impacts the firm's success, financially and otherwise?

A) return on marketing investment B) a Gantt chart C) a SWOT analysis D) portfolio analysis E) a PERT chart Answer: A Difficulty: Easy LO: 3.3: Describe the steps in market planning

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130) Which of the following is a key assumption of ROMI? A) thinking of marketing as an investment B) thinking of marketing as a risk C) eliminating any risk D) ignoring expenditures E) thinking of marketing as an expense Answer: A Difficulty: Difficult LO: 3.3: Describe the steps in market planning 131) Action plans are often referred to as ________.

A) marketing mixes B) marketing programs C) ROMI measures D) marketing metrics E) promotional strategies Answer: B Difficulty: Moderate LO: 3.3: Describe the steps in market planning 132) Individual support plans included in a marketing plan that provide guidance for implementation and control of the various marketing strategies within the plan are referred to as a(n) ________.

A) price strategy B) promotion strategy C) action plan D) strategic plan E) marketing mix Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 133) Market planning is followed by the ________, which details how the plan will be carried out, outlining the day-to-day execution.

A) operational plan B) control plan C) SWOT analysis D) strategic plan E) marketing metric Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Interpersonal relations and teamwork

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134) Which of the following is NOT typically part of a firm's action plan?

A) a timeline B) clearly assigned responsibilities C) pricing strategies D) a budget E) measurement and control processes Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Interpersonal relations and teamwork 135) Which of the following is a tool that marketers can use to portray an action plan's timeline?

A) a Gantt chart B) a SWOT analysis C) an SBU analysis D) a BCG matrix E) a marketing metric Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning 136) In which element of an action plan is the person who has final ownership of the marketing plan identified?

A) timeline B) budget C) responsibility D) measurement and control E) strategic plan Answer: C Difficulty: Easy LO: 3.3: Describe the steps in market planning AACSB: Interpersonal relations and teamwork 137) Which of the following provides post hoc insights for next actions for marketers?

A) lagging indicators B) leading indicators C) a PERT Chart D) a BCG matrix E) a SWOT analysis Answer: A Difficulty: Moderate LO: 3.3: Describe the steps in market planning

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138) In the Scrum methodology, the word "plan" or "planning" is replaced by the word ________.

A) strategy B) disruption C) sprint D) action E) implementation Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 139) Which of the following involves using data and analytics in real time to continuously source promising opportunities or solutions to problems?

A) leading indicators B) lagging indicators C) agile marketing D) return on marketing investment E) control Answer: C Difficulty: Moderate LO: 3.3: Describe the steps in market planning 140) Daily scrum is also known as daily ________.

A) controls B) stand up C) timelines D) budgets E) distribution strategies Answer: B Difficulty: Moderate LO: 3.3: Describe the steps in market planning 141) The first step in market planning is setting marketing objectives.

Answer: FALSE Difficulty: Easy LO: 3.3: Describe the steps in market planning 142) Decisions about packaging and branding are part of a firm's product strategy.

Answer: TRUE Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Written and oral communication

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143) The number of consumers the firm believes are willing and able to pay for its products is referred to as potential demand.

Answer: TRUE Difficulty: Moderate LO: 3.3: Describe the steps in market planning 144) The promotional strategy identifies how, when, and where the firm will make the product available to targeted customers.

Answer: FALSE Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Written and oral communication 145) The distribution strategy is the place component of the marketing mix.

Answer: TRUE Difficulty: Easy LO: 3.3: Describe the steps in market planning 146) Operational plans focus on the long-term execution of the marketing plan performed by top-level management.

Answer: FALSE Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Interpersonal relations and teamwork 147) Typically, each element of an action plan is linked to a budget item.

Answer: TRUE Difficulty: Moderate LO: 3.3: Describe the steps in market planning 148) Building in contingency planning better takes into account the market uncertainties and constancy of change in business today.

Answer: TRUE Difficulty: Easy LO: 3.3: Describe the steps in market planning

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149) Define digital disruptions and the digital vortex. Discuss why they are key drivers to more effective planning.

Answer: Digital disruption is the effect of digital technologies and digital business models on an organization's value proposition and its resulting position in the markets in which it competes.

The digital vortex is the inexorable movement of industries toward a "digital center" in which business models, offerings, and value chains are all digitized to the maximum extent possible.

The net of these phenomena of digital disruption and the digital vortex is that traditional processes to strategic market planning are pretty well suited to more stable, non-disrupted products and markets. In more sectors today, that level of stability no longer exists as digital disruption and the digital vortex are rapidly redefining what customers want and expect.

Difficulty: Difficult LO: 3.3: Describe the steps in market planning AACSB: Application of knowledge 150) Explain the concept of agile marketing and why it is increasingly important in today's marketing environment.

Answer: Agility is all about being nimble, responding quickly to rapid changes and new challenges presented by the environment. In today's fast-paced competitive marketing place, market planning cannot always be the neat and orderly process presented in the text. Particularly in high-tech and start-up environments, it is crucial for teams to be able to use agile marketing, which refers to using data and analytics to continuously identify promising market opportunities and solutions to problems. In agile marketing, tests are deployed quickly and results are analyzed immediately in an iterative process. Agile marketing is most important in hypercompetitive markets in which success depends on the speed of developing and implementing successful marketing strategies.

Difficulty: Difficult LO: 3.3: Describe the steps in market planning AACSB: Application of knowledge 151) Briefly describe the purpose and components of an action plan.

Answer: An action plan, sometimes referred to as a marketing program, is a specific plan for implementation that supports the various marketing objectives and strategies developed in the marketing planning process. An action plan is given a title and begins by laying out the purpose of the plan. A brief description of the action plan is followed by details on responsibility for carrying out the plan. A timeline or timetable for the steps of the plan is included, as well as a budget for the action plan. Finally, measurements and controls for the plan are identified.

Difficulty: Difficult LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 152) Identify an important difference between strategic planning and market planning.

Answer: Though the process is similar, market planning is much more focused on issues related to the marketing mix—the firm's product, its price, promotional approach, and distribution methods.

Difficulty: Difficult LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 37 Copyright © 2022 Pearson Education, Inc.

153) What is contingency planning? How are scenarios used in contingency planning??

Answer: Contingency planning assesses the risk of a variety of possible, mostly external, environmental factors and their potential level of impact on the firm's ability to add value and serve its market through its offerings. Scenarios are the multiple strategic paths a firm develops in contingency planning.

Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 154) Why is it important to consider marketing as an investment rather than as an expense?

Answer: Considering marketing as an investment rather than an expense is critical because this distinction drives firms to use marketing more strategically. The ROMI concept heightens the importance of identifying and tracking appropriate marketing metrics.

Difficulty: Difficult LO: 3.3: Describe the steps in market planning AACSB: Application of knowledge 155) A sales manager at ABC Services Inc. was required to track important marketing metrics each quarter. Give two examples of the marketing metrics this sales manager might report.

Answer: Answers will vary, but could include the following: customer commitment to relationship, customer loyalty, long-term value of a customer, company reputation, sales calls per day, reach and frequency of advertising, etc.

Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking 156) Briefly explain the difference between lagging indicators and leading indicators.

Answer: A leading indicator is a marketing metric that evaluates current efforts in a way that allows marketers to make adjustments in the current action plan. A lagging indicator is a marketing metric that is used to analyze outcomes realized after a plan has been implemented.

Difficulty: Moderate LO: 3.3: Describe the steps in market planning AACSB: Analytical thinking

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 4 Market Research 1) A ________ is a process that determines what information marketing managers need and then gathers, sorts, analyzes, stores, and distributes relevant and timely marketing information to users.

A) primary data collection system B) secondary data collection system C) competitive intelligence system D) marketing research project E) marketing information system Answer: E Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 2) Which of the following lists the three important components of a basic marketing information system (MIS)?

A) competitive intelligence, internal records, and all sales personnel B) existing data, market researchers to gather more data, and the technology to convert those data into information C) managers at all levels, corporate culture, and internal data D) data, computer hardware and software, and output for marketing decision makers E) information resources, technical experts, and marketing managers Answer: D Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 3) A firm's sales records including back-orders, out of stock items, and customer buying history are examples of ________.

A) marketing intelligence B) acquired data points C) external primary data D) marketing research E) internal company data Answer: E Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences

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4) A(n) ________ is an internal corporate communication network that uses Internet technology to link company departments, employees, and databases.

A) social network B) market intelligence system C) market research online community D) intranet E) marketing decision support system Answer: D Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 5) Which of the following is NOT a major data source for a marketing information system (MIS)?

A) internal company data B) market intelligence C) market research D) acquired databases E) modeling software Answer: E Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 6) ________ refers to the ability an organization or individual has to determine what data collected can be shared with third parties.

A) Data privacy B) Anonymity C) Data mining D) GIGO E) Confidentiality Answer: A Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences

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7) Which of the following is the method marketers use to collect available information about what is going on in the world that is relevant to their business?

A) a marketing decision support system B) marketing management C) longitudinal research D) a market intelligence system E) modeling software Answer: D Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 8) A(n) ________ is a comprehensive display and access system that provides employees with up-to-the-minute information necessary to make decisions.

A) intranet B) marketing dashboard C) acquired database D) market intelligence system E) syndicated research report Answer: B Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 9) To gather market intelligence on the way actual customers are handled, retailers and other service-providers often use ________.

A) mystery shoppers B) intranets C) an MIS D) acquired databases E) competitive intelligence Answer: D Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making

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10) ________ is the process of collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness.

A) Market research B) Marketing management C) Competitive intelligence D) Market intelligence E) Internal marketing Answer: A Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making 11) Which of the following is general information collected by specialized firms on a regular basis and then sold to other firms?

A) syndicated research B) custom research C) competitive research D) perceptual tracking E) marketing decision support research Answer: A Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making 12) Nielsen compiles ratings of television shows and then sells the information to other firms.

Nielsen conducts ________.

A) custom research B) case study research C) syndicated research D) exploratory research E) ethnographic research Answer: C Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making 13) ________ is research a single firm conducts to provide answers to specific questions.

A) Syndicated research B) Custom research C) Customer insight research D) Longitudinal research E) Institutional research Answer: B Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making 4 Copyright © 2022 Pearson Education, Inc.

14) A marketing decision support system (MDSS) is ________.

A) a basic system used by companies that do not have the resources to develop a marketing information system (MIS) B) a popular syndicated research report purchased by most major media companies C) the data, analysis software, and interactive software that allow managers to conduct analyses and find the information they need D) a type of custom research report often called for in the marketing research process E) a data warehouse used to support a marketing information system (MIS) Answer: C Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 15) A marketing manager would most likely use which of the following to find out how many consumers stay with his brand and how many switch, enabling him to project market share over time?

A) modeling software B) syndicated research C) cross-sectional research D) exploratory research E) competitive intelligence Answer: A Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 16) Which of the following is a question that a marketing manager would use an MDSS rather than an MIS to answer?

A) What were our company sales of each of our products during the past month?

B) What are the best media for reaching a high percentage of heavy users of our product?

C) What changes in sales are happening in our industry?

D) If we change our media schedule by replacing a certain media buy with a new media buy, will we reach more users of our product?

E) What are the demographic characteristics of consumers whose purchase patterns are changing the most?

Answer: D Difficulty: Difficult LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences

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17) Which of the following is the process of physically deconstructing a competitor's product to determine how it is put together?

A) reverse engineering B) ethnography C) cross-sectional research D) predictive engineering E) sampling Answer: A Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making 18) Marketing managers at a cosmetic company wanted to find out how resistant their product is to smudging. They hired a research firm to ask 293 women who were wearing the company's StayColor line of cosmetics to rub their cheeks against their shirts using "the pressure they use when caressing someone else's face." The company was conducting ________.

A) syndicated research B) custom research C) case study research D) secondary research E) ethnography Answer: B Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Analytical thinking 19) A company reports on consumers' perceptions of more than 1,700 performers for companies that are interested in using a performer in their advertising. This type of report is an example of ________.

A) syndicated research B) custom research C) case study research D) exploratory research E) primary research Answer: A Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Analytical thinking

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20) SwimFit produces gear for swimmers, including suits, goggles, swim caps, and ear plugs.

SwimFit wants to improve the quality of its goggles to match or surpass the quality of the product category leader. Which of the following is SwimFit most likely to use to find out more about how its competitor's product is made?

A) syndicated research B) customer insights C) predictive technology D) mystery shoppers E) reverse engineering Answer: E Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Analytical thinking 21) Few aspects of market research have the potential for ethical breaches.

Answer: FALSE Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 22) Market research is the informational inputs to marketers that allow them to make the best decisions.

Answer: TRUE Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 23) It is unethical to collect data under the guise of market research when your real intent is to develop a database of potential customers for direct marketing.

Answer: TRUE Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 24) A database is an organized collection of data that can be searched and queried to provide information about contacts, products, customers, and inventory.

Answer: TRUE Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences

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25) Decision makers within a company would be more likely to use an MIS than an MDSS to forecast the results of maintaining the company's prices while competitors reduce their prices.

Answer: FALSE Difficulty: Difficult LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Application of knowledge 26) Discuss the components and functions of a marketing information system (MIS).

Answer: A typical MIS includes three important components: data, computer hardware and software, and output for marketing decision makers. The different types of data that feed into an MIS are internal company data, marketing intelligence, market research, and acquired databases.

This data is processed by the MIS software, and then MIS analysts use the output to generate reports for various decision makers.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 27) The Chair Trade is an independent furniture store that specializes in selling Amish-style furniture and household items. Until the first of the year, its overall sales revenue was slowly increasing. Since the first of the year, however, sales of small items increased while sales of furniture decreased, leading to declining sales revenue. How could the owner of the store rely on market intelligence to understand the change in consumer buying behavior? Should the owner rely solely on market intelligence? Why or why not?

Answer: A market intelligence system is a method by which marketers get information about everyday happenings in the marketing environment relevant to their business. The owner of the store could compile observations about the marketplace, read industry trade publications, review competitors' websites, and even hire "mystery shoppers" to gather information on the customer experience. However, market intelligence is just the beginning. An effective marketing information system must include procedures to ensure that the intelligence data are translated and combined with internal data and other marketing information to create a useful report for the owner.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Application of knowledge

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28) How does a marketing decision support system (MDSS) differ from a marketing information system (MIS)? Why might a marketer want to use an MDSS in addition to an MIS? Answer: A marketing decision support system (MDSS) includes analysis and interactive software that allows marketing managers to access MIS data and conduct their own analyses.

The statistical and modeling software of an MDSS allows marketers to examine complex relationships among factors in the marketplace and to generate answers to "what-if" questions about those relationships. MDSS is an enhancement to the MIS that makes it easy for marketing managers, rather than just MIS analysts, to access the MIS system and find answers to their questions.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Application of knowledge 29) What is internal company data? Give two examples of internal data.

Answer: Internal company data refer to information that comes from within the company.

Answers may vary, but could include a firm's internal records of sales and information such as which customers buy which products in what quantities and at what intervals, what items are in stock, which items are back-ordered because they are out of stock, when items were shipped to the customer, and what items have been returned because they are defective.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Application of knowledge 30) What is reverse engineering?

Answer: Reverse engineering is the process of physically deconstructing a competitor's product to determine how it's put together.

Difficulty: Easy LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Analytical thinking 31) What are two important issues when an organization collects data? Explain what each issue means.

Answer: When an organization collects data —whether via digital or other means—important issues of privacy and confidentiality come into play. Data privacy refers to the ability an organization or individual has to determine what data collected can be shared with third parties.

Confidentiality refers to a condition in which the researcher knows the identity of a research subject but takes steps to protect that identity from being discovered by others.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Ethical understanding and reasoning

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32) What is syndicated research? Provide an example.

Answer: Syndicated research is general information collected by firms on a regular basis to be sold to other firms. Nielsen's Scarborough is an example. Student responses may vary.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Application of knowledge 33) Economic and demographic data compiled by the U.S. Census Bureau are available at little or no cost. In the terms of a marketing information system, what type of data is this?

Answer: This is secondary research from an acquired database.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Integration of real-world business experiences 34) What is GIGO? Explain why it is important to market research.

Answer: GIGO refers to "garbage in, garbage out." Information is the fuel that runs the marketing engine. Marketers must have information that is accurate, up to date, and relevant in order to make good decisions based on research. With information that is "garbage"—inaccurate, out of date, or irrelevant—marketers cannot make good decisions.

Difficulty: Moderate LO: 4.1: Explain the role of a marketing information system and a marketing decision support system in marketing decision making AACSB: Ethical understanding and reasoning 35) Raw, unorganized facts that need to be processed are called ________.

A) information B) samples C) data D) insights E) research Answer: C Difficulty: Easy LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights AACSB: Integration of real-world business experiences

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36) When analysts process, organize, structure, and present data so that it is useful for decision making, the transformation creates ________.

A) primary data B) secondary data C) exploratory research D) descriptive research E) information Answer: E Difficulty: Easy LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights AACSB: Integration of real-world business experiences 37) Using all relevant information to make the best possible marketing decision is referred to as ________.

A) agile marketing B) market intelligence C) evidence-based decision making D) the market research process E) predictive technology Answer: C Difficulty: Easy LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 38) ________ refers to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain customers.

A) Market research B) Evidence-based decision making C) Exploratory research D) Customer insight E) Predictive technology Answer: D Difficulty: Easy LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 39) Which of the following best explains the difference between data and information?

A) Information needs to be processed to be useful, but data is useful without being processed.

B) Data is created from the transformation of information.

C) Data is more structured and organized than information.

D) Information is more structured and organized than data.

E) Data is interpreted information.

Answer: D Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 11 Copyright © 2022 Pearson Education, Inc.

40) Data analytics in marketing is the process of examining raw data to discover trends, answer questions, and gain insights in order to make evidence-based decisions.

Answer: TRUE Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 41) Customer insight is closely related to evidence-based decision making.

Answer: TRUE Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 42) The role of a customer insight manager is typically a support role across a company's strategic business units (SBUs).

Answer: TRUE Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 43) Analysts transform data into information.

Answer: TRUE Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights AACSB: Integration of real-world business experiences 44) Describe the function of customer insights.

Answer: Customer insights refer to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain its customers. A customer insight specialist sifts through all of the available information about how customers interact with the organization in order to support market planning decisions. The insight specialist incorporates information from many different sources to create a more complete image of customers. Charged with integrating information, the insights manager has a supporting role across departments and SBUs. Difficulty: Moderate LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 45) What is the difference between data and information?

Answer: Data, which are raw and unorganized facts, become information when they are organized, structured, and presented in a way that becomes useful for decision making.

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46) What is evidence-based decision making?

Answer: Evidence-based decision making refers to a marketer's capability to utilize all of the relevant information available in order to make the best possible marketing decisions.

Difficulty: Easy LO: 4.2: Understand the concept of evidence-based decision making toward gaining customer insights 47) Which of the following is true about the steps in the market research process?

A) The research design should be determined before the problem is defined.

B) The last step is to analyze and interpret the data.

C) The first step is to select a method of data collection.

D) The first step is to define the research problem.

E) Data must be collected before the sample can be designed.

Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 48) The first step in the market research process is to ________.

A) determine how data will be collected B) select samples C) clearly understand the information needed by managers D) set the mission statement for the research E) determine a research design Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Interpersonal relations and teamwork 49) The focus of a ________ often comes from marketplace feedback that identifies a possible problem.

A) research question B) sample design C) research design D) data collection method E) research report Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process

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50) Which component of the market research process determines the consumer population that a company will study?

A) the research design B) the sampling method C) the research objective D) the collection method E) the sampling design Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 51) The second step of the marketing research process is to ________.

A) define the problem B) select the primary data collection method C) determine the sampling method D) calculate the budget E) determine the research design Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 52) Which of the following identifies exactly what information marketers will collect and what type of study they will conduct?

A) the research objective B) the environmental context C) the sampling method D) the data collection method E) the research design Answer: E Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 53) Data that have been collected for some other purpose than to answer the question at hand are called ________.

A) primary data B) secondary data C) mined data D) experimental data E) ethnographic data Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process

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54) Which of the following questions should marketers first answer when they are determining their research design?

A) What kind of sampling method should we use?

B) What type of focus group best fits our needs?

C) Do we need quantitative or qualitative data?

D) Does the information we need already exist?

E) How should we collect the data we need?

Answer: D Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process 55) Online sources of ________ for marketers include the U.S. Census Bureau, the Bureau of Labor Statistics and the American Marketing Association.

A) primary data B) secondary data C) reality mining data D) causal research data E) ethnographic data Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 56) Which of the following is gathered directly from respondents in order to specifically address a question at hand?

A) ethnographic observations B) experimental hypotheses C) primary data D) secondary data E) internal data Answer: C Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 57) Marketers would be most likely to use ________ to come up with ideas for new strategies and opportunities or to get a better understanding of a problem they are currently experiencing with a product.

A) experimental research B) experiential research C) exploratory research D) causal research E) predictive technology Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process

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58) Which of the following is NOT an example of exploratory research?

A) unobtrusive measures B) in-depth interviews C) focus groups D) case studies E) ethnography Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 59) Which type of research tends to generate nonnumeric results that provide detailed verbal or visual information about consumers' attitudes, feelings, and buying behaviors?

A) data mining B) qualitative research C) quantitative research D) causal research E) descriptive research Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 60) A small restaurant chain wanted to test their hunches about a change in their menu. What type of research are they most likely to use?

A) exploratory research B) causal research C) case study research D) ethnography E) descriptive research Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 61) A product-oriented discussion among a small group of consumers led by a trained moderator is a(n) ________.

A) focus group B) case study C) one-on-one interview D) online community E) chatbot Answer: A Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication

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62) Which of the following would most likely be used in a focus group?

A) an fMRI machine to better understand why consumers make the decisions they do B) a one-way mirror that allows a client to observe the group C) a longitudinal design that tracks the responses of members of the group over time D) an experiment that attempts to rule out some explanations for consumer decisions E) a cross-sectional design that collects information from a large number of respondents Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 63) Which of the following research techniques has the advantage of rapid back-and-forth communication between a company and group of consumers, allowing for real-time data collection over a period of time?

A) ethnography B) traditional focus group C) market research online community D) longitudinal research E) cross-sectional research Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 64) In business-to-business market research in which the customers are other firms, researchers may try to learn how one particular company makes its purchases. This is an example of a(n) ________.

A) focus group B) case study C) longitudinal study D) market research online community E) ethnographic study Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 65) Ethnography borrows from which group of social scientists?

A) anthropologists B) psychologists C) sociologists D) economists E) historians Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process

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66) Which type of research is conducted when a researcher "hangs out" and watches what people do when they choose among competing brands in a store aisle, and then approach them with some questions?

A) focus group B) in-depth interview C) case study D) longitudinal study E) market research online community Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 67) Once a company has conducted exploratory research and reviewed the resulting data, its next step is most likely which of the following?

A) conduct descriptive research B) calculate the representative sample size C) identify secondary data sources D) select a primary data collection method E) conduct qualitative research Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 68) Descriptive research using a ________ design tracks the responses of the same sample of respondents over time.

A) latitudinal B) cause-and-effect C) longitudinal D) cross-sectional E) hierarchical Answer: C Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 69) To identify cause-and-effect relationships between two (or more) things, a marketer is likely to use which type of research?

A) ethnography B) predictive techniques C) descriptive research D) causal research E) exploratory research Answer: D Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process

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70) In causal research, factors that might be responsible for causing a change are called ________.

A) predictive techniques B) obtrusive measures C) unobtrusive measures D) dependent variables E) independent variables Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 71) Researchers design ________ to test predicted relationships among variables in a controlled environment.

A) longitudinal assessments B) statistical models C) multidimensional scales D) experiments E) perceptual maps Answer: D Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 72) Your text describes the two main primary data collection methods as ________.

A) descriptive and exploratory B) causal and descriptive C) survey and observation D) direct and indirect E) impersonal and personal Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 73) Which of the following best explains the goal of neuromarketing?

A) to use subliminal messages to influence consumer decisions B) to better understand why consumers make the decisions they do C) to drive consumer preferences D) to design better marketing research experiments using the Internet E) to analyze data from various sources to answer complex "what if" questions Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences

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74) Of the following, which type of data collection method is likely to have the lowest response rate?

A) mail questionnaire B) focus group C) online focus group D) case study E) face-to-face interview Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 75) Which of the following is NOT a survey method for data collection?

A) online questionnaires B) mail questionnaires C) intercepts D) observations E) face-to-face interviews Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 76) Which data collection method generally provides marketers the LEAST flexibility in the types of questions they can ask?

A) telephone interviewing B) face-to-face interviewing C) mail questionnaires D) online questionnaires E) intercepts Answer: C Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 77) Which of the following is NOT an advantage of online questionnaires?

A) provide no interviewer bias B) are low cost C) provide instantaneous data collection D) can determine whether respondents have trouble understanding questions E) have no geographic restrictions Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences

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78) Telemarketing has had the greatest impact on which of the following data collection methods?

A) mail questionnaires B) online questionnaires C) intercepts D) telephone interviews E) face-to-face interviews Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 79) A questionnaire that asks respondents whether they "strongly agree," "somewhat agree," "somewhat disagree," or "strongly disagree" is most likely a(n) ________.

A) unstructured questionnaire B) intercept interview C) face-to-face interview D) moderately structured questionnaire E) completely structured questionnaire Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 80) ________ is a type of data collection in which the researcher simply records the consumer's behaviors.

A) Intercept research B) Observation C) Mechanical observation D) Focus group research E) Neuromarketing Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 81) Which of the following is a primary data collection method that relies on nonhuman devices to record consumer behavior?

A) mechanical observation B) intercepts C) ethnography D) unobtrusive measurement E) case studies Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 21 Copyright © 2022 Pearson Education, Inc.

82) Interviewer bias is a problem in which survey data collection method?

A) mail questionnaires B) telephone interviews C) face-to-face interviews D) case studies E) online questionnaires Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 83) Robocalls often rely on the use of numbers that look familiar to the intended receiver but are actually fake. These numbers are referred to as ________.

A) spoofed numbers B) TRACED C) people meters D) intercept research E) neuromarketing Answer: A Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 84) Eye tracking technology used to gain insights into how individuals interact with and respond to different visual elements and stimuli is a type of ________.

A) ethnographic research B) intercept research C) secondary research D) mechanical observation E) structured survey Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 85) Sifting through garbage to search for clues about each family's consumption habits is an example of which data collection method?

A) unobtrusive measures B) intercept research C) mechanical observation D) eye tracking technology E) sampling Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge

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86) ________ are a method for tracking what computer users do at various websites and which sites they visit.

A) Projective techniques B) People meters C) Predictive techniques D) Cookies E) Search engines Answer: D Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 87) Using the approach of ________, researchers track consumption patterns and conversations of online consumers.

A) mechanical observation B) netnography C) predictive techniques D) eye tracking technology E) sampling Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 88) Predictive technology used by e-marketers relies on which of the following?

A) sophisticated brain scans revealing consumers' reactions to advertisements and products B) collecting data through people meters C) collecting qualitative information through online questionnaires D) drawing generalizations from professional respondents E) tracking the shopping patterns of large numbers of people Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 89) ________ is/are used to identify fake responses to online questionnaires by correlating specific computers used with multiple browsers.

A) Eye tracking technology B) Unobtrusive measures C) Cross-browser digital fingerprinting D) Intercept research E) Netnography Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 23 Copyright © 2022 Pearson Education, Inc.

90) Searching the latest posts and popular terms to gain insight into emerging trends and see what customers are talking about in real time is referred to as ________.

A) scraping the Web B) intercept research C) cross-browser digital fingerprinting D) ethnography E) GIGO Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 91) ________ is the extent to which research actually measures what it was intended to measure.

A) Flexibility B) Validity C) Responsiveness D) Reliability E) Representativeness Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 92) ________ is the extent to which the research design was set to measure what was intended to be measured and not obscured by the accidental inclusion of any factors not intended to be included in the study.

A) External validity B) Internal validity C) External reliability D) Internal reliability E) Representativeness Answer: B Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 93) Children are difficult subjects for market researchers because they have poor recall and often do not understand abstract questions they are asked, and they cannot always explain the reasons for their preferences. This brings into question the ________ of the survey.

A) flexibility B) sampling C) responsiveness D) reliability E) representativeness Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 24 Copyright © 2022 Pearson Education, Inc.

94) ________ is the process of selecting respondents for a survey.

A) Sampling B) Prospecting C) Modeling D) Surveying E) Representation Answer: A Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 95) The two main types of samples used by researchers are ________.

A) reliable and nonreliable B) probability and nonprobability C) valid and invalid D) static and dynamic E) longitudinal and cross-sectional Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 96) Which of the following is true about a probability sample?

A) The observation method is used to select people who appear most willing to participate.

B) Convenience is the key determinant of who participates.

C) A researcher uses personal judgment to select participants.

D) Every member of the population is included in the sample.

E) Each member of the population has some known chance of being included in the sample.

Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 97) A ________ sample is a type of probability sample in which a researcher divides the population into segments that relate to the study's topic.

A) systematic B) convenience C) stratified D) quota E) simple random Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process

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98) A ________ selects the nth member of a population after a random start.

A) systematic sampling procedure B) stratified sample C) simple random sample D) convenience sample E) nonprobability sample Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 99) Which of the following is true about a nonprobability sample?

A) The hierarchical sampling method is used to select people who appear most willing to participate.

B) Representativeness is the key determinant of who participates.

C) A researcher uses personal judgment to select participants.

D) Every member of the population is included in the sample.

E) Each member of the population has some chance of being included in the sample.

Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 100) A survey questioned men and women to determine how each group felt about low-fat foods advertised on television. The results from male and female respondents were examined separately to see if their responses were different. The research results were analyzed using ________.

A) ethnographic techniques B) single-source data methods C) cross-tabulation D) standard correlation calculations E) projective techniques Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 101) In general, a research report will NOT include ________.

A) an executive summary of the report that covers the high points of the total report B) a description of the research methodology C) a discussion of the results of the study, including tabulations, cross-tabulations, and additional statistical analysis D) a discussion of limitations of the study E) a situation analysis Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication

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102) To determine what type of information to add to its website in order to attract more visitors, an Internet company could look at a survey by the AOL/Roper Starch Cyberstudy, which showed the primary activities Americans are most likely to engage in online. This study is an example of ________.

A) ethnographic data B) a secondary data source C) a primary internal data source D) data mining E) a primary external data source Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 103) Which of the following is NOT an example of a secondary data source for a company researching whether it should open a casino near St. Louis, Missouri?

A) U.S. Census Bureau reports on St. Louis growth patterns B) a survey commissioned by the company asking St. Louis residents about their gambling habits C) the stockholders' report from a casino that currently operates in St. Louis D) a trade organization report on the tourism industry in Missouri E) an academic study of the growth of online gambling activities Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 104) A market research bureau semiannually conducts national surveys of more than 25,000 consumers who complete monthly logs detailing their purchases of products. Many companies subscribe to the bureau's report publication to learn of the findings of these surveys. This information can be classified as ________.

A) primary data B) secondary data C) mined data D) experimental data E) ethnographic data Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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105) A group of investors wants to bring a minor league baseball team to a community of 100,000 to create hometown spirit and offer a new form of family entertainment. The group surveyed people in the community to see if they would attend the games, how frequently they would attend, and whether the location of the proposed baseball stadium was acceptable. This survey is an example of ________.

A) data mining B) a secondary internal source C) longitudinal data D) a primary data source E) a secondary external source Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 106) A city hired a research company to survey spring break vacationers to learn about this market. One of the questions asked was, "If you were able to hang out on the beach with any celebrity, who would she or he be?" This type of question is a means for gathering ________.

A) qualitative data B) ethnographic observations C) cross-tabulated data D) quantitative data E) longitudinal data Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 107) Six women were invited to participate in a discussion on motels, hotels, and resorts. A discussion leader first asked them what differentiated motels, hotels, and resort accommodations.

Then she asked them to identify all the amenities they expect to find in overnight accommodations. These six women and their group leader participated in a(n) ________.

A) intercept B) questionnaire C) expert panel D) case study E) focus group Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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108) A company conducted a comprehensive examination of how one particular firm makes its purchases. The goal was to identify the key decision makers and to learn what criteria they emphasized when they chose among suppliers. The company conducted a(n) ________.

A) focus group B) concept test C) case study D) intercept E) experimental study Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 109) A researcher is following you around while you shop and while you use the products you bought to see what kind of consumer you are. This is an example of ________.

A) a focus group B) experimental research C) mechanical observation D) descriptive research E) ethnography Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 110) Researchers counted the number of out-of-state cars parked in an outlet mall parking lot at and The gathering of this quantitative data is an example of descriptive research using ________.

A) a hierarchical format B) a cross-sectional design C) latitudinal tracking D) a longitudinal design E) ethnography Answer: B Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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111) Southwest Airlines has a longstanding Customer Advisory Council. These customers interact with one another and share opinions and ideas with the goal of helping to shape the future of the airline. This is an example of ________.

A) a hierarchical format B) a cross-sectional design C) latitudinal tracking D) a longitudinal design E) ethnography Answer: D Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 112) An independent grocer who wants to know if cocktail sauce and tartar sauce would sell better if the two products were moved from the salad dressing section of the store to a display next to the seafood selection would most likely use ________ research.

A) longitudinal B) exploratory C) latitudinal D) ethnographic E) causal Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 113) Samsung and NeuroInsight partnered to analyze the brain activity of iPhone and Samsung users to develop television commercials that appealed specifically to Apple enthusiasts. This is an example of ________.

A) focus groups B) neuromarketing C) ethnographic research D) telemarketing E) observational research Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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114) Barry was sitting on a bench near the center of the shopping mall waiting for his wife to finish her shopping when he was approached by a woman holding a clipboard and a dress shirt.

She asked if Barry had the time to answer a few questions about the shirt. After Barry examined the shirt, the woman asked him to assess the quality of the shirt and to state how much he would be willing to pay for the shirt. Barry participated in a(n) ________.

A) focus group B) observational interview C) expert panel D) experimental interview E) intercept Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 115) A survey about pet ownership used a sample derived from people who visit a website and register. This sample would lack ________ because not everyone has Internet access.

A) flexibility B) internal validity C) responsiveness D) reliability E) representativeness Answer: E Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 116) Managers of a movie theater company want to learn more about what types of premium services their customers who participate in the theater's loyalty program most desire and would be willing to pay a premium price for. The managers use a computer program that selects customers in a lottery style from the company's database to receive an online survey and loyalty points for completing the survey about premium services. What kind of sampling technique do the movie theater managers use?

A) simple random sampling B) nonprobability sampling C) stratified sampling D) systematic sampling E) convenience sampling Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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117) A daycare center operator wanted to survey her parents to determine if they were interested in the center providing once-a-month Saturday night care for their children. Rather than survey all 254 parents, the operator took the list of parents' names and, starting with the third parent's name, surveyed every twelfth parent. What type of sampling did the daycare operator use?

A) simple random sampling B) convenience sampling C) stratified sampling D) systematic sampling E) nonprobability sampling Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 118) The ACME Company needed answers quickly on how consumers felt about electric cars.

Their marketing researchers used their personal judgment to select respondents to their survey.

What format of participant sampling did the ACME Company use?

A) probability sampling B) systematic sampling C) stratified sampling D) nonprobability sampling E) simple random sampling Answer: D Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 119) As part of her summer job, Martina was instructed to collect data from 10 people to determine how they felt about a number of political issues, including socialized medicine, food stamps, and educational vouchers. She asked her father, grandfather, mother, brother, two uncles, and four sorority sisters to answer the survey questions. Martina used a ________ sample.

A) probability B) convenience C) stratified D) systematic E) simple random Answer: B Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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120) Whether a sample can be categorized as a probability sample or a nonprobability sample depends on the ________ of the sample.

A) validity B) responsiveness C) representativeness D) flexibility E) reliability Answer: C Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 121) A sports entertainment company wants to research how Canadians spend their free time. It is preparing a survey that will be used in all of Canada, including the province of Quebec. Unlike Canadians from other provinces, the people of Quebec primarily speak French. The researchers are planning to use English and French versions of the survey. In preparing the surveys, they should use ________.

A) back translation B) nonprobability sampling C) probability sampling D) syndicated research E) cross-tabulation Answer: A Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 122) The first step in the market research process is to clearly understand what information managers need.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 123) Sample design falls into the two broad categories based on whether the analysts will use secondary or primary data.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 124) A syndicated research report is an example of a secondary data source.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process

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125) Because exploratory research is usually small scale and less costly than other techniques, marketers may do this to test their hunches about what's going on without too much risk or expense.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 126) Intercept research can be conducted online.

Answer: FALSE Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Integration of real-world business experiences 127) Descriptive research is typically expressed in qualitative terms.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 128) Cross-sectional design involves the systematic collection of qualitative information.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 129) A causal research design attempts to understand cause-and-effect relationships.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 130) In causal research, the independent variable(s) cause some change in the dependent variable(s).

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 131) Mail questionnaires give researchers full flexibility in the types of questions they can ask as well as full control over the circumstances under which the respondents answer the questions.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 132) Spoofed numbers look familiar to the intended receiver but are actually fake.

Answer: TRUE Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 34 Copyright © 2022 Pearson Education, Inc.

133) When researchers suspect that research subjects will alter their behavior if they know someone is watching, the researchers are likely to use unobtrusive observational methods.

Answer: TRUE Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process 134) Catfishing could impact the integrity of the research that marketers think they're conducting.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 135) Cross-tabulation means that we examine the data that we break down into subgroups.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Written and oral communication 136) When research findings have external validity, the findings of the study can be generalized to the target market, not just the specific participants in the research.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 137) Netnography is a form of qualitative research that tracks the consumption patterns and conversations of online consumers.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process 138) After conducting formal marketing research for your department, you summarize the data in an oral presentation to management. You are following normal marketing research steps.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 139) A researcher investigating the amount of food waste in the typical four-person family plans to sift through the garbage of a small sample of representative families. This method is an example of an unobtrusive survey.

Answer: FALSE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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140) ABC Interior Designs wants to collect research data about which areas of the store attract the most customer attention through video recording devices placed throughout the store. This is an example of mechanical observation.

Answer: TRUE Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 141) Describe the basic market research process.

Answer: The market research process involves seven steps: defining the research problem, determining the research design, choosing the method to collect primary data, designing the sample, collecting the data, analyzing and interpreting the data, and preparing the research report. First, it must be clear what information management needs, or what problem they need to solve. The research design may rely on secondary research or primary research. The three types of primary research are exploratory, descriptive, and causal. Next, the method for collecting the primary data must be selected. Researchers can use different types of surveys or observation to collect the data that is required. Before data collection can begin, decisions about the design of the sample must be made. Researchers can use probability or nonprobability sampling. The next step is actually collecting the data as planned, which is followed by analyzing the data and then interpreting it in a research report.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 142) A catalog retailer specializes in ceramic figures, paintings, books, and other decorative items related to endangered animals. The company is considering donating 10 percent of its net profit to the World Wildlife Foundation (WWF). This idea may attract more customers who like the idea of a portion of their money supporting this charity that works to save species. Provide several examples of primary and secondary data that the retailer can use in its market research investigating the possible benefits of this plan.

Answer: Students' answers to this question will vary. Primary data could come from a customer survey about the WWF and its mission or from a series of focus groups asking current customers how they might respond to the proposed relationship between the catalog and the World Wildlife Foundation. Secondary data could come from looking at reports on other companies engaged in similar promotions as well as internal sales records. Secondary data could also include published information on the WWF and its membership.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge

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143) Compare and contrast the structure and uses of exploratory research and descriptive research.

Answer: Exploratory research can be used to generate ideas for future strategies or just to get a better handle on a problem a firm is experiencing with a product. These studies are usually small in scale and less costly than other research techniques. Exploratory research typically is qualitative, meaning that the results of the research project tend to be nonnumeric. The results might be verbal or visual information about consumers' attitudes, feelings, and buying behavior in the form of words rather than numbers. Descriptive research often follows exploratory research. Descriptive research is much more systematic, probing into a specific marketing problem and basing its conclusions on a much larger sample of participants. Descriptive research is quantitative, meaning that results are expressed in numerical terms such as averages, percentages, or other statistics summarizing results from a large set of measurements.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 144) List the main survey data collection methods and discuss the advantages of each.

Answer: The main data collection methods are mail questionnaires, telephone interviews, face-to-face interviews, and online questionnaires. Mail questionnaires can be used to collect information at a low cost per respondent. Respondents may give more honest answers to more questions in this format than to an unknown interviewer in person or on the phone. Telephone interviewing is one of the best methods for gathering information quickly and it provides great flexibility. Telephone interviewing is also less expensive than face-to-face interviewing.

Face-to-face interviews are flexible and allow interviewers to help respondents understand difficult questions. Visual aids can be used, products can be demonstrated, and reactions and behaviors can be observed. Online questionnaires allow the interviewee to be more honest, the costs are greatly reduced, there is no interviewer bias, and reports come back faster.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge

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145) Explain the three factors that typically influence the quality of research results and discuss how researchers can ensure the quality of their data.

Answer: The three factors that typically influence the quality of research results are validity, reliability, and representativeness. Validity is the extent to which the research actually measures what it was intended to measure. To ensure internal validity, researchers should carefully analyze the construction of surveys and experiments so that they measure intended factors. To ensure external validity, researchers need to work with a sample that represents the target population so that results of the research can be generalized. The second factor is reliability, which is the extent to which the research measurement techniques are free of errors. Researchers can maximize reliability by carefully training interviewers and by using several different ways to ask the same question or using several analysts to interpret the responses. The third factor is representativeness, which is the extent to which consumers in the study are similar to the larger population in which the organization is interested. Researchers should carefully design the sample to ensure representativeness.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 146) What is eye tracking technology?

Answer: Eye tracking technology is a type of mechanical observation technology that uses sensors and sophisticated software to track the position and movement of an individual's eyes in order to gain context-specific insights into how individuals interact with and respond to different visual elements.

Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 147) What is ethnography? How do marketers use this?

Answer: Ethnography is an approach to research based on observations of people in their own home or communities. Some market researchers visit people's home or participate in real-life consumer activities to get a handle on how they really use products Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 148) What is the difference in the qualitative versus quantitative approach to research?

Answer: In the qualitative approach, the results of the research project tend to be nonnumeric.

The results might be verbal or visual information about consumers' attitudes, feelings, and buying behavior in the form of words rather than in numbers. In the quantitative approach, results are typically expressed in numerical terms of averages, percentages, or other statistics summarizing results from a large set of measurements.

Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge

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149) Explain the roles of independent and dependent variables in causal research.

Answer: Independent variables cause some change in dependent variables. Researchers test the relationship between these variables in causal research.

Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 150) Why might a researcher decide to use causal research rather than descriptive research?

Answer: Descriptive research techniques provide valuable information about what is happening in the marketplace but do not address why something may or may not be happening. Causal research attempts to understand why something is happening. Marketers use causal research techniques when they want to know if a change in something is responsible for a change in something else.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 151) A manager in a grocery store decides to place packages of pound cake in two different locations in the store. One display of the cake also includes other bakery items. The second display of the cake is in the vegetable section of the store, placed next to the shelf full of boxes of fresh strawberries. The grocery store manager wants to learn which of the two locations will encourage the most customers to buy the cake. What format of research is the store manager conducting? Explain your answer.

Answer: The store manager is conducting an experiment. Experiments are carefully designed to test predicted relationships among variables in a controlled environment. The store could be considered a controlled environment, and the experiment is to see which location will cause more sales of the cakes.

Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking 152) An advertising agency's research division sends researchers into homes with handheld video cameras to get pictures of how and why people use products. What method of research is this advertising agency implementing? Explain your answer.

Answer: The advertising agency is implementing the observation method. Specifically, the personal observation method is being implemented. This method is used when consumers are watched to understand how they react to marketing activities.

Difficulty: Moderate LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Analytical thinking

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153) As she stumbles over boxes of books in her cramped retail space, the owner of a successful independent bookstore has been thinking that she either needs to find a new location or expand her current space. What type of research design should she use to determine how her customers feel about the current store? Why? Answer: This would be an opportunity to use exploratory research. The store owner is trying to come up with a new strategy, and the type of qualitative feedback offered by exploratory research would likely be most helpful. She needs to know about her customers' attitudes and feelings, something more easily discovered through exploratory research than descriptive or causal research.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 154) Two brothers own a hair salon. One believes they could have more business if they mailed out $5-off coupons to people living within a five-mile radius of the shop. The other brother wants to run an ad in the local shopping newspaper with a coupon for a free hot oil treatment.

(The newspaper goes to everyone in the area.) What type of market research can they use to determine whose idea would be more profitable? Explain your answer.

Answer: Causal research could be used to understand cause-and-effect relationships. Both methods should be tried as experiments, and then the results compared to determine which idea would be the most profitable.

Difficulty: Difficult LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge 155) List the sections of a typical market research report.

Answer: A typical market research report includes an executive summary, an understandable description of the research methods, a complete discussion of the results of the study (including the tabulations, cross-tabulations, and additional statistical analyses), limitations of the study, and conclusions drawn from the results with the recommendations for managerial action based on the results.

Difficulty: Easy LO: 4.3: List and explain the steps and key elements of the market research process AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 5 Marketing Analytics: Welcome to the Era of Data-Driven Insights!

1) CRM stands for ________.

A) consumer relationship marketing B) consumer retention management C) customer relationship management D) customer retention marketing E) consumer response management Answer: C Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 2) A company's first step in one-to-one marketing should be to ________.

A) rank its customers in terms of sales volume B) identify customers that cost the company money C) identify types of transactions and determine which will be abandoned D) identify customers and get to know them in as much detail as possible E) determine which aspect of the product will be customized to meet the individual needs of its customers Answer: D Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 3) In a firm's top executive team, the ________ is positioned as the leading force of all things customer-related.

A) chief operating officer B) chief financial officer C) chief customer officer D) chief information officer E) chief marketing officer Answer: C Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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4) In one-to-one marketing, the final step is to ________.

A) interact with the customers and find ways to improve cost efficiency B) prioritize efficiency of interactions with customers C) differentiate among these customers in terms of both their needs and their value to the company D) customize some aspects of the products or services offered to each customer E) implement a mass customization program Answer: D Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 5) Which of the following statements about CRM programs is true?

A) The success of a CRM program relies on its use of mass communication channels.

B) CRM programs include information gathered from each customer touchpoint.

C) Internet technology is a barrier to the successful implementation of CRM programs.

D) To succeed, all companies should engage in CRM every time they interact with a customer.

E) Only consumer marketers can benefit from the use of CRM programs.

Answer: B Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 6) Any direct interface between customers and a company—whether it is online, in-person, or over the phone—is called a(n) ________.

A) share of customer B) customer target C) touchpoint D) customization E) analytic Answer: C Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Written and oral communication

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7) To reduce the cognitive and clerical workload required to fully take advantage of all of the data collected from customers in a CRM program, firms use ________, a set of rules for handling different processes in a predetermined way.

A) conversion rates B) marketing automation C) customer lifetime value D) share of customer E) structured data Answer: B Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 8) Which of the following is considered a CRM service metric?

A) share of customer wallet B) conversion rate C) customer churn rate D) number of webpage views E) CLV Answer: C Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 9) CRM firms focus on increasing their share of ________, not share of market.

A) profit B) audience C) segment D) usage E) customer Answer: E Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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10) At its core, CRM is about ________.

A) communication with customers and customers being able to communicate with a company "up close and personal" B) building the company's social media platforms C) increasing profit for the company D) measuring the value of each customer E) ensuring products meet the customers' needs and wants Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 11) ________ is the term commonly used to denote the fusion of marketing and technology.

A) MarTech B) MIS C) CLV D) MROI E) COO Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 12) The criteria for a SMART goal includes all of the following EXCEPT ________.

A) meaningful B) specific C) timely D) measurable E) achievable Answer: A Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking

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13) ________ are measures that marketers can use to watch the performance of their marketing efforts.

A) Predictive analytics B) Marketing metrics C) Marketing controls D) Touchpoints E) Data warehouses Answer: B Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 14) The process through which a company finds, qualifies, and sells its products to buyers is referred to as ________.

A) sales funnel B) lead nurturing C) CRM D) a touchpoint E) digital marketing Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 15) The local florist shop has begun using an automated process of sending personalized and relevant content to local prospects to build their trust and entice them into the shop to make a purchase. The florist is using ________.

A) lead nurturing B) customer segmentation C) CLV D) touchpoints E) SMART goals Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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16) The automated process of sending personalized and relevant content to the prospect to build their trust, making it more likely that they will eventually make a purchase, is known as ________.

A) repositioning B) machine learning C) lead nurturing D) sentiment analysis E) A/B testing Answer: C Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 17) The dentist's office calling to remind you of your scheduled appointment for the next day is an example of ________.

A) CRM B) chain modeling C) undifferentiated targeting D) share of customer E) repositioning Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 18) Through its CRM program, an online clothing company records information about each time a customer makes a purchase or clicks on a link through an email or an online advertisement.

These interactions are examples of ________.

A) customizations B) touchpoints C) analytics D) optimizations E) impressions Answer: B Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking

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19) The ACME Company is particularly concerned with customer satisfaction. They have developed measures addressing the extent to which customer experiences are enhanced as a result of CRM. The ACME Company has implemented ________.

A) customer perception metrics B) segment profiles C) one-to-one marketing D) undifferentiated targeting E) brand perception metrics Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 20) A building supply company has many high-volume customers and many low-volume customers. A CRM system would be LEAST likely to help management decide to use which of the following methods for communicating with low-volume customers?

A) Every November, send each customer a new calendar that has the phone number of the building supply company printed on the cover.

B) Once or twice a year, mail a new product catalog to each customer.

C) Every few months, have a customer service representative from the building supply company call each customer.

D) Have a sales representative make a personal one-on-one appointment with every low-volume customer at least twice a month.

E) Give each low-volume customer the company Web address to check building supply products sold by the company.

Answer: D Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 21) The Final Outback Company uses over 50 CRM business performance metrics. Ten of these are critical indicators of progress toward their intended result. These ten represent the company's ________.

A) KPIs. B) CCO C) CLV D) Big Data E) customer perception metrics Answer: A Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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22) Customer relationship management (CRM) programs are often called interactive marketing programs.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 23) A firm's top executive team is often called the "C-suite" because of the focus on customers in today's marketing environment.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) 24) CCO refers to the Chief Customer Officer.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) 25) The term "MarTech" refers to the fusion of marketing and technology, particularly digital technologies.

Answer: TRUE Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 26) Customer relationship management (CRM) programs can systematically track customers' preferences and behaviors over time.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 27) An individual or firm with a potential interest in buying something you sell is a lead.

Answer: TRUE Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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28) User adoption metrics include number of logins and data completeness.

Answer: TRUE Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 29) Technology designed specifically for marketing analytics is referred to as MarTech.

Answer: TRUE Difficulty: Easy LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 30) Rather than focusing on improving cost efficiencies, a CRM program helps marketers focus on the effectiveness of each interaction with a customer.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 31) The final stage in one-to-one marketing is to identify customers in terms of both their needs and their value to the company.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 32) CRM programs facilitate communication from a company to its customers and from customers to the company.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 33) During the interact step of one-to-one marketing, companies should focus on ways to improve the cost efficiency and effectiveness of the interaction.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences

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34) CRM programs are used by e-commerce firms, but not by brick-and-mortar firms.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) 35) Goals tend to be longer term than objectives.

Answer: FALSE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) 36) Using a CRM approach, customers are prioritized and communication is customized accordingly.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Integration of real-world business experiences 37) The Union Express website tracking a lost package is an example of CRM. Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 38) To better tailor the services it offers to the needs of specific customers, First City Bank should first collect, verify, and update the information it has about its customers.

Answer: TRUE Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 39) Explain the philosophy of customer relationship management (CRM).

Answer: Customer relationship management (CRM) programs allow companies to talk to individual customers and adjust elements of their marketing programs in light of how each customer reacts to elements of the marketing mix. Communication with customers is key, as is fostering a long-term relationship with each profitable customer.

Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking

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40) Explain the relationship between one-to-one marketing and CRM. Answer: One-to-one marketing is facilitated by CRM. One-to-one marketing is the concept of the company identifying and then addressing the specific needs and demands of its individual customers. The key to doing this is the implementation of CRM, customer relationship management. CRM helps companies get to know customers in as much detail as possible, differentiate among these customers, and then interact with customers in more cost-efficient and effective ways. Finally, a CRM system will help a company customize some or all aspects of its goods and services based on what has been learned through customer interactions.

Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 41) Explain the function of the chief customer officer in a firm's executive team.

Answer: A firm's chief customer officer is a part of the firm's leadership team and is the firm's leading voice on all things customer-related. A chief customer officer might replace or supplement the traditional chief marketing officer role. This role is an example of a firm's commitment to a customer orientation that prioritizes the satisfaction of customers' wants and needs in order to enhance the customer experience.

Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 42) What is a lead? Explain how leads are converted into paying customers.

Answer: A lead is an individual or firm with a potential interest in buying something you sell.

Leads are converted into paying customers through the sales funnel, which is the process through which a company finds, qualifies, and sells its products to buyers. Like a funnel, only the most qualified prospects advance through the process and only a fraction of these people actually end up making a purchase.

Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 43) What is a SMART goal? Provide an example of a SMART goal explaining how each element of the criteria is met.

Answer: A SMART goal meets the criteria of being specific, measurable, achievable, relevant, and timely. Student responses will vary on their examples. Each of the before-mentioned criteria should be explained.

Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge

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44) What are two ways the airline industry can benefit from the implementation of CRM systems? Explain your answer.

Answer: CRM systems could help flyers by automating crucial information and reducing phone call volume. CRM could also be used to identify customers' flying patterns, favored destinations, and frequency of usage so that extra perks can be given to the "best" customers.

Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 45) Describe the four steps of one-to-one marketing.

Answer: Through one-to-one marketing, firms get to know the wants and needs of individual customers and use that information to customize goods and services. The first step of one-to-one marketing is identifying and getting to know customers in detail. The second step is to differentiate among these customers in terms of their needs and potential value to the company.

The third step is interacting with the customers in order to determine how to improve cost efficiency and effectiveness. The final step is customizing services or goods based on information gained through interaction with the customer.

Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Analytical thinking 46) Explain how a firm benefits from customers who make multiple purchases versus customers who make just one purchase.

Answer: A firm's profitability and long-term success will be far greater if it develops long-term relationships with its customers so that those customers buy from this firm again and again.

Costs will be far higher and profits lower if each customer purchase is a first-time sale, as it is more expensive to attract a new customer than it is to maintain a relationship with a current customer.

Difficulty: Moderate LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge

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47) The ACME Company has stated its goal is to "strengthen customer relationships." Explain why this is not a SMART goal. Recommend a revised SMART goal for the ACME Company.

Answer: A SMART goal meets the criteria of being specific, measurable, achievable, relevant, and timely. The company's goal is not specific, as it does not identify which customers should or should not be included as part of the goal, what customer relationship elements are relevant, or what the intended action plan might be. The goal is not measurable, as it does not describe how the strength of customer relationships will be assessed. Because the goal is not measurable, it is nearly impossible to determine either if it is achievable or how relevant it is to the broader objectives of the company. Finally, it is not timely because there is no timeline associated with this goal—that is, when do we want to achieve it? Student answers will vary in providing recommendations. The responses should address the shortfalls in the stated goal. A proposed recommendation is: "To increase customer conversion rates for new referral customers by 15 percent by the end of Quarter 4, as tracked and measured by our CRM software."

Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 48) With a CRM approach, how might a firm select different methods of contacting and communicating with customers based on their value?

Answer: Using CRM, a firm would likely use the most expensive and most effective methods of contacting and communicating, such as personal selling, for its customers with the highest potential value. For low-volume, low-value customers, the firm is more likely to use less expensive methods of contact.

Difficulty: Difficult LO: 5.1: Explain how marketers increase long-term success and profits by practicing customer relationship management (CRM) AACSB: Application of knowledge 49) The term "Big Data" refers to the ________.

A) use of data warehouses to store structured and unstructured data B) exponential growth of structured and unstructured data that are difficult to process using traditional database techniques C) increasing number of everyday objects that are connected to the Internet and can communicate information about their use D) extraction and analysis of large amounts of data from websites E) collection and analysis of unstructured data by data scientists Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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50) ________ is a term that refers to a system in which everyday objects are able to communicate information throughout an interconnected system.

A) Big Data B) The Internet of Things C) Data Science D) Data warehousing E) Data mining Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 51) When a company uses computer software to extract large amounts of data from social media platforms, it is using ________.

A) data warehousing B) scanner data C) intelligent agents D) web scraping E) reality mining Answer: D Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 52) Through a process of ________, a company can identify a social media platform user's attitude toward a brand.

A) data warehousing B) sentiment analysis C) search engine optimization D) predictive analytics E) reality mining Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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53) CRM and enterprise resource planning databases are examples of ________ sources of Big Data for marketers.

A) social media B) NGO C) commercial entity D) government E) corporate IT Answer: E Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 54) Which of the following is true of information stored in departmental "silos"?

A) Such information is best described as structured data.

B) Such information is best described as unstructured data.

C) Such information is unlikely to be shared with other departments in the firm.

D) Such information is typically gathered from indirect sources.

E) Such information is typically gathered by channel partners.

Answer: B Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 55) The body of emails and tweets are considered ________.

A) structured data B) unstructured data C) scanner data D) indirect data E) IoT Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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56) Census data is an example of a ________ source of Big Data.

A) social media B) partner database C) commercial entity D) government E) corporate IT Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 57) Scanner data is an example of a ________ source of Big Data.

A) social media B) partner database C) commercial entity D) government E) corporate IT Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 58) Walmart's Retail Link provides real time purchase data to suppliers of goods sold at Walmart stores. Retail Link is an example of a ________ source of Big Data.

A) social media B) partner database C) commercial entity D) government E) corporate IT Answer: B Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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59) The relationship in which a two-way exchange of information between purchasing organizations and their respective vendors that is facilitated through shared or integrated IT systems is known as a(n) ________.

A) data warehouse system B) artificial intelligence system C) channel partner model D) data broker system E) cybersecurity model Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 60) Because of ________, it can be difficult to decide what data are useful and what data are not useful.

A) conversion rates B) predictive analytics C) unstructured data D) search engine optimization E) information overload Answer: E Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 61) Big Data would most likely be measured in which of the following?

A) megabytes B) bytes C) bits D) megabits E) terabytes Answer: E Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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62) ________ is a state in which the marketer is buried in so much data that it becomes nearly paralyzing to decide which of the data provide useful information and which do not.

A) Search engine optimization B) Big Data C) Information overload D) Data warehousing E) Conversion rates Answer: C Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 63) According to SAS, "________ refers to the ever-increasing volume, velocity, variety, variability, and complexity of information."

A) Big Data B) Information overload C) Structured data D) Predictive analytics E) Unstructured data Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 64) To take advantage of the massive amount of data now available, a sophisticated analysis technique called ________ is becoming a priority for many firms.

A) data mining B) prospecting C) cold calling D) data warehousing E) data tallying Answer: A Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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65) ________ allows data to be processed and stored faster, which means real-time applications become more efficient.

A) Edge computing B) Data mining C) Unstructured data D) The Internet of Things E) Web scraping Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 66) A company that compiles and uses large amounts of data to understand its customers is likely to have a ________ to store and process its data.

A) distribution center B) data warehouse C) competitive intelligence center D) custom research project E) marketing research department Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 67) The process through which analysts sift through massive amounts of available data to identify unique patterns of behavior among different customer groups is called ________.

A) structuring data B) information overload C) reality mining D) data warehousing E) data mining Answer: E Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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68) Through a(n) ________, there is a two-way exchange of information between purchasing organizations and their vendors through integrated IT systems.

A) data warehouse B) channel partner model C) data mining process D) web scraper E) Internet of Things Answer: B Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 69) Numeric or categorical information is referred to as ________.

A) structured data B) unstructured data C) predictive data D) optimized data E) converted data Answer: A Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 70) Which of the following is NOT considered structured data?

A) video transcripts B) date C) time D) Census data E) Facebook "Likes" Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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71) Using the method of ________, unstructured data such as social media posts can be categorized into a wide range of complex feelings and emotions.

A) sentiment analysis B) emotion analysis C) predictive analytics D) market basket analysis E) search engine optimization Answer: B Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 72) A ________ is someone who analyzes multiple, disparate data sources in order to discover insights that will provide a competitive advantage.

A) search engine optimizer B) data broker C) data warehouser D) data scientist E) reality miner Answer: D Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 73) Which of the following is NOT one of the four main applications of data mining for marketers?

A) customer retention B) customer acquisition C) customer abandonment D) competitive intelligence E) market basket analysis Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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74) Through the data mining application of ________, marketers identify big-spending customers and target them for special offers that other customers won't receive.

A) customer retention B) customer acquisition C) customer abandonment D) competitive intelligence E) market basket analysis Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 75) ________ is the broad concept of machines being able to carry out tasks in a way that humans would consider "smart."

A) Artificial intelligence B) Augmented intelligence C) Cybersecurity D) Data mining E) Competitive intelligence Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 76) ________ is a subset of machine learning that allows machines to solve complex problems even when using a dataset that is very diverse, unstructured, and interconnected.

A) Deep learning B) Data mining C) Deepfake D) IoT E) Competitive intelligence Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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77) ________ is a strong commitment by firms to protect digital data from destructive forces and from the unwanted actions of unauthorized users.

A) Cybersecurity B) Data mining C) Machine learning D) Deep learning E) Data breach Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 78) The intentional or unintentional release of secure or private/confidential information to an untrusted environment is a(n) ________.

A) data breach B) hacker C) AI system D) data scientist E) deepfake Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 79) Which of the following is the most accurate comparison of structured and unstructured data?

A) More unstructured data than structured data is created every day.

B) More structured data than unstructured data is created every day.

C) Computers can organize and understand structured data but not unstructured data.

D) Computers can organize and understand unstructured data but not structured data.

E) Data mining and analysis has historically focused on unstructured data rather than structured data.

Answer: A Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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80) Companies are most likely to use data mining results identifying unprofitable customers for ________.

A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 81) Through the data mining application of ________, marketers target promotional strategies for products based on the records of which customers have recently purchased certain other products.

A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: E Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 82) Through the data mining application of ________, marketers offer promotions to non-customers who share demographic characteristics with current customers.

A) customer retention B) customer loyalty C) customer acquisition D) customer abandonment E) market basket analysis Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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83) ________ is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity.

A) A blockchain B) A deepfake C) Unstructured data D) Competitive intelligence E) Computer logic Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 84) A data scientist is also known as a(n) ________.

A) intelligent agent B) search engine optimizer C) data broker D) business intelligence developer E) reality miner Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 85) Which of the following is true about unstructured data?

A) It cannot be combined with other data sources.

B) Computer logic programs can identify and extract patterns in it.

C) It must be analyzed manually.

D) It is less valuable than structured data in terms of providing insights into customer behavior.

E) It is more likely to come from direct sources than indirect sources.

Answer: B Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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86) A new "smart" refrigerator has been designed with sensors that send information to the manufacturer about the refrigerator's use and performance. One advantage of the system is that it will detect any possible performance issues before they interfere with consumer use of the refrigerator and communicate that information to both the manufacturer and consumer so that service and/or repairs can take place immediately. This is an example of ________.

A) the Internet of Things B) a data warehouse C) data mining D) sentiment analysis E) unstructured data Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 87) Prep for Success is an educational services company that specializes in preparing students for selective private school entrance exams. Prep for Success sends information about its services to consumers who have purchased school supplies such as backpacks and lunchboxes online and who live in a community with an average household income of above $85,000 per year. This is an example of a company using ________ to identify and contact potential customers.

A) the Internet of Things B) sentiment analysis C) unstructured data D) information overload E) Big Data Answer: E Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 88) Walgreens customers can sign up for the Balance Rewards program, entering a member number or using a member card every time they make a Walgreens purchase in order to receive discounts and build up points that can be redeemed for rewards. Information that Walgreens collects through these purchases is best described as ________.

A) scanner data B) web scraping C) unstructured data D) sentiment analysis E) data mining Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 26 Copyright © 2022 Pearson Education, Inc.

89) Soundz, a marketer of high-end headphones, wants to identify new markets in Asia with high potential for growth and dense pockets of consumers with growing incomes. Which of the following would be the best source of data to help the leadership at Soundz decide which new markets present the best opportunities?

A) corporate IT sources B) social media sources C) government sources D) commercial entity sources E) partner database sources Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 90) Soundz, a marketer of high-end headphones, wants to better understand how consumers think and feel about its products. Which of the following would be the best tool to help the leadership at Soundz learn about consumer attitudes toward the brand?

A) predictive technology B) scanner data C) machine learning D) sentiment analysis E) search engine optimization Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 91) RBC Royal Bank wanted to evaluate the financial value of its substantial personal customer base to determine which type of customers were the most valuable to the bank. To do this, the bank looked at revenues and expenses from each of its financial products, including loans and credit card usage. To identify and then analyze this information, the bank utilized the marketing information systems analysis technique called ________.

A) data warehousing B) marketing research C) probability sampling D) data mining E) market basket analyzing Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking

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92) Tabak catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. Through ________, it has found that customers who change residences are three times more likely than customers who do not move as frequently to buy tables, color printers, and decorative products but are no more likely to buy jewelry or footwear.

A) data mining B) prospecting C) machine learning D) sentiment analysis E) customer acquisition Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 93) Scrambler is a popular smartphone app that users can download and play for free. The makers of Scrambler make the app profitable by selling information obtained about users as they play the game. Marketers would most likely use this information for the data mining application of ________.

A) customer acquisition B) customer retention C) customer loyalty D) customer abandonment E) machine learning Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 94) The publisher of Lifting Life, a magazine and website about weightlifting, wants to develop a clear picture of how readers of the magazine and its competitors feel about the magazine. In order to accomplish this, Lifting Life will likely need to analyze ________ retrieved from social media posts related to weightlifting.

A) optimized data B) structured data C) unstructured data D) market basket data E) scanner data Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge

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95) The publisher of Lifting Life, a magazine and website about weightlifting, wants to develop a clear picture of how readers of the magazine and its competitors feel about the magazine. In order to accomplish this, Lifting Life will likely need to use the technique of ________.

A) search engine optimization B) market basket analysis C) predictive analytics D) emotion analysis E) artificial intelligence Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 96) In her work at Powered Solutions, Angelica helps business clients identify, organize, and analyze data from social media sources, internal CRM databases, commercial entity sources, and government sources. Angelica would best be described as a(n) ________.

A) web scraper B) sentiment analyst C) data scientist D) intelligent agent E) data broker Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 97) A catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship.

It has found that customers who change residences are three times more likely than customers who do not move as frequently to buy tables, color printers, and decorative products but are no more likely to buy jewelry or footwear. By using data analysis to determine which promotion to target to customers who have recently moved, this catalog retailer has engaged in ________.

A) customer retention B) customer acquisition C) customer abandonment D) customer accrual E) market basket analysis Answer: E Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking

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98) Which of the following refers to the application of artificial intelligence?

A) data mining B) predictive analytics C) emotion analysis D) machine learning E) cybersecurity Answer: D Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 99) Fred's Furniture World has been vigilant about its data security—especially after a failed attempt to gain access to the company's customer database. The company is trying to prevent ________.

A) a cyberattack B) customer abandonment C) a deepfake D) data mining E) prospecting Answer: A Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 100) The Echo combines voice recognition with additional data analysis to become a virtual assistant to the user. The Echo relies on ________ and ________ to work its magic, allowing it to get more and more accurate results the more data it gets.

A) artificial intelligence; machine learning B) structured data; artificial intelligence C) deep learning; prospecting D) machine learning; unstructured data E) optimized data; artificial intelligence Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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101) Self-driving cars are an example of ________.

A) autonomous intelligence B) augmented intelligence C) automation D) assisted intelligence E) competitive intelligence Answer: A Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 102) A catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. It has found that customers who are married, are between the ages of 31 and 44, and have moved within the past year are its most profitable customer segment. By sending promotional offers to non-customers who also fit this description, this catalog retailer has engaged in ________.

A) customer retention B) customer acquisition C) customer abandonment D) artificial intelligence E) market basket analysis Answer: B Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 103) The old adage "seeing is believing" may no longer apply in a world of AI and Big Data due to ________.

A) deepfake B) cybersecurity C) market basket intelligence D) emotion analysis E) data mining Answer: A Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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104) A catalog retailer studies about 3,500 variables over the lifetime of a customer's relationship. It has found that customers who are single, between the ages of 22 and 35, and have no children are its least profitable customer segment. By severely reducing the number of communications and promotional offers sent to this segment, this catalog retailer has engaged in ________.

A) customer retention B) customer acquisition C) customer abandonment D) web scraping E) market basket analysis Answer: C Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 105) Every action you take online leaves a digital footprint—data that can be used to create valuable insights into consumer behavior.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 106) Deep learning is a subset of machine learning.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 107) Because of recent advances in data warehousing and data mining, the amount of data we produce is expected to decrease in the near future.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 108) Data about how consumers use everyday products is likely to increasingly be communicated if the Internet of Things is fully developed.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 32 Copyright © 2022 Pearson Education, Inc.

109) Marketers can collect and analyze detailed information about consumer attitudes toward a brand from social media sources such as Facebook and Twitter.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 110) A data breach is not intentional.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 111) A company that uses data mining is unlikely to need a data warehouse, as the company's data is constantly in use.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 112) When an Amazon customer purchases an Echo Dot and Amazon then recommends a Fire TV Stick, this is an example of market basket analysis.

Answer: TRUE Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 113) For marketers today, gathering data is a bigger challenge than deciding how to use the data that are collected.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 114) The application of AI to help people make better decisions is augmented intelligence.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences

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115) A person who illegally gains access to and sometimes tampers with information in a computer system is called a hacker.

Answer: TRUE Difficulty: Easy LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 116) Data mining can be used to identify customers who are not profitable and who should be abandoned.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 117) Blockchain offers a level of unmatched data security because no single entity owns the data, which is cryptographically stored, making it almost impossible to tamper with the data, even if it gets stolen.

Answer: TRUE Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 118) It is just as expensive for a company to retain good customers as it is to acquire customers.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 119) With the use of data mining, it is no longer a common business practice to fire an unprofitable customer.

Answer: FALSE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 120) The method of emotion analysis provides more detailed and accurate information than the method of sentiment analysis.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 34 Copyright © 2022 Pearson Education, Inc.

121) A data breach may be intentional, such as a cyberattack, or it may be an unintentional release of private information.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 122) Sora is a teenager who loves to shop for clothes. She has a points card from Trend Town, her favorite shop. Sora's card is scanned each time she makes a purchase at Trend Town, and the more she uses the card, the more special offers she receives from the shop. Managers at Trend Town can use information from Sora's shopping for the purpose of customer acquisition.

Answer: TRUE Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 123) Explain three ways in which Big Data can help marketers create competitive advantages.

Answer: The collection and analysis of Big Data has the potential to provide competitive advantage in three main areas. First, marketers can use analytics to identify new opportunities that yield greater return on investment (ROI) on marketing efforts. Second, marketers can use insights they gain through the analysis of Big Data to create products and services that are better aligned with the actual desires of consumers. Finally, the use of Big Data can help marketers more efficiently and effectively deliver communications about products and services.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking

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124) Describe the different types of Big Data sources available to marketers. How can marketers use this information?

Answer: There are five different types of Big Data sources that marketers can use. One external source is social media. When consumers interact with each other and with brands online, they generate a wealth of information about their attitudes toward products and how they use them in their daily lives. This information, when collected and analyzed, can help marketers develop an understanding of how consumers perceive their brands. Internal Big Data sources are a firm's corporate IT sources, such as CRM databases and web analytic databases. This information tells marketers how specific consumers are interacting with the firm over time. Government and NGO sources can provide a range of information, such as demographic information about consumers or economic conditions in specific regions of the country or world. This information can help marketers better understand consumers and potential markets. Two other sources for Big Data are commercial entity sources and partner database sources. Commercial entity sources are companies that collect data about consumers and then sell that data to marketers, helping marketers understand the purchasing habits of different types of consumers. Partner database sources are channel partners that share information, such as a retailer sharing purchasing information with the producers of the goods it sells to end users. This real-time information helps marketers understand where and when consumers want their products.

Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 125) Theresa Fielding owns an Internet company that sells gift baskets. Each customer can pick out what she wants in the basket to make it a personalized gift. Theresa has demographic information about buyers stored in the company database. The database also has the address of each basket recipient, when each basket was sent, the contents of each basket, and if it was sent for a special occasion. How could Theresa use this database?

Answer: Theresa has an opportunity to engage in a small-business version of data mining. She could use a data mining program to identify unique patterns of behavior among her different customer groups. Identifying and understanding the habits of her current customers will help Theresa with customer acquisition, or attracting new customers. Data mining could help Theresa increase customer retention and loyalty by identifying the most important customers and then targeting them with special offers and inducements to buy more. Theresa could also use data mining for market basket analysis, using the records of customers who have bought certain products to develop promotional strategies. Finally, Theresa could use data mining to identify unprofitable customers who should be abandoned.

Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge

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126) How could the Internet of Things benefit marketers?

Answer: The Internet of Things refers to a system in which everyday objects are connected to the Internet and communicate information about their performance and use. Through the Internet of Things, marketers could have access to information about how consumers actually use products every day—information that previously needed to be acquired through costly traditional market research—and then use that information to develop consumer insights.

Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 127) Explain how a sporting goods retailer could use both structured and unstructured data to retain customers.

Answer: Answers may vary, but could include use of structured data such as demographic data and scanner data. Unstructured data could include information from customer surveys or emotion analysis of brand references on social media.

Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Application of knowledge 128) What is the purpose of data mining?

Answer: Researchers rely on data mining to help them use information in extremely large databases to identify unique patterns of behavior among different customer groups.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 129) Why might a firm want to abandon a customer? What are some of the signs that a firm would be better off "firing" a customer?

Answer: A firm might choose to abandon, or fire, a customer if servicing the customer actually costs more than the firm earns through the customers' purchases. Warning signs that a customer is unprofitable include the following: they make unreasonable demands, they want everything for nothing, they are slow to pay, they don't listen to communications from the firm, they don't respond to communications from the firm, or they show a lack of basic respect in their interactions with the firm.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking

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130) What is data mining? What are the four important applications for marketers?

Answer: Data mining is a process in which analysts sift through Big Data to identify unique patterns of behavior among different customer groups. Data mining has four important applications for marketers: customer acquisition, market basket analysis, customer retention and loyalty, and customer abandonment.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 131) What is the difference between structured and unstructured data?

Answer: Structured data is typically either numeric or categorical and can be organized and formatted in a way that is easy for computers to read, organize, and understand. Unstructured data, on the other hand, contains non-numeric information that is not as easily organized and understood by computers. The text of an email is an example of unstructured data.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 132) A gambling casino gives its high-spending players free rooms in its hotels along with free meals and tickets to the entertainment shows at the casino. What application of data mining is the casino using?

Answer: The casino is using data mining for customer retention and loyalty. The firm can identify big-spending customers and then target them for special offers and inducements other customers will not receive.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking 133) How are the concepts of machine learning and artificial intelligence related?

Answer: Artificial intelligence is the broad idea that machines can be capable of engaging in and completing tasks in ways that humans would consider "smart." Machine learning is the application of the idea of artificial intelligence, based on the idea that machines can and should have access to data and engage in learning.

Difficulty: Difficult LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Analytical thinking

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134) What is blockchain? How does it impact data security?

Answer: Blockchain is a type of database that exists on multiple computers simultaneously, containing "blocks" of data that are linked together as "chains" of immutable data. Blockchain offers a level of unmatched data security because no single entity owns the data, which is cryptographically stored, making it almost impossible to tamper with the data, even if it gets stolen.

Difficulty: Moderate LO: 5.2: Understand Big Data and data mining, and how marketers can put these techniques to good use AACSB: Integration of real-world business experiences 135) Which of the following is NOT a process included in marketing analytics?

A) collecting data about marketing efforts B) creating marketing efforts C) measuring marketing efforts D) analyzing marketing efforts E) assessing marketing efforts Answer: B Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 136) Which of the following is true about marketing analytics?

A) Its importance has increased as consumers conduct more of their daily activities online.

B) It generates Big Data to be used in marketing decision making.

C) It is a departmental approach to separately analyzing the performance of different marketing initiatives.

D) It can be used for information gathered from traditional marketing efforts but not from digital marketing channels.

E) It can be used for information gathered from digital marketing channels but not from traditional marketing efforts.

Answer: A Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences

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137) Which of the following is an example of digital advertising?

A) television commercial B) billboard C) search engine ad D) print magazine ad E) print newspaper ad Answer: C Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 138) Which of the following is NOT an example of a digital marketing channel?

A) television B) email C) social media D) search engine E) short message service Answer: A Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 139) Which of the following could a retailer use to determine which of two different marketing messages generates the most sales?

A) predictive analytics B) churn rate C) A/B test D) cost-per-impression E) cost-per-click Answer: C Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences

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140) Through ________ pricing, a marketer pays for an advertisement based on the number of times users select the advertisement and are directed to the product's webpage.

A) cost-per-impression B) cost-per-customer C) cost-per-order D) cost-per-click E) cost-per-conversion Answer: D Difficulty: Easy LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 141) Through ________ pricing, a marketer pays for an advertisement based on how many times an advertisement appears on a webpage viewed by users.

A) cost-per-impression B) cost-per-customer C) cost-per-order D) cost-per-click E) cost-per-conversion Answer: A Difficulty: Easy LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 142) Through ________, a firm tries to guarantee that its brand will appear at or near the top of lists of typical search phrases related to its business.

A) cost-per-impression pricing B) A/B testing C) search engine optimization D) search engine analytics E) predictive analytics Answer: C Difficulty: Easy LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences

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143) ________ is a system of delivering products to customers before they place an order, utilizing predictive analytics to determine what customers want and then sending the products automatically.

A) Anticipatory shipping B) Landing pages C) Search engine optimization D) Cybersecurity E) Omni channels Answer: A Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 144) ________ are techniques that use large quantities of data and variables to forecast specific future outcomes of marketing efforts.

A) Marketing analytics B) Conversion rates C) Marketing metrics D) Search engine analytics E) Predictive analytics Answer: E Difficulty: Easy LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 145) To track the effectiveness of a campaign in a nondigital marketing channel, a firm can set up a(n) ________ that engages the consumer and enables the firm to track the relationship between the marketing effort and its desired outcome.

A) search engine B) web scraper C) landing page D) conversion E) omni channel Answer: C Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences

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146) Which of the following is an application of predictive analytics?

A) anticipatory shipping B) landing pages C) search engine optimization D) cybersecurity E) omni channels Answer: A Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 147) A real estate company places ads on a local newspaper's website. The real estate company pays the newspaper based on how many times readers of the newspaper's website select the ads and enter the real estate company's website. This is an example of ________ pricing.

A) cost-per-impression B) cost-per-customer C) cost-per-order D) cost-per-click E) cost-per-conversion Answer: D Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Analytical thinking 148) A regional restaurant chain wants to place ads on a local newspaper's website. The marketing team at the restaurant chain knows from experience that about five percent of the people who see its ads on a newspaper's website will click on the ad to get more information or sign up for a promotion. Because the marketing team wants to keep the price of running the ads low, the restaurant chain will likely opt for ________ pricing.

A) cost-per-impression B) cost-per-customer C) cost-per-order D) cost-per-click E) cost-per-conversion Answer: A Difficulty: Difficult LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge

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149) The marketing team at Joe's Auto World wants to use the information it collected from last year's online advertising campaigns, the most recent Census, and the company's internal CRM system to forecast the effectiveness of two proposed advertising campaigns for the upcoming year. To accomplish this, the marketing team at Joe's Auto World will most likely use ________.

A) marketing controls B) conversion rates C) sentiment analysis D) predictive analytics E) search engine optimization Answer: D Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge 150) It is more difficult to determine the ROI on traditional media efforts such as TV commercials than the ROI on digital media efforts such as banner ads.

Answer: TRUE Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 151) Cost-per-impression advertising is typically more expensive than cost per click advertising.

Answer: FALSE Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences 152) Through anticipatory shipping, a firm can make highly accurate shipping decisions before customers finalize purchases.

Answer: TRUE Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Integration of real-world business experiences

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153) Marketers for Ranch Life, a Connecticut family resort that offers horseback riding and a waterpark, want to make sure that Ranch Life comes up at the top or near the top of every list of online search results for the phrases "Connecticut family vacation," "Connecticut horseback riding," and "Connecticut waterpark." Ranch Life marketers will likely use predictive analytics to achieve this goal.

Answer: FALSE Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge 154) John Wanamaker, a famous retailer from the late 1800s, is credited with saying "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." Explain the marketing issue highlighted by this quote and how marketing analytics affects this issue.

Answer: John Wanamaker's quote refers to the problem of not being able to connect specific marketing activities, such as advertisements or promotions, to specific outcomes, such as increased sales or new customers. Marketers want to be able to tie specific actions in advertising to measurable results, which has been difficult to do for traditional advertising forms such as television, radio, and billboards. In other words, marketers want to know what types of advertising are effective so they can put more resources into those efforts and fewer resources into less effective advertising methods. Through marketing analytics, marketers can collect, measure, analyze, and assess the effectiveness of different marketing efforts so that they can identify and compare the return on investment of each marketing channel.

Difficulty: Difficult LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge 155) How can a marketer determine the effectiveness of a banner ad on a website?

Answer: The return on investment (ROI) of a banner ad can be calculated by tracing the number of consumers who make an online purchase on the marketer's product page after clicking on the ad.

Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge

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156) Explain two reasons that digital marketing has become an increasingly important element of the marketer's toolbox.

Answer: One reason that digital marketing has become more important is that consumers use digital media more than ever, with 89 percent of Americans using the Internet and 69 percent of Americans using at least one social networking site. A second reason that digital marketing has become more important is that it is easier for marketers to track and analyze the effectiveness of digital marketing efforts.

Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Application of knowledge 157) Why is search engine optimization an important process for online marketers?

Answer: Search engine optimization is an important process for online marketers because more and more people search for product information online. If a company's website does not appear at or near the top of an online search for a phrase related to the company's products and services, then consumers are less likely to visit the company's website. Instead, they will select websites that appear at or close to the top of the list of search results.

Difficulty: Moderate LO: 5.3: Describe what marketing analytics include and how organizations can leverage both marketing analytics and predictive analytics to improve marketing performance AACSB: Analytical thinking

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 6 Understand Consumer and Business Markets 1) The process that individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires is known as ________.

A) the consumer decision-making process B) the family life cycle C) cognitive dissonance D) consumer behavior E) extensive problem solving Answer: D Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 2) The decision to buy a box of cereal is most likely considered ________ on the consumer decision-making continuum.

A) habitual decision making B) extensive problem solving C) compensatory decision rules D) artificial intelligence E) limited problem solving Answer: A Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 3) A consumer purchase decision made with a great deal of consumer effort is a type of ________.

A) habitual decision making B) extensive problem solving C) compensatory decision D) heuristic E) limited problem solving Answer: B Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 4) A purchase decision made with some, but not extensive, effort is classified as ________.

A) habitual decision making B) extensive problem solving C) compensatory deciding D) determinant attributing E) limited problem solving Answer: E Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process

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5) The consumer's ________ determines whether she will engage in habitual decision making, extensive problem solving, or something in between the two.

A) need for customization B) level of involvement C) need for cognitive dissonance D) ability to generalize stimuli E) personal marketing mix Answer: B Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 6) The greater the ________ of a purchase, the higher the consumer's level of involvement will be.

A) perceived risk B) cognitive dissonance C) psychographics D) heuristics E) targeting Answer: A Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 7) A consumer who is considering purchasing a house would probably use ________.

A) habitual decision making B) stimulus generalization C) operant decision making D) limited problem solving E) extensive problem solving Answer: E Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 8) Which of the following accurately identifies a difference between habitual decision making and extensive problem solving?

A) Extensive problem solving uses behavioral learning, while habitual decision making relies upon cognitive learning.

B) Consumers engaged in extensive problem solving perceive less risk than consumers involved in habitual decision making.

C) The level of involvement for habitual decision making is lower than it is for extensive problem solving.

D) Habitual decision making involves significant buyer's remorse, while extensive problem solving rarely involves buyer's remorse.

E) Consumers who are seeking to develop their loyalty to a brand would be more likely to make habitual decisions than use extensive problem solving.

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9) ________ can occur when the current state changes or when the desired state changes.

A) Perceived risk B) Problem recognition C) Problem solving D) Learning E) Lifestyle change Answer: B Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 10) ________ is the step of the decision-making process in which the consumer checks her memory and surveys the environment to identify what options might solve her problem.

A) Product evaluation B) Behavioral targeting C) Problem recognition D) Problem screening E) Information search Answer: E Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 11) In the information search step, the alternatives a consumer knows about are the ________ and the ones she seriously considers are the ________.

A) evoked set; consideration set B) shopbots; evoked set C) consideration set; information search D) information search; shopbot E) consideration set; evoked set Answer: A Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 12) The product alternatives a customer seriously considers are referred to as the ________.

A) compensatory set B) determinant set C) evoked set D) consideration set E) evaluative criteria Answer: D Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process

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13) Bizrate.com and Pricegrabber.com are examples of ________.

A) shopbots B) heuristics C) search engine optimizers D) data brokers E) chatbots Answer: A Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Integration of real-world business experiences 14) A consumer who is armed with information and is narrowing down his choices by comparing the pros and cons of each remaining option is in the ________ step of the consumer decision-making process.

A) problem recognition B) information search C) evaluation of alternatives D) product choice E) postpurchase evaluation Answer: C Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 15) Consumers often rely on rules of thumb to make speedy decisions when weighing the merits of competing brands. These rules are referred to as ________.

A) evaluative criteria B) compensatory decision rules C) affects D) heuristics E) cognitions Answer: D Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 16) Brand loyalty in the product choice step of the consumer decision-making process is an example of a ________.

A) psychographic B) consumer expectation C) cognitive dissonance D) heuristic E) behavioral target Answer: D Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process

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17) The marketing strategy in the ________ step of the consumer decision-making process is to encourage accurate consumer expectations.

A) problem recognition B) information search C) evaluation of alternatives D) product choice E) postpurchase evaluation Answer: E Difficulty: Difficult LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 18) When a consumer is determining her overall feelings or attitudes about a product after purchasing it, she is involved in the ________ step of the consumer decision-making process.

A) problem recognition B) information search C) evaluation of alternatives D) product choice E) postpurchase evaluation Answer: E Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 19) Customer satisfaction with a purchase is based on which of the following?

A) how the perceived risk of purchasing the product compares to the actual risk B) how the actual performance of the product compares to customer expectation of performance C) how the product's brand personality aligns with the customer's personality D) the service provided with the purchase E) the total cost of the purchase Answer: B Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 20) The overall feelings, or attitude, a person has about a product after she purchases it is known as ________.

A) affect B) a heuristic C) an operant reaction D) buyer's remorse E) a conditioned response Answer: A Difficulty: Easy LO: 6.1: Define consumer behavior, and explain the purchase decision-making process

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21) Which of the following is NOT an internal influence on consumer decision making?

A) time B) perception C) lifestyle D) learning E) age groups Answer: A Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 22) The invitation to go skiing for the weekend forced Donna to look at her current wardrobe.

She decided she needed a much warmer coat. Donna was in which stage of the purchase decision?

A) product evaluation B) situational analysis C) problem recognition D) problem screening E) information search Answer: C Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 23) Asad wants to buy a new car. He talks to his friends, visits car showrooms, and reads Consumer Reports to get an idea of the cars in which he is interested. Asad is in the ________ stage of his purchase decision.

A) product choice B) evaluation of alternatives C) problem recognition D) problem screening E) information search Answer: E Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking

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24) To determine the best price for a first edition copy of a Stephen King novel with a dust jacket in mint condition, Jason would most likely use a(n) ________ to provide him with pricing information from all the bookstores that currently have the requested book in stock.

A) shopbot B) chatbot C) evoked set D) compensatory decision rule E) heuristic Answer: A Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Application of knowledge 25) Robert has taken up bicycle riding as a hobby and as a way to maintain his physical stamina.

He understands he will need to get adequate water when he is bike riding, so he wants to buy a hydration system. Having gathered a great deal of information, he has decided to compare three systems: Waterbags for Roadies, Supertanker Hydropacks, and Fast Water. Robert is in the ________ stage of his purchase decision.

A) problem recognition B) evaluation of alternatives C) product choice D) postpurchase evaluation E) information choice Answer: B Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 26) Pat thought he had received the best deal on his new car. Shortly after the purchase, Pat started to notice certain disadvantages of his new car as he learned more about other cars. Pat was experiencing ________.

A) perceived risk B) multitasking C) buyer's remorse D) compensatory decision making E) consumerism Answer: C Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 27) Researchers think in terms of the effort expended in the consumer decision-making continuum.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 7 Copyright © 2022 Pearson Education, Inc.

28) Purchase decision making usually begins with information search and then moves to evaluation of alternatives.

Answer: FALSE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 29) Marketers often play a role in educating consumers about which product characteristics they should use as evaluative criteria.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 30) Common heuristics used in product choice include brand loyalty and country of origin.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 31) Consumers use compensatory decision rules when they allow one weak or unattractive product attribute to be outweighed or offset by a strong or attractive product attribute.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 32) Heuristics can be used to explain why Madelyn always buys a specific brand of deodorant and why Ralph always buys the most expensive brand.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Application of knowledge 33) In today's environment of hyperchoice, consumers actually make poorer decisions and feel more frustrated than when they had fewer choices.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process 34) In reality, consumers' search for information and evaluation of alternatives occur simultaneously.

Answer: TRUE Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process

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35) What is consumer behavior? Give examples of the types of questions about consumer behavior that marketers investigate.

Answer: Consumer behavior is the process individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Consumers use a decision-making process involving a number of steps, and they are influenced by a variety of factors when selecting and using products. Consumer behavior is an ongoing process. Marketers are interested in understanding where consumers buy, what they buy, and when they buy. Marketers are also interested in knowing how and when consumers actually use their products. Marketers also need to understand the internal and external factors that influence each step in the consumer decision-making process.

Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 36) Briefly describe each step in the consumer decision-making process.

Answer: The steps in the consumer decision-making process are problem recognition, information search, evaluation of alternatives, product choice, and post-purchase evaluation. In the problem recognition step, a consumer realizes that there is a significant difference between her current state and a desired state. To solve this problem, she begins the process of deciding on a purchase to achieve that desired state. Once she has recognized a problem, the consumer will conduct an information search, checking her memory and the environment to identify options that might solve her problem. After gathering the product information, the consumer will identify the products that interest her and then narrow down her choices by evaluating the pros and cons of each remaining option. The next step is the actual product choice and purchase. After purchasing the product, the consumer will have some level of satisfaction or dissatisfaction with the product, which is her post-purchase evaluation.

Difficulty: Difficult LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 37) How do heuristics affect a consumer's decision-making process? Give two examples of heuristics you might use when shopping.

Answer: Heuristics are decision guidelines, or mental rules of thumb, that help consumers evaluate the merits of competing brand claims. The more heuristics a consumer has, the easier the consumer decision-making process is. For example, if you know that a particular brand of jeans always fits just right, then you will not spend time looking at other brands. Brand loyalty is the most commonly used heuristic. Other common heuristics include country-of-origin preferences and "price = quality."

Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Reflective thinking

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38) What are compensatory decision rules? In which step of the consumer decision-making process are these important?

Answer: Compensatory decision rules are the methods for making decisions that allow information about attributes of competing products to be averaged in some way. The poor standing of one attribute can be potentially offset by the good standing of another. Compensatory decision rules are important in the product choice step of the consumer decision-making process.

Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Analytical thinking 39) Explain the role of marketers in the information search step of the consumer decision-making process. Give an example of how the marketer might execute this role.

Answer: The role of marketers in the information search step of the consumer decision-making process is to make the information consumers want and need about their product easily accessible. Today more than ever, thanks to social media and the availability of product information online, consumers spend time seeking information about potential purchases.

Student examples will vary.

Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Application of knowledge 40) What is ZMOT and how does it relate to the digital age?

Answer: ZMOT, a term coined by Google, is the zero moment of truth, or the moment a consumer decides to make a purchase. In our digital age, the ZMOT is just as likely or more likely to happen online (on a table, smartphone, or laptop) as it is in a physical store.

Difficulty: Moderate LO: 6.1: Define consumer behavior, and explain the purchase decision-making process AACSB: Integration of real-world business experiences 41) ________ is the process by which people select, organize, and interpret information from the outside world.

A) Perception B) Learning C) Attention D) Motivation E) Cognition Answer: A Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication

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42) Which of the following is NOT considered sensory stimuli in the perceptual process?

A) time B) sights C) textures D) smells E) sounds Answer: A Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 43) The three steps of the perceptual process are ________.?

A) exposure, attention, and interpretation B) attention, cognition, and affect C) affect, attention, and exposure D) interpretation, cognition, and decision making E) exposure, selection, and cognition Answer: A Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Analytical thinking 44) Which of the following refers to the process of assigning meaning to a stimulus?

A) cognition B) attention C) affect D) interpretation E) exposure Answer: D Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 45) Many people believe that even messages they can't see will persuade them to buy advertised products. These people are referring to ________.

A) subliminal advertising B) rich media C) encryption D) affect E) sadvertising Answer: A Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication

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46) An example of Maslow's ________ is the U.S. Army's slogan of "Be all you can be."

A) social needs B) ego needs C) physiological needs D) self-actualization needs E) belongingness needs Answer: D Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Interpersonal relations and teamwork 47) Learning is ________.

A) an internal state that drives us to satisfy needs B) the process by which people select, organize, and interpret information from the outside world C) a change in behavior caused by information or experience D) a lasting evaluation of a person, object, or issue E) the set of unique psychological characteristics that consistently influence the way a person responds to situations in the environment Answer: C Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 48) When an ad shows a product and a breathtakingly beautiful scene so that (the marketer hopes) you will transfer the positive feelings you get when you look at the scene to the advertised product, the marketer is using ________.

A) classical conditioning B) operant conditioning C) cognitive conditioning D) information searching E) observational learning Answer: A Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 49) A marketing application of ________ occurs when consumers receive a gift with the purchase of a product.

A) Classical conditioning B) Operant conditioning C) Cognitive conditioning D) Information searching E) Observational learning Answer: B Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes 12 Copyright © 2022 Pearson Education, Inc.

50) Cognitive learning theories assume that ________.

A) learning occurs when people realize their actions result in rewards or punishments B) learning takes place as the result of connections we form between stimuli C) the most important component of learning is directed by cognition D) people are problem solvers who do more than passively react to associations between stimuli E) the individual takes a passive role during the learning process Answer: D Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 51) An attitude is ________.

A) an internal state that drives us to satisfy needs B) the process by which people select, organize, and interpret information from the outside world C) a change in behavior caused by information or experience D) a lasting evaluation of a person, object, or issue E) the set of unique psychological characteristics that consistently influence the way a person responds to situations in the environment Answer: D Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes 52) The ABC Theory of Attitudes refers to the three components of ________.

A) affect, cognition, and behavior B) psychological, physiological, and situational C) situation, emotion, and environment D) cognitive, operant, and situational E) ritual, cultural, and referential Answer: A Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes 53) ________ is the doing component of attitudes.

A) Affect B) Cognition C) Behavior D) Motivation E) Interpretation Answer: C Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes

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54) ________ is the knowing component of attitudes. It is the beliefs or knowledge a person has about a product and its important characteristics.

A) Affect B) Cognition C) Behavior D) Motivation E) Interpretation Answer: B Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes 55) Personality is ________.

A) an internal state that drives us to satisfy needs B) the process by which people select, organize, and interpret information from the outside world C) a change in behavior caused by information or experience D) a lasting evaluation of a person, object, or issue E) the set of unique psychological characteristics that consistently influence the way a person responds to situations in the environment Answer: E Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Interpersonal relations and teamwork 56) The "selfie" epidemic is a symptom of the infatuation with ________.

A) personality B) self-concept C) lifestyle D) attitude E) motivation Answer: B Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Interpersonal relations and teamwork 57) ________ refers to how positive a person's ________ is.

A) Personality; psychography B) Affect; attitude C) Attitude; affect D) Self-concept; self-esteem E) Self-esteem; self-concept Answer: E Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Interpersonal relations and teamwork

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58) One way marketers identify consumers' lifestyles is to use AIO, which describes people in terms of ________.

A) activities, interests, and opinions B) abilities, interests, and opinions C) activities, interests, and organizations D) abilities, income, and opinions E) activities, income, and opinions Answer: A Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes 59) Juana looked at her September issue of O magazine and did not see anything of interest.

However, after her mother was diagnosed with bipolar disorder, Juana found the issue extremely interesting because it offered advice on how to help people who are suffering from this problem.

The fact that the boring issue became quite interesting is most directly due to a change in Juana's ________.

A) exposure B) cultural values C) attention D) personality E) self-concept Answer: C Difficulty: Difficult LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 60) McDonald's placement of a small toy in each Happy Meal as a reward for coming to the fast-food restaurant and ordering its food is based on which theory of learning?

A) operant conditioning B) subliminal advertising C) cognitive learning D) classical conditioning E) observational learning Answer: A Difficulty: Difficult LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge

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61) Allstate Insurance uses the slogan "You're in good hands with Allstate." Allstate is addressing which need in Maslow's Hierarchy of Needs?

A) safety B) physiological C) ego needs D) belongingness E) self-actualization Answer: A Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 62) The manufacturer of a new treadmill uses ads that feature athletic, physically fit men and women running on the equipment. Marketers for the company are using ________.

A) observational learning B) classical conditioning C) psychographics D) demographics E) sensory marketing Answer: A Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 63) There is a trend in the United States toward rediscovering the flavor of regional cooking and the use of locally grown ingredients. People are choosing to spend hours in the kitchen using only the freshest ingredients to recreate culinary traditions. This change in ________ is one of the reasons the number of farmers markets in the United States has increased by 70 percent in the last decade.

A) the family life cycle B) lifestyles C) demographics D) personality E) social class Answer: B Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Analytical thinking 64) Perception is an example of an internal influence on the consumer decision-making process.

Answer: TRUE Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication

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65) Consumers are more likely to pay attention to messages that speak to their current needs.

Answer: TRUE Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 66) The prevalence of multitasking among consumers creates attention challenges for today's marketers.

Answer: TRUE Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 67) The marketing strategy of gamification is designed to address consumers' motivational needs of prestige, status, and accomplishment.

Answer: TRUE Difficulty: Easy LO: 6.2: Explain how internal factors influence consumers' decision-making processes 68) Advertisers try to arouse more negative emotions to get our attention and create a bond with their products using sadvertising.

Answer: TRUE Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Written and oral communication 69) The two major perspectives on how people learn are behavioral and cognitive learning.

Answer: TRUE Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes 70) When an insurance company tailors its promotional messages to show how its products protect people from being devastated by a natural disaster or an accident, the company is appealing to a higher level need on Maslow's hierarchy of needs.

Answer: FALSE Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Analytical thinking 71) The cognition component of a person's attitude would typically be more influential than the affect component for purchases such as scented candles, bath salts, and luxurious towels.

Answer: FALSE Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Reflective thinking

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72) Describe the process of perception and discuss how marketers can influence each component of the perception process.

Answer: Perception is the process by which people select, organize, and interpret information from the outside world. The three components of perception are exposure, attention, and interpretation. Exposure is the extent to which a person's sensory receptors—eyes, ears, nose, mouth, and skin—are capable of registering a stimulus. Attention is the extent to which we devote mental-processing activity to a marketing stimulus. We do not attend to every stimulus to which we are exposed. Interpretation is the process of assigning meaning to a stimulus based on prior associations and assumptions. Marketers should present their messages in media that increase consumer exposures and that increase the likelihood of consumer attention. Because consumers may not interpret messages in the way marketers intended, marketers should take care to avoid content that would lead to possible misinterpretations.

Difficulty: Difficult LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 73) What is the ABC Theory of Attitudes? What are the three components? List and briefly describe each in the context of marketing.

Answer: The ABC Theory of Attitudes is a term for referring to attitudes that brings to mind the three components of attitudes. These three components are affect, cognition, and behavior.

Affect is the feeling component of attitudes, the overall emotional response a person has to a product. Cognition is the knowing component, or the belief and knowledge a person has about the product. Behavior is the doing component, which involves a person taking action by deciding to buy or use the product. Affect is usually the dominant attitude factor for decisions involving expressive products, such as perfume or clothing. Cognition is usually the dominant attitude factor for decisions involving complex products, such as cameras or laptops.

Difficulty: Difficult LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Application of knowledge 74) Why is a consumer's stage in the family life cycle typically a better predictor of purchasing behavior than the consumer's age?

Answer: While the demographic characteristic of age does influence purchasing behavior, as consumers in the same age range have a similar set of memories about and experiences with cultural events, a consumer's position in the family life cycle has more influence on purchasing behavior. The family life cycle refers to the sequence of stages a person typically goes through, such as being a single adult, having a professional job, getting married, having children, sending children to school, and so on. Marketers target different stages of the family life cycle with relevant offerings, such as car seats or life insurance or luxury cruises.

Difficulty: Moderate LO: 6.2: Explain how internal factors influence consumers' decision-making processes AACSB: Analytical thinking

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75) People's moods and behaviors are strongly influenced by their physical surrounding. Two dimensions, ________, determine whether a shopper will react positively or negatively to a store environment.

A) color and size B) size and activity C) arousal and pleasure D) perceived risk and level of involvement E) motivation and self-concept Answer: C Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior 76) ________ is made up of the values, beliefs, customs, and tastes produced or practiced by a group of people.

A) The family life cycle B) Culture C) Lifestyle D) A psychographic persona E) Social class Answer: B Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments 77) A group within a society whose members share a distinctive set of beliefs or characteristics is a ________.

A) target market B) market segment C) social class D) subculture E) lifestyle Answer: D Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments

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78) The overall rank of people in a society according the value assigned to factors such as family, background, education, occupation, and income is known as ________.

A) the family life cycle B) social class C) subculture D) microculture E) mass class Answer: B Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments 79) Vegan restaurants, electric cars, and solar heating panels installed on homes are all examples of the growing trend of ________.

A) sensory marketing B) gamification C) rich media marketing D) multitasking E) conscientious consumerism Answer: E Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Ethical understanding and reasoning 80) There are people who have similar income and education levels and often share tastes in clothing, decorating styles, and leisure activities. These people also share many political and religious beliefs as well as ideas regarding valued activities and goals. These people could all be categorized as being in the same ________.

A) family life cycle B) social class C) regional group D) operant conditioning set E) microculture Answer: B Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments

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81) Which of the following refers to the hundreds of millions of global consumers who now have a level of purchasing power that allows them to afford high-quality products offered by multinational companies?

A) reference group B) social class C) mass class D) opinion leaders E) microculture Answer: C Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments 82) The view of the main breadwinner in a family is changing. This is an example of a changing ________.

A) gender role B) reference group C) social class D) mass class E) opinion leader Answer: A Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments 83) A ________ is an actual or imaginary individual or group that has a significant effect on an individual's evaluations, aspirations, or behavior.

A) culture group B) family lifestyle group C) perception group D) reference group E) social class group Answer: D Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Interpersonal relations and teamwork

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84) ________ often influence others' attitudes or behaviors because others perceive them as possessing expertise about a product.

A) Opinion leaders B) Status symbols C) Heuristics D) Reference groups E) Social classes Answer: A Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior 85) Jane's aunt wants a cashmere blanket to put over her legs when she watches television from her favorite chair. Jane could drive 50 miles and pay $90 for the blanket, or she could order one off the Internet for $168. Because Jane works 50 hours a week, cares for three children, and tries to help her aunt, she opts to buy the blanket on the Internet. This is an example of how ________ influences the consumer decision-making process.

A) rich media B) subliminal advertising C) perceived risk D) time poverty E) sensory marketing Answer: D Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Analytical thinking 86) Easy Spirit uses ads featuring a country music singer with the hope that her fans will see her wearing Easy Spirit shoes and want to wear the same shoes she wears. Easy Spirit is hoping the singer's fans view her as a ________.

A) steward B) status symbol C) heuristic D) reference group E) microculture Answer: D Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Application of knowledge

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87) Which of the following is NOT a speculated possibility for the new normal after the COVID-19 pandemic?

A) Consumer brand loyalty will increase substantially.

B) Social networks will grow to rival the original Internet.

C) User-generated content will be the most disruptive in terms of marketing activities.

D) Transparency will be part of all successful business-customer relationships.

E) Mobile will dominate the new norm.

Answer: A Difficulty: Difficult LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Analytical thinking 88) Culture is society's personality.

Answer: TRUE Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Diverse and multicultural work environments 89) Patagonia's goal to make its supply chain carbon neutral by 2025 is an example of conscientious consumerism.

Answer: TRUE Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Ethical understanding and reasoning 90) Showrooming refers to consumers browsing products on their mobile devices while shopping in a physical retail store.

Answer: TRUE Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior 91) Authentic companies that admit their mistakes are referred to as "flawsome."

Answer: TRUE Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior

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92) The social graph has been referred to as "the global mapping of everybody and how they are related."

Answer: TRUE Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Analytical thinking 93) An example of sensory marketing is Cinnabon's commitment to make sure the aroma of freshly baked cinnamon rolls floats down the mall to attract customers.

Answer: TRUE Difficulty: Easy LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Application of knowledge 94) What is consumerism? How are marketers following the consumerism call to action?

Answer: Consumerism is a social movement that attempts to protect consumers from harmful business practices. Much of the current focus of consumerism is about business activities that harm the environment and the potential damage to our planet. As consumers and the media place more and more emphasis on this, many of us are much more mindful of environmental issues when we shop and when we make decisions about the foods we eat, the clothes we wear, the buildings in which we live and work, and the cars we drive. And marketers are following the consumerism call to action. This new value is called conscientious consumerism. The evidence of its impact is everywhere, in the form of vegan restaurants, electric cars, recycling activities and solar heating panels on home.

Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Ethical understanding and reasoning 95) How have marketers responded to an increasing sense of time poverty among consumers?

Answer: More and more people feel pressed for time and look for products and services that help them save time. In response, marketers offer services such as online shopping, drive-thru lanes at pharmacies, mobile pet grooming, and express lines at supermarkets.

Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Application of knowledge

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96) What is the difference between a subculture and a microculture?

Answer: A subculture is broader than a microculture. A subculture is a group within a larger culture whose members share a distinctive set of beliefs or characteristics, while a microculture is a smaller group whose members identify with a specific activity or art form.

Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Application of knowledge 97) Many students in a high school wear the same style of shoes to school. From the marketing perspective, why are these students conforming to a similar style?

Answer: Consumers often change their behavior to gain acceptance into a particular reference group. Students in this high school may want to feel as if they are the same as their fellow classmates, so they will wear the same style of shoes to be part of the group.

Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior AACSB: Application of knowledge 98) In what way might a marketer rely on opinion leaders?

Answer: Opinion leaders can influence other larger groups of consumers to be attracted to a marketer's products.

Difficulty: Moderate LO: 6.3: Show how situational factors and consumers' relationships with other people influence consumer behavior 99) ________ is the marketing of goods and services that businesses and other organizations buy for purposes other than personal consumption.

A) Business-to-business marketing B) Just-in-time (JIT) marketing C) Single sourcing D) Retailing E) Outsourcing Answer: A Difficulty: Easy LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers

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100) Business-to-business marketing differs from consumer marketing in that business-to-business marketing ________.

A) is targeted at many individual and household customers B) relies upon frequent impulse purchases C) emphasizes advertising more than any other element of the promotion mix D) may involve competitive bidding and price negotiations E) usually has one person involved in purchase decisions Answer: D Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 101) Organizational markets differ from consumer markets in that organizational markets ________.

A) have a high number of purchases that are low risk and low cost B) have derived demand C) are not geographically concentrated D) have a single individual in the role of decision maker E) involve shorter decision processes Answer: B Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 102) ________ is another name for business-to-business markets.

A) Organizational markets B) Consumer markets C) NGOs D) Not-for-profits E) Joint demand Answer: A Difficulty: Easy LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 103) ________ purchases are much greater than ________ purchases, both in the quantity of items ordered and how much they cost.

A) Business; consumer B) Organizational; institutional C) Online; offline D) Not-for-profit; for-profit E) Joint; derived Answer: A Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 26 Copyright © 2022 Pearson Education, Inc.

104) Which of the following is NOT considered a reseller in the business marketplace?

A) the agriculture industry B) wholesalers C) distributors D) online retailers E) brick-and-mortar retailers Answer: A Difficulty: Difficult LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 105) The success of one company in one industry may depend on another company in a different industry. This dependence creates ________.

A) inelastic demand B) value-added demand C) derived demand D) inelasticity E) elasticity Answer: C Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 106) When a product has ________ demand, an increase or decrease in the price of the product has little or no effect on the demand for the product.

A) elastic B) joint C) derived D) inelastic E) fixed Answer: D Difficulty: Easy LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 107) One year many customers' machinery wears out and needs to be replaced. The following year no customers need new machinery. This is an example of ________ demand.

A) inelastic B) fluctuating C) elastic D) consumer E) static Answer: B Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 27 Copyright © 2022 Pearson Education, Inc.

108) ________ occurs when two or more goods are necessary to create a product.

A) Inelastic demand B) Fluctuating demand C) Joint demand D) Elastic demand E) Economic demand Answer: C Difficulty: Easy LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 109) The major categories of business-to-business customers are ________.

A) producers, retailers, and consumers B) resellers and governments C) organizations, producers, and manufacturers D) producers, resellers, and organizations E) consumers and retailers Answer: D Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 110) ________ do not actually produce goods, but they do provide their customers with time, place, and possession utility by making goods available when and where consumers want them.

A) Resellers B) End users C) Not-for-profit organizations D) Producers E) Buying centers Answer: A Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 111) Which of the following make up the largest single business and organizational market in the United States?

A) raw material markets B) producer markets C) not-for-profit markets D) e-commerce markets E) government markets Answer: E Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers

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112) The North American Industry Classification System is the numerical coding system that the United States, Canada, and Mexico use to classify firms into detailed categories according to their ________.

A) fluctuating demand B) elastic demand C) business buying decision processes D) channels of distribution E) business activities Answer: E Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 113) Many businesses today are abandoning traditional business attire and allowing their employees to come to work in business casual dress that typically does not include ties, cufflinks, or business suits. There has been a decrease in the sale of silk ties as a result of this cultural trend. A decrease in consumer demand for silk ties has led to a decrease in demand for silk because the demand for silk is ________.

A) independent B) referenced C) derived D) inelastic E) fixed Answer: C Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Application of knowledge 114) A Miami restaurant has created atmosphere through its subtle use of blue and green lighting, ceiling fans over each table, and frozen drinks. If its electrical energy supplier raises its prices, the restaurant will most likely ________.

A) raise the prices of all menu items because it has an elastic demand for electricity B) ask other Miami restaurants to create a derived demand for cheaper electricity C) decide to find other ways to use electricity D) continue its present operation because it has an inelastic demand for electricity E) remove its lighting, turn off its fans, and economize on its use of electricity Answer: D Difficulty: Difficult LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Application of knowledge

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115) In terms of organizational markets, discount stores are examples of ________.

A) resellers B) resuppliers C) not-for-profit markets D) producers E) facilitating agents Answer: A Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Analytical thinking 116) NGOs are resellers in the business marketplace.

Answer: FALSE Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 117) Business markets tend to be more geographically concentrated than consumer markets.

Answer: TRUE Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 118) In business markets, products often must do more than satisfy an individual's needs.

Answer: TRUE Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers 119) PPG Industries is a producer of glass for windows. It likely sells its products in the consumer market.

Answer: FALSE Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Application of knowledge

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120) How are consumer demand and business-to-business demand of goods and services related?

Answer: Consumer demand is based on a direct connection between a need and the satisfaction of that need. Business customers do not purchase goods and services to satisfy their own needs.

Business-to-business demand is derived demand because a business's demand for goods and services comes either directly or indirectly from the consumers' demand. Therefore, in each purchasing decision, the consumers' demand is important.

Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Analytical thinking 121) What is the difference between producers and resellers?

Answer: Producers purchase products for the production of other goods and services that they in turn sell to make a profit, while resellers buy finished goods for the purpose of reselling, renting, or leasing to other businesses. Resellers do not produce goods but do provide time, place, and possession utility to their customers.

Difficulty: Moderate LO: 6.4: Understand the characteristics of business-to-business markets and how marketers classify business-to-business customers AACSB: Application of knowledge 122) A ________ identifies the degree of effort required of the firm's personnel to collect information and make a purchase decision.

A) needs hierarchy B) purchase continuum C) buyclass framework D) determinant attribute E) compensatory decision rule Answer: C Difficulty: Easy LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 123) A new-task buy ________.

A) requires less time and effort than a modified rebuy B) cannot be used if the buyer uses single sourcing C) is characterized by uncertainty and high risk D) is similar to routine decision making in the consumer market E) begins with a SWOT analysis Answer: C Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media

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124) The group of people in the organization who participate in the purchasing decisions is referred to as the ________.

A) gatekeeper B) resource center C) buying center D) purchasing hierarchy E) purchasing office Answer: C Difficulty: Easy LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Interpersonal relations and teamwork 125) Business buyers often develop a written description of the quality, size, weight, color, features, warranty, delivery requirement, and other details required of a product purchase, also called ________.

A) product specifications B) a buyclass C) a new-task buy D) an extranet E) a customer reference program Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Written and oral communication 126) The ________ is the member of the buying center who controls the flow of information to other members.

A) initiator B) gatekeeper C) decider D) user E) influencer Answer: B Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Written and oral communication

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127) Which member of the buying center typically has the most power?

A) buyer B) gatekeeper C) decider D) initiator E) influencer Answer: C Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Interpersonal relations and teamwork 128) The ________ is the member of the buying center whose primary function is handling the details of the transaction.

A) buyer B) gatekeeper C) decider D) initiator E) influencer Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Interpersonal relations and teamwork 129) When a business needs to make a complex purchase, it is most likely to form a buying center during the ________ stage of the business buying decision process.

A) problem recognition B) vendor analysis C) information search D) supplier selection E) alternative evaluation Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Interpersonal relations and teamwork

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130) In the business buying decision process, the selection of the product and supplier follows ________.

A) obtaining written or verbal bids B) evaluating alternatives C) scanning trade publications D) evaluating vendors E) setting the price ceiling Answer: B Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 131) Which of the following is an advantage of using single sourcing?

A) Suppliers are more likely to remain cost-competitive.

B) Buyers are less reliant on one firm to deliver the needed goods without interruption.

C) The buyer and seller agree to be each other's customers.

D) Consistency of quality of materials input into the product process is more assured.

E) Buyers have other suppliers to fall back on if one supplier fails.

Answer: D Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 132) A business-to-business marketer would be most likely to use a customer reference program to influence the buying center in the ________ stage of the business buying process.

A) problem recognition B) evaluation of alternatives C) sourcing selection D) postpurchase evaluation E) reverse marketing Answer: B Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 133) Sometimes supplier selection is based on ________, which means a buyer and a seller agree to purchase each other's goods and services.

A) requisition B) reciprocity C) customer references D) outsourcing E) reverse marketing Answer: B Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 34 Copyright © 2022 Pearson Education, Inc.

134) A business practice in which a buyer firm attempts to identify suppliers who will produce products according to the buyer firm's specifications is referred to as ________.

A) reciprocity B) functionalization C) reverse marketing D) bottom-up marketing E) crowdsourcing Answer: C Difficulty: Easy LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 135) Which of the following is the simplest form of B2B e-commerce?

A) online catalogs B) reciprocal sites C) intranets D) extranets E) private exchanges Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences 136) A company uses a(n) ________ to allow certain suppliers, customers, and others outside the organization to access its internal system.

A) corporate website B) search engine C) extranet D) shopbot E) intranet Answer: C Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences

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137) To purchase an item from an internet site, you will be asked to provide a credit card number. Because of ________, a computer hacker who intercepts this number as it is being sent to the seller would likely see £D¥$&0PDJLJL, or something equally as meaningless.

A) decoding B) spyware C) encryption D) the firewall E) malware Answer: C Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences 138) The Green Awning is a flower and gift store. When its owner purchases the green foam used in the bottom of vases of cut flowers, floral tape used in flower arrangements, and gift cards, she is most likely making a ________.

A) straight rebuy B) complex-task purchase C) modified rebuy D) new-task buy E) gatekeeping buy Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking 139) Although much of the equipment used by dentists is thrown away after one use, many of the instruments used to clean teeth, fill cavities, and deal with impactions and other dental problems are made of steel and must be sterilized. A dentist is considering replacing his conventional steam sterilizer with a chemical sterilizer that cleans without rusting or corroding instruments.

Because the dentist is already familiar with sterilizers, he is looking to find the best price possible on a chemical sterilizer. He is engaged in a ________.

A) straight rebuy B) customer-reference purchase C) modified rebuy D) reciprocal purchase E) reverse marketing purchase Answer: C Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking

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140) A trucking company is considering purchasing new trucks that are powered by ethanol instead of diesel fuel. In terms of the buying center, the truck drivers who must make sure that the trucks' fuel tanks do not run out of fuel are the ________.

A) initiators B) liaisons C) agents D) users E) gatekeepers Answer: D Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking 141) A patient of Dr. Albrecht told the dentist he needed to buy a machine that would sterilize his tools without using any water because water tends to cause the tools to rust or corrode over time. In terms of the buying center, the patient had the role of ________.

A) decider B) liaison C) agent D) user E) influencer Answer: E Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking 142) Worthington Farm raises chickens. For years, it has used wooden coops to haul its poultry to market. When Bob Worthington went to reuse some of his coops, he noticed many of them could not be sufficiently cleaned for reuse and ought to be replaced. Worthington was at which stage of the business buying process?

A) problem recognition B) vendor analysis C) information search D) information evaluation E) product selection Answer: A Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking

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143) Johnson Controls, Inc. has decided that it will only buy its critical supplies from a supplier if that vendor's rivals are also capable of making the same item. Johnson Controls is engaged in ________.

A) reciprocity B) single sourcing C) reverse marketing D) a buying center E) multiple sourcing Answer: E Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking 144) An initiator in a buying center is responsible for executing the purchase decision.

Answer: FALSE Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Interpersonal relations and teamwork 145) Suppliers are more likely to stay price competitive when the purchasing company uses single sourcing than when it uses multiple sourcing.

Answer: FALSE Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 146) Malware is software that covertly gathers information from an individual's or an organization's computer.

Answer: FALSE Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences 147) In terms of the buyclass framework, modified rebuys often contribute the "bread and butter" revenue a firm needs to maintain a steady stream of income.

Answer: FALSE Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking

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148) Unlike consumer marketing, B2B organizations have not used social media content to deliver their content marketing tactics.

Answer: FALSE Difficulty: Difficult LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Application of knowledge 149) Multiple sourcing is the business practice of obtaining outside vendors to provide goods or services that could otherwise be supplied in-house.

Answer: FALSE Difficulty: Easy LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media 150) Discuss the security issues of B2B e-commerce and how companies address those issues.

Answer: The major security threats B2B e-commerce companies face include hackers destroying company records or stealing trade secrets, ensuring authentication and making transactions secure, and employees giving unauthorized access to company systems. Companies use several safety measures to address these problems. Firewalls are combinations of hardware and software that allow only authorized individuals access to company computer systems.

Through encryption software, companies scramble messages so that only those with the right decoder "key" can read the message. Such encryption software is used to protect private customer information, such as credit card numbers, from hackers using sniffer programs to intercept and read messages. Despite firewalls, encryption, and other security measures, web security for B2B marketers remains a serious problem.

Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences 151) Compare the three business-to-business buyclasses.

Answer: The three business-to-business buyclasses are straight rebuys, modified rebuys, and new-task buys. A straight rebuy is a routine purchase of items that a business-to-business customer regularly needs. The buyer has purchased the same items many times before and routinely reorders them when supplies are low. A modified rebuy occurs when a firm wants to shop around for suppliers with better prices, quality, or delivery times. This situation also can occur when the organization has new needs for products it already buys. A new-task buy requires the buyer to start from scratch to gather information on purchase specifications. This situation requires the most effort of buyers and offers the most opportunity for new sellers.

Difficulty: Difficult LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Application of knowledge

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152) What are the steps in the business-to-business buying decision process? Discuss how they are different from the steps in the consumer decision process.

Answer: Steps in the business-to-business buying decision process are problem recognition, information search, evaluation of alternatives, product and supplier selection, and postpurchase evaluation. These steps are the same as those in the consumer decision process, but for business purchases, each step may be far more complex and require more attention from marketers. In the first step of the B2B buying process, a firm may form a buying center. Multiple individuals are involved in the buying decision process. Business buyers conduct a much more thorough information search than consumers do. They also develop product specifications and obtain bids from potential suppliers during this step. Much more negotiation is typically involved in the alternative evaluation stage of the B2B buying process. Also, the B2B buying process often includes formal presentations and product demonstrations by potential suppliers. Unlike consumers, B2B buyers must decide on what type of sourcing to use for a purchase in the product and supplier selection stage. Finally, the B2B postpurchase evaluation is much more formal than the consumer postpurchase evaluation.

Difficulty: Difficult LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Application of knowledge 153) Discuss the marketer's use of intranets and extranets.?

Answer: Although the Internet is the primary means of B2B e-commerce, many companies maintain an intranet. This provides a more secure means of conducting business. Intranets allow companies to process internal transactions with greater control and consistency because of stricter security measures than those they can use on the entire web. In contrast to an intranet, an extranet allows certain suppliers, customers, and others outside the organization to access a company's internal system. A business customer that a company authorizes to use its extranet can place orders online. Extranets also allow business partners to collaborate on projects and build relationships.

Difficulty: Difficult LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Integration of real-world business experiences 154) How does reverse marketing work?

Answer: Reverse marketing changes the marketing process. Instead of sellers trying to identify potential customers, buyers try to find suppliers capable of producing specific, needed products, and then attempt to convince the suppliers to contract to make the products.

Difficulty: Moderate LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Analytical thinking

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155) Identify an advantage and disadvantage of implementing multiple sourcing.

Answer: Multiple sourcing means buying a product from several different suppliers. Under this system, suppliers are more likely to remain price competitive. And if one supplier has problems with delivery, the firm has others to fall back on. One of the disadvantages to purchasing from multiple sources is that a firm may not have much clout with a supplier when it comes to negotiating prices and contract terms. Also, having many suppliers increases the firm's administrative costs because it has more invoices to pay, more contracts to negotiate, and more salespeople to see than if it used a single source.

Difficulty: Difficult LO: 6.5: Identify and describe the different business purchase situations and the business buying decision process including the use of e-commerce and social media AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 7 Segmentation, Target Marketing, and Positioning 1) People's diverse interests and backgrounds in modern society divide them into numerous groups with distinct needs and wants, a condition most accurately described as ________.

A) market aggregation B) market positioning C) economic aggregation D) differentiation E) market fragmentation Answer: E Difficulty: Easy LO: 7.1: Identify the steps in the target marketing process 2) Marketers must balance the ________ of mass marketing with the ________ of offering each individual customer exactly what he wants.

A) efficiency; effectiveness B) effectiveness; efficiency C) investment; cost D) cost; investment E) positioning; scale Answer: A Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process 3) Which of the following statements about the steps in the target marketing process is true?

A) The first step in the target marketing process is setting marketing objectives.

B) There are four steps in the target marketing process.

C) The second step in the target marketing process is the identification of all segmentation variables.

D) The final step in the target marketing process is positioning.

E) The target marketing process is not related to positioning.

Answer: D Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process 4) In the target marketing process, marketers first ________.

A) divide the market into segments based on customer characteristics B) identify a market that is likely to buy a product C) select one or more segments as target markets D) develop a product to meet the needs of a specific market segment E) position a product Answer: A Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process

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5) In the targeting marketing process, the step that follows segmentation is ________.

A) targeting B) positioning C) producing D) selling E) advertising Answer: A Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process 6) Some people want healthy cereal that will help them lose weight. Some want presweetened cereal. Some want fruits and nuts in their cereal. Some people want whole wheat cereal while others want rice cereal. There are some who like hot cereal and others who like to eat their cereal right out of the box. The diversity of consumers for cereal is an example of ________.

A) geodemography B) target marketing C) cultural diversity D) psychographics E) market fragmentation Answer: E Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process AACSB: Analytical thinking 7) Technological and cultural advances contribute to market fragmentation.

Answer: TRUE Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process AACSB: Integration of real-world business experiences 8) A mass marketing approach involves more advertising costs than a target marketing approach does.

Answer: FALSE Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process AACSB: Written and oral communication 9) What is market fragmentation? Why is market fragmentation of concern to marketers?

Answer: Market fragmentation refers to how modern society is divided into groups with diverse interests and diverse backgrounds. Each group has distinctive wants and needs. Because of this diversity, the same good or service will not appeal to everyone. Marketers must understand a group's distinctive wants and needs in order to meet the needs of the group with a product or service.

Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process AACSB: Application of knowledge 2 Copyright © 2022 Pearson Education, Inc.

10) Explain the major steps in the target marketing process.

Answer: The first step is market segmentation: dividing a market into smaller groups based on one or more meaningfully shared characteristics. The second step is targeting: evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. The third step is positioning: developing a marketing strategy to influence how a target market segment perceives a good or service in comparison to the competition.

Difficulty: Moderate LO: 7.1: Identify the steps in the target marketing process AACSB: Analytical thinking 11) Which of the following is the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics?

A) acculturation B) segmentation C) market fragmentation D) targeting E) positioning Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 12) Age, gender, place of residence, and income are all examples of ________.

A) segmentation variables B) positioning strategies C) market fragment strategies D) psychographics E) targeting strategies Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 13) Which of the following is NOT one of the criteria used to segment consumer markets?

A) industry B) demographic C) geographics D) psychographic E) behavioral Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments

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14) Which of the following is NOT an example of a demographic segmentation variable?

A) lifestyle B) income C) ethnicity D) gender E) age Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 15) ________ are those individuals who spend a big chunk of their time online. And because they spend so much time online, they expect brands to engage them in two-way digital conversations.

A) Digital natives B) VALS C) Content marketers D) The neglected segment E) The long tail Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Ethical understanding and reasoning 16) Marketers often use generational marketing because members of a generation tend to share the same ________.

A) lifestyle B) income and social class C) outlook and priorities D) psychographics and usage patterns E) geodemographics Answer: C Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 17) The group of American consumers born after 1994 is often called ________.

A) Millennials B) Generation Y C) Generation X D) busters E) Generation Z Answer: E Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 4 Copyright © 2022 Pearson Education, Inc.

18) Which of the following groups are referred to as digital natives?

A) Millennials B) Generation Y C) Generation X D) busters E) Generation Z Answer: E Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 19) Which of the following is true of members of Generation Z? A) They were born between 1965 and 1978.

B) They are the least diverse generation.

C) They are the first generation to grow up with access to the Internet.

D) They grew up during the Great Recession.

E) They are the largest generation.

Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 20) "Echo boomers" is another name for which generation?

A) the busters B) iGen C) Generation Y D) tweens E) Generation X Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 21) Which of the following is NOT true of the differences between the millennials and Gen Z? A) Gen Z is an extension of the millennials.

B) Gen Z tends to be more pragmatic.

C) Millennials tend more toward idealism.

D) Gen Z is more focused on saving money than on the customer experience.

E) Gen Z sets a higher bar for expecting innovation from companies.

Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments

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22) Which generation is referred to as "busters" and is thought of as slackers who are cynical about marketing?

A) Generation Y B) Generation X C) Baby boomers D) Millennials E) Generation Z Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 23) Which generation has a cynical attitude toward marketing that was reflected in the chapter title "I Am Not a Target Market!" in a famous book?

A) Baby boomers B) Echo boomers C) Generation X D) Generation Y E) Generation Z Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 24) Baby boomers ________.

A) were born between 1965 and 1978 B) are currently in their 30s and 40s C) are important to marketers because of the size and wealth of the segment D) are 75 or older E) are the parents of Generation X, not Generation Y Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 25) Marketers have suggested which generation be divided into two different groups for the purpose of considering their discretionary and nondiscretionary spending capabilities?

A) Echo boomers B) Millennials C) Baby boomers D) Gen X E) Generation Z Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 6 Copyright © 2022 Pearson Education, Inc.

26) The segment of the baby boomers who are spending significantly more on non-discretionary items is referred to as ________.

A) trailing edge boomers B) leading edge boomers C) baby busters D) echo boomers E) iGen Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 27) The supermarket sells boxes of pink diapers and blue diapers. This is an example of segmenting by ________.

A) gender B) age C) ethnicity D) social class E) generation Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 28) ________ products are traditionally sex-typed items adapted to the opposite gender.

A) Gender-bending B) Gender identity C) Androgynous D) Lifestyle E) Geotargeted Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 29) The attention of the ________ has served as a very positive force for marketers to step back and ensure that gender biases do not unwittingly creep into their messaging.

A) Me Too movement B) Black Lives Matter movement C) movement for androgyny D) gender-bending products E) segment of one Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments

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30) Because family needs and expenditures change over time, marketers may segment consumers by ________.

A) age B) generation C) family life cycle stage D) social class E) psychographics Answer: C Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 31) Which of the following best explains why marketers do not consider social class segments as strictly as they once did?

A) Many consumers buy according to the social class image they wish to portray rather than according to where they actually fall in the social class framework.

B) Due to the Great Recession, members of the upper class have become members of the middle class, and members of the middle class have become members of the lower class.

C) Data related to social class are more complicated and difficult to obtain and analyze than they once were.

D) Social class in the United States is more related to education and family history than to wealth.

E) Members of the upper and middle classes are unlikely to be attracted to any products marketed toward members of the lower classes.

Answer: A Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it 32) ________ is the concept in segmentation that can help marketers determine how to better match different products and versions of products to different consumer groups based on an understanding of what discretionary and non-discretionary allocations of funds they are able to make.

A) Buying power B) Ethnicity C) Psychographics D) Social networking E) Geocoding Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments

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33) The ________ population is the largest minority group in the United States.

A) African American B) Asian American C) Pacific Islander D) Latino/a E) American Indian Answer: D Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 34) ________ is the strategy of establishing thought leadership in the form of bylines, blogs, commenting opportunities, videos, sharable social images, and infographics.

A) Content marketing B) Psychography C) Geodemography D) Ethnic segmentation E) Social networking Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Written and oral communication 35) Which of the following is NOT true of the Asian American segment of the population?

A) Their numbers are relatively small relative to several other ethnicities.

B) They do not yet receive significant attention from marketers.

C) Their average family income is $20,000 higher than the U.S. average family income.

D) This is the fastest-growing minority group in the United States.

E) By 2055, they are expected to be the nation's largest immigrant group.

Answer: B Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 36) The management practice of ________ involves actively seeking people of different races, sexes, ethnic groups, and religions in an organization's employees, customers, suppliers, and distribution channel partners.

A) geodemography B) cultural diversity C) ethnic segmentation D) psychography E) social networking Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 9 Copyright © 2022 Pearson Education, Inc.

37) Your firm has decided to tailor its products and services to meet local market demands. A good approach to use would be ________ segmentation.

A) geographic B) psychographic C) usage D) positioning E) social class Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 38) Which of the following is a segmentation technique that combines geography with demographic information such as income, age, race, and household composition?

A) geocoding B) geodemography C) geodiversity D) geotargeting E) psychographics Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 39) Companies can customize marketing to consumers on mobile devices through ________, which delivers messages to consumers based on their real-time physical location.

A) geotargeting B) geodemography C) geodiversity D) psychographics E) profiling Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 40) Which of the following approaches to market segmentation is most likely to use AIOs? A) psychographics B) demographics C) geodemographics D) socioeconomics E) ethnographics Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge

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41) ________ is the use of psychological, sociological, and anthropological factors to construct market segments.

A) Demographics B) Ethnographics C) Geodemographics D) Socioeconomics E) Psychographics Answer: E Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 42) ________ is a well-known system based on psychological traits that correlate with consumer behavior. It divides the entire U.S. population into segments and then sells pieces of this information to clients for specific strategic applications.

A) VALS™ B) ROMI C) AIO D) PRIZM E) NAICS Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 43) The ability to identify and target market segments that may be as small as just one individual is known as ________.

A) geotargeting B) micromarketing C) psychographic segmenting D) geodemography E) usage segmenting Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 44) Which two factors are key to the VALS™ system?

A) household composition and economic resources B) age and location C) place of usage and time of usage D) economic resources and psychological motivators E) education and location Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences

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45) A milestone or reward earned for progressing through a video game is referred to as a ________.

A) badge B) carrot C) stick D) freebie E) segment Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 46) ________ segmentation variables classify consumers on the basis of how they act toward, feel about, or use a product.

A) Demographic B) Behavioral C) Geodemographic D) Socioeconomic E) Psychographic Answer: B Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it 47) Loyalty programs such as Marriott Rewards and American Airlines Advantage are examples of segmentation by ________.

A) usage rate B) occasion C) geodemography D) psychographics E) geotargeting Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 48) The 80/20 rule is most directly related to ________ segmentation.

A) demographic B) behavioral C) geodemographic D) socioeconomic E) psychographic Answer: B Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it

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49) According to the long tail approach to selling, ________.

A) the Internet provides reduced opportunities for segmenting markets B) companies can make the most money by focusing on the "bottom-of-pyramid" market C) companies should focus on the 20 percent of customers who purchase the greatest volume of their product D) companies should focus on the 80 percent of customers who purchase the greatest volume of their product E) companies can make money by selling small amounts of items that only a few people want Answer: E Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 50) According to the 80/20 rule, which of the following is true?

A) 80 percent of a product's customers account for 20 percent of the product's marketing expenditures.

B) 20 percent of a product's customers account for 80 percent of the product's marketing expenditures.

C) 80 percent of a product's sales come from 20 percent of the product's purchasers.

D) 80 percent of a product's marketing cost should be equal to 20 percent of the firm's total marketing budget.

E) 80 percent of a product's market should be consumers who are 20 or older.

Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 51) ________ refers to highly cultivated customers who are likely to follow through on an intended purchase, buy the product repeatedly, and recommend it to others.

A) Customer stickiness B) Customer loyalty C) The 80/20 rule D) Behavioral segmentation E) Geotargeting Answer: A Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it

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52) During tax season, you're likely to see more TurboTax ads on Google pages, even if you aren't searching for tax software. This is an example of ________ segmentation.

A) geodemographic B) psychographic C) usage occasion D) demographic E) geotargeting Answer: C Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 53) Used as a measure of a customer's bond and loyalty to a product, ________ identifies and cultivates relationships with customers who are likely to buy a product repeatedly and recommend it to others.

A) geodemographic segmentation B) the 80/20 rule C) the long tail D) customer stickiness E) geotargeting Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 54) Business-to-business marketers who look at the size of firms in terms of total sales or number of employees are using ________ to segment their market.

A) organizational psychographics B) organizational demographics C) organizational culture D) behavior variables E) usage variables Answer: B Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 55) High-end exercise equipment marketer Peloton ran an ad in late 2019 showing a man giving a Peloton bike to a woman as a gift. The backlash of this campaign reminded companies of the need to avoid messages with ________.

A) a gender bias B) health agendas C) age bias D) cultural bias E) generational difference Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 14 Copyright © 2022 Pearson Education, Inc.

56) Demographic variables are so frequently used in market segmentation because they ________.

A) create smaller segments than other methods do B) create more easily reached segments than other methods do C) do not involve stereotypes D) are easy to identify E) involve fewer attributes to consider than other methods do Answer: D Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 57) In developing a new shoe, Reebok targeted the youth market. It used ________ segmentation to define its target market.

A) lifestyle B) behavioral C) socioeconomic D) demographic E) psychographic Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 58) A retailer that wants to target prospective grooms within six months of their marriage is using ________ segmentation to define its target market.

A) lifestyle B) behavioral C) socioeconomic D) family life cycle E) ethnicity Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking

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59) When many men in the baby boomer segment started getting gray hair, they were reluctant to use hair dyes made for women even though they were just as eager as women to fight the aging process. To address this reluctance, hair care product manufacturers introduced hair dying systems for men to use both on their heads and their facial hair. These hair care product manufacturers used ________ segmentation to define their target markets.

A) lifestyle B) behavioral C) socioeconomic D) demographic E) psychographic Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 60) A soup company found its canned nacho cheese sauce was too spicy for Americans in the East and not spicy enough for those in the West and the Southwest. As a result, the company's plants in Texas and California produce a hotter nacho cheese sauce than is produced in its other plants. The company is using ________ segmentation.

A) geographic B) life cycle C) psychographic D) lifestyle E) usage Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 61) To market Suave shampoo, Unilever used PRIZM to identify neighborhoods with high concentrations of young working women. These women responded best to advertisements conveying the message that Suave is inexpensive, yet will make their hair "look like they spend a fortune on it." What segmentation tool did Unilever use in this example?

A) geotargeting B) geodemography C) the hierarchy of needs D) behavioral E) family life cycle Answer: B Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking

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62) Starbucks uses a ________ strategy when it rewards members with stars for each latte purchased to redeem for a free refill.

A) gamification B) market segmentation C) geodemographic D) socioeconomic E) psychographic Answer: A Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 63) Magazines targeted to people who love in-line skating, people who enjoy cooking, or people who prefer living more simply use ________ segmentation variables.

A) demographic B) ethnographic C) geodemographic D) socioeconomic E) psychographic Answer: E Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 64) To more effectively market their new product, the ACME Company has decided to use VALS to assist them in classifying their customers. Which approach to segmentation are they using?

A) value analysis B) psychographics C) geodemographics D) socioeconomics E) ethnography Answer: B Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking

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65) Many people entertain in their homes during months when their homes are decorated for holidays. The increase in ads for prepared trays of food to be served at these functions is directly related to ________ segmentation.

A) socioeconomic B) geodemographic C) geographic D) demographic E) usage occasion Answer: E Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 66) Starting in February and ending sometime in late April, department stores promote the fact that they stock a wide range of formal attire for high school proms. The dresses and tuxedos are available year-round, but the heaviest promotion of these products occurs in spring, when most proms are held. This spring promotion to high school students is based primarily on ________.

A) social class B) psychographics C) lifestyle D) usage occasion E) geodemography Answer: D Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 67) Which of the following is the best example of the long tail approach to selling?

A) Nearly 20 percent of the videos delivered by Netflix are older or obscure titles from its vast collection of videos.

B) Kraft Foods focuses on the 20 percent of U.S. households that purchase 80 percent of the Miracle Whip the company markets.

C) Barnes & Noble stocks the most popular books and magazines in its retail stores.

D) Google lets advertisers target certain ads to certain segments of search engine users.

E) Staples segments its business-to-business markets based on sales volume.

Answer: A Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 68) Age and gender are examples of demographic segmentation variables.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it

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69) Generation X is also known as the millennials.

Answer: FALSE Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 70) Generational marketing refers to marketing to members of a generation who tend to share the same outlook, values, and priorities.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 71) Those individuals born before 1946 are members of the baby boomer generation.

Answer: FALSE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 72) In comparison to trailing-edge boomers, leading-edge boomers spend a higher proportion of their income on non-discretionary items.

Answer: FALSE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 73) Marketers today are more frequently making a distinction between sex-typed people and androgynous people.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 74) Mercedes, BMW, and Audi have developed lower-priced versions of their cars. This is an example of marketers' shift away from marketing to social class segments and instead marketing to the image the segment wishes to portray.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 75) Asian Americans are the fastest-growing minority group in the United States.

Answer: TRUE Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Diverse and multicultural work environments 19 Copyright © 2022 Pearson Education, Inc.

76) The capabilities to execute against a segment of one are getting stronger all the time.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it 77) The VALS™ system is a crucial part of geodemographic segmentation.

Answer: FALSE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 78) The long tail approach to segmentation indicates that companies can make money selling small amounts of items that only a few people want as long as they sell enough different items.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 79) The gamer segment combines a lifestyle/psychographic component with generational marketing.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 80) Marketers using a gamification strategy often use points or badges to reward and encourage desired consumer behavior.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Integration of real-world business experiences 81) Because children have little influence over family purchases beyond toys and games, marketers tend to not focus on consumers under the age of 12.

Answer: FALSE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge 82) Experiential loyalty refers to the customer loyalty that results not just in increased purchases but also in an enhanced broader experience for the customer.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking

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83) Many of the people in Generation X have a cynical attitude toward marketing.

Answer: TRUE Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 84) Describe several characteristics of Generation Y and Generation X that are important to marketers.

Answer: Generation Y, also known as Millennials or Echo Boomers, consists of people born between 1979 and 1994. They are the first generation to grow up with the Internet, and their comfort with technology is reflected in their media choices. They are opting for streaming video rather than watching television and are heavy users of smartphones, tablets, and social media.

Millennials are very racially diverse and a greater proportion of them have never been married in comparison to other generations. Members of Generation X are older than Millennials, born between the years of 1965 and 1978. Many Gen Xers have a cynical attitude towards marketing.

They are focused on having stable families, and they see their homes as expressions of individuality rather than material success.

Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 85) Explain why the Latino/a population is particularly important to marketers.

Answer: The Latino/a population is the country's largest minority group, but that is not the only reason it is described as the "emerging superstar segment." This group's buying power has reached $1.4 trillion. This has tripled since 2010. Latino/a individuals now represent nearly 10 percent of total U.S. buying power.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge 86) How do marketers use the assumption that "birds of a feather flock together"?

Answer: Marketers have developed geodemography—a segmentation technique that combines demographics and regional marketing. Through geodemography, marketers segment markets of people who live near one another and share similar characteristics. They can construct segments including a number of households with a common pattern of preferences and know more precisely who will be interested in special offerings.

Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge

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87) What is geotargeting? Explain how a marketer might use this.

Answer: Geotargeting is marketing to a set of specific users based on their current real-time location. The opportunities for targeted advertising are endless once a marketer grabs the address of their customer. Domino's asks for customer addresses when they sign up for offers. With the specific location information, the company can provide special offers responding to conditions in that location such as a big storm or a local big sporting event.

Difficulty: Difficult LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 88) How do marketing organizations benefit from cultural diversity?

Answer: Marketing organizations that hire people of different sexes, races, ethnic groups, and religions benefit from the diverse backgrounds, experiences, and points of views of their employees as they develop strategies for brands to appeal to diverse customer groups.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Interpersonal relations and teamwork 89) How does the concept of customer stickiness relate to the 80/20 rule?

Answer: According to the 80/20 rule, 20 percent of purchasers account for 80 percent of a product's sales. In other words, a relatively small group of purchasers makes up the majority of sales. Customer stickiness is a concept used to actively target the 20 percent of highest-volume purchasers to encourage customers to follow through on purchases, buy repeatedly, and recommend the product to others. Marketers can encourage customer stickiness, or a strong bond to a brand, through designing marketing that rewards customer loyalty.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 90) List the four ways in which consumer markets can be segmented.

Answer: Consumer markets can be segmented according to demographic, geographic, psychographic or behavioral criteria.

Difficulty: Easy LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 91) How might a marketer benefit most from using PRIZM? Answer: People and locations can be segmented into marketable groups of like-minded consumers, so marketers can more closely tailor their efforts to their target.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge

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92) You work for a travel agency. Business has been slow, and you want to suggest some promotions targeted to specific market segments. What three psychographic segmentation variables would you recommend using and why?

Answer: Students' answers will vary. Many students will list shared opinions, interests, and attitudes. More sophisticated answers will include segments such as people who enjoy fishing, people who like to look at wildlife, vegetarians, people who are interested in adventure, and so forth.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Application of knowledge 93) Tropicana Essentials Healthy Heart targets consumers who like orange juice and who also want extra vitamins but no sodium. Explain how Tropicana uses behavioral segmentation in this example.

Answer: Behavioral segmentation categorizes consumers on the basis of how they act toward, feel about, or use a product. Tropicana Essentials Healthy Heart targets consumers who want the healthy benefits of added vitamins and no sodium added to their orange juice.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 94) A large chain amusement park sells tickets at its main gate for guests who are visiting the park for just that one day. The park also sells seasonal passes that can only be used on weekdays.

What market segmentation is being implemented by the amusement park?

Answer: The amusement park is using behavioral segmentation. Guests who are planning to visit once are one segment, and guests who are planning to visit repeatedly throughout the season are another.

Difficulty: Moderate LO: 7.2: Understand the need for market segmentation and the approaches available to do it AACSB: Analytical thinking 95) ________ is a strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers.

A) Segmentation B) Differentiation C) Targeting D) Market mixing E) Positioning Answer: C Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy

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96) Before selecting a targeting strategy, marketers should ________.

A) select media for an advertising campaign B) develop segment profiles C) compare target markets D) implement a positioning strategy E) finalize the marketing mix Answer: B Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 97) Which of the following is NOT a requirement for determining if a target segment is viable?

A) Is the segment similar enough to consumers in other segments to use a mass-marketing strategy?

B) Can marketers measure the segment?

C) Can marketing communications reach the segment?

D) Can the marketer adequately serve the needs of the segment?

E) Is the segment large enough to be profitable now and in the future?

Answer: A Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 98) When the size and purchasing power of a target segment can be determined, the segment is ________.

A) measurable B) accessible C) substantial D) differentiable E) profitable Answer: A Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 99) A(n) ________ would probably include customer demographics, location, lifestyle information, and a description of how frequently the customer buys the product.

A) geocode B) NAICS classification C) segment profile D) VALS™ type E) PRIZM segment Answer: C Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy

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100) A company that uses a(n) ________ targeting strategy is appealing to a broad spectrum of people.

A) fragmented B) undifferentiated C) concentrated D) differentiated E) customized Answer: B Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 101) Mass marketers such as Walmart often ignore market segment differences and target the whole market with one offer. What is this approach to targeting?

A) undifferentiated targeting B) differentiated targeting C) target marketing D) concentrated targeting E) mass customization Answer: A Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 102) Which of the following best explains why a company would adopt an undifferentiated targeting strategy?

A) to more efficiently focus on customer relationship management B) to remove the need for positioning C) to move a product to the next stage of its product life cycle D) to take advantage of economies of scale E) to reach the underserved "bottom-of-the-pyramid" consumers Answer: D Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 103) Using a ________ targeting strategy, a company develops one or more products for each of several customer groups with different product needs.

A) fragmented B) homogeneous C) custom D) differentiated E) mass customization Answer: D Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy

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104) When a firm offers one or more products to a single segment, it is using a ________ strategy.

A) fragmented B) homogeneous C) custom marketing D) mass customization E) concentrated targeting Answer: E Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 105) An industrial manufacturer that works with one or a few large clients and develops products that only these clients will use is most likely to implement a(n) ________ strategy.

A) undifferentiated targeting B) homogeneous C) customized marketing D) bottom-of-the-pyramid E) differentiated targeting Answer: C Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 106) Personal or professional services we get from doctors, lawyers, and hairstylists reflect a(n) ________ strategy.

A) undifferentiated targeting B) customized marketing C) differentiated targeting D) concentrated targeting E) mass marketing Answer: B Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 107) Using ________, a company modifies a basic good or service to meet the needs of a specific individual customer.

A) undifferentiated targeting B) positioning C) customized marketing D) mass customization E) differentiated targeting Answer: D Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy

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108) Marketers at P&G selected Generation Y, a demographic that includes college students, as an untapped group of potential customers for their Febreze line of products. Which of the following were they executing?

A) market segmenting B) undifferentiated targeting C) differentiation D) targeting E) positioning Answer: D Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 109) A travel agency's marketers have created ________ to represent different key potential user types for their travel services.

A) personas B) cultures C) digital natives D) perceptual maps E) badges Answer: A Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge 110) The Wright Bros. Collection is a catalog retailer that sells clothing and collectibles to aviation enthusiasts. Its ________ might be men and women between the ages of 25 and 55 who are risk takers. They belong to organizations such as the American Legion, the VFW, and the National Rifle Association of America. They are either pilots themselves or have close ties to a pilot. They prefer camping to taking a luxury cruise. Annually, they spend $900 on items purchased from catalogs.

A) value analysis B) customer potential assessment C) segment profile D) positioning statement E) brand personality Answer: C Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking

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111) An undifferentiated marketing strategy is most likely to be successful in which of the following scenarios?

A) The market has many competitors.

B) The product or service has wide appeal.

C) Growth of the market has stabilized.

D) The market is slowly shrinking.

E) The market has a few strong competitors.

Answer: B Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge 112) Jolene Enterprises mass produces an all-purpose floor cleaner, mass distributes it, and mass promotes it. This firm uses a(n) ________.

A) segmented strategy B) undifferentiated targeting strategy C) focused targeting strategy D) differentiated targeting strategy E) concentrated targeting strategy Answer: B Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 113) Small firms that do not have the resources or the desire to be all things to all people often engage in a(n) ________ strategy.

A) concentrated targeting B) undifferentiated targeting C) differentiated targeting D) focused targeting E) segmented Answer: A Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge

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114) Favorite Memories is a small company that specializes in serving women over the age of 50 who are special occasion gift shoppers overlooked by major competitors. Which of the following best describes Favorite Memories' market targeting strategy?

A) undifferentiated targeting B) custom marketing C) differentiated targeting D) concentrated targeting E) mass customization Answer: D Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 115) In mass customization, a manufacturer modifies a basic good to meet an individual's specific needs.

Answer: TRUE Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 116) A target market is not viable unless the segment is large enough to be profitable now and in the future.

Answer: TRUE Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy 117) Differentiated marketing can involve connecting the same product with different market segments by communicating differently to each segment.

Answer: TRUE Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Written and oral communication 118) Walmart's appeal to a broad spectrum of people reflects its differentiated targeting strategy.

Answer: FALSE Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge

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119) Explain how a marketer determines whether an identified market segment is viable.

Answer: A viable target segment should satisfy several requirements. First, members of the segment should be similar to each other in their product needs and wants and, at the same time, different from consumers in other segments. Second, the segment should be measurable.

Marketers need to know whether the size and purchasing power of the segment make it a worthwhile target. If the segment is measurable, marketers need to decide whether it is large enough to be profitable now and in the future. Another critical consideration is whether marketing communications can reach the identified segment. Finally, marketers must be able to adequately serve the needs of the identified segment.

Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge 120) Discuss the advantages and disadvantages of undifferentiated targeting, differentiated targeting, and concentrated targeting.

Answer: An undifferentiated targeting strategy ignores market segment differences and targets the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than on what is different. Undifferentiated targeting provides economies of scale, but does not allow for individualization of the marketing mix. In contrast, a differentiated strategy targets several market segments and designs separate offers for each.

Companies hope for higher sales and a stronger position within each market segment.

Concentrated targeting goes after a large share of one segment instead of going after a share of a large market. These segments may be overlooked, unimportant, or under worked. Concentration offers smaller companies an opportunity to compete by focusing their limited resources more effectively.

Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 121) Explain how a computer company might use mass customization to meet the needs of its customers.

Answer: Using mass customization, a company modifies its products or services to meet the needs of its individual customers. A computer company might do this by offering customized computer systems over the Internet. Users could create their own computers, everything from personal computers to networking systems, selecting the specific hardware and software they want from a menu of possible options.

Difficulty: Difficult LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge 122) What is a customized marketing strategy?.

Answer: A customized marketing strategy is an approach that tailors specific products and the messages about them to individual customers.

Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 30 Copyright © 2022 Pearson Education, Inc.

123) The cosmetics giant L'Oréal offers several product lines at a variety of prices. It targets the luxury market with its brand Helena Rubinstein, while less expensive offerings such as Elseve are targeted to large department stores and discounters. What type of targeting strategy is this?

Explain your answer.

Answer: This company is implementing a differentiated targeting strategy, which involves offering different products for several customer groupings with different product needs.

Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 124) XYZ Computers, Inc., a business with limited resources, uses a concentrated targeting strategy. How might XYZ benefit from this?

Answer: XYZ Computers will have an opportunity to compete by focusing its limited resources on serving small segments that may be unimportant to or overlooked by larger competitors.

Difficulty: Moderate LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Application of knowledge 125) BMW allows customers to design their own vehicles from a set of options at BMW's website. What is this called?

Answer: This is mass customization. Advances in computer technology, coupled with the new emphasis on building solid relationships with customers, have focused managers' attention on devising new ways to tailor specific products and the messages about them to individual customers. With mass customization, a manufacturer (such as BMW) modifies a basic good to meet an individual's specific needs.

Difficulty: Easy LO: 7.3: Explain how marketers evaluate segments and choose a targeting strategy AACSB: Analytical thinking 126) ________ means developing a marketing strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition.

A) Concentrated targeting B) Positioning C) Benefit segmentation D) Mass customization E) Customization Answer: B Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication

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127) What the marketer "thinks" about its offering doesn't matter. It is trumped by ________.

A) what the customer perceives B) what competitors say C) a competitive analysis D) what the competitors' consumers say E) what other marketers say Answer: A Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy 128) Which of the listed choices is NOT a positioning task?

A) identifying a set of possible competitive advantages B) surveying frequent users of the product C) analyzing competitors' positions D) finalizing the marketing mix E) evaluating responses to the marketing mix Answer: B Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 129) When marketers are deciding how to position their product, they must first analyze competitors' positions. The next step is to ________.

A) set the marketing communications budget B) identify segmentation variables C) analyze similar industries D) describe their product with a competitive advantage E) create target markets Answer: D Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy 130) When McDonald's failed to realize that Applebee's and Chili's were providing products that met consumers' needs for a quick, tasty, and convenient meal, McDonald's failed to consider its ________.

A) marketing mix B) mass customization C) direct competition D) indirect competition E) competitive advantage Answer: D Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking

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131) Superior image, unique product features, and better service are all examples of ________.

A) brand personalities B) brand positions C) perceptual maps D) competitive advantages E) customer touchpoints Answer: D Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 132) Which of the following would LEAST likely be included in a product's positioning statement?

A) the product's strongest competitors B) the segment(s) to which the product is targeted C) the product's most important differentiator D) evidence supporting the most important claim made about the product E) the specific value of the product Answer: A Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 133) Once a(n) ________ is defined, the next step in positioning is for marketers to finalize the marketing mix.

A) segmentation variable B) competitive advantage C) indirect competitor D) direct competitor E) concentrated target Answer: B Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 134) ________ is a change in positioning strategy.

A) Repositioning B) Using a perceptual map C) Selecting a segment D) Engaging in indirect competition E) Engaging in strategic planning Answer: A Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication

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135) A firm may find that over time, it needs to change which segments it targets and even alter a product's position to respond to marketplace changes. This occurs in which step in developing a positioning strategy?

A) Evaluate responses and modify as needed.

B) Identify segmentation variables.

C) Analyze the competitors' positions in the marketplace.

D) Describe a product with a competitive advantage.

E) Finalize the marketing mix.

Answer: A Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 136) A company that tries to modify its brand image to keep up with changing times is using a ________ strategy.

A) concentrated B) repositioning C) competitive advantage D) personality E) perceptual Answer: B Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Written and oral communication 137) A perceptual map is used to ________.

A) compare and contrast consumer psychographic segments B) create consumer cross-tabulations for marketing research C) locate consumers within a geographic information system D) determine how consumers position products in relation to one another E) identify the critical stage of the targeting process for the marketer Answer: D Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy 138) ________ can help marketers determine where their product actually stands in the minds of consumers.

A) A perceptual map B) A geographic information system C) NAICS D) PRIZM E) VALS™ Answer: A Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Integration of real-world business experiences 34 Copyright © 2022 Pearson Education, Inc.

139) Marketers might use a perceptual map to identify a ________, an unserved market segment that can represent an opportunity for a new product entry.

A) segment profile B) neglected segment C) segmentation variable D) market fragment E) usage occasion Answer: B Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy 140) Saturn is "a different kind of company, different kind of a car;" the Hummer is "like nothing else." These statements indicate a firm's ________.

A) product portfolio B) target markets C) positioning D) brand anthropomorphism E) segmentation Answer: C Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking 141) Levi's 501 button-fly jeans are an example of a unique product feature providing a ________.

A) competitive advantage B) perceptual map C) product portfolio D) brand anthropomorphism E) segment of one Answer: A Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking 142) Which of the following is true of perceptual maps?

A) They are only used during the new product development process.

B) They are the most effective method for predicting product success.

C) They identify consumer shopping preferences in terms of retail and nonretail locations.

D) They are not useful in business-to-business marketing.

E) They cannot be created without consumer research.

Answer: E Difficulty: Difficult LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Application of knowledge

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143) Indirect competitors offer products or service different from yours but potentially could provide the same benefits and satisfy the same customer needs as your offerings do.

Answer: TRUE Difficulty: Easy LO: 7.4: Recognize how marketers develop and implement a positioning strategy 144) Once a brand's position is established, marketers rarely attempt to change it.

Answer: FALSE Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy 145) Retro brands like Breck Shampoo, Ovaltine cereal, and Tab cola were nearly forgotten but then got a new lease on life.

Answer: TRUE Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy 146) Olive Garden, Outback and Chili's are indirect competitors of McDonald's.

Answer: TRUE Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking 147) Explain the concept of positioning and the steps marketers take to develop and implement a positioning strategy.

Answer: A product's position is the way the product is perceived by a particular market segment. Positioning involves conveying the brand's unique benefits and differentiation to customers. To carry out effective positioning, a company should first analyze its competitors' positions. Then a company should identify the competitive advantages that can be built upon differentiation. The company must then effectively communicate and deliver the chosen position to the market through the marketing mix. Ultimately, a brand's position should deliver a valued benefit to the target, offer a superior benefit that can be communicated to consumers, and be affordable to the target. In the final step, marketers evaluate the target market's responses so they can modify strategies if necessary.

Difficulty: Difficult LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking

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148) Why is it important for marketers to analyze the positions of both direct and indirect competitors? Give an example of direct and indirect competitors for a supermarket.

Answer: Marketers need to understand the positions of both their direct and indirect competitors in order to develop a winning position for their own product. Indirect competitors that provide similar benefits to direct competitors may signal an emerging consumer trend that marketers need to be aware of. For example, for a supermarket, direct competitors would be other supermarkets and grocery stores. An indirect competitor could be a convenience store that begins to stock a small selection of fresh fruits and vegetables.

Difficulty: Difficult LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Application of knowledge 149) What are retro brands?

Answer: Retro brands are once-popular brands that have been revived to experience a popularity comeback, often by riding a wave of nostalgia.

Difficulty: Moderate LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Analytical thinking 150) Why might a marketer of laundry detergent be interested in viewing a perceptual map?

Answer: Perceptual maps show consumer perceptions of a brand versus competing products on important buying dimensions. Laundry detergent, for example, may be placed on a perceptual map based on price and cleaning power; this lets marketers see how consumers perceive their product with respect to others' products along those dimensions.

Difficulty: Difficult LO: 7.4: Recognize how marketers develop and implement a positioning strategy AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 8 Product I: Innovation and New Product Development 1) A(n) ________ is defined as a tangible good, service, idea, or some combination of these that satisfies consumer or business customer needs through the exchange process.

A) augmented product B) service C) core product D) product E) innovation Answer: D Difficulty: Easy LO: 8.1: Explain how value is derived through different product layers 2) Which of the following is an example of a good?

A) a massage B) a handbag C) a medical examination by a doctor D) an idea for a new television show E) dry cleaning Answer: B Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 3) A(n) ________ is an outcome that a customer derives from owning or using a product.

A) attribute B) offering C) good D) benefit E) augmentation Answer: D Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers 4) A customer buys a kitchen knife. What core product has she purchased?

A) the ability to cut and slice B) the ergonomic handle C) the lifetime guarantee D) the prestige of its brand name E) the affordable price Answer: A Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking

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5) Marketers use the generic term ________ to denote the broadest possible range of sources of value for a product.

A) innovations B) services C) good D) brand E) offering Answer: E Difficulty: Easy LO: 8.1: Explain how value is derived through different product layers 6) A product has three distinct layers. The most basic layer is the ________, which consists of all the benefits the product will provide for consumers or business customers.

A) actual product B) augmented product C) core product D) innovation E) brand Answer: C Difficulty: Easy LO: 8.1: Explain how value is derived through different product layers 7) A product has three distinct layers. The second layer is the ________, which is the physical good or delivered service.

A) actual product B) augmented product C) core product D) innovation E) brand Answer: A Difficulty: Easy LO: 8.1: Explain how value is derived through different product layers 8) The ________ is the actual product plus supporting features, such as delivery, installation, financing, and warranty.

A) brand B) innovation C) augmented product D) potential product E) core product Answer: C Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers

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9) The ________ for a guest paying for a night's stay at a hotel is rest and sleep.

A) generic product B) core product C) value-deliverable product D) augmented product E) actual product Answer: B Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 10) The ________ for a guest paying for a night's stay at a hotel is the use of a bed, bathroom, towels, dresser, light, and closet.

A) actual product B) core product C) value-deliverable product D) customized benefit E) augmented product Answer: A Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 11) The ________ for a guest paying for a night's stay at a hotel would include express checkout and superb room service.

A) actual product B) value network C) augmented product D) potential product E) core product Answer: C Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 12) The primary benefit of a car is transportation.

Answer: TRUE Difficulty: Easy LO: 8.1: Explain how value is derived through different product layers AACSB: Application of knowledge

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13) Explain the following statement: "A product is a bundle of attributes."

Answer: A product is not just a thing in a package. It includes the package, the brand name, the product benefits, and supporting features in addition to the physical good. A product is everything a consumer receives in an exchange. This question can also be answered in terms of the core product, the actual product, and the augmented product.

Difficulty: Moderate LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 14) Pick a product and describe its three layers and how each creates value for the customer.

Answer: Answers will vary depending on the product chosen. A complete answer will contain descriptions of the core product, the actual product, and the augmented product, as well as the value each provides to the customer.

Difficulty: Difficult LO: 8.1: Explain how value is derived through different product layers AACSB: Analytical thinking 15) Is marketing more about supplying benefits or is it more about supplying attributes? Explain your answer.

Answer: Marketing is more about supplying benefits, as consumers are much more interested in what benefits—or outcomes—products will provide.

Difficulty: Difficult LO: 8.1: Explain how value is derived through different product layers AACSB: Application of knowledge 16) In contrast to convenience products, ________ products are goods or services for which customers will spend time and effort to gather information on price, attributes, and quality.

A) emergency B) shopping C) unsought D) impulse E) staple Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products 17) Which of the following is the best example of a durable good?

A) a bag of cat food B) a refrigerator C) a bottle of nail polish D) a package of light bulbs E) a box of detergent Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 4 Copyright © 2022 Pearson Education, Inc.

18) Which of the following is the best example of a nondurable good?

A) a dishwasher B) a bookshelf C) a computer D) a newspaper E) a file cabinet Answer: D Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 19) A consumer packaged good (CPG) is ________.

A) a high-cost good B) consumed slowly C) more basic than a staple product D) not easily obtainable E) replaced frequently Answer: E Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 20) We consume ________ in the short term rather than the long term.

A) unsought products B) specialty products C) raw materials D) durable goods E) nondurable goods Answer: E Difficulty: Easy LO: 8.2: Describe how marketers classify products 21) Which item is best classified as an impulse product?

A) a gossip magazine B) baby diapers C) dish detergent D) toilet paper E) wiper fluid Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products

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22) ________ include convenience products, shopping products, specialty products, and unsought products.

A) Fast moving consumer goods B) Consumer products C) MRO products D) Industrial products E) Component products Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products 23) A convenience product is typically ________.

A) a durable good or service B) purchased by consumers after careful deliberation C) high cost D) bought infrequently E) widely available Answer: E Difficulty: Moderate LO: 8.2: Describe how marketers classify products 24) Which of the following is the best example of a convenience product?

A) a silk scarf B) a subscription to a magazine C) a gallon of milk D) a lawn mower E) a CD player Answer: C Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 25) Marketers classify convenience products as ________.

A) staple products, impulse products, and emergency products B) specialty products, shopping products, and unsought products C) core products, actual products, and augmented products D) generic products and branded products E) attribute-based products and price-based products Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products

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26) Bread, gasoline, and milk are best classified as which type of products?

A) durable goods B) staple products C) impulse products D) shopping products E) specialty products Answer: B Difficulty: Easy LO: 8.2: Describe how marketers classify products 27) ________ marketing involves using GPS or RFID technology to create a virtual geographic boundary, enabling software to trigger a response when a mobile device enters or leaves a particular area.

A) Geofencing B) B2B C) Specialty D) Impulse E) Nondurable Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products 28) Which is an example of geofencing marketing?

A) sending direct mail to potential customers within a certain geographic distance of a store B) making a buy two, get one free offer to customers C) emailing a coupon for a future purchase to customers D) pinging customers' cell phone with sales promotions when they enter a store E) texting surveys to customers regarding previous purchase experiences Answer: D Difficulty: Easy LO: 8.2: Describe how marketers classify products 29) A fast-moving consumer good, also known as a(n) ________, is a low-cost good that people consume quickly and replace frequently.

A) impulse product B) emergency product C) consumer packaged good D) specialty good E) shopping product Answer: C Difficulty: Easy LO: 8.2: Describe how marketers classify products

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30) ________ have unique characteristics that are important to buyers at almost any price.

A) Specialty products B) Staple products C) Impulse products D) MRO products E) Unsought products Answer: A Difficulty: Easy LO: 8.2: Describe how marketers classify products 31) Funeral services are best classified as ________.

A) commodities B) staple products C) impulse products D) unsought products E) fast-moving consumer goods Answer: D Difficulty: Moderate LO: 8.2: Describe how marketers classify products 32) Marketers classify B2B products based on ________.

A) when organizational customers need them B) why organizational customers need them C) how organizational customers use them D) how long they last for organizational customers E) where they are used by organizational customers Answer: C Difficulty: Moderate LO: 8.2: Describe how marketers classify products 33) In the B2B market, capital equipment ________.

A) is portable B) costs less than accessory equipment C) has a longer life span than light equipment D) includes goods a business consumes in a relatively short time E) comprises products of the fishing, lumber, and mining industries Answer: C Difficulty: Difficult LO: 8.2: Describe how marketers classify products

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34) In the context of B2B products, chairs and desks would be classified as ________.

A) heavy equipment B) accessory equipment C) installations D) capital equipment E) maintenance products Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 35) MRO products are goods that businesses use for ________.

A) management, research, and ordering B) marketing, relationship-building, and operating C) maintenance, research, and organizing D) maintenance, repair, and operating E) marketing, research, and organizing Answer: D Difficulty: Easy LO: 8.2: Describe how marketers classify products 36) For the business market, a multipurpose absorbent used to clean up any type of spills would be an example of a(n) ________.

A) repair product B) operating supply C) maintenance product D) restoration product E) consumer product Answer: C Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 37) For a veterinarian's office, the paper used to print payment receipts is an example of a(n) ________.

A) repair product B) operating supply C) maintenance product D) component part E) raw material Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking

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38) In the business market, organizational customers purchase products from the fishing and agricultural industries to use in their finished products. These are examples of ________.

A) component parts B) accessory equipment C) processed materials D) MRO products E) raw materials Answer: E Difficulty: Easy LO: 8.2: Describe how marketers classify products 39) ________ are manufactured goods or subassemblies of finished items that organizations need to complete their own products.

A) Component parts B) Accessory equipment materials C) Processed materials D) MRO products E) Raw materials Answer: A Difficulty: Easy LO: 8.2: Describe how marketers classify products 40) Which of the following products would most consumers classify as a shopping product?

A) a subscription to the Wall Street Journal B) a winter coat C) a box of adhesive bandages D) a can of soup E) a pack of gum Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 41) Camille was standing in the checkout line at her neighborhood grocery last night when she saw a display of Hostess Twinkies. She remembered how much she had enjoyed Twinkies as a child, and she knew she just had to buy a package of Twinkies, even though it was not on her shopping list. For Camille, Twinkies are an example of a(n) ________.

A) unsought product B) impulse product C) staple D) emergency product E) MRO product Answer: B Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 10 Copyright © 2022 Pearson Education, Inc.

42) Marissa was driving from the airport to an interview for a prestigious position at a large marketing firm. She needed to rely on navigation directions from her smartphone, but her smartphone battery was low and she did not have a charger cable. She was pleased to see a convenience store down the road and went there to purchase a new charger cable for her smartphone. For Marissa, the charger cable is an example of a(n) ________.

A) unsought product B) impulse product C) staple D) emergency product E) MRO product Answer: D Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 43) Tony wanted to buy a pair of binoculars, but not just any brand. He wanted to buy a pair of Steiner Nighthunters, just like the pair he had learned about in his newest copy of Peter's Hunt Magazine. He had to visit five different sporting goods stores before he found this brand. For Tony, the Steiner Nighthunter is an example of a(n) ________.

A) specialty product B) staple C) shopping product D) convenience product E) unsought product Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 44) For an amusement park, concession food stands and the amusement rides themselves are examples of ________.

A) MRO products B) specialty products C) processed materials D) equipment E) convenience products Answer: D Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking

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45) At a retail store, the display racks on which clothes are hung, the shelving, and the cash registers are all examples of ________.

A) accessory equipment B) shopping products C) capital equipment D) component parts E) MRO products Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 46) The vehicle jack and other hand tools carried by a truck driver in case of a flat tire are examples of which type of business product?

A) repair products B) operating supplies C) maintenance products D) light equipment E) component parts Answer: A Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 47) An Internet company helps other online businesses with handling distribution bottlenecks, including managing tariffs and exchange rates for international shipping. This company provides a(n) ________.

A) component service B) processed product C) MRO product D) specialized service E) unsought product Answer: D Difficulty: Moderate LO: 8.2: Describe how marketers classify products 48) Marketers classify products based on where and how consumers buy the products.

Answer: TRUE Difficulty: Moderate LO: 8.2: Describe how marketers classify products 49) Consumers are more likely to purchase durable goods under conditions of low involvement and nondurable goods under conditions of high involvement.

Answer: FALSE Difficulty: Moderate LO: 8.2: Describe how marketers classify products 12 Copyright © 2022 Pearson Education, Inc.

50) The purchase of a shopping product typically involves habitual consumer decision making.

Answer: FALSE Difficulty: Difficult LO: 8.2: Describe how marketers classify products 51) When consumers need an emergency good, price and product quality may be irrelevant to the purchase decision.

Answer: TRUE Difficulty: Moderate LO: 8.2: Describe how marketers classify products 52) Geofencing marketing relies on GPS or RFID technology.

Answer: TRUE Difficulty: Easy LO: 8.2: Describe how marketers classify products 53) Explain the difference between durable and nondurable goods. Give an example of each.

Answer: Durable and nondurable goods are goods that have been classified according to how long the product lasts. Durable goods are consumer products that last many years, such as refrigerators, computers, bedroom furniture, and cars. Nondurable goods are consumer products that are consumed in the short term, such as a newspaper, soda, chewing gum, and deodorant.

Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Application of knowledge 54) Compare and contrast the three types of convenience products.

Answer: Marketers classify convenience products as either staple products, impulse products, or emergency products. Staple products are basic or necessary items that are available almost everywhere. Impulse products are items people buy on the spur of the moment. Emergency products are those products we purchase when we're in dire need, such as umbrellas during a rain storm.

Difficulty: Difficult LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 55) Explain impulse products. Identify two challenges marketers may have regarding impulse products.

Answer: An impulse product is something people buy on the spur of the moment. With an impulse product, marketers have two challenges. (1) Create a product or package design that is enticing and "reaches out and grabs the customer." (2) Make sure the product is highly visible by securing prime end-aisle or checkout lane space for the product. With consumers more frequently moving through check-out lines with "mobile blinders on," package design and placement are even more important.

Difficulty: Difficult LO: 8.2: Describe how marketers classify products AACSB: Application of knowledge 13 Copyright © 2022 Pearson Education, Inc.

56) On what basis do marketers classify B2B products? List the different classifications.

Answer: Marketers classify B2B products based on how customers use them. The five classifications are 1) equipment; 2) maintenance, repair, and operating (MRO) products; 3) raw materials; 4) processed materials/specialized services; and 5) component parts.

Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Reflective thinking 57) Give an example of geofencing marketing.

Answer: Answers will vary, but should include an example that takes advantage of using GPS or RFID technology to create a virtual geographic area and target consumers via their mobile devices when they enter or leave the area.

Difficulty: Difficult LO: 8.2: Describe how marketers classify products AACSB: Reflective thinking 58) In business-to-business products, what is the difference between capital equipment and accessory equipment?

Answer: Capital equipment, sometimes referred to as installations, refers to big-ticket items that last for a number of years. Accessory equipment refers to portable items that cost less and have a shorter life span than capital equipment.

Difficulty: Moderate LO: 8.2: Describe how marketers classify products AACSB: Analytical thinking 59) How are processed materials different from raw materials?

Answer: Raw materials such as those from the agricultural and mining industries are transformed by manufacturers into processed materials.

Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 60) From a marketing perspective, an innovation ________.

A) must be entirely new B) has to involve a change of 50 percent or more to the original offering C) is anything consumers view as new or different D) may only be called an innovation for three months E) must satisfy legal requirements designated by the FTC Answer: C Difficulty: Difficult LO: 8.3: Understand the importance and types of product innovations

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61) Divergent and convergent thinking are two components of the ________ process.

A) creativity B) ideation C) disruptive innovation D) continuous innovation E) technical development Answer: B Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 62) What is the first process step in design thinking?

A) define B) test C) prototype D) empathize E) ideate Answer: D Difficulty: Easy LO: 8.3: Understand the importance and types of product innovations 63) The ________ process step of design thinking involves clearly articulating the problem, assumptions, and risks.

A) ideate B) define C) test D) empathize E) prototype Answer: B Difficulty: Easy LO: 8.3: Understand the importance and types of product innovations 64) A famous actress wears a designer gown to an awards ceremony. A few days later, numerous retailers are selling a cheaper version of the gown with different buttons. This less expensive dress is an example of a(n) ________.

A) augmented product B) discontinuous innovation C) dynamically continuous innovation D) continuous innovation E) knockoff Answer: E Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Ethical understanding and reasoning

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65) A consumer doesn't have to learn anything new to use a(n) ________.

A) dynamically continuous innovation B) augmented product C) converged product D) continuous innovation E) discontinuous innovation Answer: D Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 66) A(n) ________ is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it.

A) dynamically continuous innovation B) augmented product C) disruptive innovation D) continuous innovation E) discontinuous innovation Answer: A Difficulty: Easy LO: 8.3: Understand the importance and types of product innovations 67) Consumers must engage in a great amount of learning to use a(n) ________ because no similar product has ever been on the market.

A) dynamically continuous innovation B) augmented product C) competitive innovation D) continuous innovation E) discontinuous innovation Answer: E Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 68) An innovation that creates a new market and value chain, disturbing the order of an existing market and value chain, is called a(n) ________.

A) augmented product B) dynamically continuous innovation C) disruptive innovation D) convergent product E) ideation Answer: C Difficulty: Easy LO: 8.3: Understand the importance and types of product innovations

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69) Pepsi-Cola's development of Wild Cherry Pepsi, a cherry-flavored soda, is an example of a ________ innovation.

A) dynamically continuous B) convergent C) disruptive D) continuous E) discontinuous Answer: D Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 70) Even though most people in the original target market for electric toothbrushes already knew how to brush their teeth, consumers still had some learning to do in order to make good use of the new brushing technique. The electric toothbrush is an example of a(n) ________.

A) dynamically continuous innovation B) ideation C) disruptive innovation D) knockoff E) discontinuous innovation Answer: A Difficulty: Difficult LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 71) Prior to the development of the cardiac stent, surgeons used balloons to clear obstructed heart vessels, but there was no way to ensure the vessels would stay open. The stent is a tiny metal scaffold that props open the formerly obstructed blood vessel and keeps it from becoming obstructed again. Surgeons who use the stent had to engage in a great deal of learning to understand its use and its value in patient care. There was nothing like the stent on the market when it first appeared. The cardiac stent is an example of a ________.

A) dynamically continuous innovation B) knock-off C) divergent product D) continuous innovation E) discontinuous innovation Answer: E Difficulty: Difficult LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 72) The Federal Trade Commission says that a product may be called new for only one year.

Answer: FALSE Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations

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73) The more innovative a new product is, the more quickly it will spread throughout a population.

Answer: FALSE Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 74) The design thinking process begins with empathizing to gain a deep understanding of the problem space and users, including their issues and goals.

Answer: TRUE Difficulty: Difficult LO: 8.3: Understand the importance and types of product innovations 75) A convergence is a type of discontinuous innovation.

Answer: TRUE Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 76) Divergent thinking uses an analytical focus on different ideas in order to come to a decision on the best choice.

Answer: FALSE Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations 77) The addition of sugar-free canned fruits to Del Monte's line of canned fruits and vegetables is an example of a discontinuous innovation.

Answer: FALSE Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 78) Marketers classify innovations into three categories based on their degree of newness.

Explain these categories, identifying the role the consumer has in each.

Answer: (1) A continuous innovation is a modification of an existing product. The consumer does not have to learn anything to use a continuous innovation. (2) A dynamically continuous innovation is a pronounced modification to an existing product that requires the consumer to engage in a modest amount of learning or a change in behavior to use. (3) A discontinuous innovation creates major changes in the way we live. To use a discontinuous innovation, consumers must engage in a great amount of learning because no similar product has ever been on the market.

Difficulty: Difficult LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking

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79) List and describe the process steps in design thinking.

Answer: The five process steps in design thinking are: 1) Empathize — gain a deep understanding of the problem space and users; 2) Define — clearly articulate the problem, assumptions and risks; 3) Ideate — generate solution ideas, evaluate and decide on the approach; 4) Prototype — create a "just realistic enough" prototype; and 5) Test — test with real users to see how the prototype performs.

Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Analytical thinking 80) Why would a company create a knockoff of a product?

Answer: A knockoff product is a new product that copies, with slight modification, the design of an original product. Firms deliberately create knockoff products with the intent to sell to a larger or different market than consumers who would buy the original product.

Difficulty: Moderate LO: 8.3: Understand the importance and types of product innovations AACSB: Reflective thinking 81) In the ________ phase of new product development, marketers use a variety of sources to come up with great new product ideas that provide customer benefits and that are compatible with the company mission.

A) commercialization B) product concept screening C) idea generation D) technical development E) business analysis Answer: C Difficulty: Moderate LO: 8.4: Show how firms develop new products 82) In most companies, ________ is a well-defined and systematic approach to innovation.

A) research and development B) diffusion C) adoption D) positioning E) augmentation Answer: A Difficulty: Easy LO: 8.4: Show how firms develop new products

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83) Marketers would be most likely to use a focus group in which stage of new product development?

A) idea generation B) problem recognition C) business analysis D) positioning strategy E) product adoption Answer: A Difficulty: Moderate LO: 8.4: Show how firms develop new products 84) What is the second phase of the new product development process?

A) marketing strategy development B) product concept development and screening C) business analysis D) commercialization E) test marketing Answer: B Difficulty: Easy LO: 8.4: Show how firms develop new products 85) In new product development, ________.

A) successes come more frequently than failures B) failures are extremely rare C) ideas are screened only for their technical value D) estimating commercial success means deciding whether a project is technologically feasible E) screening helps weed out concepts that have little chance to make it to market Answer: E Difficulty: Difficult LO: 8.4: Show how firms develop new products 86) In response to ideas solicited from customers via an online platform, Lego has created play sets based on television shows like The Gilmore Girls. This approach is an example of ________.

A) product screening B) commercialization C) value co-creation D) technical development E) test marketing Answer: C Difficulty: Moderate LO: 8.4: Show how firms develop new products

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87) Marketers estimate ________ when they determine whether anyone is likely to buy a new product.

A) pricing points B) diffusion rates C) commercial success D) technical success E) creative success Answer: C Difficulty: Moderate LO: 8.4: Show how firms develop new products 88) The business analysis for a new product begins with ________.

A) idea generation B) problem recognition C) assessing how the new product will fit into a firm's total product mix D) value co-creation with stakeholders E) identifying the distribution channel for the product Answer: C Difficulty: Moderate LO: 8.4: Show how firms develop new products 89) During which stage of new product development will management most likely consider whether the new product will cannibalize sales of the company's existing products?

A) idea generation B) marketing strategy development C) business analysis D) product concept development E) test marketing Answer: C Difficulty: Difficult LO: 8.4: Show how firms develop new products 90) In the ________ phase of new product development, engineers work with marketers to refine the design and production process.

A) idea generation B) technical development C) business analysis D) test marketing E) commercialization Answer: B Difficulty: Moderate LO: 8.4: Show how firms develop new products

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91) After the business analysis phase of the new product development process, a physical version of the product is typically developed. This is called a ________.

A) test market B) focus group C) business analysis D) product concept E) prototype Answer: E Difficulty: Easy LO: 8.4: Show how firms develop new products 92) A simulated market test ________.

A) is a more expensive alternative to a traditional test market B) may become obsolete as technology improves C) is less discreet than traditional market tests D) imitates the introduction of a product into the marketplace E) is not very successful at predicting the impact of price cuts Answer: D Difficulty: Difficult LO: 8.4: Show how firms develop new products AACSB: Ethical understanding and reasoning 93) Which of the following is an advantage of running a test market?

A) They are generally extremely inexpensive.

B) They prevent any changes in the marketing plan.

C) They thwart competitors from imitating the product.

D) They may provide an advance warning of product failure.

E) They guarantee getting to the market before competitors.

Answer: D Difficulty: Moderate LO: 8.4: Show how firms develop new products 94) The final stage of new product development, ________, requires full-scale production, distribution, advertising, sales, and promotion.

A) technical development B) test marketing C) business analysis D) commercialization E) marketing strategy development Answer: D Difficulty: Moderate LO: 8.4: Show how firms develop new products

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95) Start-up entrepreneurs may use ________ through sites such as Kickstarter.com to raise the necessary capital to get a new product to market.

A) simulated market tests B) beta tests C) crowdfunding D) ideation E) value co-creation Answer: C Difficulty: Easy LO: 8.4: Show how firms develop new products 96) Which of the following costs is most likely associated with the commercialization stage of new product development?

A) implementing trade promotion plans for channel members B) paying groups of target consumers for product feedback C) determining the product's planned price, distribution, and marketing budget D) developing a prototype of the product E) identifying target markets Answer: A Difficulty: Difficult LO: 8.4: Show how firms develop new products AACSB: Analytical thinking 97) Bossa Nova founder and CEO Alton Johnson was fascinated with the fruits of Brazil, a fascination that led him to develop juices with these new fruit flavors for the American market.

Johnson's interest in Brazilian fruits is an example of ________.

A) idea screening B) idea generation C) concept testing D) product development E) product manufacturing Answer: B Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Analytical thinking

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98) A group of business entrepreneurs who worried about their teenage children drinking and driving decided there must be some way to approach this problem proactively. They came up with an idea for a pair of blurry goggles. They believed looking through the goggles would simulate what the world looks like when someone is seriously intoxicated. The first crude pair of blurry goggles developed by the entrepreneurs to show to prospective customers was a(n) ________.

A) prototype B) component part C) market test D) ideation E) patent Answer: A Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Analytical thinking 99) Procter & Gamble introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Foods became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction.

This act illustrates ________.

A) why many companies engage in test marketing B) one of the problems associated with test marketing C) why prototypes are so important D) how idea screening can make a product a commercial success E) the variety of sources for idea generation Answer: B Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Application of knowledge 100) Burger King developed a new French fry to compete with McDonald's fry—considered the world's best. Burger King's specifications included that the crunch would last for seven or more chews. The product failed because consumers did not like the fry as much as McDonald's fry. It is most likely that Burger King did not sufficiently ________ the idea for both technical and commercial value.

A) patent B) advertise C) screen D) promote E) adopt Answer: C Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Application of knowledge

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101) Procter & Gamble introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Foods became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction.

General Foods was able to enter the ________ stage of the new product development process before Procter & Gamble could.

A) commercialization B) business analysis C) idea generation D) screening E) product concept development Answer: A Difficulty: Difficult LO: 8.4: Show how firms develop new products AACSB: Application of knowledge 102) A fast-food chain wanted to add a new product to its breakfast menu. The company considered a pancake shaped like a muffin. The problem was determining how a customer would add syrup to the pancake while eating and driving. Fortunately, one of the company's suppliers developed a crystallized syrup that seeps through the pancake once it is heated. Which phase of new product development occurred during this process with the chain and its supplier?

A) commercialization B) technical development C) patenting D) product screening E) business analysis Answer: B Difficulty: Difficult LO: 8.4: Show how firms develop new products 103) Higher levels of R&D activity are inherently more competitively important in some industries versus others.

Answer: TRUE Difficulty: Moderate LO: 8.4: Show how firms develop new products 104) In the product concept development and screening phase of new product development, successes generally occur much more frequently than failures.

Answer: FALSE Difficulty: Moderate LO: 8.4: Show how firms develop new products 105) A patent can help a company recoup some of its investments in technical development.

Answer: TRUE Difficulty: Moderate LO: 8.4: Show how firms develop new products

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106) Business analysis for a new product includes assessing whether the firm has the resources to develop and introduce the product.

Answer: TRUE Difficulty: Moderate LO: 8.4: Show how firms develop new products 107) When marketers consider whether it is possible to actually build a product, they are estimating its commercial success.

Answer: FALSE Difficulty: Moderate LO: 8.4: Show how firms develop new products 108) Test marketing is an inexpensive way to predict whether a new product will be a success.

Answer: FALSE Difficulty: Moderate LO: 8.4: Show how firms develop new products 109) Simulated test marketing can help a company determine where in a store a product should be placed to maximize sales.

Answer: TRUE Difficulty: Difficult LO: 8.4: Show how firms develop new products 110) Commercialization comes in the middle of the new product development process.

Answer: FALSE Difficulty: Moderate LO: 8.4: Show how firms develop new products 111) One measure of a firm's commitment to innovation is to what degree the organizational culture provides both the freedom and security for employees to try new things and fail.

Answer: TRUE Difficulty: Moderate LO: 8.4: Show how firms develop new products

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112) Why is simulated test marketing a compelling alternative to traditional market testing?

Answer: Traditional test marketing has a number of disadvantages: high costs; the competitor getting a free and early look at the product, the introductory price, and the intended promotional strategy; and the competitor getting an opportunity to enter the market first with a competing product. Because of the potential problems and expense of market tests, marketers instead may use special computer software to conduct a simulated market test that imitates the introduction of a product into the marketplace. These simulations allow the company to see the likely impact of price cuts and new packaging—or even to determine where in the store it should try to place the product. The process entails gathering basic research data on consumers' perceptions of the product concept, the physical product, the advertising, and other promotional activity. The test market simulation model uses that information to predict the product's success much less expensively (and more discreetly) than a traditional test market. As this technology improves, traditional test markets may become a thing of the past.

Difficulty: Difficult LO: 8.4: Show how firms develop new products AACSB: Analytical thinking 113) What are some of the advantages that can be gained by developing a prototype of a new product?

Answer: Developing a prototype, or a test version of a proposed product, has several advantages. It allows a firm to better understand how customers will react to a new product and gives the firm the opportunity to incorporate feedback from customers before commercialization.

A prototype also helps those involved in technical development of the product make decisions about how and where different components of the product will be produced and whether new production equipment or new production processes are needed.

Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Analytical thinking 114) What are the phases involved in the development of a new product?

Answer: There are seven phases in the development of a new product. The seven phases are: idea generation (or ideation), product concept development and screening, marketing strategy development, business analysis, technical development, test marketing, and commercialization.

Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Analytical thinking 115) What must marketers do during the marketing strategy development phase of the new product-development process?

Answer: Marketers must identify the target market, estimate its size, and determine how the product can be positioned to effectively address the target market's needs.

Difficulty: Moderate LO: 8.4: Show how firms develop new products AACSB: Analytical thinking

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116) ________ is the process by which a consumer or business customer begins to buy and use a new good, service, or idea.

A) Commercialization B) Product testing C) Product adoption D) Diffusion E) Positioning Answer: C Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 117) Diffusion refers to ________.

A) how promotion is used to support products throughout their product life cycle B) the second stage of the new product development process C) the methodology for evaluating new product ideas D) how the use of a product spreads throughout a population E) the selection of opinion leaders to encourage product acceptance Answer: D Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 118) Change happens quickly when a process reaches the moment of critical mass, which is called the ________ point.

A) adoption B) diffusion C) innovation D) trial E) tipping Answer: E Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 119) The first step in the product adoption process, or adoption pyramid, is ________.

A) product evaluation B) awareness C) problem recognition D) evaluation E) interest Answer: B Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Written and oral communication

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120) Which of the following is NOT a stage of the adoption pyramid?

A) awareness B) compatibility C) interest D) trial E) evaluation Answer: B Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Written and oral communication 121) Which of the following occurs during the interest stage of the adoption process?

A) A consumer learns that the innovation exists at all.

B) A consumer starts to see how a new product may satisfy a need.

C) A consumer weighs expected versus actual costs and benefits of the new product.

D) A consumer uses the product for the first time.

E) A consumer buys the actual product.

Answer: B Difficulty: Difficult LO: 8.5: Explain the process of product adoption and the diffusion of innovations 122) In the ________ stage of the adoption process, the costs and benefits of the new product are weighed.

A) confirmation B) adoption C) trial D) evaluation E) awareness Answer: D Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 123) Consumers in the ________ category of adopters tend to be better off financially than those in the other adoption categories.

A) innovator B) early adopter C) early majority D) late majority E) laggard Answer: A Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations

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124) Unlike innovators, early adopters of new products ________.

A) compose the smallest of the adopter categories B) have greater concern for social acceptance C) are upper class consumers D) are light media users E) are well educated Answer: B Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Diverse and multicultural work environments 125) Which of the following statements about the adopter categories is true?

A) More than 50 percent of the population is classified as late majority adopters.

B) Early adopters are risk averse.

C) Early majority adopters are typically middle class and like to buy established products.

D) Innovators are a much larger group than laggards.

E) Late majority adopters are typically unconcerned about social acceptance.

Answer: C Difficulty: Difficult LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Diverse and multicultural work environments 126) Many innovative technology products are released as a ________ to allow usage and feedback from a small number of users who are willing to test the product under normal, everyday conditions of use.

A) trial B) beta test C) laggard D) relative advantage E) tipping point Answer: B Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 127) ________ are typically lower in social class than other adopter categories and are bound by tradition.

A) Early adopters B) Early majority C) Late majority D) Laggards E) Impulse buyers Answer: D Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Diverse and multicultural work environments

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128) Which of the following is NOT one of the five characteristics of innovations that affect the rate of adoption?

A) relative advantage B) tangibility C) observability D) trialability E) compatibility Answer: B Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 129) ________ is the degree to which a consumer perceives that a new product provides superior benefits.

A) Compatibility B) Complexity C) Relative advantage D) Comparability E) Tangibility Answer: C Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 130) ________ is the extent to which a new product is consistent with existing cultural values, customs, and practices.

A) Compatibility B) Complexity C) Relative advantage D) Comparability E) Tangibility Answer: A Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 131) The ease of sampling a new product and its benefits is called ________.

A) relative advantage B) complexity C) compatibility D) trialability E) observability Answer: D Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations

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132) ________ is how visible a new product and its benefits are to others who might adopt it.

A) Compatibility B) Observability C) Relative advantage D) Comparability E) Tangibility Answer: B Difficulty: Easy LO: 8.5: Explain the process of product adoption and the diffusion of innovations 133) A website is full of games, activities, music, and stories that appeal to children of all ages.

Before a parent commits to paying the annual membership fee to gain access to the site, she can register for one free month of use. By accepting the free month's usage, potential adopters move into the ________ stage.

A) interest B) awareness C) trial D) confirmation E) evaluation Answer: C Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 134) Which of the following new products had the greatest degree of observability when it was introduced?

A) nail clippers designed to prevent ingrown toenails B) Tylenol PM, a nonprescription sleep aid C) Dr. Scholl's shoe inserts D) Splenda sugar substitute E) rollerblades Answer: E Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge

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135) Traffic in major metropolitan areas is too often brought to a standstill because accident investigators must painstakingly measure skid marks and other evidence to determine responsibility for the crash. After a police chief missed an important meeting because of a wreck investigation, he was pleased to find an article about a company that markets a new high-tech crash investigation system that shortens the time required for these investigations by 40 percent.

In which stage of the adoption process is the police chief?

A) evaluation B) trial C) interest D) confirmation E) adoption Answer: C Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 136) One of the reasons given for the success of reality television shows is that the shows appeal to a cultural bias that real-life drama is preferable to fiction. Americans desire adventure and escapism that offer them the opportunity for participation but do not require it. In terms of the five characteristics of innovations that affect the rate of adoption, reality television shows have a high degree of ________.

A) innovation B) complexity C) tangibility D) divisibility E) compatibility Answer: E Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 137) In terms of the five characteristics of innovations that affect the rate of adoption, the smartphone would most clearly have a higher degree of ________ than flavored bottled water.

A) compatibility B) complexity C) tangibility D) comparability E) trialability Answer: B Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge

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138) A product's adoption rate is also known as its infection rate.

Answer: TRUE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 139) Adoption is the final step in the product adoption pyramid.

Answer: FALSE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 140) Bleeding edge technologies typically move rapidly from adoption by innovators to adoption by the early adopters and early majority.

Answer: FALSE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 141) The first category of consumers to adopt a new product is called early adopters.

Answer: FALSE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Diverse and multicultural work environments 142) The smallest category of adopters is the late majority.

Answer: FALSE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations 143) By the time laggards adopt a new product, it may already be superseded by other innovations.

Answer: TRUE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Diverse and multicultural work environments 144) Consumers' perception of relative advantage would help determine the success of a new magazine targeted to girls between the ages of 14 and 17.

Answer: TRUE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 145) Consumers would perceive a ceiling fan as having greater trialability than a new kind of snack food.

Answer: FALSE Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 34 Copyright © 2022 Pearson Education, Inc.

146) What is a media blitz? In which stage of the new product adoption process is it likely to be employed?

Answer: A media blitz is a massive advertising campaign that takes place over a relatively short period of time. It may be employed in the first stage of the adoption process, awareness, when marketers work to ensure consumers know that the innovation exists at all.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Analytical thinking 147) Microsoft launched a massive $500 million marketing campaign when it introduced the Xbox, promoting the new product through in-store merchandising, retailer incentives, events, and sponsorships, in addition to traditional advertising. What stage of the consumers' adoption of a new product was Microsoft most trying to influence? Support your answer.

Answer: Microsoft may have been trying to influence the awareness and the interest stages. In the awareness stage, consumers learned about the Xbox for the first time. In the interest stage, consumers began to see how the Xbox might satisfy a need.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 148) White Wave Inc., the maker of Silk soy milk, gave away free samples of its product to get consumers to try the first refrigerated soy milk sold in America. What stage of the consumers' adoption of a new product was White Wave Inc. trying to influence? Support your answer.

Answer: White Wave Inc. was attempting to move consumers to the trial stage of the adoption of a new product by offering potential consumers samples of the company's soy milk.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Application of knowledge 149) Why is reselling the customer an important part of confirmation after the adoption of an innovation?

Answer: Favorable experiences contribute to new customers becoming loyal adopters, as their initially positive opinions result in confirmation of the product. Even loyal customers may decide that a new product is not meeting expectations and reject it. Many marketers feel that reselling the customer in the confirmation stage is important, so they use advertisements, sales presentations, and other communications to reinforce a customer's choice.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Analytical thinking

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150) Why might a company decide to use a beta test for a new product?

Answer: A beta test involves releasing a new product—typically one that uses bleeding edge technology—to a small number of users who are willing to test the product under normal, everyday conditions of use. A product that is beta tested is not ready for release to the whole market, often because of issues of reliability or stability, but can be improved by using feedback from beta testers before introduction to the whole market.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Analytical thinking 151) What category of consumer adopters would purchase a product when it is no longer considered new or different but before it is considered a necessity? Explain your answer.

Answer: Consumers classified as the early majority avoid being either the first or last to try an innovation. When early majority adopters purchase a product, the product is no longer considered new or different. The product has already been established.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Analytical thinking 152) List and describe the five characteristics of innovations that affect the rate of adoption.

Answer: 1) Relative advantage — the degree to which a consumer perceives that a new product provides superior benefits; 2) Compatibility — the extent to which a new product is consistent with existing cultural values, customs, and practices; 3) Complexity — the degree to which consumers find a new product or its use difficult to understand; 4) Trialability — the ease of sampling a new product and its benefits; and 5) Observability — how visible a new product and its benefits are to others who might adopt it.

Difficulty: Moderate LO: 8.5: Explain the process of product adoption and the diffusion of innovations AACSB: Analytical thinking

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 9 Product II: Product Strategy, Branding, and Product Management 1) Which of the following is an accurate statement about product management?

A) It is also known as quality management.

B) It is rarely team based.

C) It is a continual process.

D) It includes responsibility for the marketing mix tools of product and promotion, but not of price and place.

E) It focuses equally on all aspects of the marketing mix.

Answer: C Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 2) ________ is the systematic and usually team-based approach to coordinating all aspects of a product's strategy development and execution.

A) Product management B) Six Sigma C) ISO 9000 D) Cannibalization E) Rebranding Answer: A Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose.

AACSB: Written and oral communication 3) A SKU is a unique identifier for each distinct ________.

A) product B) product line C) product objective D) product strategy E) product line extension Answer: A Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 4) The most appropriate strategy for a firm that wants consumers to see it as a specialist with a clear, specific position in the market is a(n) ________.

A) full-line product strategy B) limited-line product strategy C) undifferentiated product strategy D) upward product line stretch E) downward product line stretch Answer: B Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 1 Copyright © 2022 Pearson Education, Inc.

5) A firm that plans to use a(n) ________ will add higher priced, higher quality items to its product line.

A) upward product line stretch B) limited-line product strategy C) undifferentiated product strategy D) downward product line stretch E) cannibalization strategy Answer: A Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 6) Whenever a product line or a product family is extended, there is a risk of ________, which occurs when sales of an existing brand decline as the firm's current customers switch to the new product.

A) product line contraction B) disintermediation C) cannibalization D) brand dilution E) brand equity Answer: C Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 7) An alternative to a two-way stretch is ________, adding more items within the present range of the line.

A) cobranding B) family branding C) a mixing strategy D) a filling-out strategy E) a contracting strategy Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 8) With the ________ strategy, a company simultaneously expands new items both toward the higher and lower ends of the market.

A) limited-line product B) filling-out product C) upward product line stretch D) downward product line stretch E) two-way product line stretch Answer: E Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose

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9) The number of different product lines a firm produces is called the ________.

A) product mix width B) product mix length C) product line width D) product line length E) product line extension Answer: A Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 10) The product line length is determined by ________.

A) the total set of all products a firm offers for sale B) the number of different product lines the firm produces C) the number of separate items within the same category D) the number of new items toward the lower-priced end of the market E) the number of new items toward the higher-priced end of the market Answer: C Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 11) Which of the following refers to a product's overall ability to satisfy customers' expectations?

A) value proposition B) brand equity C) product precision D) brand meaning E) product quality Answer: E Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 12) Which of the following is a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement of all aspects of the company's operations?

A) cannibalization B) total quality management (TQM) C) Six Sigma D) ISO 9000 E) ISO 14000 Answer: B Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork

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13) That it is important to receive feedback from employees who receive my work is one of the beliefs of the ________.

A) brand equity process B) internal customer mind set C) Six Sigma method D) ISO 9000 guidelines E) ISO 14000 guidelines Answer: B Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork 14) ________ is a process whereby firms work to limit product defects to 3.4 per million or fewer.

A) Total quality management (TQM) B) ISO 9000 C) ISO 22000 D) ISO 27001 E) Six Sigma Answer: E Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork 15) TQM maximizes customer satisfaction by ________.

A) involving all employees in efforts to continually improve quality B) employing the external customer mindset C) viewing external customers as coworkers D) limiting product defects to 3.4 million or fewer E) following the five-step DMAIC process Answer: A Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork 16) Which of the following was developed to guarantee that an organization's products conform to food safety management?

A) Six Sigma B) ISO 9000 C) ISO 14000 D) ISO 22000 E) TQM Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose

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17) The ISO 27001 focuses on which of the following?

A) product quality B) environmental management C) food safety management D) information security E) conformity to the customer's requirements Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Ethical understanding and reasoning 18) An American company wanting to be competitive in the European market would be most likely to seek which type of certification?

A) ISO 14000 B) DMAIC C) TQM D) Six Sigma E) Universal Product Code Answer: A Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 19) Which of the following is designed to help a firm almost entirely reduce product and service defects?

A) ISO 14000 B) ISO 27001 C) Six Sigma D) TQM E) ISO 22000 Answer: C Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 20) Active Beverages targets the same people who watch the Gravity Games and enjoy skateboarding, in-line skating, mountain biking, and other extreme sports. It makes high-energy drinks for this target market. It does not attempt to make any drinks that are not targeted to this market. Active Beverages uses a(n) ________.

A) undifferentiated marketing strategy B) filling-out product strategy C) cannibalization strategy D) limited-line product strategy E) brand extension strategy Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 5 Copyright © 2022 Pearson Education, Inc.

21) In addition to regular Alka-Seltzer, there is an Alka-Seltzer product for each of the following: cold sufferers, people with upset stomachs, people who can't sleep, people with allergies, and people who have severe headaches. The manufacturer of Alka-Seltzer is using a(n) ________ to reach as many different target markets as possible.

A) full-line product strategy B) downward product line stretch C) cannibalization strategy D) undifferentiated strategy E) upward product line stretch Answer: A Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 22) Mercedes was able to successfully introduce its C-Class car at $30,000 without injuring its ability to sell other Mercedes cars for $100,000 or more. Mercedes implemented a(n) ________.

A) downward product line stretch B) product line contraction C) cannibalization strategy D) upward product line stretch E) value stretch Answer: A Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 23) Heinz stopped marketing its "Bite Me" brand of frozen pizza snacks due to disappointing sales. This is an example of a ________.

A) filling-out product strategy B) downward product line stretch C) product line contraction D) value stretch E) cannibalization strategy Answer: C Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking

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24) A winery introduced a brand of wine that is priced twice as high as its other wines. This is an example of product extension by a(n) ________.

A) downward product line stretch B) product mix C) cannibalization strategy D) upward product line stretch E) two-way product line stretch Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 25) A company makes several different kinds of shampoo, but it did not have a dandruff shampoo designed for women until it added Pro-Women antidandruff shampoo. This is an example of a(n) ________.

A) downward product line stretch B) upward product line stretch C) cannibalization strategy D) filling-out product strategy E) product line contraction Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 26) A company introduced the Funday film to compete with lower-priced brands, but it found many of its regular customers bought Funday instead of its usual, higher-priced film. The company experienced ________.

A) an upward product line stretch B) a product line contraction C) brand dilution D) cannibalization E) filling in Answer: D Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking

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27) A company has just one product line: it manufactures only supercomputers. This one product line is also the company's ________.

A) branding strategy B) marketing mix C) product mix D) promotional mix E) brand equity Answer: C Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 28) Practically every brand of soft drink ever made is available at Mom's Soda Shop; regional beverages from around the world can be purchased at the retailer's website. The retailer targets people who have developed a fondness for a particular soft drink and can no longer find it. The retailer's ________ is all types of soft drinks.

A) branding strategy B) product objective C) positioning strategy D) marketing mix E) product mix Answer: E Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 29) Clearly stated product objectives provide focus and direction.

Answer: TRUE Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 30) A positioning strategy is a firm's total product offering designed to satisfy a group of target customers.

Answer: FALSE Difficulty: Easy LO: 9.1: Discuss the product objectives and strategies a firm may choose 31) A company can stretch its product line either upward or downward, but not both directions.

Answer: FALSE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 32) A two-way product line stretch is an option for extending a product line.

Answer: TRUE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 8 Copyright © 2022 Pearson Education, Inc.

33) A firm's product line length is determined by the number of separate items within the same category.

Answer: TRUE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 34) According to the total quality management philosophy, coworkers are internal customers.

Answer: TRUE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork 35) Product management is typically team based.

Answer: TRUE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Interpersonal relations and teamwork 36) The Six Sigma process is applied to products but not services.

Answer: FALSE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 37) A watch manufacturer added a watch to its product line that was higher priced than the models it already carried. The company used a two-way stretch strategy.

Answer: FALSE Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 38) What are product objectives and what role do they play in an organization?

Answer: Product objectives are the direction and focus that marketers establish for their products, which ultimately support the broader marketing objectives of the business unit and are consistent with the firm's overall mission.

Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Reflective thinking

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39) Explain cannibalization. How does a line extension strategy increase the risk of cannibalization?

Answer: Organizations often decide to extend their product lines by adding more brands or models. Any time a new or similar product is introduced, there is a risk of cannibalization of existing products. Cannibalization is the loss of sales of an existing product to a new item in a product line or product family that the company has introduced. Instead of reaching new customers, the new product may just cause current customers to switch brands. Marketers must consider whether a new brand or model will significantly detract from their existing brands.

Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Reflective thinking 40) How can marketers use elements of the marketing mix to improve product quality?

Answer: Product, place, price, and promotion are the elements of the marketing mix. Improving quality through the product element might mean improving customer service support, making it quicker and easier for customers to interact with the company and get the results they desire.

Improving quality through place could involve improving on-time delivery to customers by reevaluating and modifying purchasing and delivery strategies. Improving quality through price involves offering a lower price, which means reducing the firm's costs. Finally, improving quality through promotion can mean making more information available to customers when and where they want it.

Difficulty: Difficult LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Reflective thinking 41) Why is successful product management increasingly important as technology moves forward and the marketplace becomes more globalized?

Answer: As more competitors enter the global marketplace and as technology moves forward at an increasing pace, more and more products are created, grow, reach maturity, and decline faster.

This means that good product decisions are more critical than ever. Marketers don't have the time to try one thing, find out if it does not work, and then try something else.

Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose 42) What is the difference between a product line and a product mix?

Answer: A product line is a firm's total product offering designed to satisfy a single need or desire of a group of target customers. A firm's product mix is its entire range of products, encompassing all of the firm's product lines.

Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking

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43) List and describe some of the standards set by the International Organization for Standardization (ISO).

Answer: The ISO developed the ISO 9000, which focuses on guaranteeing that an organization's products conform to customers' requirements. Subsequently, ISO developed the ISO 14000, focusing on an organization's environmental management; the ISO 22000 focusing on food safety management; and the ISO 27001 focusing on information security.

Difficulty: Difficult LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 44) What is the difference between total quality management (TQM) and the Six Sigma process?

Answer: Six Sigma sets a specific goal for product and service quality, with a specific five-step process to achieve that goal, while total quality management sets a goal of continuous improvement of all of the company's operations.

Difficulty: Difficult LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 45) Identify four different possible meanings of product quality.

Answer: Answers will vary, but should reflect the different meanings of quality: durability, reliability, versatility, consistency, precision, ease of use, safety, and aesthetics.

Difficulty: Moderate LO: 9.1: Discuss the product objectives and strategies a firm may choose AACSB: Analytical thinking 46) What is the first stage of the product life cycle?

A) introduction B) adoption C) growth D) maturity E) decline Answer: A Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 47) In which stage of the product life cycle do R&D costs and high advertising costs most impact revenue?

A) introduction B) growth C) maturity D) relaunch E) decline Answer: A Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle

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48) Which stage of the product life cycle is characterized by narrowing profit margins and the goal of attracting new customers?

A) introduction B) growth C) maturity D) relaunch E) decline Answer: C Difficulty: Difficult LO: 9.2: Understand how firms manage products throughout the product life cycle 49) What is marketing's goal in the growth stage of the product life cycle?

A) getting first-time buyers to try the new product B) attracting new users C) deciding whether to keep or phase out the product D) remaining profitable E) encouraging brand loyalty Answer: E Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 50) In which stage of the product life cycle will promotional expenditures be especially high in an attempt to create consumer awareness?

A) product development B) introduction C) decline D) maturity E) youth Answer: B Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Written and oral communication 51) In the ________ stage of the product life cycle, firms try to sell their product through as many outlets as possible because availability is crucial in a competitive market.

A) introduction B) relaunch C) growth D) maturity E) decline Answer: D Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle

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52) A manufacturer of a product in the decline stage of its product life cycle would be LEAST likely to do which of the following?

A) continue producing the product for loyal users B) reduce the advertising budget for the product C) phase out production of the product D) advertise heavily without changing the product or its target market E) withdraw most marketing support for the product and rely on e-commerce Answer: D Difficulty: Difficult LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 53) A manufacturer with a product in the decline stage of the product life cycle would most likely decide to ________ if there is reason to believe that there will be a small but continuing demand for the product.

A) maintain the product without change B) let existing stocks of the product run out C) drop the product immediately D) search for replacements E) increase sales promotion efforts Answer: A Difficulty: Difficult LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 54) Kitchen dishcloths are often difficult to rinse clean and typically dry slowly. A company developed a disposable kitchen cloth that rinses easily and dries quickly. Because this is a new product to the market, it can be said to be in the ________ stage of its product life cycle.

A) competitive B) trial C) introduction D) growth E) youth Answer: C Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking

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55) There are numerous kinds of shampoo, including vitamin-enriched, fruit-enhanced, color-reviving, therapeutic, and so on. Shampoo that simply promises to clean hair, however, has seen declining sales, has little or no advertising, and has been phased out by most manufacturers.

Shampoo that makes no other promise than to clean hair is in the ________ stage of its product life cycle.

A) maturity B) leveling C) repositioning D) withdrawal E) decline Answer: E Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 56) Recently a company brought a miniature version of its cereal bars to market. The nugget-sized product was very successful because it was not messy. Another company then introduced a similar product under its own brand. Mini-cereal bars are most likely in the ________ stage of their product life cycle.

A) introduction B) youth C) growth D) brand dilution E) extension Answer: C Difficulty: Difficult LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 57) Over the past 100 years or so, Binney and Smith's Crayola crayons have become household staples in more than 80 countries around the world. The company occasionally tinkers with the product's marketing mix to maintain market share. Crayola crayons are in the ________ stage of the product life cycle.

A) growth B) extension C) development D) maturity E) decline Answer: D Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking

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58) The length of the introduction stage of the product life cycle is typically the same for all products.

Answer: FALSE Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 59) The sales peak typically occurs during the growth stage of the product life cycle.

Answer: FALSE Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 60) The maturity phase of the product life cycle is typically the longest.

Answer: TRUE Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 61) Each year, the majority of new products that are introduced fail.

Answer: TRUE Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle 62) A buttery spread designed to help lower cholesterol levels is a product with a number of new competitors entering the market. This product is most likely in the introduction stage of its product life cycle.

Answer: FALSE Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 63) Why do so many products fail to make it past the introduction stage of the product life cycle?

Answer: For a new product to be successful, consumers must first know about it. Then they must believe it is something they want or need. The intense promotional costs of this stage, as well as the firm's need to recoup its investment in developing the product, put a lot of pressure on the firm to quickly establish and then increase sales. If marketers cannot successfully do this, then the new product is unlikely to leave the introduction stage.

Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Application of knowledge

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64) Each product will have a life cycle, although its exact shape and length is not known in advance. Briefly explain each step in the product life cycle.

Answer: Introduction is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. Growth is a period of rapid market acceptance and increasing profits. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition. Decline is the period when sales fall off and profits drop. A company may seek to maintain a product, hoping competition will diminish, or drop it.

Difficulty: Difficult LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Analytical thinking 65) Why might ad expenditures be high for products in the introductory stage of the product life cycle?

Answer: Consumers have very little awareness about such products; promotional spending can enhance customer awareness. Without awareness of the product, consumers will not purchase the new product.

Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Application of knowledge 66) Why might ad expenditures remain high in the growth stage of the product life cycle?

Answer: Though sales are increasing for such products, competition becomes fierce as competitors attempt to enter the market; therefore, ad dollars remain high in an effort to offset competitive threats.

Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Application of knowledge 67) What is a product relaunch?

Answer: A product relaunch involves using principles of segmentation, target marketing, and positioning to reposition an existing product for reintroduction into the product life cycle.

Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Application of knowledge 68) Can a product that has begun the journey downward to decline ever regain momentum and achieve new growth on the product life cycle?

Answer: The answer is yes, but it is usually very difficult and requires application of several of the key principles of segmentation, target marketing, and positioning.

Difficulty: Moderate LO: 9.2: Understand how firms manage products throughout the product life cycle AACSB: Application of knowledge

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69) The Jolly Green Giant is an example of a ________.

A) patent B) brand mark C) trade character D) brand meaning E) cobrand Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 70) Which of the following is NOT a desirable quality for a brand name?

A) It should suggest something about the product's benefits.

B) It should be easy to pronounce and remember.

C) It should be a long word to get attention.

D) It needs to fit legal requirements.

E) It should make sense in the customer's culture.

Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 71) Which of the following is the symbol in the United States for legal registration of a trademark?

A) ™ B) ® C) © D) ¶ E) № Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 72) Which of the following statements about brand equity is NOT true?

A) Brand equity means a brand has customer loyalty.

B) Brand equity refers to the brand's value to an organization.

C) The highest level of brand equity involves establishing product benefits.

D) Brand equity gives a firm the power to capture and hold onto a larger share of the market and to sell at prices with higher profit margins.

E) Brand equity can provide a competitive advantage.

Answer: C Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity

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73) "Tell to sell" has made a comeback as marketers seek to engage consumers with compelling stories rather than 30-second TV commercials. This exemplifies ________.

A) brand meaning B) brand storytelling C) brand equity D) product quality E) total quality Answer: B Difficulty: Easy LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 74) Brand anthropomorphism involves ________.

A) creating distinctive images that capture the character of a good B) telling compelling stories about brands to engage customers C) establishing beliefs and associations that a brand has about the consumer D) attributing human characteristics and qualities to a brand E) introducing new products with the same brand as a strong existing brand Answer: D Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 75) All of the following statements about brand extensions are true EXCEPT which one?

A) It involve selling new products with the same brand name.

B) It is a way for a company to leverage its brand equity.

C) It allows the firm to sell new products at a higher price than if they created a new brand.

D) It will attract new customers immediately.

E) It is not susceptible to brand dilution.

Answer: E Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity 76) Brand dilution ________.

A) is not a risk with brand extensions B) can impact brand equity but not sales C) may diminish brand loyalty D) occurs when new products live up to the existing brand's level of quality E) does not affect how consumers perceive the brand Answer: C Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity

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77) Marketing multiple items under the same brand name means using a(n) ________.

A) family brand B) individual brand strategy C) brand dilution D) brand anthropomorphism E) generic brand Answer: A Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 78) P&G makes Tide, Cheer, Ivory Snow, and Bold detergents as well as PertPlus, Rejoice, and Vidal Sassoon shampoos. Through its use of a separate and unique brand name for each of these products, Procter & Gamble is using a(n) ________ strategy.

A) umbrella brand B) family brand C) individual brand D) private-label brand E) cobranding Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 79) Through ________, one firm sells another firm the right to use a legally protected brand name for a specific purpose for a specific period of time.

A) umbrella branding B) store branding C) franchising D) licensing E) trademarking Answer: D Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 80) Toronto-based Loblaw supermarket chain developed President's Choice brand products to sell exclusively in its stores. President's Choice is an example of a ________.

A) manufacturer brand B) national brand C) cobrand D) generic brand E) private-label brand Answer: E Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 19 Copyright © 2022 Pearson Education, Inc.

81) Which of the following is essentially no branding at all?

A) national branding B) ingredient branding C) generic branding D) sub-branding E) store branding Answer: C Difficulty: Easy LO: 9.3: Explain how branding and packaging strategies contribute to product identity 82) Private-label brands, also called ________brands, are the retail store or chain's exclusive trade name.

A) national B) manufacturer C) store D) generic E) license Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 83) Generic branding is one strategy to meet customers' demands for ________.

A) the highest quality specialty products B) the lowest prices on standard products C) the widest assortment of mature products D) the best-known consumer products E) the most expensive new products Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 84) All of the following are advantages of licensing EXCEPT which one?

A) It provides instant recognition.

B) It generates immediate consumer interest.

C) It quickly positions a product for a certain target market.

D) It allows the use of the brand name for an indefinite amount of time.

E) It trades on the high recognition of the license brand.

Answer: D Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity

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85) ________ is an agreement between two brands to work together in marketing a new product.

A) Manufacturer branding B) Cobranding C) Franchising D) Family branding E) Umbrella branding Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 86) In ________, branded materials become component parts of other branded products.

A) family branding B) private-label branding C) umbrella branding D) manufacturer branding E) ingredient branding Answer: E Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 87) Breyers and Reese's have worked together to create Breyers Ice Cream with Reese's Peanut Butter Cups. This is an example of ________.

A) family branding B) ingredient branding C) private-label branding D) individual branding E) generic branding Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 88) ________ seeks to inspire, guide, and motivate people with the goal of contributing to the consumer's way of life.

A) A lifestyle brand B) Ingredient branding C) Cobranding D) A private-label brand E) A generic brand Answer: A Difficulty: Easy LO: 9.3: Explain how branding and packaging strategies contribute to product identity

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89) Which is the best example of a lifestyle brand?

A) GoPro B) Oreo C) M&Ms D) Crest E) Drano Answer: A Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 90) Product packaging can do all of the following EXCEPT which one?

A) protect the product B) provide service C) communicate brand personality D) make the product easier to store E) create a competitive advantage Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 91) ________ involves designing and producing the container or cover for a product.

A) Labeling B) Licensing C) Packaging D) Retailing E) Servicing Answer: C Difficulty: Easy LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 92) Which of the following is true of the Universal Product Code (UPC)?

A) It is a five-digit number used to control inventory.

B) It is a package communication element.

C) It is legally required for products with dual distribution channels.

D) It is used only by companies that have more than one retail outlet.

E) It prevents product cannibalization.

Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication

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93) Which of the following is NOT true of the Universal Product Code (UPC)?

A) It is printed on the side or bottom of all non-perishable items sold in grocery stores and other mass-merchandising outlets.

B) It supplies information about the type of item.

C) It identifies the manufacturer of the product.

D) It is read by an electronic scanner.

E) It is used by retailers to track sales and control inventory.

Answer: A Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity 94) Firms interested in using socially responsible packaging that is less harmful to the environment are developing ________.

A) aesthetic packaging B) sustainable packaging C) ingredient packaging D) venture packaging E) copycat packaging Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 95) Using the strategy of ________, a marketer designs a package that closely resembles the look of the national branded product with which it is competing.

A) aesthetic packaging B) sustainable packaging C) ingredient packaging D) venture packaging E) copycat packaging Answer: E Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 96) Which of the following controls package communications and labeling in the United States?

A) the Food and Drug Administration (FDA) B) the Nutrition Labeling and Education Act C) the Nutrition Facts Panel D) the Federal Fair Packaging and Labeling Act E) the Consumer Bill of Rights Answer: D Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning

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97) Which of the following is NOT required by the U.S. Food and Drug Administration (FDA) on the labels of most foods sold in the United States?

A) amount of saturated fat in the product B) sources of all ingredients in the product C) amount of cholesterol in the product D) number of calories in the product E) amount of protein in the product Answer: B Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 98) Which of the following would be information included in a UPC code?

A) the customer's contact information B) the ingredients of the product C) the manufacturer of the product D) the retailer of the product E) the expiration date of the product Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 99) Chicken of the Sea brand tuna sells more than the same size Kroger brand tuna, even though the Kroger tuna costs $0.15 less per can. Chicken of the Sea has brand ________.

A) extension B) equity C) service D) valuation E) specialization Answer: B Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 100) Oreos and Coke are both examples of ________.

A) store brands B) cobrands C) private-label brands D) national brands E) ingredient brands Answer: D Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking

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101) Arm & Hammer began as a producer of baking soda. Now the company manufactures detergents, deodorants, and fabric softeners under the Arm & Hammer brand name. Arm & Hammer uses a ________ strategy.

A) brand extension B) product line contraction C) downward line stretch D) cannibalization E) cobranding Answer: A Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 102) Kellogg's has marketed Special K cereal for a number of years to a loyal customer base. Its introduction of a new cereal called Special K with Red Berries is an example of a(n) ________ strategy.

A) cannibalization B) cobranding C) brand extension D) upward line stretch E) downward line stretch Answer: C Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 103) The J. M. Smucker Company makes jams, jellies, fruit spreads, and ice cream toppings. All of these products are sold using the Smucker's brand name. This company uses a(n) ________ strategy.

A) store brand B) private-label brand C) cobranding D) ingredient branding E) family brand Answer: E Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking

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104) Disney allowed a paint manufacturer to produce paint using the Disney brand name for a specific period of time. Disney paint is an example of ________.

A) licensing B) cobranding C) family branding D) ingredient branding E) private-label branding Answer: A Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 105) Mattel teamed with Coca-Cola to market Soda Fountain Sweetheart Barbie. This is an example of ________.

A) generic branding B) family branding C) franchising D) cobranding E) ingredient branding Answer: D Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 106) Which of the following is an advantage offered by cobranding?

A) Manufacturers do not have to invest in creating their own brand names.

B) Retailers have exclusive products that cannot be purchased from competitors.

C) Advertising, sales, promotion, and marketing can be managed independently.

D) Brand equity is stabilized.

E) A company can expand its existing brand into a category it otherwise might have difficulty entering alone.

Answer: E Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 107) A brand is a name, term, symbol or any other unique element of a product that identifies one firm's product(s) and sets it apart from the competition.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 108) A logo is the legal term for a brand name, brand mark, or trade character.

Answer: FALSE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 26 Copyright © 2022 Pearson Education, Inc.

109) The concept of brand meaning encompasses the beliefs and associations that a consumer has about the brand.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 110) Producers' brands are also called national or manufacturer brands.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Written and oral communication 111) A reckoning with social justice led consumer brands such as Eskimo Pie and Mrs. Butterworth's to rebrand and reimage their products so as to avoid any hint of racism.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity 112) The UPC is a global system of product identification.

Answer: FALSE Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity 113) Retailers today are often in the driving seat when it comes to deciding which brands to stock and push.

Answer: FALSE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 114) The Food and Drug Administration (FDA) requires most food labels in the United States to state how much fat, cholesterol, and protein are in each serving of the product.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 115) Marketers want to increase brand dilution, which refers to the spread of interest in and knowledge about a brand among target consumers.

Answer: FALSE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity

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116) The Clorox Company marketed a new product called Clorox Oxygen Action Multi-Purpose Stain Remover. This is an example of a brand extension.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 117) Heinz and Jack Daniels worked together to produce Jack Daniels grilling sauce. This is an example of cobranding.

Answer: TRUE Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 118) What is meant by brand anthropomorphism?

Answer: One of the more effective ways to give a brand a personality in the minds of consumers is to engage in deliberate marketing actions that make the brand seem more human.

The phenomenon of attributing to a brand human characteristics is known as brand anthropomorphism.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 119) Define licensing and provide an example.

Answer: Product licensing is an arrangement in which one firm sells another firm the right to use a brand name for a specific purpose for a specific amount of time. Examples will vary.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Reflective thinking 120) What is ingredient branding? Why would manufacturers want to engage in ingredient branding?

Answer: Ingredient branding is a form of cobranding in which branded materials are used as ingredients or component parts of other branded products. The practice of ingredient branding has two primary benefits. First, it attracts customers to the host brand because the ingredient brand is familiar and has a strong brand reputation for quality. Second, the ingredient brand's firm can sell more of its product, not to mention the additional revenues it gets from the licensing agreement.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge

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121) How can a marketer use a package to communicate with consumers?

Answer: A marketer can use a package to communicate brand personality through effective use of colors, words, shapes, and images. In addition to brand identity, the package can provide facts and important consumer tips, as well as warranty information and ways to contact the company.

The choice of packaging can make an aesthetic statement about the brand or convey a brand's commitment to social responsibility. For instance, many brands are now marketed in sustainable packaging that is less harmful to the environment than other materials.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 122) Briefly explain the history of regulations concerning packaging and labels.

Answer: The Fair Packaging and Labeling Act of 1966 controls package communications and labeling. The law aims to make labels provide information that is useful to consumers. The Nutritional Labeling and Education Act of 1990 requires sellers to provide detailed nutritional information on food products. In addition, the Food and Drug Administration requires labels to provide information about calories, fat, carbohydrates, protein, and vitamin content.

Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 123) What are the four "easy" tests brand designers use in selecting a good brand name? Choose a brand and explain how it passes these tests.

Answer: The four "easy" tests brand designers use to judge a brand name are whether the name is easy to say, easy to spell, easy to read, and easy to remember. Specific brand answers will vary.

Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 124) On what four dimensions must a good brand name pass the "fit test"?

Answer: The four dimensions are: 1) Fit the target market; 2) Fit the product's benefits; 3) Fit the customer's culture; and 4) Fit legal requirements.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 125) How is it possible for a company in the United States to have protection for a brand even if it has not legally registered it?

Answer: In the United States, common-law protection exists if the firm has used the name and established it over a period of time.

Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning

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126) Panasonic markets a line of digital cameras that use Leica lenses. Leica lenses are legendary for their superb image quality. Panasonic is known for its consumer electronics. What marketing strategy are Panasonic and Leica implementing? Support your answer.

Answer: Panasonic and Leica are implementing cobranding. Cobranding benefits both partners when the combination of the two brands provides more customer recognition power than either brand on its own.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Analytical thinking 127) Why might a firm want to use sustainable packaging? Describe one type of sustainable packaging in your answer.

Answer: A firm might want to use sustainable packaging, such as using recycled materials to produce the package, to reduce the environmental impact of the package. The firm can show customers its commitment to act in a socially responsible manner through its packaging choices.

Difficulty: Moderate LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Ethical understanding and reasoning 128) Briefly explain what the U.S. Food and Drug Administration (FDA) requires on food labels and why.

Answer: The FDA requires marketers to provide a great deal of information on food labels, including the amount of fat, saturated fat, calories, cholesterol, carbohydrates, protein, vitamins, and trans fat. These regulations are designed to force firms to be accurate in describing their products so that consumers can know exactly what they are buying.

Difficulty: Difficult LO: 9.3: Explain how branding and packaging strategies contribute to product identity AACSB: Application of knowledge 129) ________ managers are responsible for developing and implementing the marketing plan for a single brand.

A) Product category B) Brand C) Venture team D) Market E) Sales Answer: B Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork

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130) Which of the following is a disadvantage of the brand management system?

A) a tendency to avoid price differentiation B) too much focus on the supplementary and complementary roles of all product lines C) a tendency to overemphasize short-term gains in sales D) an interdependent structure that can undermine personal responsibility E) too much focus on establishing brand equity Answer: C Difficulty: Difficult LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 131) An individual who is responsible for developing and implementing the marketing plan for all the brands and products within a product category is known as a ________manager.

A) product category B) brand C) market D) venture team.

E) sales Answer: A Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management 132) Which of the following accurately describes a product category manager?

A) A product category manager works for a company that relies solely on individual branding.

B) A product category manager is responsible for moving a company's product mix from generic to branded.

C) A product category manager coordinates the development of brand equity for a specific brand name.

D) A product category manager is also called a sales manager.

E) A product category manager coordinates the mix of product lines within a general product category and is responsible for the addition of new product lines.

Answer: E Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management

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133) What do you call an individual who is responsible for developing and implementing the marketing plans for products sold to a particular customer group?

A) product category manager B) market manager C) brand manager D) sales manager E) venture team manager Answer: B Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management 134) Which of the following is most useful when a firm offers a variety of products that serve the needs of a wide range of customers?

A) the single marketing manager structure B) the independent brand manager structure C) the sales manager structure D) the product category manager structure E) the market manager structure Answer: E Difficulty: Difficult LO: 9.4: Describe how marketers structure organizations for new and existing product management 135) When large companies undertake new-product development, they typically enlist specialists in different areas to create a ________ within the organization.

A) focus group B) product category team C) sales team D) venture team E) market management group Answer: D Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork

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136) Venture teams focus exclusively on which of the following?

A) products in the maturity stage of the product life cycle B) products in the growth stage of the product life cycle C) relationships with large, important customers D) new-product development E) servicing specific customer groups Answer: D Difficulty: Easy LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 137) The term "skunk works" is associated with which of the following?

A) total quality management (TQM) B) Six Sigma C) product category teams D) market management structure E) venture teams Answer: E Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 138) General Foods produces many different brands of coffee, including Brim, Maxim, Maxwell House, International Coffees, Sanka, and Yuban. Each brand is likely to have its own ________.

A) venture team B) market manager C) product category manager D) communication manager E) brand manager Answer: E Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Application of knowledge

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139) Kodak markets cameras, film, X-ray film and equipment, printers, printer accessories, motion picture film, and touch screen sensors. Kodak is likely to have ________ who coordinate the mix of the product lines.

A) brand managers B) product category managers C) venture teams D) communication teams E) market managers Answer: B Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Application of knowledge 140) Colgate-Palmolive replaced its brand management structure with a product category management structure. A manager who had once managed Colgate toothpaste now manages all of the company's dental products. Under Colgate's new system, a product category manager would have ________.

A) profit and loss responsibility for all dental products B) completely different duties than the brand manager had C) less direct authority to achieve goals D) no authority over functions, other than marketing, that affect dental products E) no authority over international dental product sales Answer: A Difficulty: Difficult LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Application of knowledge 141) A manufacturer of acrylic, latex, and nitrile gloves sells to medical laboratories, factories where employees handle chemicals, companies that manufacture micro-tech equipment, and cleaning services. The company is organized to better satisfy the specific needs of each of its four target markets, so it uses a ________ structure.

A) product category B) market manager C) brand manager D) venture team E) family brand Answer: B Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Application of knowledge

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142) All companies employ a number of different managers who are responsible for different brands, product categories or markets.

Answer: FALSE Difficulty: Easy LO: 9.4: Describe how marketers structure organizations for new and existing product management 143) Depending upon the organization, product management may include brand managers, product category managers, and market managers.

Answer: TRUE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 144) A venture team is typically composed of a brand manager, product category manager, and market manager.

Answer: FALSE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 145) A potential downside of the brand management system is an overemphasis on the overall product category for the firm at the expense of short-term sales for a manager's own brand.

Answer: FALSE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management 146) The term "skunk works" refers to a small and often isolated department or facility that functions with minimal supervision.

Answer: TRUE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management 147) The market manager structure is useful when firms offer a variety of products that serve the needs of a wide range of customers.

Answer: TRUE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork

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148) A brand manager serves essentially the same function as a product category manager.

Answer: FALSE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Analytical thinking 149) The size of the firm is the most important factor in determining whether a product category manager or market manager structure should be used.

Answer: FALSE Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Analytical thinking 150) How does a product category manager differ from a market manager?

Answer: The focus of each position is different. A product category manager is responsible for developing and implementing the marketing plan for all of the brands and products within a product category. A market manager is responsible for developing and implementing the marketing plans for all products sold to a particular customer group. A product category manager will have more expertise in a particular product line, while a market manager will have more expertise in serving a particular market segment.

Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Analytical thinking 151) What are some of the potential responsibilities of brand managers employed at P&G? Answer: Procter & Gamble brand managers operate like internal consultants to cross-functional teams. They are responsible for positioning brands and developing brand equity. They are likely to work with sales and finance as well as logistic staff members as a part of cross-functional teams.

Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork 152) Explain the potential problems associated with the brand management system.

Answer: Because brand managers within one firm may be in competition against each other, they may push too hard for short-term sales with coupons and other sales promotions for their own brand that damage other brands and, in the long run, hurt brand equity.

Difficulty: Difficult LO: 9.4: Describe how marketers structure organizations for new and existing product management AACSB: Interpersonal relations and teamwork

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153) When might the market manager structure best serve a firm?

Answer: With a market manager structure, different people focus on specific customer groups rather than on the products the company makes. This type of organization can be especially useful when firms offer a variety of products that serve the needs of a wide range of customers.

Difficulty: Moderate LO: 9.4: Describe how marketers structure organizations for new and existing product management

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 10 Price: What Is the Value Proposition Worth?

1) Before societies minted coins or printed paper money, people exchanged one good or service for another. What is this practice called?

A) pricing B) bartering C) profiting D) valuing E) yielding Answer: B Difficulty: Easy LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 2) Which of the following statements about price is true?

A) Pricing is the least important marketing mix element.

B) Price is always a monetary value.

C) Price can mean exchange of nonmonetary goods or services.

D) Most consumers believe price has little influence on their purchase decisions.

E) Pricing is unaffected by changes in the business cycle.

Answer: C Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 3) The value of something we give up in order to obtain something else is referred to as a(n) ________.

A) transformation cost B) opportunity cost C) exchange D) variable cost E) marginal cost Answer: B Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies

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4) The percentage of a market (defined in terms of either sales units or revenue) accounted for by a specific firm, product line(s), or brand(s) is known as ________.

A) price B) pricing objectives C) profit margin D) market share E) demand Answer: D Difficulty: Easy LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 5) In price planning, a firm would be most likely to set a profit objective for which of the following products?

A) a commodity such as coal B) toothpaste C) a fad such as fidget spinners D) light bulbs E) construction materials Answer: C Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 6) With prestige products, ________is particularly important.

A) the image-enhancement function of pricing B) an emphasis on short-term profits C) the dilution of rivals' marketing efforts D) undercutting competitors' prices E) low-cost pricing Answer: A Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies

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7) When setting prices, a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years.

What type of pricing objective has the company set?

A) profit B) sales C) competitive effect D) market-based E) value Answer: B Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies AACSB: Analytical thinking 8) When Home Depot stores entered the Canadian market, there were already stores providing similar services and products. To get people to try Home Depot, the chain deliberately sold merchandise below the price that the Canadians were used to. What type of pricing objective did Home Depot use?

A) market share B) profit C) competitive effect D) customer satisfaction E) image enhancement Answer: C Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies AACSB: Analytical thinking 9) Tuition, rent, interest, and fee are other names for price.

Answer: TRUE Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 10) The first step in planning how to price a product is to develop pricing objectives.

Answer: TRUE Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 11) When dealing with a product that is a fad, the firm must harvest profits before customers lose interest and move onto the next cool idea.

Answer: TRUE Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 3 Copyright © 2022 Pearson Education, Inc.

12) Market share is a measure of the profit margin yielded through a specific brand.

Answer: FALSE Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies AACSB: Analytical thinking 13) Explain the concept of opportunity cost, giving at least one example from your life.

Answer: Opportunity cost is the value of something that is given up to obtain something else.

For example, the cost of going to college includes more than tuition. It also includes the income that a student could have earned by working instead of going to classes.

Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies AACSB: Reflective thinking 14) What is market-based pricing?

Answer: Sometimes strategists design the pricing plan to dilute the competition's marketing efforts. In these cases, a firm may deliberately try to preempt or reduce the impact of a rival's pricing changes. This is referred to as competitive-effect pricing or market-based pricing.

Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies 15) Explain how prestige products may relate to some customers' feelings of self-worth. What is an example of a prestige product?

Answer: The image enhancement function of pricing is particularly important with prestige products that have a high price and appeal to status-conscious consumers. People are often willing to pay a premium price for a luxury product like a watch because they believe that it makes a statement about their own worth.

Difficulty: Moderate LO: 10.1: Explain the importance of pricing and how marketers set objectives for their pricing strategies AACSB: Application of knowledge 16) Which of the following is true about the demand curve?

A) It is used to illustrate the effect of price on the quantity supplied.

B) It is always graphically depicted by a straight line.

C) It shows the quantity of product customers will buy in a market during a period of time even if other factors change.

D) It usually slopes upward and to the right.

E) It shows the relationship between product demand and product price.

Answer: E Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 4 Copyright © 2022 Pearson Education, Inc.

17) ________ refers to the quantity of a good or service that consumers and business customers are willing and able to buy at a given price in a given period of time.

A) Cost B) Demand C) Revenue D) Pricing environment E) Estimate Answer: B Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 18) On a demand curve for most goods, as the price of the product ________, the number of units the customer is willing to buy ________.

A) increases; goes up B) goes down; increases C) fluctuates; remains constant D) remains constant; fluctuates E) decreases; goes down Answer: B Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 19) For products such as ________, a price hike may actually result in an increase in demand.

A) Louis Vuitton handbags B) American Airlines plane tickets C) Spectrum cable TV services D) Tide pods E) generic brand napkins Answer: A Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 20) Which of the following is the percentage change in unit sales that results from a percentage change in price?

A) liquidity ratio B) break-even point C) price elasticity of demand D) marginal analysis E) basing-point Answer: C Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 5 Copyright © 2022 Pearson Education, Inc.

21) How is the price elasticity of demand calculated?

A) averaging previous demand levels with new demand levels B) dividing percentage change in quantity demanded by percentage change in price C) dividing the new quantity demanded by the percentage change in price times 100 D) multiplying the percentage change in quantity demanded by the percentage change in price E) dividing the percentage change in price by the percentage change in quantity demanded Answer: B Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 22) Which of the following occurs when price is inelastic?

A) Price and revenue change in the same direction.

B) Revenues decrease when price increases.

C) Revenue is unaffected by price changes.

D) Quantity demanded increases when price increases.

E) The demand curve is more horizontal.

Answer: A Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 23) When products are complements for each other, ________.

A) the products are substitutes for each other B) one product is essential to the use of the other C) an increase in the price of one increases the demand for the second D) a decrease in the price of one decreases the demand for the second E) a change in the price of one product does not affect the demand for the other Answer: B Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 24) If a product has a close substitute, its demand will likely be ________.

A) inelastic B) elastic C) cross-elastic D) fixed E) break-even Answer: B Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions

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25) The total fixed costs divided by the number of units produced and sold is known as ________.

A) fixed costs B) variable costs C) average fixed cost D) marginal costs E) everyday costs Answer: C Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 26) All of the following are fixed costs EXCEPT which one?

A) rent B) utilities C) equipment D) raw materials E) advertising costs Answer: D Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 27) Break-even analysis is used to examine the relationship between ________.

A) fixed costs and variable costs B) costs and contributions C) costs and price D) demand and costs E) demand and profits Answer: C Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 28) How is contribution per unit calculated?

A) total fixed costs divided by number of units produced and sold B) total revenue added to total costs C) per units costs of production D) revenue per unit minus variable costs E) the fixed cost per unit produced Answer: D Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions

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29) What is true about the break-even point?

A) It is the point at which the company doesn't lose any money.

B) It is the point at which the company first makes a profit.

C) The company makes a profit below this point.

D) The company suffers a loss above this point.

E) Total revenues are greater than total costs at this point.

Answer: A Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 30) The manufacturer's suggested retail price is also referred to as the ________.

A) break-even price B) marginal price C) list price D) markup E) markdown Answer: C Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 31) Each member of a channel of distribution adds a ________ to create the price at which they will sell the product.

A) break-even point B) percentage of sales C) list price D) markup E) contribution per unit Answer: D Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 32) When setting prices, a company must consider factors in its pricing environment. ________ such as the business cycle, economic growth, and consumer confidence can have a significant impact on the firm's pricing strategies.

A) Consumer trends B) Economic trends C) Competitors' responses D) Regulations E) Market structures Answer: B Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 8 Copyright © 2022 Pearson Education, Inc.

33) In a ________, consumers become more price-sensitive, switching brands to get better prices and reducing their consumption.

A) sharing economy B) monopolistic market structure C) recession D) price war E) keystoning pricing structure Answer: C Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 34) In a market with ________, there are many sellers, each offering a slightly different product.

Firms can differentiate products and focus on nonprice competition.

A) pure competition B) monopolistic competition C) oligopolistic competition D) vertical integration E) inflation Answer: B Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 35) In a market with ________, the market consists of many buyers and a few sellers who are likely to have similar pricing.

A) pure competition B) monopolistic competition C) oligopolistic competition D) vertical integration E) inflation Answer: C Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 36) Which of the following consumer trends is a response to the frequent reports of terrorism and political unrest?

A) buying time B) vertical integration C) the sharing economy D) shopping for control E) keystoning Answer: D Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 9 Copyright © 2022 Pearson Education, Inc.

37) Uber and Airbnb are both examples of the consumer trend of ________.

A) recession B) price lining C) the sharing economy D) shopping for control E) keystoning Answer: C Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 38) Many people rely on a prescription drug to control their cholesterol. An increase in the price of the drug would have little effect on the quantity demanded because there are no substitutes for the drug and because people who take it have no choice but to continue taking it if they wish to stay healthy. The demand for the cholesterol drug is ________.

A) elastic B) inelastic C) cross-elastic D) supply-driven E) asymmetrical Answer: B Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking 39) When Joe's Coffee Nook raised the price of a latte, Joe noticed a substantial change in his daily latte sales. A price reduction caused his sales to increase. From this information, you can assume the demand for lattes is ________.

A) static B) supply-driven C) cross-elastic D) elastic E) inelastic Answer: D Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking

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40) Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

A) drop the price B) raise the price C) maintain the price D) discontinue the item E) bundle the item with another product Answer: B Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Application of knowledge 41) Which of the following is an example of a variable cost for an amusement park?

A) salary of the park manager B) food cart supplies C) liability insurance D) interest on the property's mortgage E) property taxes Answer: B Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking 42) For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

A) fixed costs B) average fixed costs C) variable costs D) marginal costs E) everyday costs Answer: A Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking

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43) As a manufacturer increases price, the ________ drops.

A) target B) break-even point C) marginal revenue D) total cost E) variable cost Answer: B Difficulty: Difficult LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Application of knowledge 44) According to the law of demand, if prices decrease, customers will buy more.

Answer: TRUE Difficulty: Easy LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 45) When products are substitutes, an increase in the price of one increases the demand for the other.

Answer: TRUE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 46) The first step in price planning is to estimate demand.

Answer: FALSE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 47) One anticipated result of The Tax Cuts and Job Acts of 2017 is companies moving jobs and investments outside of the United States.

Answer: FALSE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 48) The Credit Card Responsibility and Disclosure Act and the Affordable Care Act are both examples of government regulations that directly affect prices.

Answer: TRUE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions

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49) Inflation may cause marketers to decide to either raise or decrease their prices.

Answer: TRUE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 50) Businesses within a purely competitive market have few opportunities to raise or lower their prices.

Answer: TRUE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions 51) Variable costs for producing textbooks include the price of paper.

Answer: TRUE Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking 52) Describe what a demand curve is and explain how it helps marketers make decisions.

Answer: The demand curve estimates consumer demand at different prices. A demand curve doesn't account for changes in the company's external environment, but it is a useful tool marketers can use to determine how much of a product customers will buy at different price points. This information can help marketers decide on the price position for their product.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Application of knowledge 53) When setting prices, the company must consider its external pricing environment. Describe three components of the pricing environment and how they affect businesses.

Answer: Economic conditions affect both the costs of producing a product and consumer perceptions of the product's price and value. The business cycle, inflation, economic growth, and consumer confidence all influence the type of pricing strategy that will succeed. The competition is another major influence in the pricing environment. Depending on the type of industry, a company may charge a similar price as its competitors or set prices on the basis of its own costs.

Consumer trends can also greatly affect prices. As demographics change, consumers' tastes change, affecting their purchasing habits. Change in government regulation is an environmental factor that can change a company's production costs or directly address how an industry sets prices.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking

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54) What does it mean for products to be complements? Give an example of products that are complements.

Answer: Products are complements when one product is essential to the use of the other. With complements, an increase in the price of one decreases the demand for the second. Answers will vary as to an example of complements.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking 55) What is the gross margin?

Answer: The gross margin is the markup added to the cost of a product to cover the fixed costs of the retailer or wholesale and leave an amount for a profit.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Application of knowledge 56) How does the contribution per unit relate to the process of determining the break-even point?

Answer: The contribution per unit is the difference between the price the firm charges for a product and the variable costs. This figure is the amount the firm has after paying for fixed costs of production. Determining the contribution per unit is the first step in calculating the break-even point.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking 57) What is vertical integration, and how does it affect a retailer's pricing?

Answer: A retailer uses vertical integration by developing its own distribution chain and taking on the role of wholesaler. This allows the retailer to save money by shortening the channel of distribution and gives the retailer more control over availability of products. These advantages give the retailer more room to offer lower prices to its customers.

Difficulty: Moderate LO: 10.2: Describe how marketers use costs, demand, revenue, and the pricing environment to make pricing decisions AACSB: Analytical thinking

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58) The method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price is called ________.

A) demand-based pricing B) psychological pricing C) yield management pricing D) cost-plus pricing E) high/low pricing Answer: D Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 59) Which of the following is an advantage of using cost-based pricing methods?

A) They consider external factors such as competition.

B) They include consideration of the effects of demand.

C) They are relatively simple to calculate.

D) They simplify the process of accurately estimating cost.

E) They take the product life cycle into consideration.

Answer: C Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 60) In which type of pricing is the selling price based on an estimate of volume or quantity a firm can sell in different markets at different prices?

A) value B) keystoning C) demand-based D) penetration E) congestion Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 61) With target costing, marketers first ________ and then ________.

A) build the marketing mix; identify the target market B) segment and identify target markets; set different prices for each market C) design the product; determine its cost based on target profits D) use skimming pricing; use penetration pricing E) determine a selling price market segments will pay; target costs to ensure that the price is met Answer: E Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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62) Which of the following is a pricing strategy based on the competition?

A) price bundling B) trial pricing C) variable pricing D) price leadership E) skimming pricing Answer: D Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 63) The goal of ________ is to accurately predict the proportion of customers who fall into different price categories to best allocate the percentages of their stock so that no product goes unsold and revenue is maximized.

A) yield management pricing B) keystoning C) high/low pricing D) promo pricing E) congestion pricing Answer: A Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 64) ________ is a pricing strategy in which a firm set prices that provide ultimate value to customers.

A) Price leadership B) Value pricing C) Congestion pricing D) Keystoning E) Yield management pricing Answer: B Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 65) In the keystoning pricing strategy, what does a retailer do to determine the price of an item?

A) doubles its cost B) triples its cost C) uses a 200 percent markup D) uses a 50 percent markup E) halves its cost Answer: A Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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66) ________ is the practice of charging different prices to different market segments for the same product.

A) Trial pricing B) Price segmentation C) Price leadership D) Value pricing E) Promo pricing Answer: B Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 67) Which of the following should be true for a skimming price to be successful?

A) Target consumers are price sensitive.

B) Supply exceeds demand.

C) Demand is stable.

D) The producer uses intensive distribution.

E) There is little chance that competitors can quickly enter the market.

Answer: E Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 68) A movie theatre offering lower daytime ticket prices and a restaurant offering "early bird" discounts are examples of ________.

A) peak load pricing B) price segmentation C) surge pricing D) bottom-of-the-pyramid pricing E) trial pricing Answer: A Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 69) Which of the following is a reason that a marketer would choose a penetration pricing strategy?

A) to ensure the company has the ability to increase prices once demand decreases B) to focus on the rapid achievement of profit objectives C) to appeal to different consumer segments with different levels of price sensitivity D) to create markets for highly technical products E) to discourage competition from entering the market Answer: E Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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70) What is the opposite of skimming pricing?

A) promo pricing B) trial pricing C) penetration pricing D) specialty pricing E) price bundling Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 71) A retailer that uses the list price for products but runs frequent promotions that heavily discount some products is using which type of pricing strategy?

A) price skimming B) trial pricing C) penetration pricing D) peak load pricing E) high/low pricing Answer: E Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 72) Using ________, a company raises the price of its product as demand goes up and lowers it as demand declines.

A) price skimming B) decoy pricing C) surge pricing D) keystoning E) high/low pricing Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 73) Which pricing tactic calls for offering three similar products, one that is lower priced and less attractive and two that are comparable but more expensive?

A) peak load pricing B) decoy pricing C) bottom-of-the-pyramid pricing D) keystoning E) high/low pricing Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics

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74) ________ refers to the sale of two or more goods or services as a single package for one price.

A) Two-part pricing B) Captive pricing C) Price bundling D) Decoy pricing E) Trial pricing Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 75) ________ is a pricing tactic a firm uses for two products that work only when used together.

The firm sells one item at a very low price and then makes its profit on the second high-margin item.

A) Two-part pricing B) Price bundling C) Captive pricing D) Decoy pricing E) Keystoning Answer: C Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 76) Another name for F.O.B. factory pricing is ________ pricing.

A) captive B) CIF C) F.O.B. origin D) F.O.B. delivered E) freight absorption Answer: C Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 77) With ________, the seller pays both the cost of loading and transporting the product to the customer.

A) freight absorption pricing B) peak load pricing C) F.O.B. origin pricing D) F.O.B. delivered pricing E) F.O.B. factory pricing Answer: D Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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78) When a company charges the same rate to ship a product regardless of location, it is using which form of pricing?

A) freight absorption B) F.O.B. factory C) F.O.B. origin D) uniform delivered E) F.O.B. delivered Answer: D Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 79) When the seller takes on part or all of the cost of shipping, it is called ________ pricing.

A) freight absorption B) F.O.B. factory C) F.O.B. origin D) uniform delivered E) two-part Answer: A Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 80) Trade or functional discounts are offered by manufacturers to which of the following?

A) channel intermediaries who perform various marketing functions B) consumers who earn a price reduction for buying in bulk C) intermediaries who pay their bills before they are due D) manufacturers that agree to exclusive distribution contracts E) the government market and other organizations that require bid proposals Answer: A Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 81) Many firms try to entice their customers to ________ by offering cash discounts.

A) make more frequent purchases B) pay their bills with an installment plan C) buy products when they are out of season D) purchase larger quantities of a product E) pay their bills quickly Answer: E Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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82) Which of the following is true about noncumulative quantity discounts?

A) They encourage large single orders.

B) They encourage a strong relationship between buyer and seller.

C) They are based on a total quantity purchased within a set time period.

D) They typically involve giving the buyer a credit to use against future orders.

E) They encourage small, regularly spaced orders.

Answer: A Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics 83) When a snow blower shop offers a price reduction to customers who buy during the spring and summer, the shop is giving a(n) ________ discount.

A) functional B) seasonal C) annual D) trade E) allowance Answer: B Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 84) Joe Bergerson makes and sells maple racks for cooling cakes and cookies. Joe knows that it costs $15 to make one rack, and he wants to earn a 20 percent profit on each rack. Which approach to pricing is Joe most likely to use?

A) demand-based pricing B) target costing C) cost-plus pricing D) yield management pricing E) value pricing Answer: C Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 85) Swatch surveyed the market and identified an unserved segment of watch buyers. Using these results, Swatch created a watch at a price that consumers were willing to pay. The unorthodox order of this marketing mix decision is an example of ________.

A) competition-based pricing B) cost-plus pricing C) target costing D) value pricing E) penetration pricing Answer: C Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 21 Copyright © 2022 Pearson Education, Inc.

86) The average price Xerox charged when it introduced the first stand-alone fax machine was $12,700. This premium price was a way for Xerox to recoup some of the research and development costs that went into production. Xerox used ________.

A) a skimming price B) a trial price C) penetration pricing D) prestige pricing E) target costing Answer: A Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 87) When a beverage maker came out with a new drink and priced it at half price for the first month of sales to attract buyers, the company was using a(n) ________ strategy.

A) penetration pricing B) skimming price C) everyday low price D) trial pricing E) promo pricing Answer: D Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 88) Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share. As a consultant, you should recommend a ________ pricing strategy.

A) skimming B) penetration C) price leadership D) cost-plus E) value Answer: B Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge

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89) Mach 5 razor blades must be used in the Mach 5 razor. Which type of pricing is most likely used for the razor blades?

A) penetration B) value C) captive D) two-part E) uniform delivered Answer: C Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 90) Manufacturers of which of the following would be most likely to use freight absorption pricing?

A) chocolate candy B) laptop computers C) furniture polish D) feline flea collars E) repair parts for vacuum cleaners Answer: B Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 91) The most common cost-based approach to pricing is cost-plus pricing.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 92) Restaurants typically charge a 300 percent markup for the food that goes into a menu item and a 400 percent markup for the cost of alcoholic beverages.

Answer: FALSE Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 93) Consumer surveys are often important to marketers using demand-based pricing.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 94) Payment pricing makes a consumer think the price is "do-able" by breaking up the total price into smaller amounts payable over time.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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95) Keystoning is the opposite of cost-based pricing.

Answer: FALSE Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics 96) Using a skimming price is a typical strategy for pricing new products, while market-penetration is a more typical strategy for pricing products that are advanced in the product life cycle.

Answer: FALSE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 97) A penetration price is typically used when the company introducing a new product wants to quickly gain market share.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 98) Price leadership strategies provide a legal way for firms to agree on prices without ever explicitly coordinating rates.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Ethical understanding and reasoning 99) Trial pricing is the opposite of skimming pricing.

Answer: FALSE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics 100) With subscription pricing, a seller offers or requires that customers pay a periodic fee for access to a product.

Answer: TRUE Difficulty: Easy LO: 10.3: Understand key pricing strategies and tactics 101) The Value Meal Deal at a fast food restaurant that offers a sandwich, fries, and a drink for one price is an example of price bundling.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics

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102) Beach resorts setting higher room prices in summer and ski resorts setting higher room prices in winter are examples of surge pricing.

Answer: FALSE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Ethical understanding and reasoning 103) When a major moving van company sells accessory products (boxes, bubble wrap, etc.) that must be used in moving a household's furniture, the company is practicing captive pricing.

Answer: TRUE Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 104) What is congestion pricing?

Answer: Congestion pricing is a pricing strategy of charging a high fee for operating cars during peak traffic times to reduce congestion. For example, several major cities, including London and Shanghai, use this strategy to reduce their horrendous traffic jams. They have succeeded by creating congestion zones where drives must pay a high fee for the privilege or operating their cars during peak times.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 105) Companies bringing out a new product can choose between three broad strategies: a skimming price, penetration pricing, and trial pricing. Distinguish among the three.

Answer: A skimming price is used to skim revenues from the market by entering with high initial prices. The product's quality and image must support its higher price, and enough buyers must want the product at that price. Competitors should not be able to enter the market easily and undercut the high price. Penetration pricing is the opposite of a skimming price. It is used to penetrate the market quickly and deeply to attract a large number of buyers and win a large market share by setting a low price upon entering the market. The low price should help keep out competition and be maintained over time. Trial pricing also offers a low price for a new product, but unlike penetration pricing it only offers the low price for a limited time.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking

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106) Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Answer: Price bundling means selling two or more goods or services as a single package for one price. A retailer would implement this strategy so that consumers will buy all instead of some products associated with a main product. Charging one price will make the customer feel as if the total cost is the entire set of items instead of charging for each item separately.

Examples given will vary.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 107) What is keystoning?

Answer: Many retailers mark up clothing, gifts, and other items by keystone pricing, or keystoning. This is a pricing strategy in which the retailer simply doubles the cost of the item (100 percent markup) to determine the price. Restaurants typically triple the costs (200 percent markup) of the food that goes into a menu item and quadruple (300 percent markup) the cost of alcoholic beverages.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 108) When Top-Flite introduced its Strata golf balls with a new dimple design and more solid core for better flight with metal clubs, the price was three times that of regular balls. Pro shops still could not keep them in stock. What is the pricing strategy implemented by Top-Flite, and why did the company choose this strategy?

Answer: Top-Flite implemented the skimming price strategy, charging a high, premium price for its new product. Top-Flite may have been able to recoup the cost of research and development.

Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 109) What is yield management pricing? In which industries is it used?

Answer: Yield management pricing is a practice of charging different prices to different customers to manage capacity while maximizing revenues. It is used by hospitality businesses, like airlines, hotels, and cruise lines.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge

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110) Cellular phone service providers typically offer customers a set number of minutes for a monthly fee plus a per-minute rate for extra phone usage. What is the pricing strategy being implemented by these cellular phone service providers?

Answer: Cellular phone service providers are implementing the two-part pricing strategy, which requires two separate types of payments to purchase the product. The cellular phone customer must pay a monthly fee plus an additional fee for the minutes used.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 111) What is the difference between peak load pricing and surge pricing? Give an example of when each might be used.

Answer: Using peak load pricing, a company sets higher prices during predictable periods of higher demand. For example, movie theaters charge more for tickets to evening shows than to daytime shows because the demand is predictably greater for evening shows. Using surge pricing, a company reacts quickly to increasing demand by raising prices. For example, the car service company Uber uses surge pricing to charge more when demand is increased by events such as rain.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 112) Discuss some pricing tactics firms use in dealing with members of their distribution channels.

Answer: Four such tactics are mentioned. Trade or functional discounts are discounts off product list prices offered to members of the distribution channel who perform various marketing functions. Quantity discounts are a pricing tactic of charging reduced prices for purchases of larger quantities of a product. Cash discounts are offered to customers to entice them to pay their bills quickly. Seasonal discounts are price reductions offered only during certain times of the year.

Difficulty: Difficult LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking 113) What is payment pricing and why is it effective?

Answer: Payment pricing refers to the practice of breaking up a total price into smaller payments due over time, helping the consumer perceive the price as more "doable." Payment pricing avoids the sticker shock of paying the whole price of an item at once.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Analytical thinking

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114) How do consumers benefit from price bundling? Give an example of price bundling.

Answer: The advantage for the consumer is that several products are sold together at a reduced rate, so consumers pay less for the "bundle" than they would if they separately purchased each item in the bundle. Vacation packages that include air and hotel, or value meals in the fast-food industry are examples.

Difficulty: Moderate LO: 10.3: Understand key pricing strategies and tactics AACSB: Application of knowledge 115) Virtual currencies that use cryptography for security are also called ________.

A) blockchain B) barters C) digital currencies D) freemiums E) loss leaders Answer: C Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

116) Which of the following allows shoppers to bid on everything from bobble heads to health-and-fitness equipment?

A) shopbots B) reserve pricing tactics C) reverse auctions D) online auctions E) extranets Answer: D Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

117) Which of the following is a pricing strategy that charges different prices to different buyers for the same product based on the size of the order or the buyer's geographic location?

A) reserve pricing B) peak load pricing C) Internet price discrimination D) freight absorption pricing E) reverse auction Answer: C Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

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118) Blockchain is ________.

A) the most popular and fastest-growing cryptocurrency B) the network of computers that maintains the database of all Bitcoin and other cryptocurrency transactions C) a digital currency that uses cryptography for security D) a financial account used to store funds, make transactions, and track payments E) a smartphone app that stores credit card and other information in order to make purchases/payments Answer: B Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

119) In a(n) ________, sellers compete for the right to provide a product to a buyer.

A) reverse auction B) dynamic auction C) open auction D) reserve auction E) closed auction Answer: A Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

120) ________ is a business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

A) Prestige pricing B) Freemium C) Price segmentation D) Reverse marketing E) Dynamic marketing Answer: B Difficulty: Easy LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

121) ________ is a smartphone app that stores credit card and other information in order to make purchases/payments.

A) A digital wallet B) A mobile wallet C) Blockchain D) Cryptocurrency E) Bitcoin Answer: B Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

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122) ________ is a service that allows customers to get a product now and pay for it over three or four months.

A) Buy-now-pay-later B) Save-now-buy-later C) Collaborative savings and consumption D) Peer-to-peer lending E) Rent-to-own Answer: A Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

123) Pricing based on supply and demand is part of dynamic pricing.

Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

124) Internet price discrimination is, by definition, an illegal practice.

Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Ethical understanding and reasoning 125) An advantage of cryptocurrency is that it eliminates the risk of credit card fraud for consumers.

Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Ethical understanding and reasoning 126) Bitcoin is the most popular and fastest-growing cryptocurrency.

Answer: TRUE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Ethical understanding and reasoning

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127) Save-now-buy-later programs have been criticized because young consumers can quickly get into debt and damage their credit scores.

Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Ethical understanding and reasoning 128) In 2020, only 17 percent of Americans still used cash for small purchases.

Answer: FALSE Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Ethical understanding and reasoning 129) How has the Internet made it easier for companies to use dynamic pricing strategies? Use an example in your explanation.

Answer: A dynamic pricing strategy involves easily adjusting prices to meet changes in the marketplace. The cost of changing prices in a brick-and-mortar retail store involves labor, advertising, and materials; the cost of changing prices online is minimal and can also be instant.

For example, with the Internet the marketers of concert tickets can adjust ticket prices on the basis of supply and demand so that a ticket for a certain seat might cost more or less depending on which day the customer logs on to make the purchase.

Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Application of knowledge 130) What are some of the potential consumer benefits to purchasing items online?

Answer: Consumers can potentially save on the actual cost of the purchased product by shopping online. With more information about competing prices and the actual costs of producing products available through the Internet, customers have more negotiating power for big-ticket items. Savings can be realized in the customer's expenses in the gasoline not used when driving to a store. Also, there are time management advantages and stress reduction for the customer who does not have to physically travel to a store.

Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Analytical thinking

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131) How can digital and mobile wallets help consumers in developing nations?

Answer: In developing nations, digital wallets allow consumers to participate more fully in the global financial system. Digital wallets mean individuals can accept and make payments and even receive funds from individuals in other nations. Digital wallets do not requires a bank account with a physical firm or branch, often allowing those in more rural areas to connect.

Digital and mobile wallets mean consumers in developing countries can move away from cash economies to safer, more secure financial systems and participate in the world's growing economy.

Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Analytical thinking 132) What is meant by the term "cashless society"?

Answer: A cashless society is an economic state where financial transactions are executed through the transfer of digital information — usually in the form of a credit card, debit card, mobile wallet, or digital currency such as Bitcoin — rather than with banknotes.

Difficulty: Moderate LO: 10.4: Understand the opportunities for Internet pricing strategies and innovations in payment.

AACSB: Analytical thinking 133) If a competing brand's product is priced much lower than a consumer's internal reference price, which is most likely to occur?

A) The consumer will feel it is overpriced.

B) The consumer will buy a less expensive competing brand.

C) The consumer will wonder what is wrong with the product.

D) The consumer will think the product is higher than average quality.

E) The consumer will purchase the item without hesitation.

Answer: C Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 134) A(n) ________ strategy is implemented when a store places two similar items next to each other, highlighting the fact that the price of one item is slightly lower than that of the other item.

A) assimilation effect B) contrast effect C) price-placebo effect D) penetration pricing E) skimming price Answer: A Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing

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135) Research shows that price ending in 99 rather than 00 can ________.

A) cause the customer to spend less overall B) increase sales by about 50-60 percent C) create a perception that the product is a luxury good D) decrease sales by about 10-20 percent E) boost sales by about 20-30 percent Answer: E Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 136) Which of the following is a pricing strategy that reverses the typical assumption about price-demand relationships?

A) penetration pricing B) price bundling C) assimilation effect pricing D) placebo effect pricing E) prestige pricing Answer: E Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 137) Some retailers advertise items at very low prices or even below cost just to get customers into the store. The rationale for implementing this ________ strategy is the belief that once a customer is in the store she will buy the advertised item as well as other items at regular prices.

A) bait-and-switch B) price lining C) predatory pricing D) loss-leader pricing E) keystoning Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 138) In some states, unfair trade practices acts are designed to ________.

A) regulate the markups used by various industries B) control the sale of agricultural products and raw materials C) regulate all forms of psychological pricing D) prohibit the selling of products below cost E) ban the use of price lining Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning

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139) Which of the following occurs when competitors making the same product jointly determine what price each will charge customers for the item?

A) horizontal price-fixing B) vertical price-fixing C) predatory pricing D) internal reference pricing E) assimilation pricing Answer: A Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 140) Federal legislation on price-fixing requires that sellers set their prices ________.

A) based on their fixed and variable costs B) without communication with competitors C) to achieve a specified profit margin D) consistently with all customers E) consistently throughout a region Answer: B Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning 141) As a result of the ________, Rick decided the candy priced at $2.50 per pound could not be nearly as good as the candy priced at $9.50 per pound.

A) assimilation effect B) contrast effect C) fair price effect D) reference effect E) clouding effect Answer: B Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 142) A local restaurant sells lunch entrees for $7.95, $9.95, and $11.95. From this information, you can infer the restaurant uses which of the following?

A) price discrimination B) odd-even pricing and price lining C) dynamic pricing and price lining D) reference pricing and value pricing E) dynamic pricing and loss leader pricing Answer: B Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 34 Copyright © 2022 Pearson Education, Inc.

143) A hamburger stand near the local mall sells hamburgers for $3.99, drinks for $1.99, and fries for $1.49, while a gourmet restaurant nearby sells entrees for $20, $30, and $45. Both of these restaurants are using ________.

A) demand-based pricing B) cost-based pricing C) psychological pricing D) prestige pricing E) penetration pricing Answer: C Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 144) After looking at the ads in her Sunday paper, Ruby decided to visit a local nursery and buy potting soil for her plants at $1.99 a bag. The regular price is $4.99 a bag. While Ruby was there she also purchased three bushes, six flowering plants, and a bird bath. You can infer from this information that the nursery used the bags of potting soil as a ________.

A) loss leader B) freemium C) bait-and-switch D) price line E) reference price Answer: A Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 145) When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is most likely using ________.

A) price fixing B) price lining C) penetration pricing D) skimming pricing E) loss leader pricing Answer: B Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking

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146) Bayer AG agreed to pay $46 million as part of a law settlement for conspiring with Archer-Daniels-Midland (ADM) to keep prices of citric acid at a certain level. These two international companies were guilty of ________.

A) price lining B) skimming pricing C) predatory pricing D) price-fixing E) placebo pricing Answer: D Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 147) Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________.

A) skimming prices B) price-fixing C) predatory pricing D) deceptive pricing E) loss leader pricing Answer: C Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 148) Mark believes he should pay more than $49.95 for a motel room; this price is his internal reference price.

Answer: TRUE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 149) To encourage customers to buy the $799 dining room suite, the furniture store set a much cheaper and shoddily made set next to the more expensive furniture, thereby using the contrast effect.

Answer: TRUE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Analytical thinking 150) Restaurants have found that when prices are given with dollar signs or the word dollar, customers spend more.

Answer: FALSE Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing 36 Copyright © 2022 Pearson Education, Inc.

151) Explain the pricing strategy being implemented when a retail store places the store's brand items next to the national brand items when the national brand items have a slightly higher price than the store's item. Why would a retailer do this?

Answer: The store is relying on the assimilation effect. A retailer may do this in an attempt to show the consumer that the products are very similar, and then consumers will feel as if they are saving money by purchasing the generic versus the national brand item. Sales of the generic items will likely increase because of their positive association with the brand items and their somewhat lower prices.

Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 152) Why is price lining a good practice for retailers?

Answer: Price lining is a way to maximize profits. Price lining uses a limited number of prices, or price points, that generally fall at the top of the range that different types of customers find acceptable. Ideally, companies would charge each customer a different price–the highest price she was willing to pay. Since this isn't possible, price lining is a more workable alternative.

Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 153) A local appliance store is advertising the sale of a 27-inch color TV for only $199. The ad states that this price will apply only to TVs that are in stock and no rain checks will be given.

Fifteen minutes after the store opens on the day of the sale of the TV, a customer is told by a sales clerk that all of the TVs selling for $199 have been sold. However, the sales clerk is very happy to show the customer a similar TV for only $399. What pricing strategy is the store implementing and why?

Answer: The store is using the bait-and-switch tactic. One item is used as the bait to get customers into the store. Then, for whatever the reason, the customer cannot buy the advertised sale item, so a salesperson shows the customer another item, the switch, usually selling for a higher price. The store was successful in getting the customer into the store. Now, the store is striving to get the customer to spend more money.

Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge 154) Define price gouging and give an example.

Answer: Price gouging is an illegal act in which a seller seeks to take advantage of an emergency or extreme need to charge exorbitant prices for items. An example is charging high prices for shovels, snow blowers, salt and other related items during a blizzard.

Difficulty: Moderate LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Application of knowledge

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155) What are the two types of price fixing? Briefly define each.

Answer: Horizontal price fixing occurs when competitors making the same products jointly determine what price they will charge. Vertical price fixing occurs when manufacturers and wholesalers force retailers to charge a certain price for their products.

Difficulty: Difficult LO: 10.5: Describe the psychological, legal, and ethical aspects of pricing AACSB: Ethical understanding and reasoning

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 11 Deliver the Goods: Determine the Distribution Strategy 1) Which of the following is the term for the set of activities that move finished goods from manufacturers to final customers?

A) channel intermediary B) physical distribution C) facilitating function D) breaking bulk E) disintermediation Answer: B Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 2) At minimum, a channel of distribution consists of a producer and a(n) ________.

A) wholesaler B) diverter C) broker D) intermediary E) customer Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 3) Firms that sell their own products to final customers through websites, catalogs, toll-free numbers, or factory outlet stores are using ________.

A) direct channels B) channel intermediaries C) indirect channels D) third parties E) outside entities Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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4) It is most accurate to say that channels of distribution provide which of the following?

A) time, place, and possession utility B) promotion, product, and place utility C) time, place, and form utility D) promotion and form utility E) time and promotion utility Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 5) Which of the following is NOT an example of a channel intermediary?

A) agent B) broker C) manufacturer D) retailer E) wholesaler Answer: C Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 6) Firms or individuals who help move a product from the producer to the consumer or business user are known as ________.

A) manufacturers B) producers C) creators D) channel intermediaries E) direct channels Answer: D Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 7) Distribution channels create ________ because they reduce the number of transactions necessary for goods to flow from many different manufacturers to large number of customers.

A) assortments B) efficiencies C) bulks D) quantities E) intermediaries Answer: B Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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8) Channel members can help producers by identifying customer complaints, customer preferences, and new competitors in the market. These are all examples of the ________ function of channel intermediaries.

A) communication B) marketing C) facilitating D) diverting E) risk-taking Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Written and oral communication 9) An intermediary providing customer services, such as offering credit to buyers, is an example of the ________ function of distribution channels.

A) diverting B) marketing C) breaking bulk D) facilitating E) risk-taking Answer: D Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 10) Through a process of ________, traditional intermediaries are being eliminated as many companies question the value added by layers in the distribution channel.

A) knowledge management B) disintermediation C) horizontal marketing D) vertical marketing E) hybrid marketing Answer: B Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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11) In the world of B2B, a company conducting its knowledge management via an intranet ________.

A) is extremely unlikely B) involves an external corporate communication network C) can facilitate the sharing of knowledge among channel partners D) is not a secure and protected platform E) is a less strategic form of information management Answer: C Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 12) At the core, online distribution piracy amounts to ________.

A) copyright infringement B) disintermediation C) knowledge management D) wholesaling E) licensing Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 13) Netflix believes that making legal access to content ________ can lead to ________ piracy.

A) easier; increases in B) more convenient; decreases in C) more expensive; the elimination of D) more difficult; decreases in E) less complicated; increases in Answer: B Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 14) Limited-service merchant wholesalers are less likely than full-service merchant wholesalers to do which of the following?

A) set the prices of the merchandise they sell B) take title to the merchandise they sell C) suffer financial losses if the merchandise they sell is damaged or stolen D) offer marketing assistance or delivery for the products they sell E) use their own sales force Answer: D Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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15) Which group of independent intermediaries can be divided into the two broad types of full-service and limited-service?

A) brokers B) agents C) sales branches D) specialty wholesalers E) merchant wholesalers Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 16) Merchant wholesalers ________.

A) are not responsible for losses due to damaged products B) do not set the prices they charge their customers C) do not sell to B2B customers D) can suffer losses if products are stolen E) cannot develop their own marketing strategies Answer: D Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 17) The owner of a grocery store wants to have non-food items delivered, priced, displayed, and inventoried by a wholesaler. Which type of wholesaler best fits the owner's needs?

A) drop shipper B) cash-and-carry wholesaler C) truck jobber D) rack jobber E) mail-order wholesaler Answer: D Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 18) Truck jobbers are limited-service merchant wholesalers who would most likely handle which of the following?

A) building materials B) fruits and vegetables C) coal and lumber D) cosmetics E) magazines Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 5 Copyright © 2022 Pearson Education, Inc.

19) Mail-order wholesalers are associated with all of the following EXCEPT which one?

A) selling products to small retailers and other industrial customers B) selling products to retailers in remote locations C) allowing shipment prior to receiving payment D) carrying products in inventory E) selling through catalogs Answer: C Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 20) Drop shippers do all of the following EXCEPT which of the following?

A) take title to the merchandise B) take actual possession of the merchandise C) take orders from retailers and industry buyers D) bill retailers and industry buyers E) assume the same risks as other types of limited-service merchant wholesalers Answer: B Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 21) Accepting legal ownership of a product and assuming the accompanying rights and responsibilities of ownership is known as ________.

A) taking title B) wholesaling C) drop shipping D) rack jobbing E) cash-and-carrying Answer: A Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 22) A ________ brings buyers and sellers together and facilitates transactions, typically charging a fee after a transaction is completed.

A) cash-and-carry wholesaler B) broker C) retailer D) wholesaler E) commission merchant Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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23) Which of the following carry several lines of noncompeting products and use independent salespeople?

A) manufacturers' agents B) selling agents C) commission merchants D) merchandise brokers E) sale mediators Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 24) An advantage of ________ is enhanced efficiency in markets where there are many small buyers and sellers?

A) manufacturers' agents B) selling agents C) export/import agents D) commission merchants E) merchandise brokers Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 25) Which of the following statements about merchandise brokers is true?

A) Brokers are paid salaries by the manufacturers for whom they work.

B) Brokers never take title to the merchandise they sell.

C) Brokers work for manufacturer-owned intermediaries.

D) Brokers typically represent sellers on an ongoing basis.

E) Brokers work in industries with only a few, very large buyers and sellers.

Answer: B Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 26) Which of the following statements about manufacturers' agents is true?

A) Manufacturers' agents are also called manufacturers' brokers.

B) Manufacturers' agents most typically work for only one manufacturer.

C) Manufacturers' agents are paid with commissions based on a percentage of their sales.

D) Manufacturers' agents have unlimited sales territories.

E) Manufacturers' agents market one manufacturer's entire product line.

Answer: C Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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27) A commission merchant would most likely sell which of the following?

A) agricultural products B) extractive materials such as coal and iron C) convenience goods such as gum and candy D) fresh fruits and vegetables E) real estate Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 28) Which of the following channel intermediaries have unlimited territory and control the pricing, promotion, and distribution of their products?

A) manufacturers' reps B) selling agents C) merchandise brokers D) rack jobbers E) sales branches Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 29) Which of the following is true about sales branches, sales offices, and manufacturers' showrooms?

A) They are all manufacturer-owned intermediaries.

B) They all determine the marketing strategy for the products they sell.

C) They are all independent intermediaries.

D) They all carry inventory and take title to the inventory they carry.

E) They perform the same functions as self-service wholesalers.

Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 30) Which of the following are manufacturer-owned facilities that carry inventory and provide sales and services to customers?

A) sales offices B) sales branches C) manufacturers' showrooms D) manufacturers' offices E) merchandise brokerages Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 8 Copyright © 2022 Pearson Education, Inc.

31) Which of the following are manufacturer-owned facilities that do NOT carry inventory but provide selling functions for the manufacturer in a specific geographic area?

A) commission merchandise marts B) merchandise brokerages C) sales offices D) sales branches E) manufacturers' showrooms Answer: C Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 32) Ed Barney owns a chain of small gift shops. Before buying merchandise to carry in his store, Barney can visit a ________ where he can examine a manufacturer's products before he stocks his stores.

A) sales office B) manufacturer's showroom C) commission merchandise mart D) merchandise brokerage E) manufacturer's office Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 33) To a producer of goods, a greater number of channel levels means ________.

A) less distance between producer and end consumer B) less control C) more creativity D) higher taxes E) fewer distribution systems Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 34) The producer-retailer-consumer channel is ________.

A) the most efficient channel B) also referred to as a triple channel C) the shortest indirect channel D) the shortest direct channel E) a rarely used channel form Answer: C Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 9 Copyright © 2022 Pearson Education, Inc.

35) In business-to-business channels, the functions of a merchant wholesaler are performed by a(n) ________.

A) sales office B) commission merchant C) merchant broker D) business retailer E) industrial distributor Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 36) Direct channels ________.

A) are more common in consumer markets than B2B markets B) do not operate in B2B markets C) only operate in B2B markets D) are more common in B2B markets than consumer markets E) don't make financial sense in B2B markets Answer: D Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 37) Subscription boxes ________.

A) are declining in popularity B) are prone to product counterfeits C) exclusively focus on style, fashion, and fitness products D) are more often purchased by men than women E) are approximately a $15 billion market Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 38) Which of the following is a distribution system that uses different channels and communication methods to reach and serve a target market?

A) a vertical marketing system B) a horizontal marketing system C) a hybrid marketing system D) a logistics system E) an intensive distribution system Answer: C Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Written and oral communication 10 Copyright © 2022 Pearson Education, Inc.

39) Which of the following is most likely to force a manufacturer to pay a slotting allowance?

A) a selling agent B) a merchandise broker C) a large retail chain D) a small retailer E) a rack jobber Answer: C Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 40) ________ can be a big problem for manufacturers, due to the loss of controls that results once the product is in the hands of unauthorized distributors and resellers.

A) Subscription boxing B) Slotting allowances C) Hybrid marketing D) Dual distribution E) Product diversion Answer: E Difficulty: Easy LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Ethical understanding and reasoning 41) Which of the following is the best example of a direct channel?

A) J&L Manufacturing Company sells drapery hardware to The Home Depot's Design Center, and the Design Center then sells it to consumers.

B) Family Dollar Store sells modeling clay to school-age children.

C) A wholesaler sells candy to convenience stores, who then sell it to store patrons.

D) Farmer Mintz sells corn to the Hughes household, who will eat it for supper.

E) A farmer in Colombia sells flowers to an international broker, who makes sure the flowers reach consumers in the United States.

Answer: D Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking

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42) A husband and wife have a small store that is located at a beach resort. The only products sold at this store are hand-dipped and sculptured candles made by this couple. Marketers would classify the channel of distribution for these candles as ________.

A) indirect B) direct C) logistic D) reverse E) inbound Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 43) Steve's Physco Skates sells its products to Walmart, who then sells them to the consumer.

This is an example of a(n) ________.

A) direct marketing channel B) producer channel C) indirect marketing channel D) horizontal marketing system E) corporate vertical marketing system Answer: C Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 44) Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores. Which of the following would Proud Pets be LEAST likely to expect from its new channel member?

A) promoting its products through advertising B) assembling and packaging its products for final sale C) distributing relevant market information D) identifying raw materials and other productive inputs E) taking the risk that items may not sell Answer: D Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking

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45) Burt can visit his local hardware store and buy one 4-inch paint brush and not the case of 24 brushes that the retailer had to buy. This is an example of how the channel of distribution facilitates ________.

A) assortment creation B) risk taking C) breaking bulk D) relationship management E) logistics Answer: C Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 46) Nita can visit her local supermarket and buy a dozen roses, a gallon of milk, two birthday cards, a bag of cat litter, and a pan for roasting a turkey. This illustrates how channels of distribution benefit consumers by ________.

A) creating atmospherics B) creating assortments C) diverting products D) managing knowledge E) managing relationships Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 47) Which of the following is NOT a channel intermediary?

A) the supplier of the raw materials used to make glass windows B) the distributor who sells stained glass windows C) the wholesaler who buys the stained glass window from its creator D) the showroom that displays glass windows for customers to see E) the manufacturers' agent who sells the stained glass windows Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking

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48) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet from Chemical, Inc., which then placed the order with the manufacturer and arranged for its transportation by truck to the Tony Pool store. Chemical, Inc. is an example of which of the following?

A) a diverter B) a truck jobber C) a warehouser D) a hybrid marketer E) a wholesaling intermediary Answer: E Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 49) A business buys candy and gum from many different manufacturers and then resells the items to a variety of different stores. The business is an example of a(n) ________.

A) independent intermediary B) manufacturer-owned intermediary C) disintermediation D) diverter E) brokerage company Answer: A Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 50) You own an independent store in your neighborhood and like to offer fresh seafood in your meat display case. Which type of wholesaler is likely to best serve you?

A) cash-and-carry wholesaler B) drop shipper C) rack jobber D) selling agent E) commission merchant Answer: A Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge

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51) An independent hardware retail store 100 miles from the nearest city of more than 5,000 people provides needed supplies for area ranchers. The store would most likely buy its plumbing and electrical supplies through a ________.

A) truck jobber B) commission merchant C) mail-order wholesaler D) rack jobber E) merchandise broker Answer: C Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 52) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet from Chemical, Inc., then placed the order with the manufacturer and arranged for its transportation by truck to the Tony Pool store. Chemical, Inc. took title to the pool chemicals but never actually took possession of them. Chemical, Inc. is an example of a ________.

A) drop shipper B) truck jobber C) rack jobber D) mail-order wholesaler E) cash-and-carry wholesaler Answer: A Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 53) Which of the following is an example of a dual distribution system?

A) Walmart locating in several countries B) Athleta's catalog and retail store sales C) Avon's door-to-door distribution D) Starbucks located inside a bookstore E) a hotel providing guest privileges at a nearby health spa Answer: B Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 54) Order processing, warehousing, and materials processing are part of physical distribution.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 15 Copyright © 2022 Pearson Education, Inc.

55) A channel of distribution in which firms sell their products through third parties is called direct distribution.

Answer: FALSE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 56) The producer and the final consumer are part of every type of channel of distribution.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 57) Breaking bulk is a way that distribution channels create efficiencies.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 58) When rooms-To-Go furniture retailers provide financing for customers' purchases, they are performing a channel intermediary facilitating function.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 59) Product diversion is usually perpetrated by a regular customer of the manufacturer.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 60) Traditional record labels are now able to control the online distribution piracy problems that had plagued the music industry in the past.

Answer: FALSE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 61) In the future, channel intermediaries that physically handle the product may become obsolete.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels

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62) Netflix adjusts its prices higher in markets outside the U.S. that have greater rates of piracy to attract more consumers to the legitimate offerings through the company website.

Answer: FALSE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 63) Rack jobbers are important to both the producers and the customers of bulky products such as coal, oil, or lumber.

Answer: FALSE Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 64) Cash-and-carry wholesalers deliver perishable food and tobacco items to retailers.

Answer: FALSE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels 65) A restaurant that features a serve-yourself buffet, which eliminates the need for a full wait staff, is using disintermediation.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 66) A U.S. wool producer that wants to export its product to Europe could use a selling agent or a merchandise broker.

Answer: TRUE Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 67) Always Fresh Produce Company has a route selling to more than 100 groceries, schools, and restaurants at wholesale prices. Last week the owners opened up a walk-in discounted consumer produce outlet. Always Fresh is now using a dual distribution system.

Answer: TRUE Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking

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68) Requiring a slotting allowance prevents many smaller retailers from getting products from big name manufacturers on their shelves.

Answer: FALSE Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 69) Describe two ways that distribution channels create efficiencies.

Answer: Distribution channels create efficiencies because they reduce the number of transactions necessary for goods to flow from many different manufacturers to large numbers of customers. This occurs in two ways. The first is breaking bulk. Wholesalers and retailers purchase large quantities (usually cases) of goods from manufacturers but sell only one or a few at a time to many different customers. Second, channel intermediaries reduce the number of transactions when they create assortments; they provide a variety of products in one location so that customers can conveniently buy many different items from one seller at one time.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 70) Discuss issues with Internet distribution of music.

Answer: Unauthorized downloads of music continue to pose a major challenge to the "recording" industry—to the point where the whole nature of the industry has turned topsy-turvy in search of a new business model that works. Many in the music business are rethinking exactly what—and where—is the value-added for what they do. To most (but not yet all) of today's music consumers, the value of a physical CD has plummeted—to the point where many listeners are unwilling to pay anything at all for the artist's work. And more and more musical artists, like Nick Jonas and Demi Lovato, have defected from traditional record labels to introduce their tunes online, where they can control at least some of the channel of distribution. On the other hand, other stars from many eras and genres, from Dr. Dre to Neil Young, decline to make their albums available on Spotify so that fans can stream them.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 71) What are the similarities and differences between manufacturers' agents and selling agents?

Answer: Manufacturers' agents are independent salespeople who carry several lines of noncompeting products. They have contractual arrangements with manufacturers that outline territories, selling prices, and other specific aspects of the relationship. Selling agents market a whole product line or one manufacturer's total output. Unlike manufacturers' agents, they have unlimited territories and control over pricing.

Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 18 Copyright © 2022 Pearson Education, Inc.

72) Explain the concept of a hybrid marketing system. What might be the advantages of a company implementing this type of marketing system?

Answer: Hybrid marketing systems use a number of different channels and communication methods to serve a target market. A hybrid marketing system might use all or some of the following: direct sales, distributors, retail sales, and direct mail. Hybrid marketing systems can offer companies certain competitive advantages, including increased coverage of the market, lower marketing costs, and a greater potential for customization.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 73) What are some advantages of a farmer selling strawberries grown on his farm directly to consumers instead of using channel intermediaries?

Answer: The farmer will be able to directly serve the customer and may be able to sell the strawberries at a lower price but higher profit margin than if an intermediary were involved.

Also, the farmer has control of the product and the sale, making sure that the berries are sold when they are still fresh.

Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 74) How might the Internet affect the distribution channel of an artisan who makes handmade dolls that had previously been sold only at craft shows?

Answer: The Internet has become an important place for consumers to shop. By using the Internet, this artisan can market her dolls with the same competitive advantages as larger companies who market their products around the globe.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 75) An appliance, television, and stereo dealer serves as an authorized repair center, provides maintenance contracts, and sells essential supplies to customers. What types of channel functions are being implemented by this dealer?

Answer: The dealer is offering facilitating functions; the dealer is making the purchase process easier for customers by having so many added benefits available at one location.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking

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76) Identify and describe three types of merchant wholesalers.

Answer: Cash-and-carry wholesalers provide products for small-business customers who purchase at the wholesaler's location. Truck jobbers deliver perishable food and tobacco items to retailers. Drop shippers take orders from and bill retailers for products drop-shipped from the manufacturer. Mail-order wholesalers sell through catalogs, telephone, or mail order. Rack jobbers provide retailers with display units, check inventories, and replace merchandise for retailers.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 77) A major manufacturer of bread sells its finished products to a grocery store chain. This grocery store then sells the bread to its customers. What type of channel of distribution is this, and what are the levels of distribution?

Answer: This is a typical consumer channel of distribution. There are three levels of distribution: the producer (the bread manufacturer), the retailer (the grocery store), and the consumer.

Difficulty: Moderate LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Analytical thinking 78) Why are direct channels of distribution common in business-to-business markets dealing with high-dollar, high-profit items?

Answer: Business-to-business marketing often means selling high-dollar, high-profit items, such as a single piece of industrial equipment that may cost hundreds of thousands of dollars to a market of only a few customers who can use the product. In such markets, it makes sense financially for a company to develop its own sales force that sells the products directly to customers.

Difficulty: Difficult LO: 11.1: Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels AACSB: Application of knowledge 79) Developing distribution objectives is the ________ step in distribution planning.

A) first B) second C) third D) fourth E) fifth Answer: A Difficulty: Easy LO: 11.2: List and explain the steps to plan a distribution strategy

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80) Before a firm evaluates internal and external environmental influences, it should ________.

A) select channel partners B) determine a distribution budget C) develop logistics strategies D) develop distribution objectives E) choose a distribution strategy Answer: D Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 81) The number of intermediaries at each level of the channel is called ________.

A) distribution exclusivity B) distribution intensity C) channel exclusivity D) channel selectivity E) channel intensity Answer: B Difficulty: Easy LO: 11.2: List and explain the steps to plan a distribution strategy 82) Which of the following is NOT a true statement about conventional marketing systems?

A) Conventional marketing systems are multilevel distribution channels.

B) Most conventional marketing systems are highly successful.

C) Members of conventional marketing systems work independently of one another.

D) Members of conventional marketing systems do not work toward the same broad goals.

E) Relationships between members of conventional marketing systems are limited to simply buying and selling from one another.

Answer: D Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy 83) Longer channels with more intensive distribution are generally best for ________.

A) goods that require much technical expertise B) perishable products C) standardized consumer goods D) expensive consumer goods E) products that need to get to the final user quickly Answer: C Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy

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84) A corporate VMS has the advantage of controlling the entire distribution chain under ________.

A) franchise licenses B) single ownership C) mass distribution D) informal cooperation E) contractual agreements Answer: B Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 85) What are the three major types of vertical marketing systems?

A) corporate, contractual, and chain B) contractual, corporate, and independent C) corporate, contractual, and administered D) administered, independent, and franchised E) corporate, franchised, and conventional Answer: C Difficulty: Easy LO: 11.2: List and explain the steps to plan a distribution strategy 86) Leadership in a(n) ________ is assumed not through common ownership or contractual ties but through the size and power of a single dominant channel member.

A) horizontal marketing system B) administered vertical marketing system C) corporate vertical marketing system D) conventional marketing system E) multiple distribution system Answer: B Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 87) Which of the following statements about a vertical marketing system (VMS) is true?

A) A VMS is a channel in which there is cooperation among channel members at two or more different levels of the channel.

B) Members of a VMS operate totally independently of one another outside of buying and selling one another's products.

C) The three types of vertical marketing systems are independent, conventional, and customized.

D) Channel conflict is a more serious problem in a vertical marketing system than in a conventional marketing system.

E) Conventional marketing systems are more efficient than vertical marketing systems.

Answer: A Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy

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88) A retailer cooperative is a form of a(n) ________ vertical marketing system (VMS).

A) administered B) conventional C) corporate D) horizontal E) contractual Answer: E Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Interpersonal relations and teamwork 89) Burger King, Holiday Inn, Avis, and H&R Block tax service are all franchises, which means they are also members of a(n) ________ vertical marketing system (VMS).

A) administered B) conventional C) corporate D) horizontal E) contractual Answer: E Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Interpersonal relations and teamwork 90) In a ________, two or more companies at the same channel level join together for a common purpose.

A) franchise B) corporate VMS C) horizontal marketing system D) multiple distribution system E) conventional marketing system Answer: C Difficulty: Easy LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Interpersonal relations and teamwork 91) Market coverage that is less than intensive distribution but more than exclusive distribution is ________ distribution.

A) selective B) inclusive C) direct D) gray market E) extensive Answer: A Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy

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92) Which product would most likely be sold through an exclusive distribution strategy?

A) refrigerator B) television C) piano D) microwave E) tablet Answer: C Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 93) An intensive distribution strategy ________.

A) limits distribution to a single outlet in a region B) is appropriate for goods with considerable service requirements C) better recoups the costs associated with long selling processes D) is used when availability is the most important consumer consideration E) makes sense when a limited number of buyers exist in any geographic area Answer: D Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy 94) A selective distribution strategy is most suitable for which consumer product category?

A) convenience goods B) unsought goods C) shopping products D) luxury products E) materials and supplies Answer: C Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy 95) Which distribution strategy is preferred when there is low customer density and the cost of serving individual customers is high?

A) intensive distribution B) selective distribution C) direct distribution D) exclusive distribution E) inclusive distribution Answer: D Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy

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96) When a firm has legal authority to call the shots, it has ________ power.

A) economic B) legitimate C) reward D) coercive E) conflict Answer: B Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 97) Increasingly commonplace today is the appearance of two different franchise chains under the same roof, such as Pizza Hut and Taco Bell. This is an example of a(n) ________ marketing system.

A) administered B) conventional C) cooperative D) vertical E) horizontal Answer: E Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 98) Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible. This is an example of ________ distribution.

A) exclusive B) selective C) dual D) intensive E) disintermediated Answer: D Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 99) Which of the following is most likely intensively distributed?

A) Olympus digital cameras B) BMW automobiles C) Diesel blue jeans D) Coca-Cola beverages E) Nike running shoes Answer: D Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge

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100) Which of the following is most likely exclusively distributed?

A) BMW automobiles B) Diesel blue jeans C) Bazooka bubble gum D) Prairie Farms yogurt E) Coca-Cola beverages Answer: A Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 101) Tiffany & Co jewelry can only be found in a very limited number of intermediaries. This is an example of ________ distribution.

A) exclusive B) intensive C) independent D) legitimate E) coercive Answer: A Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 102) A firm has economic power if it ________.

A) has the ability to control resources B) has legal authority to call the shots C) engages in exclusive distribution D) has the ability to give profitable products E) can take profitable products away from channel intermediaries Answer: A Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 103) A brand of variety stores is part of a wholesaler-sponsored voluntary chain. This means these retailers are members of a(n) ________ vertical marketing system (VMS).

A) administered B) conventional C) corporate D) horizontal E) contractual Answer: E Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking

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104) The first step in planning a channel strategy is to determine what markets need to be reached.

Answer: FALSE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 105) Short, often direct, channels may be better suited for B2B marketers for whom customers are geographically concentrated and require high levels of technical know-how and service.

Answer: TRUE Difficulty: Easy LO: 11.2: List and explain the steps to plan a distribution strategy 106) When Sherwin-Williams Paint Company has single ownership of integrated, successive stages of production, distribution and retail, it has created a corporate VMS. Answer: TRUE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 107) The proper distribution intensity means having the right number of intermediaries at each level of the channel.

Answer: TRUE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 108) Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area.

Answer: FALSE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 109) Selective distribution strategies are most suitable for convenience products.

Answer: FALSE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 110) Exchanges that occur in the grey market are illegal.

Answer: FALSE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy 111) Channel cooperation occurs when producers, wholesalers, and retailers depend on one another for success.

Answer: TRUE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 27 Copyright © 2022 Pearson Education, Inc.

112) When the NewWay Dry Cleaners and The Easy Laundromat in your hometown join forces to pursue a new marketing opportunity, they are forming a horizontal marketing system.

Answer: TRUE Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 113) Compare and contrast a conventional marketing system with a vertical marketing system (VMS).

Answer: A conventional distribution channel consists of one or more independent producers, wholesalers, and retailers. Each is a separate business seeking to maximize its own profits. No channel member has much control over the other members. On the other hand, a vertical marketing system is a unified system made up of producers, wholesalers, and retailers. While members of a conventional distribution channel seek to maximize their own profits, members of a vertical marketing system all cooperate because one member owns the others, one has contracts with the others, or one wields more power than the others.

Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 114) Compare and contrast the three distribution strategies, giving examples of products that might be distributed through each strategy.

Answer: Producers of convenience products and staples typically seek intensive distribution as a strategy to stock their products in as many outlets as possible. For example, products such as chewing gum are available just about wherever and whenever consumers want them. Selective distribution is used when selling to more than one but fewer than all of the intermediaries who are willing to carry a company's products in a given market. Examples are name-brand blue jeans and computers. Exclusive distribution is used when the producer wants to stock its products with only one dealer in an area. Examples are expensive cars and prestige clothing.

Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 115) Describe the three sources of power for a channel captain.

Answer: There are three potential sources of power for channel captains. A channel captain has economic power when it has the ability to control resources. A channel captain has legitimate power when it has the legal authority to call the shots. A channel captain has reward or coercive power if it engages in exclusive distribution and has the ability to give profitable products and to take them away from the channel intermediaries.

Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge

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116) Explain channel power in a vertical marketing system.

Answer: One channel member owns the others, has contracts with them, or wields so much power that they must all cooperate.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 117) How can a firm benefit from involvement in a contractual VMS? Answer: A contractual VMS consists of independent firms at different levels of production and distribution that join together through contracts to obtain efficiency, effectiveness, and low costs.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 118) Define channel conflict.

Answer: Because each firm has its own objectives, channel conflict may threaten a manufacturer's distribution strategy. Such conflict most often occurs between firms at different levels of the same distribution channel. Incompatible goals, poor communication, and disagreement over roles, responsibilities, and functions cause conflict. For example, a producer is likely to feel the firm would enjoy greater success and profitability if intermediaries carry only its brands, but many intermediaries believe they will do better if they carry a variety of brands.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 119) How can a firm benefit from participating in a horizontal marketing system?

Answer: Two or more companies at one level may join together to follow a marketing opportunity; by working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone.

Difficulty: Difficult LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 120) What are some of the advantages offered by a selective distribution strategy?

Answer: For producers, selective distribution means freedom to choose only those wholesalers and retailers that have a good credit rating, provide good market coverage, serve customers well, and cooperate effectively. Wholesalers and retailers like selective distribution because it results in higher profits than are possible with intensive distribution, in which sellers often have to compete on price.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge

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121) Why might a manufacturer choose to not select a large and powerful retailer as a channel partner?

Answer: A manufacturer would likely give up a great deal of control in marketing decision making when partnering with a powerful retailer.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 122) Intensive distribution is used for which types of products? Why? Answer: Marketers use intensive distribution for convenience products, such as chewing gum, soft drinks, milk, and bread that consumers quickly consume and must replace frequently.

Intensive distribution is necessary for these products because availability is more important than any other consideration in customers' purchase decisions.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Application of knowledge 123) Why would a manufacturer want to prevent its products from being sold in the gray market?

Answer: A manufacturer of a luxury good sold through exclusive distribution would want to prevent its channel partners from selling the good to unauthorized channels of distribution—the gray market—in order to protect and control consumers' perception of the brand.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 124) How might a channel leader stimulate channel cooperation?

Answer: To improve channel cooperation and foster the success of all channel members, the channel leader might establish high intermediary profit margins, offer training programs, or provide corporate advertising and marketing advice.

Difficulty: Moderate LO: 11.2: List and explain the steps to plan a distribution strategy AACSB: Analytical thinking 125) Which of the following would be considered part of outbound logistics?

A) raw materials B) parts C) finished goods D) components E) supplies Answer: C Difficulty: Easy LO: 11.3: Discuss the concepts of logistics and supply chain

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126) Marketing logistics involves which of the following types of distribution flows?

A) outbound and inbound only B) outbound, inbound, and reverse C) outbound and reverse only D) inbound and reverse only E) outbound only Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 127) Through ________, a company receives materials it needs to manufacture its products.

A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 128) ________ is becoming even more important as firms start to seriously consider sustainability as a competitive advantage.

A) Outbound logistics B) Reverse logistics C) Inbound logistics D) Order processing E) Warehousing Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 129) Which of the following integrates information from across the company in order to automate order processing?

A) just-in-time inventory techniques (JIT) B) radio frequency identification (RFID) C) vertical marketing system (VMS) D) horizontal marketing system E) enterprise resource planning system (ERP) Answer: E Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain

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130) Which of the following logistics functions refers to the series of activities that occurs between the time an order comes into the organization and the time a product goes out the door on its way to a customer?

A) warehousing B) materials handling C) transportation D) inventory control E) order processing Answer: E Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 131) The difference between distribution centers and storage warehouses is that distribution centers are designed to ________.

A) have greater capacity B) store goods for longer periods C) perform other functions, such as breaking bulk D) primarily be owned by the manufacturer E) be automated Answer: C Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 132) Which of the following logistics functions refers to the moving of products into, within, and out of warehouses?

A) warehousing B) materials handling C) transportation D) inventory control E) order processing Answer: B Difficulty: Easy LO: 11.3: Discuss the concepts of logistics and supply chain 133) ________ enables marketers to provide time utility to consumers.

A) Order processing B) Inventory control C) Warehousing D) Transportation E) Materials handling Answer: C Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain

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134) The most suitable products to be transported via ________ are automobiles, grain, and steel.

A) railroads B) the Internet C) trucks D) pipeline E) air Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 135) Which of the following is a logistics activity that involves developing and implementing a process to ensure the firm always has sufficient goods available to meet customers' demands, no more and no less?

A) materials handling B) inventory control C) supply chain supervision D) order processing E) distribution implementation Answer: B Difficulty: Easy LO: 11.3: Discuss the concepts of logistics and supply chain 136) To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation.

A) just-in-time (JIT) B) level loading C) stock-outs D) logistics management E) enterprise resource planning (ERP) Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 137) Through the use of ________, a company is able to know exactly where a product is located within the distribution channel.

A) ERP B) RFID C) PRM D) VMS E) JIT Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain

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138) To balance inventory capabilities and production capacity constraints, some companies use a practice called ________, which involves the use of a consistent production schedule, both during and beyond times of peak demand.

A) just in time (JIT) B) level loading C) stock outing D) logistics management E) enterprise resource planning (ERP) Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 139) ________ are zero-inventory situations resulting in lost sales and customer dissatisfaction.

A) Stock-outs B) Level loads C) Radio frequency IDs D) Inventory turnovers E) Cross-docks Answer: A Difficulty: Easy LO: 11.3: Discuss the concepts of logistics and supply chain 140) Which of the following includes all the activities necessary to convert raw materials into a good or service and put it in the hands of the consumer or business customer?

A) the supply chain B) the vertical marketing system C) the channel of distribution D) the retailer chain E) the industrial network Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 141) Through the practice of ________, products are transferred off a supplier's truck directly onto a buyer's truck, eliminating the need for warehousing.

A) stock-outs B) level loading C) just-in-time delivery D) cross-docking E) anticipatory shipping Answer: D Difficulty: Easy LO: 11.3: Discuss the concepts of logistics and supply chain

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142) The number of times a firm's inventory completely cycles through during a defined time frame is called ________.

A) inventory control B) inventory turnover C) average inventory D) current inventory E) inventory benchmarks Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 143) At some catalog retailers, employees on roller skates called pickers are handed a printout of the products a customer wants, and then the pickers skate through large warehouses accumulating the desired products into one central location. The pickers are engaged in ________.

A) human resource management B) nonessential operations C) essential operations D) value proposition E) facilitating functions Answer: C Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Interpersonal relations and teamwork 144) Through the practice of insourcing, a company brings in an external company to run its ________.

A) human resource management B) nonessential operations C) essential operations D) value proposition E) facilitating functions Answer: C Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Interpersonal relations and teamwork

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145) Jewels for the Rich and Famous sells very exclusive jewelry with a minimum price of $25,000 to customers around the world. Speed of delivery to distant markets is a must.

Management should use ________ as its main carrier.

A) railroads B) air C) trucks D) water E) pipeline Answer: B Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge 146) Grayville Rock and Gravel, located in a seaport town, sells rock, gravel, and sand to local markets. It has just been awarded a contract with a company 500 miles down the coast.

Management should consider switching from truck to ________ transport to save money.

A) water B) railroads C) pipeline D) air E) drone Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge 147) Which of the following modes of transportation would most likely be used to quickly haul lettuce from California, where it was grown, to markets in Nevada?

A) trucks B) railroads C) air D) drone E) water Answer: A Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge 148) Distribution may be the "final frontier" for marketing success.

Answer: TRUE Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Ethical understanding and reasoning

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149) Outsourcing means that the client company brings in an external company to run its essential operations.

Answer: FALSE Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 150) The supply chain only includes components dealing with the flow of materials internal to the firm.

Answer: FALSE Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 151) Supply chain management includes the coordination of both the physical movement of goods and the sharing of information about those goods.

Answer: TRUE Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 152) Using anticipatory shipping, Amazon can begin the process of shipping a product before its final destination has been determined.

Answer: TRUE Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain 153) What might manufacturers do when its pace of production does not match seasonal demand?

Answer: A firm might engage in a practice known as level loading. This is a manufacturing approach intended to balance the inventory holding capabilities and production capacity constraints of a manufacturer for a particular product through the implementation of a consistent production schedule, employed both during and beyond periods of peak demand. For example, it may be more economical to produce snow skis year-round and pay to store them for the colder months than to produce them only during the winter season. This is a result of capacity issues related to the number of snow skis that a manufacturer can produce in a given span of time on existing production lines and with its available work force.

Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge 154) Explain why inventory control has such a major impact on the costs of logistics.

Answer: If supplies of a product are too low to meet fluctuations in customer demand, a firm may have to make expensive emergency deliveries or lose customers to competitors. If inventories are above demand, unnecessary storage expense and the possibility of damage or deterioration can occur. Channel members want to minimize the cost of holding inventory while at the same time ensuring that inventory will be there when customers need it.

Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge 37 Copyright © 2022 Pearson Education, Inc.

155) Explain the concept of the supply chain.

Answer: The supply chain encompasses all the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer. Firms may decide to outsource or insource some of these activities. Distribution channels are a subset of the supply chain, and logistics management is the process of actually moving goods through the supply chain.

Difficulty: Moderate LO: 11.3: Discuss the concepts of logistics and supply chain AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 12 Deliver the Customer Experience 1) Which of the following is the final stop in the distribution channel in which organizations sell goods and services to consumers for their personal use?

A) franchising B) retailing C) brokering D) wholesaling E) disintermediation Answer: B Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

2) Which one of the following statements about retailers and retailing activities is true?

A) Retailers create form utility.

B) Most retailers are multi-million dollar operations.

C) Retailers are members of channels of distribution.

D) About half of all U.S. workers are employed by retailers.

E) Retailers sell only to businesses.

Answer: C Difficulty: Moderate LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

3) Customer experience describes customers' overall assessments of their interactions with ________.

A) a good only B) a good or service only C) a retail location only D) a good or retail location only E) a good, service, or retail location Answer: E Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

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4) ________ is the process of identifying customer touchpoints and tracking the experiences customers have when they interact with a brand or a store as they become aware of, consider and evaluate, and decide to purchase a product in order to improve the customer experience.

A) Customer experience B) Customer journey mapping C) Wheel-of-retailing D) Touchpointing E) Retailing Answer: B Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

5) In the context of customer journey mapping, ________ touchpoints include the company's website, chatbots, and social media postings by the company.

A) communication B) human C) physical D) sensory E) roadblock Answer: A Difficulty: Moderate LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

6) When creating a customer journey map, which of the following would be considered a physical touchpoint?

A) an email B) a piece of postal mail C) an employee uniform D) interaction with a customer service representative E) a product's fragrance Answer: C Difficulty: Moderate LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

7) Customer experience or CX refers to a customer's overall experience of every interaction he or she has experienced with a business.

Answer: TRUE Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

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8) For digital natives, CX includes only the online touchpoints of the customer's experience.

Answer: FALSE Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

9) In a customer journey map, human touchpoints are the customers' interactions with company representatives.

Answer: TRUE Difficulty: Easy LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

10) What is customer journey mapping?

Answer: One of the best ways to understand CX is to use a technique marketers call customer journey mapping. This is the process of identifying customer touchpoints and tracking the experiences customers have when they interact with a brand or a store as they become aware of, consider and evaluate, and decide to purchase a product in order to improve the customer experience. Creating a journey map is not for the faint of heart; it requires tremendous attention to even the smallest details that can derail a great experience.

Difficulty: Moderate LO: 12.1: Understand marketing's focus on excellent customer experiences traditional and online retailing and in omnichannel marketing.

AACSB: Analytical thinking 11) According to the ________ hypothesis, new retailing forms often begin as low-margin, low-price, low-status operations to challenge established retailers; then become successful; and eventually take the place of the established retailers they had challenged.

A) agent B) broker C) wheel-of-retailing D) warehousing E) retail life cycle Answer: C Difficulty: Easy LO: 12.2: Define retailing and understand how retailing evolves.

12) ________ retail refers to e-commerce companies that manufacture, sell, and ship their products without middlemen.

A) B2C B) B2B C) D2C D) D2B E) C2C Answer: C Difficulty: Moderate LO: 12.2: Define retailing and understand how retailing evolves.

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13) The wheel-of-retailing hypothesis explains how retail firms change, becoming less upscale as they go through their life cycle.

Answer: FALSE Difficulty: Moderate LO: 12.2: Define retailing and understand how retailing evolves.

14) Describe the wheel-of-retailing hypothesis. How has it been impacted by COVID-19?

Answer: According to the wheel-of-retailing hypothesis, new types of retailers begin at the entry phase with low-end strategies as they offer goods at lower prices than their competitors.

After they gain a foothold, they gradually trade up as they improve facilities and upgrade merchandise before they move up even more with a high- end strategy. This makes them vulnerable to still newer entrants that can afford to charge lower prices. And so the wheel turns.

The latest turn of the wheel came when cheaper online outlets and direct-to-consumer (D2C) retail businesses entered the system post-COVID-19.

Difficulty: Difficult LO: 12.2: Define retailing and understand how retailing evolves.

15) Which of the following is an example of a service retailer?

A) university B) pizzeria C) health food store D) pharmacy E) bookstore Answer: A Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

16) Which type of retailer is most likely to require customers to perform their own product selection and require customers to handle their own checkout process?

A) limited-service B) full-service C) self-service D) specialty service E) wholesale service Answer: C Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

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17) What is the name for a retailer that offers consumer food and general merchandise in the same store?

A) combination store B) concept store C) pop-up store D) specialty store E) resale store Answer: A Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

18) Which of the following is the number of different product lines available at a particular retail store?

A) merchandise breadth B) inventory depth C) merchandise depth D) retail diversity E) point-of-sale range Answer: A Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

19) Which of the following is LEAST likely to happen at a full-service retailer?

A) Customers have access to alteration services.

B) Gift wrapping services are offered.

C) Customers seek and receive helpful guidance from trained sales associates.

D) Customers handle their own checkout process.

E) Product consultants are available to answer specialized questions.

Answer: D Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

20) ________, such as Target and Kohl's, provide merchandise return and offer credit, but customers select merchandise without much assistance.

A) Self-service retailers B) Full-service retailers C) Specialty retailers D) Off-price retailers E) Limited-service retailers Answer: E Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

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21) Retail stores are often classified on the breadth and depth of their merchandise assortment.

The depth of the merchandise is the variety of choices for each specific product. Merchandise depth may be classified as ________ or ________.

A) narrow; broad B) narrow; deep C) shallow; broad D) shallow; deep E) narrow; full Answer: D Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

22) Which of the following is true about convenience stores?

A) They carry mostly shopping goods.

B) They charge lower-than-normal prices for shopping goods.

C) They are reluctant to change their offerings to adjust to changes in the market.

D) They create time utility for their customers.

E) They create form, time, and place utility for their customers.

Answer: D Difficulty: Difficult LO: 12.3: Understand how we classify traditional retailers.

23) ________ are new, inspirational approaches to retailing that seek to sell a lifestyle to a particular target audience through the use of customer interaction, discovery, and experience rather than selling products.

A) Combination stores B) Pop-up stores C) Resale stores D) Concept store E) Discount stores Answer: D Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

24) ________ carry a narrow assortment of product lines with deep assortments within those lines.

A) Supermarkets B) Specialty stores C) Convenience stores D) Discount stores E) Leased departments Answer: B Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

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25) A large retail store that wants to offer a broader variety of products or services on site than it would otherwise carry would most likely arrange with a(n) ________.

A) leased department B) convenience store C) variety store D) factory outlet E) off-price retailer Answer: A Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

26) Specialty stores have been victim to ________, the consumer trend toward online shopping and shopping with a giant.

A) flash retailing B) category killers C) warehouse clubs D) concept stores E) the Amazon effect Answer: E Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

27) Which of the following is a retailer owned brick-and-mortar or online store where excess merchandise or special buys from vendors, not offered in the regular retail stores, are available at lower prices?

A) pop-up store B) hypermarket C) outlet store D) concept store E) dollar store Answer: C Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

28) ________ is the process of selling used products or excess inventory to companies or consumer resale stores.

A) E-commerce B) Recommerce C) Flash retailing D) M-commerce E) B2C Answer: B Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

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29) Halloween costume stores, which appear one day and disappear after a period of a few months, are examples of ________.

A) concept stores B) flash retailing C) the Amazon effect D) upcycling E) consignment stores Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

30) Which of the following is NOT true about warehouse clubs?

A) They are full-service stores.

B) They often charge their customers with a modest annual membership fee.

C) They carry items in bulk.

D) They are a form of discount store.

E) They have followed the pattern set forth by the wheel-of-retailing hypothesis.

Answer: A Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

31) Which of the following stores is most likely to have a narrow assortment of merchandise?

A) a supermarket B) a factory outlet store C) a department store D) a warehouse club E) a hypermarket Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

32) Which type of store combines the characteristics of a warehouse store and a supermarket?

A) consignment store B) department store C) extreme-value retailer D) hypermarket E) factory outlet store Answer: D Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

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33) Which of the following statements about department stores is true?

A) Department stores are more successful in America today than they have ever been.

B) Department stores typically offer shallow and narrow assortments.

C) Department stores are more popular in America than they are abroad.

D) Department stores are typically self-service.

E) Department stores were a dominant American retailer in the first half of the twentieth century.

Answer: E Difficulty: Difficult LO: 12.3: Understand how we classify traditional retailers.

34) Which of the following types of retail stores would likely offer the broadest assortment of merchandise and services?

A) convenience stores B) factory outlet stores C) specialty stores D) pop-up stores E) hypermarkets Answer: E Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

35) ________ is a new apparel trend of using discarded products to create a higher-quality, higher-value upcycled product.

A) The Amazon effect B) Upcycling C) The concept store D) Flash retailing E) Off-price retailing Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

36) In general, vending machines are best suited for selling which of the following?

A) specialty goods B) unsought goods C) capital items D) food and beverages E) accessory equipment Answer: D Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

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37) A shoe department carries more than 55 different styles of black sandals. This is a description of the shoe department's ________.

A) merchandise breadth B) hard goods C) merchandise depth D) bifurcated retailing E) service assortment Answer: C Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking 38) Several years ago, the Paradise Surf Shop was the only surf-gear store catering to women. It carried everything the serious female surfer needed to ride the waves. In terms of its merchandise assortment, it had a ________ assortment.

A) shallow and deep B) narrow and deep C) shallow and broad D) broad and deep E) shallow and narrow Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking 39) Stop-N-Go and Circle K, both small stores that serve consumers willing to pay a higher price for the ease of buying staples close to home, are ________.

A) specialty stores B) convenience stores C) supermarkets D) pop-up stores E) off-price retailers Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking

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40) GameStop sells video games and systems, offering a narrow product line with a deep assortment within that line. GameStop is a(n) ________.

A) department store B) convenience store C) specialty store D) general merchandise discount store E) off-price retailer Answer: C Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking 41) ShopWell, a large supermarket chain, wants to offer a wider variety of fresh ready-to-go meals for its customers. ShopWell has contracted with The Great Wall, a Chinese restaurant, and Salad Heaven, a health food restaurant, to set up small take-out areas within the supermarket.

This arrangement is an example of ________.

A) convenience stores B) leased departments C) specialty stores D) consignment stores E) pop-up stores Answer: B Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking 42) Legal clinics are an example of service retailers.

Answer: TRUE Difficulty: Easy LO: 12.3: Understand how we classify traditional retailers.

43) In response to the growth of category killers, department stores have focused more on marketing hard goods and have placed less emphasis on soft goods.

Answer: FALSE Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

44) When a gift shop decided to begin selling Blue Ridge pottery, it was modifying its merchandise mix.

Answer: TRUE Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking

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45) What is the Amazon effect?

Answer: It is the effect of online shopping combined with the consumer trend of shopping with a giant such as Amazon. Specialty apparel stores have been victim to the Amazon effect.

Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Application of knowledge 46) Compare and contrast specialty stores and convenience stores.

Answer: Specialty stores carry narrow product lines with deep assortments within those lines.

They are not necessarily conveniently located for consumers. Convenience stores are small stores that carry a limited line of high-turnover convenience goods. They cater to customers willing to pay a premium for the ease of buying staples close to home.

Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Application of knowledge 47) Compare and contrast four types of discount stores.

Answer: General merchandise discount stores offer a broad assortment of items at low prices with minimal services. Off-price retailers have a narrower assortment, selling surplus merchandise from well-known manufacturers at low prices. Like general discount merchandise stores, warehouse clubs sell a broad assortment of food and nonfood items in bulk size.

However, warehouse clubs are almost entirely self-service and often charge a modest membership fee. Unlike the other types of discount stores, factory outlet stores are owned by manufacturers that use the stores to sell defective merchandise or excess inventory at a low price.

Difficulty: Difficult LO: 12.3: Understand how we classify traditional retailers.

AACSB: Application of knowledge 48) Why might a retailer be interested in using the Census of Retail Trade, which classifies retailers according to the North American Industry Classification System (NAICS) codes?

Answer: A retailer that wants to identify direct competition can find other firms that are classified by the same NAICS codes.

Difficulty: Moderate LO: 12.3: Understand how we classify traditional retailers.

AACSB: Application of knowledge 49) What is the merchandise assortment of an airport bookstore that sells only a few books but a large variety of magazines?

Answer: The airport bookstore has a narrow assortment, meaning that it offers only a few product lines. It has a shallow assortment of books and a deep assortment of magazines.

Difficulty: Difficult LO: 12.3: Understand how we classify traditional retailers.

AACSB: Analytical thinking

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50) Explain the concept of bifurcated retailing and how this trend has affected department stores.

Answer: Bifurcated retailing refers to the decline of middle-of-the-market retailing, due to the popularity of both upscale and low-end stores. Specialty stores have lured department store shoppers with deeper, more cutting-edge fashion selection and better service. Department stores have also been squeezed by mass merchandisers, catalog retailers and online stores that can offer the same items at lower prices because they don't have the expense of rent, elaborate store displays and fixtures, high salaries for knowledgeable salespeople, and so forth. Some department stores are responding by increasing the amount of private label merchandise and exclusive national brand merchandise, as well as offering e-commerce sites and providing increased service.

Difficulty: Difficult LO: 12.3: Understand how we classify traditional retailers.

AACSB: Application of knowledge 51) Which of the following refers to any method a firm uses to complete an exchange that does NOT require a customer to visit a store?

A) kiosk merchandising B) nonstore retailing C) direct selling D) omnichannel marketing E) e-commerce Answer: B Difficulty: Easy LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

52) The ________ is a technique that relies heavily on people getting caught up in the "group spirit," buying things they would not normally buy if they were alone.

A) pyramid scheme B) multilevel marketing C) party plan system D) indirect sell E) B2C e-commerce Answer: C Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

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53) Promotional and other e-commerce activities transmitted over mobile phones and other mobile devices, such as smartphones and personal digital assistants, are referred to as ________.

A) the Amazon effect B) m-commerce C) D2C commerce D) direct selling E) multilevel marketing Answer: B Difficulty: Easy LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

54) Which of the following is an illegal sales technique?

A) retailtainment B) a party plan system C) a multilevel network D) a pyramid scheme E) off-price retailing Answer: D Difficulty: Easy LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Ethical understanding and reasoning 55) Which of the following is NOT a benefit provided by e-commerce?

A) It provides consumers the satisfaction of instant gratification.

B) It reduces the cost of doing business.

C) It enables specialized businesses to be more successful.

D) It provides consumers more access to pricing information.

E) It broadens product choices for consumers in smaller communities.

Answer: A Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

56) Experts who predict a trend of destination retail believe that consumers will soon visit retailers more for ________ than for the basic process of purchasing products.

A) information B) credit services C) comparison shopping D) entertainment E) product returns Answer: D Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

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57) Because ________ of all retail customers say that friends influence their purchases, some online retailers have developed groups of "brand friends" who will share the news from the retailer.

A) exactly 10 percent B) nearly a quarter C) almost a third D) more than half E) over two-thirds Answer: D Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

58) What term is used to indicate retailer inventory that may not sell and is sold to online liquidators?

A) nonstore inventory B) distressed inventory C) abandonment inventory D) m-commerce E) specialty inventory Answer: B Difficulty: Easy LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

59) Using current sales as a predictor, which of the following products would likely be most effectively sold using direct selling?

A) women's shoes B) cleaning products C) baby furniture D) automobiles E) pet food Answer: B Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Application of knowledge

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60) A customer browses through several online retail sites and examines product descriptions of several different styles and brands of bed linens. The customer then goes to Macy's and purchases a set of flannel sheets that he had read about on another retailer's site. The purchase of this set of flannel sheets is most clearly an example of ________.

A) m-commerce B) shopping cart abandonment C) digitally influenced purchasing D) virtual experiential marketing E) distressed inventory Answer: C Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Analytical thinking 61) Network marketing is another name for multilevel marketing.

Answer: TRUE Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Interpersonal relations and teamwork 62) Mary Kay and Scentsy are major players in the direct selling industry.

Answer: TRUE Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

63) Cannibalization is not a concern for traditional retailers who also operate an e-commerce site because the two locations attract completely different markets.

Answer: FALSE Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

64) Mobile devices were expected to generate 45% of the year's total retail e-commerce sales in 2020.

Answer: TRUE Difficulty: Easy LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

65) The majority of online shopping trips end in shopping cart abandonment.

Answer: TRUE Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

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66) Explain the differences between multilevel marketing and a pyramid scheme.

Answer: In multilevel marketing, a master distributor recruits other people to become distributors. The master distributor sells the company's products to the people she entices to join and receives commissions on all the merchandise sold by the people recruited. It is a system that is growing in popularity, but not all forms of multilevel marketing are legal. Pyramid schemes are multilevel networks that are illegal. People at the top of the pyramid profit from payments made by large numbers of people at the bottom level who hope to advance to the top. In a pyramid scheme, little or no effort goes into actually marketing the products.

Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Application of knowledge 67) Describe how nonstore retailing has recently grown.

Answer: Though most purchases are still made in stores, more and more consumers are now shopping using a broad range of nonstore alternatives, including catalog shopping and direct selling. Easy-to-use websites, improved online service, and sophisticated search engines have all helped online business grow at a faster rate than retail buying. All types of retailers now use direct and online channels, with traditional bricks-and-mortar retailers selling online.

Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Analytical thinking 68) Explain the limitations for marketers offering e-commerce shopping.

Answer: Limitations for marketers engaging in e-commerce retailing may include a lack of security and a customer's fear of fraud. The marketer must maintain the site to reap its full potential benefits. The marketer must also work to find innovative ways to address the consumers' need for "touch-and-feel" information before buying a product. Finally, marketers may have difficulties arranging for payment methods for consumers from developing countries that primarily use cash.

Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

69) Barnes & Noble has many retail stores as well as a presence on the web. What are the concerns of Barnes & Noble regarding the relationship between the company's store sales and web sales?

Answer: The big problem for Barnes & Noble is the concern that the online sales will cannibalize store sales. The company needs to be careful about steering customers toward its website, which may in turn steer customers away from its chain stores, which are bursting with inventory.

Difficulty: Difficult LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

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70) Bass Pro Shops, a chain of outdoor sports equipment stores, features giant aquariums, waterfalls, trout ponds, archery and rifle ranges, putting greens, and free classes on topics from ice fishing to conservation. Why would a retailer do this?

Answer: Many shoppers are looking for a buying, entertainment, and social experience, which Bass Pro Shops offers as part of its destination retail strategy.

Difficulty: Moderate LO: 12.4: Describe business-to-consumer (B2C) e-commerce and the other common forms of nonstore retailing.

AACSB: Application of knowledge 71) Which of the following is NOT a function of a point-of-sale (POS) system?

A) collecting sales data B) connecting directly into a store's inventory-control system C) transmitting coupons to customers in the store D) collecting data on returns and transfers to other stores E) automatically sending re-orders when supplies decline to a certain level Answer: C Difficulty: Difficult LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

72) Using the strategy of ________, retailers convert shopping from a passive pursuit into an interactive activity for customers in bricks and mortar locations.

A) destination retailing B) beaconing C) sweethearting D) experiential merchandising E) customer profiling Answer: D Difficulty: Easy LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

73) Stores using POS systems may create ________ to keep a running total on sales, returns, and transfers to other stores.

A) digital wallets B) perpetual inventory unit control systems C) experiential merchandising D) proximity marketing E) e-fencing Answer: B Difficulty: Easy LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

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74) What term describes technologies that can merge the physical and virtual worlds?

A) experiential shopping B) extended reality C) proximity marketing D) retailtainment E) destination retailing Answer: B Difficulty: Easy LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

75) When sales are made in a local Walmart, the sales data is sent to Walmart headquarters where the data are used to build a picture of the buying habits of people who shop at individual Walmarts across the nation. The use of ________ makes this possible.

A) a POS system B) proximity marketing C) e-fencing D) digital wallets E) a beacon Answer: A Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

AACSB: Analytical thinking 76) Which of the following is the purpose of omnichannel commerce?

A) to deliver promotions and rewards to customers as they shop in a physical retail space B) to keep a running total on sales, returns, and transfers to other stores C) to automatically reorder products when inventories decline to a certain level D) to allow customers to automatically pay for items without cash or a credit card E) to provide a seamless shopping experience for customers across shopping locations Answer: E Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

77) Which of the following is the purpose of a beacon in a retail space?

A) to deliver promotions and rewards to customers as they shop in a physical retail space B) to keep a running total on sales, returns, and transfers to other stores C) to automatically reorder products when inventories decline to a certain level D) to allow customers to automatically pay for items without cash or a credit card E) to provide a seamless shopping experience for customers across shopping locations Answer: A Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

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78) The use of retail strategies that enhance the shopping experience and create excitement, impulse purchases, and an emotional connection with the brand is known as ________.

A) retailtainment B) experiential shopping C) m-commerce D) the Amazon effect E) beacon marketing Answer: A Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

79) Proximity marketing is also known as beacon marketing.

Answer: TRUE Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

80) A destination retailer is a store that consumers view as distinctive enough to go out of their way to shop there.

Answer: TRUE Difficulty: Easy LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

81) Extended reality (XR) uses customer's former shopping behavior to make recommendations for future purchases.

Answer: FALSE Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

82) Give an example of how the recent economic downturn affected retailers' strategies.

Answer: Answers will vary. Retailers changed their merchandise assortment to offer consumers lower prices and discounted merchandise. Walmart and other mass merchandisers increased their use of private-label brands.

Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

AACSB: Application of knowledge 83) What is order fulfillment automation?

Answer: Another way retailers seek to compete with the "Amazon effect" is through the use of order fulfillment automation. This is the use of technology and machines to improve the speed and accuracy of order fulfillment, especially for B2C e-commerce.

Difficulty: Moderate LO: 12.5: Understand the ways that retailing will continue to evolve in the future.

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84) All of the following contribute to shrinkage EXCEPT which one?

A) beacon marketing B) shoplifting C) employee theft D) return fraud E) paperwork errors Answer: A Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 85) ________ occurs when someone returns an item that they did not purchase—almost always a stolen item—for a refund.

A) Retail borrowing B) Retail return fraud C) Sweethearting D) E-fencing E) Diverting Answer: B Difficulty: Easy LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 86) A cashier who purposely undercharges a customer or allows a friend to walk away without paying for items has engaged in which of the following?

A) sweethearting B) experiential shopping C) retail borrowing D) off-price retailing E) customer profiling Answer: A Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning

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87) Which of the following refers to store personnel tailoring the level of service they give based on a customer's perceived ability to pay?

A) sweethearting B) experiential shopping C) retail borrowing D) off-price retailing E) customer profiling Answer: E Difficulty: Easy LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 88) Organized retail crime is facilitated by ________ who sell stolen merchandise to consumers.

A) diverters B) sweethearts C) boosters D) fencers E) profilers Answer: D Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 89) Josh purchased a new tie from an upscale men's clothing store to impress the managers he would meet at an important job interview. The day after the job interview, Josh returned the tie to the store for a full refund. This is an example of ________.

A) buyer's remorse B) sweethearting C) retail borrowing D) shoplifting E) customer profiling Answer: C Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Analytical thinking 90) Sweethearting is the act of tailoring the level of customer service based upon a customer's perceived ability to pay.

Answer: FALSE Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

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91) Failing to provide equal access to customers who appear economically disadvantaged is both unethical and illegal.

Answer: FALSE Difficulty: Difficult LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 92) Retail borrowing occurs when a customer returns non-defective merchandise for a refund after the merchandise has fulfilled the purpose for which it was purchased.

Answer: TRUE Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Ethical understanding and reasoning 93) Describe some solutions to the problem of retail fraud.

Answer: One solution to the retail fraud problem that many retailers have adopted is to require identification for a return, thus enabling the retailer to track individuals who frequently return merchandise. Another tactic is to only give refunds in the form of store credits. Technological advancements such as facial recognition should improve retail fraud prevention.

Difficulty: Moderate LO: 12.6: Understand the problems retailers face with unethical behavior by consumers and employees.

AACSB: Application of knowledge 94) Which statement is NOT true?

A) Intangibles are services and other experience-based products that we can't touch.

B) All services are intangible.

C) All intangibles are services.

D) Services are the fastest-growing sector of the economy.

E) Services are acts, efforts, or performances exchanged from producer to user without ownership rights.

Answer: C Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

95) According to the U.S. Bureau of Labor Statistics, people employed in service industries accounted for ________ out of every 10 individuals employed.

A) one B) two C) four D) five E) eight Answer: E Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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96) Four characteristics are used to differentiate services from goods. Which of the following is NOT one of those characteristics?

A) intangibility B) perishability C) variability D) responsiveness E) inseparability Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

97) Service ________ means that customers cannot see, touch, or smell good service.

A) perishability B) variability C) intangibility D) responsiveness E) inseparability Answer: C Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

98) ________ management is the process by which organizations adjust their services in an attempt to match supply with demand.

A) Capacity B) Variability C) Intangibility D) Inseparability E) Services Answer: A Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

99) Service ________ means that a firm cannot store its services.

A) intangibility B) perishability C) inseparability D) variability E) personalization Answer: B Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

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100) Service ________ refers to the inevitable differences in a service provider's performance from one service encounter to the next.

A) inseparability B) variability C) personalization D) responsiveness E) intangibility Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

101) A customer got a great haircut at a salon and went back six weeks later to the same person to get a second haircut. This time, the customer received one of the worst haircuts of his life. The difference between the two haircuts is due to the ________ characteristic of services.

A) perishability B) responsiveness C) personalization D) variability E) inseparability Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

102) A Colorado ski resort opens its mountain ski trails during the summer months for the recreational enjoyment of mountain bike riders. The resort is doing which of the following?

A) using disintermediation B) using total quality management (TQM) C) using capacity management D) maintaining the core service E) altering the servicescape Answer: C Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

103) The opportunities for ________ provided by the Internet have helped many companies in the financial services area address the problem of the inseparability of services.

A) capacity management B) disintermediation C) place marketing D) transactional marketing E) servicescape management Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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104) Which of the following is true due primarily to the inseparability of services?

A) Customers have to rely on reassuring physical cues that indicate quality service.

B) Service businesses cannot promise the same experience with every service encounter.

C) A service is produced and consumed at the same time.

D) It is impossible for service businesses to exactly match supply with demand.

E) It is difficult for service businesses to live up to guarantees.

Answer: C Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

105) Service ________ means that a service can only take place at the time the service provider performs it on either the customer or the customer's possessions.

A) inseparability B) personalization C) variability D) intangibility E) creativity Answer: A Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

106) The ________ is the interaction between the customer and the service provider.

A) supply-demand exchange B) transaction point C) service encounter D) servicescape E) disintermediation Answer: C Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Interpersonal relations and teamwork 107) The ________ dimension of the service encounter is important to marketers, because customers often pay close attention to the environment where they receive the service.

A) social contact B) physical C) disintermediation D) quality E) inseparability Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Interpersonal relations and teamwork

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108) Facility exteriors and interiors are part of ________.

A) the servicescape B) disintermediation C) the core service D) the intangibles in a service exchange E) place marketing Answer: A Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

109) ________ refers to the elimination of some layers of the channel of distribution to cut costs and improve the efficiency of the channel.

A) Inseparability B) Capacity management C) Disintermediation D) Intangibility E) Perishability Answer: C Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

110) Which of the following is an instrument to measure consumers' perceptions of service quality?

A) total quality management (TQM) B) capacity management C) market fulfillment D) SERVQUAL E) servicescape Answer: D Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

111) The ________ is a popular instrument used to measure customers' perceptions of service quality.

A) servicescape B) disintermediation C) service encounter D) intangibility E) SERVQUAL scale Answer: E Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

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112) Which of the following is NOT true about the SERVQUAL scale?

A) SERVQUAL is not used to assess competitors' service quality.

B) The SERVQUAL scale is usually administered in a survey format.

C) Firms often track SERVQUAL scores over time to measure how their service quality has improved.

D) SERVQUAL measures five dimensions of service quality.

E) The SERVQUAL scale remains a popular tool for measuring customer perception of service quality.

Answer: A Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

113) When using the SERVQUAL scale, a store focused on employee willingness to help customers and provide prompt service would likely pay the most attention to the results in the ________ dimension.

A) creativity B) empathy C) assurance D) responsiveness E) reliability Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Interpersonal relations and teamwork 114) Karen likes using the SERVQUAL scale to measure her clients' perception of the quality of her hair styling salon because it includes assessing ________, which involves the physical facilities and equipment and professional appearance of the stylists. These aspects are very important for the comfort of her clients.

A) tangibles B) reliability C) responsiveness D) assurance E) empathy Answer: A Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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115) Tony, a vice president of the St. Louis One Gateway Credit Union, decided to measure customers' perceptions of the service quality of the credit union. He chose to use the SERVQUAL scale because it included the ________ component, which involves the knowledge and courtesy of employees, as well as their ability to convey trust and confidence.

A) empathy B) responsiveness C) assurance D) reliability E) creativity Answer: C Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Written and oral communication 116) The president of a fast growing company that manages retirement communities states that the degree of caring and individual attention the residents receive is the most important component of service quality for his company. The president would be most likely to focus on the results in which of the following dimensions of the SERVQUAL scale?

A) creativity B) reliability C) responsiveness D) assurance E) empathy Answer: E Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Interpersonal relations and teamwork 117) People, places, and ideas are all ________ that often need to be "sold" by someone and "bought" by someone else.

A) tangibles B) goods C) intangibles D) values E) benefits Answer: C Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

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118) Political consultants market politicians when they "package" candidates who then compete for "market share" as measured by ________.

A) purchases B) market fulfillment C) physical cues D) votes E) social networking Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

119) An agent for an actor presents a client's qualifications to potential movie production companies until one company responds positively to the actor. This is an example of the ________ approach.

A) product improvement B) market fulfillment C) total quality management (TQM) D) pure selling E) relationship marketing Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

120) An agent works with a client to modify certain characteristics that will increase his or her market value in the ________ approach.

A) product improvement B) pure selling C) market fulfillment D) place marketing E) idea marketing Answer: A Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

121) Developing a new product to meet the minimum qualifications of an unmet need is integral to the ________ approach to marketing.

A) social B) pure selling C) product fulfillment D) market fulfillment E) product improvement Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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122) ________ strategies regard a city, state, country, or other locale as a brand.

A) Social marketing B) Idea marketing C) Place marketing D) Service marketing E) Green marketing Answer: C Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

123) Marketing activities that seek to gain market share for a concept, philosophy, belief, or issue by using elements of the marketing mix to create or change a target market's attitude or behavior is referred to as ________.

A) idea marketing B) place marketing C) pure selling D) product improvement E) market fulfillment Answer: A Difficulty: Easy LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Written and oral communication 124) Which of the following product offerings is intangible?

A) a pink wig B) a dancing lesson C) a page of sheet music D) a sequined dress E) a pair of tap shoes Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 125) To reduce problems associated with the intangibility of the services offered by a restaurant, the restaurant owner would be most likely to do which of the following?

A) lower entree prices between 4 p.m. and 6 p.m.

B) provide clean tablecloths and cloth napkins for each new customer C) empower employees to handle customer complaints D) offer a service guarantee to ensure customers that food quality will be consistent E) offer regular employee workshops focusing on customer service Answer: B Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge

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126) Christopher Messenger rents storage space to college students who go home for the summer but do not want to haul all of their property home and back. The business is profitable during the summer months, but when the storage space is unoccupied in the off-season, Christopher is losing money. What characteristic of service is most likely the source of Christopher's problem?

A) intangibility B) perishability C) personalization D) variability E) inseparability Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 127) A physician might deal with potential problems associated with the ________ characteristic of services by providing physical cues such as her medical diplomas hanging on the wall of the examining room.

A) intangibility B) perishability C) variability D) inseparability E) personalization Answer: A Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 128) Jack was so enthusiastic about the band he saw performing at a local club last weekend that he persuaded a large group of friends to return to the club to hear the band on Thursday.

Unfortunately, the band's Thursday performance was uninspired and at times off-key. The performance differences are due to the ________ characteristic of service.

A) perishability B) variability C) creativity D) personalization E) responsiveness Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking

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129) A hotel and resort company launched a new employee program that includes intensive training in different service encounter scenarios. This training program is most likely designed to lessen the problems related to the ________ characteristic of services.

A) perishability B) intangibility C) creativity D) inseparability E) personalization Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 130) Which of the following is NOT an example of a service encounter?

A) a nurse listening to a patient's heart rate B) a potential customer using a search engine to locate a business C) a customer checking into a hotel D) a student attending a tutoring session E) a mechanic telling a customer what is wrong with his car Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 131) An advertisement for the Blue Ridge Parkway (a highway) that runs from the Shenandoah Valley to the Smokey Mountains describes the highway as a "trip back in time." This is an example of ________.

A) idea marketing B) place marketing C) social marketing D) services marketing E) the market fulfillment approach Answer: B Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking

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132) In 2003, Home Depot's 40 Arizona stores participated with the Arizona Department of Water Resources and the cities of Phoenix, Mesa, and Scottsdale in a $1.8 million "Water, Use It Wisely" campaign. This is an example of ________.

A) place marketing B) social networking C) people marketing D) idea marketing E) societal benefit marketing Answer: D Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 133) Political candidates often hire image consultants who tell them what clothes to wear, how to wear their hair, and how to act in front of a crowd of people. Political candidates who use image consultants to help them market themselves to the voters are using which of the following strategies?

A) brand extension B) market development C) diversification D) product improvement E) pure selling Answer: D Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 134) Services are intangible products that are exchanged directly between the producer and the customer.

Answer: TRUE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

135) Inseparability refers to the characteristic of a service that makes it impossible to store for later sale or consumption.

Answer: FALSE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

136) Ads for an airline promote its last-minute fare savers program. This program is one way to deal with the service characteristic of perishability.

Answer: TRUE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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137) The quality of a service is only as good as its worst employee.

Answer: TRUE Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

138) The pure selling approach in marketing is exclusively associated with tangible items.

Answer: FALSE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

139) Place marketing involves seeking to attract new businesses, residents, or visitors to a geographic location.

Answer: TRUE Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

140) In the future, global deregulation will likely affect the delivery of services of banks and other financial service industries by reducing competition.

Answer: FALSE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

141) In the pure selling approach, an agent works with the client to modify certain characteristics that will increase his or her market value.

Answer: FALSE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 142) The talent agency that is trying to convince Berry College to hire a motivational speaker for the college's homecoming festivities is marketing people.

Answer: TRUE Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 143) What is the intangibility of service? How might a package delivery service deal with the intangibility characteristic of services?

Answer: Intangibility means that customers can't see, touch, or smell good service. There are many ways a package delivery service could deal with intangibility. Those include delivering packages undamaged during transportation, clean trucks, neat uniforms, logos, friendly employees, and carefully designed marketing communications. Any physical cues reminding the customer that the company provides excellent service will help to address the issue of intangibility.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

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144) Services are characterized by four key characteristics. Name and describe these four characteristics.

Answer: The four service characteristics are intangibility, inseparability, variability, and perishability. Services are intangible: they cannot be seen, tasted, felt, heard, or smelled before they are bought. Services are inseparable: they are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines. Services are variable: their quality may vary greatly, depending on who provides them and when, where, and how they are provided. Services are perishable: they cannot be stored for later sale or use.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Analytical thinking 145) Explain why it is difficult to standardize services and why many consumers may not necessarily want service standardization.

Answer: It is difficult to standardize services because service providers and customers vary.

Each service encounter is different, as each service provider and each customer bring unique characteristics to the encounter. Service standardization is not necessarily the ideal because many people like to have their services personalized. Examples of personalized services may include haircuts, personal training sessions, meals at fine dining establishments, and therapy sessions.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 146) JetBlue is a low-fare airline. JetBlue gives customers a friendly cabin crew, roomy overhead bins, live satellite TV at every leather seat, and even pay-per-view movies. How is JetBlue striving to provide quality service? Explain your answer.

Answer: Quality service ensures that customers are satisfied with what they have paid for.

Satisfaction is relative because the service recipient compares the current experience to some prior set of expectations. Customers of JetBlue airline may have paid a lower fare for a ticket than another airline would have charged for the same trip. The travel on that other airline may not have offered all the services listed. Therefore, the JetBlue travelers will be happy in getting to their destination, saving on the cost of the ticket, and enjoying the luxuries offered by JetBlue.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge

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147) Discuss the social contact and physical dimensions of the service encounter, explaining how marketers can use these dimensions to improve the quality of the service encounter.

Answer: The social contact dimension of the service encounter is the interaction between the employee and customer. The quality of a company's service depends on the quality of the employee, as the employee's appearance, courtesy, professionalism, and actions all represent the company. Companies should invest in continuous training to ensure that their employees are prepared and empowered to satisfy the customer in each encounter. The physical element of the service encounter is the servicescape, which includes the exterior, interior, signage, colors, sounds, and even smells of the establishment. A carefully designed servicescape can have a positive, welcoming effect on the customer.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 148) Explain how customers are an important element of the service encounter.

Answer: The customer must supply the service provider with correct information, follow directions, and provide any needed input. If the customer does not perform his or her role, then the service encounter is likely to be a service failure.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 149) As a service provider, why might you perceive the buyer-seller interaction in the service encounter to be especially critical?

Answer: Customers' perceptions are established during the service encounter. At this time, based on these perceptions, customers can become loyal, long-term buyers.

Difficulty: Moderate LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge 150) How might measuring service quality be more difficult than measuring product quality?

Answer: Products are tangible; therefore, measuring quality across several dimensions–such as durability, functionality, and so on–may be easier or performed more consistently than when measuring service quality.

Difficulty: Difficult LO: 12.7: Understand the marketing of services and other intangibles.

AACSB: Application of knowledge

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 13 Promotion I: Planning and Advertising 1) The coordination of marketing communication efforts to influence attitudes or behavior is known as ________.

A) promotion B) advertising C) marketing D) public relations E) the communication model Answer: A Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 2) Which of the following is NOT one of the four main roles performed by marketing communication?

A) to inform B) to entertain C) to persuade D) to remind E) to build relationships Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 3) The ________ approach argues that consumers come in contact with a company or brand many different ways before, after, and during a purchase.

A) promotion B) integrated marketing communications C) four Ps D) multichannel promotion E) word-of-mouth communication Answer: B Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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4) Which is an example of the one-to-many approach?

A) social media B) direct marketing C) database marketing D) email advertising E) personal selling Answer: D Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 5) The one-to-one model ________.

A) is exemplified by word-of-mouth communication B) employs evangelical marketing techniques C) is the traditional communication model D) includes personal selling E) benefits from consumer sales promotions Answer: D Difficulty: Difficult LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 6) Which is NOT an example of a consumer sales promotion?

A) coupon B) product sample C) rebate D) game E) viral buzz Answer: E Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 7) In the communication model, the ________ can be any organization or individual that intercepts and interprets a message.

A) medium B) receiver C) source D) encoder E) noise source Answer: B Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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8) In terms of the communication model, ________ is the process whereby a receiver assigns meaning to a message.

A) sourcing B) encoding C) decoding D) feedback E) receiving Answer: C Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 9) The communication model acknowledges that messages can be blocked by ________, which is anything that interferes with effective communication.

A) media B) feedback C) noise D) encoding E) decoding Answer: C Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 10) In terms of the communication model, ________ is a reaction to a message that helps the source gauge the effectiveness of the message.

A) noise B) feedback C) translating D) encoding E) decoding Answer: B Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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11) A company's total marketing communications mix consists of a special blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build customer relationships. This is also called ________.

A) direct marketing B) integrated marketing C) competitive marketing D) the promotion mix E) the marketing mix Answer: D Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 12) With which type of marketing communication does the marketer have the greatest level of control over the message?

A) word-of-mouth communication B) advertising C) public relations D) direct marketing E) personal selling Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 13) With which type of marketing communication does the marketer have the lowest level of control over the message?

A) word-of-mouth communication B) advertising C) public relations D) direct marketing E) personal selling Answer: A Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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14) The use of short-term incentives to encourage the immediate purchase or sale of a product or service is called ________.

A) indirect marketing B) sales promotion C) personal selling D) public relations E) advertising Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 15) ________ is the element of the promotion mix that involves direct interaction between a company representative and a customer.

A) Word-of-mouth communication B) Public relations C) Advertising D) Personal selling E) Sales promotion Answer: D Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 16) A company is implementing ________ when it airs a television commercial to millions.

A) interactive marketing B) viral marketing C) mass communication D) personal communication E) buzz Answer: C Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 17) Which of the following statements about advertising is true?

A) Advertising is personal communication from an identified sponsor using the mass media.

B) Consumers perceive advertising as always having a high level of credibility.

C) Advertising can be used to establish and reinforce a distinctive brand identity.

D) Advertising tends to be comparatively inexpensive.

E) Advertising always relies on factual information.

Answer: C Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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18) ________ components of the promotion mix do not seek a short-term increase in sales.

Instead, with these communication activities, the company tries to maintain a positive image of an organization and its products.

A) Personal selling B) Sales promotion C) Public relations D) Word-of-mouth E) Direct marketing Answer: C Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 19) ________ is a fancy term for an opt-in incentive to join an email mailing list.

A) Promotion mix B) Ethical bribe C) Outbound marketing D) Inbound marketing E) Word-of-mouth marketing Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 20) ________ marketing refers to messages that come from the organization and are intended for those who have agreed to receive them.

A) Outbound B) Inbound C) Ethical D) Promotion E) Database Answer: A Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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21) Delia's is a clothing retailer that targets teenage girls. It runs coordinated promotions for its catalogs, its website, and its retail outlets. Delia's works to make sure its public relations activities as well as its sales promotions harmonize with its advertising in all venues. From this information, you can infer that Delia's is using ________.

A) viral marketing B) stealth marketing C) integrated marketing communication D) word-of-mouth marketing E) mass communication Answer: C Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 22) The decision to use a genie to communicate the strength and power of Mr. Clean cleaning liquid is representative of the ________ process of the communication model.

A) sourcing B) encoding C) feedback D) decoding E) messaging Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 23) In terms of the communication model, the animated M&M candies in television commercials ________.

A) represent the source B) provide feedback C) represent the medium D) introduce noise E) decode the message Answer: A Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking

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24) An ad for a Dior fragrance featuring Natalie Portman appeared in Vogue magazine. In terms of the communication model, the medium of this ad is ________.

A) Natalie Portman B) Vogue C) Vogue readers who purchase Dior products D) Dior E) the target market to whom Natalie Portman appeals Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 25) Which of the following best explains why a 40-year-old woman and a 15-year-old boy would interpret an ad for an age-minimizing makeup differently?

A) They do not have access to the same media.

B) They are not equally susceptible to noise.

C) They follow different communication models.

D) They have different frames of reference.

E) One is not as likely as the other to provide feedback.

Answer: D Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge 26) Chevrolet runs a promotion whereby consumers can redeem two free ski lift tickets at their local dealer through a test-drive promotion. According to the communication model, the people coming into the dealership to test-drive a vehicle are the ________.

A) encoders B) message C) source D) medium E) feedback Answer: E Difficulty: Difficult LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking

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27) A new pizza restaurant is opening in town. The owners of this restaurant decide to place an advertisement in the town newspaper announcing the date of their big opening. The owners of the restaurant are using ________.

A) mass communication B) a push strategy C) word-of-mouth communication D) public relations E) one-to-one marketing Answer: A Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 28) An email from Amazon.com offers free shipping on your next purchase of more than $35.

This is an example of ________.

A) sales promotion B) personal selling C) public relations D) stealth marketing E) viral marketing Answer: A Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 29) A.Y. McDonald, a manufacturer of pumps and plumbing valves, employs regional salespeople to sell its products to wholesalers and cities. This is an example of ________.

A) sales promotion B) personal selling C) public relations D) direct marketing E) advertising Answer: B Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking

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30) A newspaper article reported on a lawsuit in which independent coffee shops accused a national chain of coffee shops of engaging in an illegal conspiracy to drive them out of business.

What promotion element would the national chain of coffee shops most likely use to improve its corporate image, which has been tarnished by these accusations?

A) sales promotion B) personal selling C) public relations D) direct marketing E) word-of-mouth communication Answer: C Difficulty: Difficult LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge 31) The traditional communication model is a one-to-many model.

Answer: TRUE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 32) Word-of-mouth communication is part of the many-to-many communication model.

Answer: TRUE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 33) In the communication model, the message is the actual communication that bounces back from the receiver to the sender.

Answer: FALSE Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 34) The communications model is an effective way to look at traditional marketing communications, but not new word-of-mouth communications.

Answer: FALSE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 35) In the communication model, noise is anything that interferes with effective communication.

Answer: TRUE Difficulty: Easy LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication

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36) Like sales promotion, public relations components of the promotion mix are used to create short-term increases in sales.

Answer: FALSE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 37) By definition, personal selling takes place face-to-face.

Answer: FALSE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 38) Personal selling is less effective but more cost efficient than advertising.

Answer: FALSE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 39) Outbound marketing describes messages that come to the organization from others outside.

Answer: FALSE Difficulty: Difficult LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Written and oral communication 40) The process of developing the Nike logo "Just Do It" as a way to communicate the power and capability of people who wear Nike shoes is an example of encoding, as defined by the communication model.

Answer: TRUE Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 41) What are the main goals of marketing communication?

Answer: Marketing communication in general performs one or more of four roles: 1) It informs consumers about new goods and services.

2) It reminds consumers to continue using certain brands.

3) It persuades consumers to choose one brand over others.

4) It builds relationships with customers.

Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge

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42) The background for a Benadryl allergy medication ad appearing in the magazine Better Homes and Gardens shows green grass and lovely flowers. The headline states "Benadryl is 54 percent more effective than the leading prescription." At the bottom of the ad, in small print, is an explanation of how the effectiveness of Benadryl was determined. The ad also shows a package of Benadryl so consumers can easily recognize it at the store. Identify the different components of the communication model for this advertisement.

Answer: The marketers of Benadryl are the source. These marketers encoded their ideas into the actual message, which includes the images and text of the advertisement. The medium for this communication is the page in Better Homes and Gardens. The receiver is anyone reading the magazine who sees this page of advertising; the receiver may or may not decode the message in the way the marketers intended. Noise could pop up at any stage of the communication process.

Difficulty: Difficult LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Analytical thinking 43) In one section of the Sunday newspaper there are four-color, magazine-style advertisements for different stores. Each of these advertisements informs consumers of the products being marketed at sale prices during the coming week. How are these magazine-style advertisements examples of the implementation of sale promotions?

Answer: Sale promotions are programs such as contests, coupons, or other incentives that marketers design to build interest in or encourage the purchase of a product during a specified time period. Unlike other forms of promotion, sales promotions are intended to stimulate immediate action rather than build long-term loyalty. The magazine advertisements are trying to entice consumers to go to the store during the week and buy the items that are being sold at lower than the original selling price.

Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge 44) Why should a company be concerned about integrating communications from different sources within the company?

Answer: Customers won't separate conflicting or varying messages from different sources within a company, so failing to integrate communications could lead to blurred consumer brand perceptions.

Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge

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45) Discuss the updated "many-to-many" communication model and describe some of the new tools it includes.

Answer: In today's "always on" world that we discussed in Chapter 1, the importance of the updated "many-to-many" model of marketing communication increases exponentially. This newer perspective recognizes the huge impact of social media and its use in word-of-mouth communication, where consumers look to each other for information and recommendations.

Many of us are more likely to choose a new restaurant based on users' reviews we read on Yelp than because we saw a cool commercial for the place on TV. In the updated model, marketers add new tools to their communications toolbox, including buzz-building activities that use viral and evangelical marketing techniques as well as new social media platforms, such as brand communities, product review sites, and social net- working sites where consumers talk to lots of other consumers.

Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge 46) Why might a company address the issue of noise, as defined in the communication model, by purchasing a block of pages in a magazine to advertise its brand?

Answer: Noise is anything that interferes with effective communication. The rationale for the purchase of a block of advertising is that the reader will not be distracted with other ads, particularly those of the competition.

Difficulty: Moderate LO: 13.1: Understand the communication process and the traditional promotion mix AACSB: Application of knowledge 47) When developing a promotional plan, a company should ________ before establishing the communication objectives.

A) determine the marketing communication budget B) allocate the marketing communication budget C) identify the target audiences D) evaluate the effectiveness of the communication program E) design the promotion mix Answer: C Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication

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48) Which is true about identifying the target audience?

A) There is never more than one audience marketers are trying to reach.

B) The intended customer should receive the same amount of attention as the other stakeholders.

C) Marketers must communicate with a variety of stakeholders that influence the target market.

D) Consumers only learn about a new product from the company that produces it.

E) The most important target audience are friends and family who influence the intended consumer.

Answer: C Difficulty: Difficult LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 49) The ________ step in the hierarchy of effects calls for marketers to tell the target market that there is a new brand on the market, often by using simple advertising that pushes the brand name in a variety of media.

A) awareness B) knowledge C) demand D) desire E) purchase Answer: A Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 50) Which of the following is NOT a step in the hierarchy of effects?

A) create awareness B) inform the market C) create demand D) create desire E) build loyalty Answer: C Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 51) The last step in the hierarchy of effects is to ________.

A) create awareness B) inform the market C) create desire D) encourage trial E) build loyalty Answer: E Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 14 Copyright © 2022 Pearson Education, Inc.

52) Which promotional effort would most likely be used in the creating desire step of the hierarchy of effects?

A) repetitive advertising B) celebrity endorsements C) personal selling D) product placement E) point-of-purchase displays Answer: B Difficulty: Difficult LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 53) Which is an example of a bottom-up budgeting technique?

A) the percentage-of-sales method B) the competitive-parity method C) the objective-task method D) the push strategy E) the hierarchy of effects Answer: C Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 54) Though the ________ method of setting an advertising budget is simple to use and helps management think about the relationships among promotion spending, selling price, and profit per unit, it wrongly views sales as the cause of promotion rather than the result.

A) percentage-of-sales B) competitive-parity C) bottom-up D) objective-task E) push-pull Answer: A Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 55) The ________ is a fancy way of saying "keep up with the Joneses."

A) objective-task method B) competitive-parity method C) percentage-of-sales method D) push-pull decision E) hierarchy of effects Answer: B Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning

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56) The ________ method of promotional budgeting is based on determining the level of spending necessary to accomplish specific promotion goals.

A) percentage-of-sales B) competitive-parity C) top-down D) pull-push E) objective-task Answer: E Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 57) The percentage-of-sales method is an example of a ________ budgeting technique.

A) top-down B) bottom-up C) push D) pull E) hierarchy of effects Answer: A Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 58) Which promotional mix strategy directs marketing efforts toward final consumers?

A) push B) pull C) hierarchy of effects D) permission marketing E) crowdsourcing Answer: B Difficulty: Easy LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 59) Which promotional mix strategy directs marketing efforts toward market channel members?

A) push B) pull C) hierarchy of effects D) permission marketing E) crowdsourcing Answer: A Difficulty: Easy LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication

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60) Of the different possible components of the promotion mix, the effectiveness of ________ activities are typically the easiest to evaluate.

A) advertising B) public relations C) social media D) sales promotion E) buzz-building Answer: D Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication 61) A florist who decides to budget five percent of last year's sales for promotional activities is using which of the following budgeting techniques?

A) bottom-up B) objective-task C) competitive-parity D) percentage-of-sales E) push-pull Answer: D Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Analytical thinking 62) Toward the end of the fiscal year, the owner of a small company came back from lunch concerned because he had learned that a business targeting his same customer base was planning on spending $150,000 on promotion. As soon as he arrived at the office, he called his financial manager and said, "I want to budget $150,000 for next year's promotion." Which method of promotional budgeting did the owner want to use?

A) the objective-task method B) the percentage-of-sales method C) the competitive-parity method D) the bottom-up method E) the pull-push method Answer: C Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Analytical thinking

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63) An ad in a professional journal targeted to an audience of dentists asked dentists to recommend Crest toothpaste to their patients. It offered toothpaste samples that dentists could buy at cost to give to their patients to encourage patients to take better care of their teeth. The manufacturer of Crest toothpaste was using ________.

A) viral marketing B) stealth marketing C) a push strategy D) a pull strategy E) public relations Answer: C Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Analytical thinking 64) Glasis is a type of paint made specifically for use on cars. An ad in Motor Trend magazine advising consumers to request their body shops use Glasis paint is an example of how a company uses ________.

A) viral marketing B) stealth marketing C) buzz marketing D) a push strategy E) a pull strategy Answer: E Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Analytical thinking 65) Business-to-consumer companies are more likely to emphasize a ________ strategy, while business-to-business companies are more likely to emphasize a ________ strategy.

A) pull; push B) push; pull C) push; pulse D) pulse; pull E) pulse; push Answer: A Difficulty: Difficult LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 66) Brochures and infomercials are most likely to be used during the "inform the market" stage of the hierarchy of effects.

Answer: TRUE Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Written and oral communication

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67) The last stage of the hierarchy of effects is encouraging promotion and trial.

Answer: FALSE Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 68) In comparison to sales promotion activities, it is easier to determine the effectiveness of traditional advertising.

Answer: FALSE Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 69) Multichannel promotion strategies combine traditional advertising, sales promotion, public relations, and direct marketing activities with social media or other digital communication activities.

Answer: TRUE Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning 70) Coca-Cola's Minute Maid unit is introducing a new premium fruit beverage. The primary promotional objective of marketing communications for the new product should be to create awareness.

Answer: TRUE Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 71) Allyson Godwin plans on setting up a small business where she will offer quilting lessons, sell material and quilting kits that she will create, and market her own creations. Last year her quilting skills earned her $2,000. She estimates that quilting as a full-time business will earn $10,000 during her first year. She has budgeted five percent of her sales estimate to be spent on promotion. What promotion method is Godwin using? What are the advantages and disadvantages of this method?

Answer: Godwin is using the percentage-of-sales method. The advantage of this method is that it reinforces the idea that spending on promotion is related to profits. Unfortunately, this method can imply that sales caused promotional outlays rather than viewing sales as the outcome of promotional efforts. If sales are not as high as estimated, Godwin may be reluctant to spend more on promotion even though the decrease might be due to some environmental change that could be countered with increased promotion.

Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge

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72) What three qualities do good promotion objectives possess?

Answer: Objectives are best when they are quantitative, when they specify the target consumer or business group, and when they specify the time frame during which the plan is expected to reach the objective.

Difficulty: Moderate LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 73) What promotional efforts might a marketer be likely to employ if the communication objective was to create desire for the product?

Answer: When the marketer's communication objective is to create desire for the product, he might use flashy advertising spreads in magazines, perhaps with endorsements of well-known celebrities, to create positive attitudes toward the brand.

Difficulty: Difficult LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 74) What promotional efforts might a marketer be likely to employ if the communication objective was to encourage purchase of the product?

Answer: When the marketer's communication objective is to encourage purchase of the product, she might use samples, create elaborate displays in stores that dispense money-saving coupons, and sponsor contests.

Difficulty: Difficult LO: 13.2: Describe the steps in traditional and multichannel promotion planning AACSB: Application of knowledge 75) Advertising is ________.

A) synonymous with marketing B) now irrelevant because of the Internet C) a form of personal communication D) communicated by a sponsor via mass media E) unrelated to marketing Answer: D Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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76) Through ________, viewers can watch their favorite television shows on mobile devices.

A) multichannel promotion B) authenticated streaming C) do-it-yourself ads D) native advertising E) embedded marketing Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 77) Product advertising ________.

A) focuses on a specific good B) emphasizes the activities of an organization C) promotes the point of view of a company D) includes advocacy advertising E) may take the form of PSAs Answer: A Difficulty: Difficult LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 78) Rather than focus on a specific brand, ________ advertising promotes the activities, personality, or point of view of a company or organization.

A) product B) institutional C) retail D) local E) streaming Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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79) Which of the following is true of advocacy advertising?

A) It is also known as public-service advertising.

B) It is primarily used to support sales promotion activities.

C) It is used only for non-profit causes.

D) It is intended to inform customers about a new product.

E) It is intended to influence public opinion.

Answer: E Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 80) ________ advertisements are messages in the public interest, run by the media at no charge, that seek to change attitudes and behavior toward a social issue.

A) Advocacy B) Public service C) Corporate D) Product E) Local Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 81) ________ advertising informs us about store hours, locations, and products that are available or on sale.

A) Advocacy B) Public service C) Local D) Product E) Corporate Answer: C Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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82) A(n) ________ is a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in various media over a period of time.

A) sales promotion B) advertising campaign C) mass marketing plan D) media schedule E) integrated marketing communication campaign Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 83) A(n) ________ provides most or all of the services needed to mount an advertising campaign.

A) institutional agency B) limited-service agency C) creative services agency D) in-house agency E) full-service agency Answer: E Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 84) Advertising account managers are typically responsible for which of the following?

A) writing the advertising copy B) acting as liaison between the agency and client C) posttesting advertisements D) collecting data to make informed strategic decisions E) identifying the most effective communication vehicles for the advertising campaign Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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85) Which advertising agency specialist is responsible for acting as the voice of the consumer in creating effective advertising?

A) the account executive B) the account planner C) the creative director D) the media planner E) the art director Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 86) An agency's creative director, copywriters, and art director make up the ________ department.

A) account management B) creative services C) research D) marketing E) media planning Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 87) The media planner is the ________ of the campaign.

A) "soul" B) "heart" C) "voice" D) "legs" E) "brains" Answer: D Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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88) Which department is responsible for analyzing information about consumers to develop sensible strategies?

A) account management B) creative services C) media planning D) research and marketing E) programmatic advertising Answer: D Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 89) Which department is responsible for determining which communication vehicles are the most effective and recommending the most efficient means to deliver the ad by deciding where, when, and how often it will appear?

A) account management B) creative services C) media planning D) research and marketing E) programmatic advertising Answer: C Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 90) Which of the following is NOT considered user-generated content (UCG)?

A) do-it-yourself ad B) consumer comment C) customer review D) professional Internet ad E) consumer-to-consumer discussion Answer: D Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising

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91) Which of the following is a method of creating user-generated content?

A) puffery B) greenwashing C) crowdsourcing D) testimonials E) slice-of-life Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 92) Puffery is a term for a(n) ________.

A) straightforward promotional message B) claim of superiority that cannot be proven or disproven C) emotional appeal to customers D) subliminal appeal to customers E) value-added promotion Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Ethical understanding and reasoning 93) ________ pricing is the illegal practice of advertising one price and then, by the time the sale is completed, presenting a total to which additional hidden fees have added.

A) Corrective B) Drip C) Puffery D) UGC E) Greenwashing Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Ethical understanding and reasoning

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94) Which of the following should be the first step of developing an advertising campaign?

A) set the budget objectives B) establish the advertising message C) understand the target audience D) draft the creative brief E) select the execution format Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 95) ________ can be classified by primary purpose, such as to inform, persuade, or remind.

A) Budget objectives B) Message objectives C) Creative strategies D) Creative briefs E) Media plans Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 96) The creative strategy for an advertising campaign is summarized in a(n) ________.

A) agency contract B) account plan C) media plan D) creative brief E) message objective Answer: D Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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97) ________ is the execution format that depicts typical people using the product in an everyday setting.

A) Lifestyle B) Fantasy C) Slice of life D) Testimonial E) Demonstration Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 98) Apple ran ads featuring real people who had switched from Microsoft Windows PCs to Macs. When companies use people, actors, or sports celebrities to express the product's effectiveness, what kind of execution format is being used?

A) testimonial B) lifestyle C) comparative D) unique selling proposition E) slice of life Answer: A Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 99) ________ refers to the mood or attitude an advertisement conveys.

A) Creative technique B) Execution format C) Unique selling proposition D) Appeal E) Tonality Answer: E Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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100) You are looking to advertise your new product, and you want good mass-marketing coverage that allows you to show the product in use. You should go with ________ as your advertising medium.

A) directories B) place-based media C) branded entertainment D) advergaming E) television Answer: E Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 101) Which of the following statements about magazines as an advertising medium is true?

A) Magazines have long lead times and deadlines that can reduce flexibility.

B) Magazines have not benefited from advances in communication technologies.

C) Magazines typically use a mass marketing strategy.

D) Magazines do not accept local advertising.

E) Magazines have poor reproduction quality of images.

Answer: A Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 102) Which of the following statements about radio as an advertising medium is true?

A) Radio advertising is typically quite expensive.

B) National radio advertising opportunities are simple to purchase.

C) One advantage of radio advertising is its flexibility.

D) Radio prohibits the use of segmentation strategies.

E) Radio is defined as a place-based medium.

Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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103) Which of the following would be the best medium for an advertisement encouraging customers to come to a local retailer's sidewalk sale this weekend?

A) magazine B) network television C) local newspaper D) directory E) advergaming Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 104) Which of the following types of ads can users block with Internet access software applications?

A) banners B) buttons C) pop-ups D) search engine listings E) pre-roll ads Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 105) Product placements in television programs and movies are examples of ________.

A) advergaming B) embedded marketing C) authenticated streaming D) native advertising E) user-generated content Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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106) ________ is a measure of the percentage of people in the target market who are exposed to the media vehicle at least once during a given time period.

A) Reach B) Frequency C) Impression D) Exposure E) Gross rating Answer: A Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 107) Which of the following is a media schedule of short, intense bursts alternating with periods of little to no activity?

A) continuous scheduling B) sequencing C) segmenting D) flighting E) monetizing Answer: D Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 108) Which of the following is a technique for measuring the impact of an advertisement during the final step of developing an advertising campaign?

A) search engine optimization (SEO) B) aided recall C) monetizing D) reach E) placement Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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109) Which of the following is a posttesting technique used by telephone survey or personal interview to determine whether a person remembers seeing an ad during a specified period without giving the person the name of the brand?

A) unaided recall B) attitudinal measure C) permission marketing D) conversion rate E) corrective advertising Answer: A Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 110) Which of the following is a sponsored message that mimics the normal content of the media vehicle in which it appears?

A) authenticated streaming B) native advertising C) support media D) paid media E) in-app advertising Answer: B Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 111) Word of mouth or buzz on social media is also referred to as ________.

A) unaided recall B) owned media C) earned media D) rich media E) native advertising Answer: C Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication

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112) Street furniture advertising and transit advertising are both examples of ________.

A) place-based media B) out-of-home media C) earned media D) geotargeting E) mobile advertising Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 113) A television commercial for Post Select cereal is an example of which of the following?

A) product advertising B) institutional advertising C) sales promotion D) direct selling E) retail advertising Answer: A Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 114) An ad for Ford did not advertise a car, but instead explained the meaning of the company's slogan, "no boundaries." This ad is an example of ________.

A) product advertising B) sales promotion C) institutional advertising D) advocacy advertising E) retail advertising Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking

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115) Which of the following advertising situations would LEAST likely be considered puffery?

A) a mouthwash that claims to make your mouth feel its freshest B) toned thighs and legs as a result of using the Thigh Master for only 15 minutes each day C) children growing into attractive adults as a result of drinking milk D) a retired couple drinking a vitamin and protein shake and then going bicycling E) a sleepy mom who wakes up to a gray day, drinks a cup of coffee, and then looks out her window to see golden sunshine, beautiful flowers blooming, songbirds singing, and a rainbow on the horizon Answer: D Difficulty: Difficult LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 116) U-Frame-It is a small company that has hired a local ad agency to put together an advertising campaign. Which of the following questions should be addressed before the others?

A) What percentage of the budget should be for U-Frame-It radio ads?

B) Which type of media is most appropriate for U-Frame-It ads?

C) What are the message objectives of U-Frame-It? D) How does U-Frame-It's competition advertise?

E) What type of appeal will work best for U-Frame-It's products?

Answer: C Difficulty: Difficult LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge 117) Avis positioned itself against market-leading Hertz by claiming, "We're number two, so we try harder." This is an example of ________.

A) reminder advertising B) comparative advertising C) demonstration advertising D) a slice-of-life appeal E) a lifestyle appeal Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking

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118) An ad for Mongoose mountain bikes shows a serious biker traversing remote and rugged but beautiful terrain and states, "There are places that are so awesome and so killer that you'd like to tell the whole world about them. But please, don't." This ad uses the ________ appeal.

A) slice-of-life B) lifestyle C) fear D) testimonial E) straight-forward Answer: B Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 119) Jell-O ads contain the phrase "Make some magic." All Ace Hardware store ads contain the statement "Life is an ongoing project." The American Dairy Farmers run ads that say, "Ahh, the power of cheese." These are all examples of ________.

A) jingles B) testimonials C) unique selling propositions (USPs) D) slogans E) slice-of-life appeals Answer: D Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 120) Many gas stations now have self-service pumps with small televisions that broadcast short news and entertainment spots, along with advertisements, as customers pump their gas. The ads reach this captive audience through the use of ________ media.

A) owned B) native C) place-based D) mobile E) permission Answer: C Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking

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121) For which of the following products would a continuous advertising schedule be most appropriate?

A) swimming pool chemicals B) ski goggles C) heaters D) mosquito repellent E) lightbulbs Answer: E Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge 122) Traditional advertising is no longer important.

Answer: FALSE Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Written and oral communication 123) TV Everywhere is a term that describes using your Internet-enabled device, like a tablet or smartphone, to stream content from your cable or satellite provider.

Answer: TRUE Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 124) The account executive, or account manager, is the "brains" of the advertising operation.

Answer: FALSE Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 125) The move to in-house agencies and the use of programmatic ad buying give firms greater efficiency, speed, control, and cost savings of around 50 percent.

Answer: FALSE Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 36 Copyright © 2022 Pearson Education, Inc.

126) Do-it-yourself ads are a type of user-generated content.

Answer: TRUE Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 127) Do-it-yourself ads cost about one-half as much as professional ads.

Answer: FALSE Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 128) Comparative advertising explicitly names one or more competitors.

Answer: TRUE Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Analytical thinking 129) QR code advertising is one way for marketers to engage consumers using their mobile devices.

Answer: TRUE Difficulty: Easy LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 130) To posttest an ad for Maytag appliances, interviewers could ask consumers what appliance ads they have seen in the last month.

Answer: TRUE Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge

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131) Discuss programmatic advertising.

Answer: Programmatic ad buying is the use of algorithms and software to buy digital advertising. In addition, the system will monitor the client's ad spending and look for areas of improvement. Programmatic advertising allows firms to have one-to-one conversations with individuals and understand their journey within digital media better.

Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge 132) Briefly describe four main ethical objections to advertising discussed in the text.

Answer: Some people believe that advertising is manipulative, causing people to make purchases they would not make without having been exposed to the ads. Similarly, some criticize advertising for encouraging people to buy products they do not need. Advertisers are sometimes accused of deceptive practices that lead consumers to believe they will get more value than they actually do. In addition, some advertising has been accused of being offensive, and some advertising has been accused of perpetuating negative stereotypes of certain groups of consumers.

Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Ethical understanding and reasoning 133) Identify the traditional mass media vehicles and identify some of the strengths and weaknesses of each type.

Answer: Television: Advantages are good mass-marketing coverage, cost-effectiveness, and appeals to the senses; weaknesses are high total costs and an increasingly fragmented audience.

Newspapers: Strengths are timeliness, good local market coverage, and high believability; weaknesses are short life and poor reproduction quality.

Magazines: Strengths are high audience selectivity, credibility, and good pass-along readership; weaknesses are high costs and reduced flexibility.

Radio: Strengths are good local acceptance and low cost; weaknesses are low attention and inappropriateness for products that need to be demonstrated.

Difficulty: Difficult LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge

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134) What is a USP? When would a marketer use a USP strategy?

Answer: USP stands for unique selling proposition, a strategy marketers use to emphasize the distinct advantages of a product that a customer can identify.

Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge 135) What is a benefit of a demonstration ad for a product, and when is this type of execution format most useful?

Answer: Demonstration ads show a product in action to prove it performs as the ad claims.

Demonstration advertising is most useful when consumers are unable to identify important benefits except by seeing the product in use.

Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising AACSB: Application of knowledge 136) How do marketers of free smartphone apps make their products profitable?

Answer: Developers of such apps monetize their products by using in-app advertising that creates revenue and entertains and engages the user.

Difficulty: Moderate LO: 13.3: Explain what advertising is, describe the major types of advertising, discuss some of the major criticisms of advertising, and describe the process of developing an advertising campaign and how marketers evaluate advertising 137) ________ is any one-to-one communication to a consumer or business recipient designed to generate a response in the form of an order, a request for further information, or a visit to a store or other place of business for purchase of a product.

A) Do-it-yourself advertising B) Direct marketing C) User-generated content D) Mobile advertising E) Earned media Answer: B Difficulty: Easy LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking

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138) Direct marketing ________.

A) spending is expected to decrease from 2019 to 2020 B) allows marketers to know almost immediately if the pitch worked C) does not provide specific feedback about what worked and what didn't work D) is a form of one-to-many marketing communication E) does not seek to elicit requests for further information Answer: B Difficulty: Difficult LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 139) ________ is a collection of products offered for sale in book form, usually consisting of product descriptions accompanied by photos of the items.

A) A catalog B) Direct mail C) Direct-response advertising D) Pop-up advertising E) Paid media Answer: A Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Application of knowledge 140) Research from the Data and Marketing Association (DMA) found that the direct mail household response rate increased to about ________ % in 2017.

A) 5 B) 10 C) 12 D) 17 E) 20 Answer: A Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 141) ________ refers to the promotional and other e-commerce activities transmitted over mobile phones and other mobile devices, such as smartphones and tablets with phone capabilities.

A) Direct-response TV B) Telemarketing C) Direct mail D) M-commerce E) In-app advertising Answer: D Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

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142) Direct marketing is the fastest-growing type of marketing communication.

Answer: TRUE Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 143) When Lands' End reduced the number of catalogs it distributed, the result was a $100 million increase in sales.

Answer: FALSE Difficulty: Easy LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 144) A catalog has an advantage over a direct mail offer because the sender can personalize it.

Answer: FALSE Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 145) The direct mail industry allows consumers to opt out of some mailing lists.

Answer: TRUE Difficulty: Easy LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 146) Telemarketing actually is more profitable for business markets than for consumer markets.

Answer: TRUE Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Application of knowledge 147) Mobile phone users make up just under 50 percent of the world's population.

Answer: FALSE Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

148) Why does direct marketing appeal to so many marketers?

Answer: One reason direct marketing appeals to so many marketers is simple but powerful: You know almost immediately whether your pitch worked. Unlike traditional advertising, every message can link directly to a response (hence the term direct marketing). For this reason, organizations that want to see evidence of a promotion's ROI ("show me the money!") can get very specific feedback about what worked and what didn't.

Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Application of knowledge

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149) What is a catalog? What role does it play in today's marketing environment?

Answer: A catalog is a collection of products offered for sale in book form, usually consisting of product descriptions accompanied by photos of the items. The innovator retailers, Montgomery Ward, Sears, and JCPenney, pioneered catalogs as a way to reach an additional target market, people in remote areas who lacked access to stores. Today, despite the growth in online shopping, the catalog is still alive and may be making a comeback. For many brands, the catalog drives both online and in-store sales. According to the Data and Marketing Association, approximately 100.7 million Americans made purchases from catalogs in 2016. Of course, many catalogs are available and viewed online, often on mobile devices. Why do retailers think catalogs are still so important? The answer is because they drive sales. When Lands' End reduced the number of catalogs it distributed, the result was a $100 million decrease in sales.

Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking 150) What measures has the government taken to regulate telemarketing?

Answer: The Federal Trade Commission (FTC) established the National Do Not Call Registry to allow consumers to limit the number of telemarketing calls they receive. The idea is that telemarketing firms check the registry at least every 31 days and clean their phone lists accordingly. Consumers responded very positively to the regulation, and more than 220 million have posted their home numbers and mobile numbers on the registry. While it may have limited some telemarketing calls, the National Do Not Call Registry unfortunately does not screen out a large majority of the vendors. As we said in Chapter 2, the growth of "robocalls" prompted passage of the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, or the TRACED Act, in 2019.

Difficulty: Moderate LO: 13.4: Understand the elements of direct marketing.

AACSB: Analytical thinking

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Marketing: Real People, Real Choices, 11e (Solomon) Chapter 14 Promotion II: Social Media Platforms and Other Promotion Elements 1) A social trend in which people use technology to get the things they need from each other, rather than from traditional institutions like corporations is called the ________.

A) media multitasking B) second screening C) groundswell D) cord-cutting E) social media Answer: C Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 2) Today, ________ is the largest single social media platform with 2.5 billion active users worldwide.

A) Twitter B) Facebook C) Snapchat D) Instagram E) TikTok Answer: B Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 3) Instagram, which came online in 2010, has reached ________ active users.

A) 350 million B) 400 million C) 500 million D) 1 billion E) 2.5 billion Answer: D Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities

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4) Media multitasking means________.

A) consuming multiple forms of media simultaneously B) spending more time on the Internet than watching television C) having profiles on multiple social media sites D) owning a smartphone, a tablet, and a laptop E) using the Internet for both business and recreational purposes Answer: A Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 5) ________ refers to consumers' cancelling of their traditional cable subscriptions and instead relying on streaming service to provide televised entertainment.

A) Media multitasking B) Second screening C) Cord-cutting D) Groundswelling E) Social networking Answer: C Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 6) Companies recruit ________, or loyal customers who care a great deal about the brand, to communicate with and sell to other consumers.

A) brand evangelists B) cord-cutters C) second screeners D) media multitaskers E) cosplayers Answer: A Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 7) To cosplay means to ________.

A) communicate with other consumers about a company one is passionate about B) dress up as characters from brands, movies, video games, books, and more C) create a graphic representation of a user in a virtual world D) cancel traditional cable subscriptions and rely instead on streaming services E) consume multiple forms of media simultaneously Answer: B Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities

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8) Which of the following is a social networking site that hosts short videos lasting for 15 seconds or less, typically accompanied by music?

A) Facebook B) YouTube C) Instagram D) Snapchat E) TikTok Answer: E Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 9) Brands connect with consumers through their own accounts and through those of celebrity influencers via ________ —content brands pay celebrities to share through their personal accounts.

A) brand communities B) brand evangelism C) second screening D) sponsored posts E) social commerce Answer: D Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 10) ________ is the most popular social network among U.S. teenagers.

A) Facebook B) YouTube C) Instagram D) Snapchat E) TikTok Answer: D Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 11) Twitch ________.

A) bills itself as the fastest way to share a moment B) is the most used streaming platform for broadcasting video games C) is a free microblogging service that lets users post short text messages D) continues to lose college-aged users E) is a social networking site dedicated to sharing photos and short-form videos Answer: B Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 3 Copyright © 2022 Pearson Education, Inc.

12) An avatar is a ________.

A) site that creates a connection between a consumer and a brand B) mobile app with increasing popularity C) type of location-based network D) component of the Internet of Things E) graphic representation of a user Answer: E Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 13) Which of the following is true of virtual worlds?

A) They are among the most popular product review sites.

B) They are likely to replace Twitter.

C) They are the most popular tool for buzz-building activities.

D) They are a booming marketplace for virtual goods paid for in actual money.

E) They use "dashboards" so businesses can monitor the locations of avatars.

Answer: D Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 14) Virtual goods are ________.

A) graphic representations of users of virtual worlds B) digital products consumers buy for use in online contexts C) online, highly engaging digital environments D) tangible products that can be used in the real world E) content that brands pay celebrities to create and share Answer: B Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 15) ________ refers to consumer decision-making activities that occur in, or are influenced by, someone's social network, particularly online.

A) Augmented reality B) Product reviewing C) Second screening D) Cord-cutting E) Social commerce Answer: E Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities

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16) What percent of consumers say they have purchased something after seeing it in a YouTube video?

A) 15 percent B) 25 percent C) 45 percent D) 70 percent E) 85 percent Answer: D Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 17) Yelp and TripAdvisor are both examples of ________.

A) virtual worlds B) location-based social networks C) product review sites D) social networking sites E) avatars Answer: C Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 18) ________ integrate(s) sophisticated GPS technology.

A) Location-based social networks B) Virtual reality C) Virtual worlds D) The Internet of Things E) Cosplay Answer: A Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 19) Which of the following is a view of a physical, real world that is enhanced or altered by computer-generated sounds, videos, graphics, or GPS data?

A) location-based social networks B) augmented reality C) virtual worlds D) the Internet of Things E) cosplay Answer: B Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities

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20) Which of the following is NOT a component of the updated communication model?

A) the "democratization" of brand messages B) Internet-based platforms C) one-way communication from organizations to consumers D) user-generated content E) users sharing content with other users Answer: C Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 21) The network of physical things, vehicles, devices, and buildings in which designers have embedded sensors, electronics, and network connectivity is called the ________.

A) extranet B) augmented reality C) virtual world D) Internet of Things E) location-based network Answer: D Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 22) If you visit diamondsforever.com, you can design your own ring. This site, which is operated

by Engaging Engagements, then allows you to email a picture of your ring to friends and relatives. This way, they can share in the excitement and be informed of the web site's existence.

Engaging Engagements is using ________.

A) location-based social networking B) buzz-building activities C) the Internet of Things D) direct marketing E) virtual goods Answer: B Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities AACSB: Analytical thinking

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23) Because consumers today prefer short messages, successful marketing communication is LEAST likely to include which of the following?

A) a 60-second commercial B) a tweet C) a snap D) a 15-second TikTok clip E) a captionless Instagram post Answer: A Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 24) In 2019, U.S. advertisers spent approximately $108 billion on Internet ads.

Answer: TRUE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 25) Logging onto Instagram when a TV commercial comes on is an example of second screening.

Answer: TRUE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 26) Online retailers find that Internet customers are easier to please and more loyal.

Answer: FALSE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 27) A downside to social media is that many consumers use it to shame companies for poor customer service experiences.

Answer: TRUE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 28) Facebook, the most popular social networking site, continues to gain college-aged users.

Answer: FALSE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities

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29) Unboxing videos are a popular form of product reviews.

Answer: TRUE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 30) Over 70 percent of global Internet users between the ages of 16 and 24 have searched for product information via social media.

Answer: FALSE Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 31) Devices and products connected through the Internet of Things can collect data and communicate it to each other.

Answer: TRUE Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 32) Because consumers today prefer short messages, successful marketing communication often includes 15-second TV commercials, a tweet, a snap, a captionless Instagram post, or a TikTok clip.

Answer: TRUE Difficulty: Easy LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 33) Compare the traditional one-to-many marketing communication model to the updated many-to-many communication model. What has caused the shift? What are the advantages and disadvantages of the new model for marketers?

Answer: The traditional marketing model of one-to-many communication involves mass media tools such as advertising, out-of-home, consumer sales promotions, and public relations.

However, through advances in Internet and mobile technologies, consumers are connected in ways they never were before. They can instantly share their opinions on products and consult the opinions of other consumers. This many-to-many communication model involves buzz building activities and social media platforms such as social networks, brand communities, product review sites, virtual worlds, and location-based social networks. For marketers, this new model offers benefits and dangers. Consumers listen to and trust the opinions of other consumers, which can work two ways. Positive product opinions spread through social media can greatly boost a product's image, but negative reviews can devastate it. Even worse, companies have little or no control over what consumers say about their products.

Difficulty: Difficult LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities AACSB: Application of knowledge 8 Copyright © 2022 Pearson Education, Inc.

34) Why has traditional mass market advertising diminished as a way to talk to younger consumers?

Answer: Younger consumers spend more and more time online and are less likely to rely on mass media outlets such as network television, national newspapers, and magazines for information and entertainment.

Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities AACSB: Application of knowledge 35) What role do brand evangelists play in the updated marketing model?

Answer: Social media are an important part of the updated communication model. This term refers to Internet-based platforms that allow users not only to modify existing content but also to create and share their own content with others who access these sites. It's hard to grasp just how much these new formats transform the way we interact with marketers; they "democratize" messages because they give individual consumers a seat at the table where organizations used to shape brand meanings on their own. This makes it much easier for companies to spread the word through their brand ambassadors, or brand evangelists, loyal customers recruited to communicate with and sell to other consumers. The flip side is that the bad stuff also gets out much quicker and reaches people a lot faster: In one survey, 36 percent of respondents said they had used social media to shame a company for poor customer service.

Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities 36) Discuss how marketers can use virtual worlds to convey marketing communications.

Answer: Virtual worlds allow users to hang out in virtual clubs, shop for virtual clothes and design virtual homes. These are all opportunities for marketers to build enthusiasm and loyalty for actual products.

Difficulty: Moderate LO: 14.1: Understand how marketers communicate using an updated communication model that incorporates new social media and buzz marketing activities AACSB: Application of knowledge 37) ________ is the promotional tool used to build interest in or encourage purchase of a good or service during a specified period.

A) Personal selling B) Direct-response advertising C) Advertising D) Public relations E) Sales promotion Answer: E Difficulty: Easy LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Written and oral communication 9 Copyright © 2022 Pearson Education, Inc.

38) Which statement about sales promotions and advertising is true?

A) Only advertising is a paid promotion activity.

B) Neither is a paid promotion activity.

C) Sales promotions are more useful if the firm has a long-term objective.

D) The purpose of many types of sales promotion is to induce action by the consumer.

E) A decreased amount of marketing budgets is put into sales promotions.

Answer: D Difficulty: Difficult LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Written and oral communication 39) What are the two major categories of sales promotions?

A) short-term and long-term B) consumer-oriented and trade-oriented C) print media and social media D) price-based and frequency-based E) public and private Answer: B Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 40) Which of the following is NOT an example of a price-based promotion?

A) coupon B) rebate C) loyalty program D) refund E) premium Answer: E Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 41) Contests and sweepstakes are an example of which type of sales promotion?

A) price-based B) trade-oriented C) attention-getting D) discounts and deals E) increased-visibility Answer: C Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities

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42) An example of a(n) ________ is an airline's practice of awarding customers points for miles traveled that can be turned in for free airline trips.

A) allowance B) rebate C) sweepstakes D) loyalty program E) premium Answer: D Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 43) Which of the following is a type of trade sales promotion designed to increase visibility?

A) case allowance B) merchandising allowance C) push money D) co-op advertising E) forward buying Answer: C Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 44) Which of the following is a discount to the retailer or wholesaler based on the volume of product ordered?

A) merchandising allowance B) case allowance C) forward buying D) push money E) diverting Answer: B Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities

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45) ________ involves a channel member purchasing large quantities of a product during a discount period, warehousing the product, and not buying the product again until another discount is offered.

A) Pushing B) Forward buying C) Rebating D) Point-of-purchase displaying E) Discounting Answer: B Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Ethical understanding and reasoning 46) With ________, a prize is offered to employees who meet a prespecified sales goal or who are top performers during a given period.

A) trade shows B) incentive programs C) sweepstakes D) loyalty programs E) diverting Answer: B Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Ethical understanding and reasoning 47) A trade show is a way for a company to do all of the following EXCEPT which one?

A) distribute literature about its product B) pay a bonus to members of its salesforce C) give away sample products D) establish new business contacts E) showcase its new products in elaborate exhibits Answer: B Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Written and oral communication

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48) Which of the following is a bonus paid by a manufacturer to a salesperson for selling its product?

A) a rebate B) a merchandising allowance C) a premium D) a sweepstakes E) push money Answer: E Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 49) Toro ran a clever preseason promotion on some of its snow blower models, offering money back if the snowfall in the buyer's market area turned out to be below average. This is an example of a ________.

A) rebate B) premium C) price-off pack D) continuity program E) sweepstakes Answer: A Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Analytical thinking 50) An example of a(n) ________ is a five-foot-high cardboard display of Cap'n Crunch next to Cap'n Crunch cereal boxes.

A) point-of-purchase (POP) display B) incentive program C) promotional product D) co-op advertisement E) case allowance Answer: A Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Analytical thinking

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51) An office supply store that pays a discounted price when it orders more than 12 metal filing cabinets is receiving a ________.

A) merchandising allowance B) promotional product C) case allowance D) rebate E) premium Answer: C Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Analytical thinking 52) The growth of very large grocery store chains and mass merchandisers such as Walmart, and the resulting shift in power in the channels, has led marketers to place less of their total marketing communication budgets in sales promotions.

Answer: FALSE Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Written and oral communication 53) A traditional advertising medium can be used to publicize a sales promotion.

Answer: TRUE Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Written and oral communication 54) When U.S. grocery stores put in-store sampling on hold due to the coronavirus pandemic, brands had no other ways to get samples into consumers' hands.

Answer: FALSE Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities 55) A merchandising allowance is a discount to a wholesaler or retailer based on the order volume of a product.

Answer: FALSE Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities

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56) To encourage sales, a candy maker has a new promotion, randomly including a small number of "free lifetime supply of chocolate" vouchers hidden in the packaging of its chocolate bars.

This is an example of a contest.

Answer: FALSE Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Analytical thinking 57) Identify and describe attention-getting sales promotions.

Answer: Attention-getting consumer promotions stimulate interest in a company's products.

Some typical types of attention-getting promotions follow. Contests and sweepstakes: According to their legal definitions, a contest is a test of skill, whereas a sweepstakes or giveaway is based on chance. Premiums: Items offered free to people who have purchased a product. Product sampling: Distributing free trial-size versions of a product to consumers.

Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Application of knowledge 58) Explain the difference between the practices of forward buying and diverting.

Answer: Forward buying is the practice of purchasing and warehousing a large volume of product offered through a case allowance, drawing on the warehoused product until the manufacturer offers another discount. Diverting is similar. It involves selling the warehoused product after the manufacturer's discount has expired at a price below the manufacturer's regular price but high enough for the selling company to make a profit.

Difficulty: Moderate LO: 14.2: Explain what sales promotion is and describe the different types of consumer and B2B sales promotion activities AACSB: Application of knowledge 59) ________ is marketing communication by which a company representative interacts directly with a customer or prospective customer to communicate about a good or service.

A) Direct marketing B) Advertising C) Mass marketing D) Personal selling E) Public relations Answer: D Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication

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60) According to an axiom in marketing, the more ________ the product, the more heavily firms tend to rely on personal selling to promote it.

A) popular B) available C) intangible D) impersonal E) marketable Answer: C Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 61) Which of the following is the most logical reason that many organizations rely heavily on personal selling?

A) to make more efficient use of the promotional mix B) to quickly move a product to the maturity stage of the product life cycle C) to create consistent marketing communications D) to more effectively sell highly technical or very expensive products E) to decrease promotional expenditures Answer: D Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 62) What type of software do salespeople use to track all aspects of customer interaction?

A) TQM (total quality management) B) CRM (customer relationship management) C) DRM (direct response management) D) PR (public relations) E) JIT (just in time) Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 63) What type of software links information between selling and buying firms?

A) CRM (customer relationship management) B) PRM (partner relationship management) C) TQM (total quality management) D) PR (public relations) E) VoIP (Voice-over Internet Protocol) Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process

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64) ________, a system that uses a data network to carry voice calls, is frequently used for communication between salespeople and customers.

A) Voice-over Internet protocol (VoIP) B) Customer relationship management (CRM) C) The Internet of Things D) Partner relationship management (PRM) E) Total quality management (TQM) Answer: A Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 65) Which of the following best describes Zoom-bombing?

A) a Zoom meeting crashing because of too many participants B) uninvited guests showing up for a Zoom meeting C) using the term Zoom to describe any VoIP technology D) the fatigue experienced by users after too many Zoom meetings E) Zoom participants attempting to speak while they are on mute Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 66) ________ is the practice of using social media to engage in the selling process.

A) Direct selling B) Social selling C) Zoom bombing D) Telecommuting E) Partner-relationship managing Answer: B Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 67) Through the practice of ________, sales organizations move away from a "one-size-fits-all" mentality and instead choose the best way to sell to individual B2B customers.

A) permission marketing B) sampling C) multilevel selling D) account-based selling E) tryvertising Answer: D Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process

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68) Of the following, which sales job requires the LEAST creative selling?

A) order getter B) order taker C) team selling member D) new-business salesperson E) missionary salesperson Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 69) A(n) ________ is a sales support person with a high level of technical expertise who assists in product demonstrations.

A) order getter B) order taker C) team seller D) technical specialist E) missionary salesperson Answer: D Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 70) A group of people from a range of departments tasked with developing products and programs that satisfy the customer's needs is referred to as a ________ team.

A) cross-functional B) partner relationship management (PRM) C) customer relationship management (CRM) D) missionary E) transactional Answer: A Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 71) ________ bypass channel intermediaries and sell directly from manufacturer to consumer through personal, one-to-one contact.

A) Order getters B) Transactional sellers C) Missionary salespeople D) Direct marketers E) Direct sellers Answer: E Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 18 Copyright © 2022 Pearson Education, Inc.

72) Team selling is usually limited to ________.

A) small customers B) cross-functional firms C) key accounts D) B2B markets E) telecommuting Answer: C Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 73) Transactional selling ________.

A) involves developing long-term customer relationships B) increases customer satisfaction C) is a long-term approach to selling D) utilizes hard-sell tactics E) prioritizes customer loyalty Answer: D Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 74) ________ selling is a form of personal selling that involves securing, developing, and maintaining long-term relationships with profitable customers.

A) Transactional B) Relationship C) Social D) Hard E) Cross-functional Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 75) Which of the following statements about relationship selling is true?

A) Relationship selling primarily uses hard-sell tactics.

B) A salesperson selling new tires to tourists who are stranded in his community will most likely use relationship selling.

C) With relationship selling, the salesperson tries to develop a win-win relationship with customers.

D) People who engage in relationship selling do not prospect for new customers.

E) Relationship selling is a short-sighted approach.

Answer: C Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 19 Copyright © 2022 Pearson Education, Inc.

76) The first step in the creative selling process is ________.

A) preapproach B) prospect and qualify C) approach D) handle objections E) sales presentation Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 77) Prospecting is the step in the creative selling process in which the salesperson ________.

A) meets the customer for the first time B) learns as much as possible about a prospective customer before making a sales call C) identifies potential customers likely to be interested in purchasing the product D) conveys the product's competitive advantages to a potential customer E) clarifies and overcomes a customer's concerns about buying Answer: C Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 78) The preapproach stage in the creative selling process is when the salesperson ________.

A) meets the customer for the first time B) learns as much as possible about a prospective customer before making a sales call C) identifies potential customers likely to be interested in purchasing the product D) anticipates reasons the potential customer might not be interested in purchasing the product E) clarifies and overcomes a customer's concerns about buying Answer: C Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 79) The step that follows preapproach in the creative selling process is ________.

A) presentation B) qualify C) handle objections D) prospect E) approach Answer: E Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process

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80) Which of the following is the LEAST relevant characteristic that a salesperson should consider when qualifying a prospect?

A) financial ability B) longevity in the market C) credit history D) volume of business E) likely level of loyalty Answer: B Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 81) After salesperson Danny O'Reilly has made a sale, he asks his customer if she knows of anyone else who might also be interested in buying his products. Referrals such as these are one method used in ________.

A) prospecting B) cold calling C) the preapproach D) qualifying E) completing follow-up Answer: A Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 82) Without prior introduction or arrangement, telemarketers telephone your home and business offering to sell you a variety of products. These telemarketers engage in what form of prospecting?

A) referring B) cold calling C) networking D) direct selling E) qualifying Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication

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83) The salesperson contacts the customer for the first time in the ________ step of the creative selling process.

A) preapproach B) prospect C) approach D) presentation E) qualify Answer: C Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication 84) A salesperson would be most likely to use Standard & Poor's 500 Directory during which stage of the creative selling process?

A) preapproach B) approach C) sales presentation D) handle objections E) close Answer: A Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 85) According to your text, sales managers rate which of the following skills as the single most important attribute they look for when hiring relationship salespeople?

A) presentation skills B) technical skills C) listening skills D) questioning skills E) time management skills Answer: C Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication

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86) After the sales presentation, which of the following is the next step in the creative selling process?

A) block objections B) handle objections C) begin building a bridge to the next sale D) wait for signals that the customer is ready to buy E) indirectly ask the customer for her business Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication 87) In which step of the sales process would the salesperson call to ensure customer satisfaction and repeat business?

A) approach B) presentation C) handle objections D) close the sale E) follow-up Answer: E Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication 88) In which stage of the creative selling process would the salesperson say, "What quantity would you like to order?"

A) preapproach B) close C) qualify D) handle objections E) follow-up Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication

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89) Which of the following is NOT a closing approach for a salesperson?

A) a last objection close B) a bridge close C) a standing-room-only close D) a buy-now close E) an assumptive close Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication 90) Which of the following is an input measure of a salesperson's success?

A) volume of sales B) number of orders C) number of sales calls D) customer satisfaction E) level of repeat business Answer: C Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 91) When Kenneth called Southern Security to buy a safe in which to store important personal documents and possessions, he most likely talked to a(n) ________ who performed all the activities needed to process the transaction.

A) order taker B) order getter C) missionary salesperson D) new-business salesperson E) technical specialist Answer: A Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking

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92) At the sales presentation for EFTPS (a type of software for making the payment of all federal taxes secure, easy, and fast), it would be most logical for which member of the sales staff to demonstrate how payments can be set up 12 months in advance and how easy it is to view payment history?

A) the order taker B) the missionary salesperson C) the technical specialist D) the relationship manager E) the reactive salesperson Answer: C Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 93) At Boeing, salespeople work with company specialists, such as financial analysts, technical specialists, and engineers, to call on potential and current customers. This is an example of ________.

A) territorial selling B) team selling C) professional selling D) industry specialization selling E) transactional selling Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 94) In which type of sales job is an employee LEAST likely to focus on relationship selling?

A) new-business salesperson B) team selling member C) order taker D) order getter E) missionary salesperson Answer: C Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge

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95) In which of the following situations would personal selling be the LEAST cost-effective choice?

A) a manufacturer selling a line of running shoes to a chain of department stores B) an automobile dealer selling luxury cars C) a real estate agent selling a home D) a chain of supermarkets selling convenience products E) a computer systems firm selling hardware and software to a large business Answer: D Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 96) Your new-business sales force is responsible for prospecting and qualifying customers.

Which of the following will likely occur?

A) The number of qualified customers will exceed the number of prospects.

B) The new-business sales force will call on all prospects.

C) A salesperson may have to approach many qualified customers just to make one sale.

D) Salespeople will contact all of the customers they research in the preapproach stage.

E) Order takers will take responsibility for the approach and sales presentation steps.

Answer: C Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 97) A young couple contacted a realtor about buying a new home. Now that the realtor has prospects, his next step should be to ________.

A) handle any of their objections B) qualify them C) prepare his approach D) make a thorough sales presentation E) close the sale Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge

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98) As the salesperson entered the prospect's office, the salesperson extended his hand and said, "Your old college roommate Tiara Johns suggested I call on you." This action occurred in which stage of the creative selling process?

A) approach B) prospect and qualify C) preapproach D) close E) follow-up Answer: A Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 99) Southern Security makes safes for storing valuables such as jewelry and family records.

When Ed sold safes for the company, he had to be prepared with a response when a prospect said, "I have no room for a safe" or "My family heirlooms aren't valuable enough to put in a safe." In other words, Ed had to ________.

A) prepare several different closings B) use a canned sales presentation C) treat each sale as a transaction D) utilize cold calling E) anticipate objections Answer: E Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 100) Southern Security makes safes for storing valuables. When Ed sold safes for the company, he sometimes told a prospect, "The model safe you are looking at is on sale this week. If you wait until next week to buy, you will spend $100 more." When Ed used this approach, he was using the ________ close.

A) canned B) standing-room-only C) assumptive D) minor points E) stimulus-response Answer: B Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking

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101) Personal selling is one of the least visible forms of marketing communication.

Answer: FALSE Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 102) Personal selling has the added advantage of allowing salespeople to gain competitive intelligence through their interactions with customers.

Answer: TRUE Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 103) With personal selling, the average cost per contact with each customer is more than $300, much lower than other forms of promotion.

Answer: FALSE Difficulty: Easy LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 104) Personal selling is more important for firms that sell goods and services that consumers buy infrequently, like houses and cars.

Answer: TRUE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 105) A salesperson who telecommutes rather than travel to a home office and clients' offices is working from a virtual office.

Answer: TRUE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 106) Zoom's usage soared from 10 million daily meeting participants in December 2019 to 30 million in April 2020.

Answer: FALSE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process

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107) A representative for Tupperware who is implementing a party plan, demonstrating and selling products at a social gathering of friends, is using direct selling.

Answer: TRUE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 108) Today's professional salesperson is more likely to practice relationship selling than transactional selling.

Answer: TRUE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Interpersonal relations and teamwork 109) Using transactional selling, a selling team consisting of company personnel from various managerial levels each call on their counterpart in the customer organization.

Answer: FALSE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Interpersonal relations and teamwork 110) Because customers almost always have objections during the presentation or closing step of the selling process, all salespeople should anticipate and be prepared to respond to objections.

Answer: TRUE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Written and oral communication 111) The final stage of the creative selling process is the close.

Answer: FALSE Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process 112) What is the relationship between personal selling and the marketing push strategy?

Answer: Generally, a personal selling effort is more important when a firm engages in a push strategy, in which the goal is to "push" the product through the channel of distribution of the retailer so it is available to the consumer. This is a business-to-business use of personal selling; the large customer is the retailer.

Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 29 Copyright © 2022 Pearson Education, Inc.

113) Pfizer pharmaceutical representatives call on physicians to influence them to prescribe the latest Pfizer medications over competing products. However, no sale is made until doctors call prescriptions into pharmacies that then place orders through their drug wholesalers. What type of sales position do these Pfizer pharmaceutical representatives hold, and what are their job responsibilities?

Answer: The Pfizer pharmaceutical representative described here is a missionary salesperson. A missionary salesperson is someone who promotes the firm and tries to stimulate demand for a product but does not actually complete a sale.

Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 114) A major manufacturer of automobile tires sells its products at its dealership retail stores.

After a tire is sold, the customer can return to any manufacturers' retail store and the tire can be rotated on the car at no expense to the customer. Should a repair to the tire be needed, the customer will receive a discount from the list price bill as a form of a warranty received at the time of purchase of the tire. Identify and explain the selling approach being implemented by this manufacturer.

Answer: Relationship selling is being implemented by the manufacturer at its dealership retail stores. The free rotation of the tire and the discount pricing if a repair is needed are means of developing a long-time relationship with customers who will likely return to this manufacturer the next time they need to buy tires.

Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Analytical thinking 115) Identify the seven steps in the creative selling process. What may be the most difficult step for most salespeople?

Answer: Prospecting and qualifying begin the process, followed by the preapproach. Next, the salesperson makes an approach to make a presentation. Handling objections follows, leading into closing the sale. Each sale requires a follow up to make it complete. For most salespeople, especially new ones, the closing step is the most difficult and requires much skill. It takes practice for asking for the sale to become a natural progression of the dialogue between seller and buyer.

Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge

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116) Explain the follow-up step of the creative selling process. Why is it so important to the selling process?

Answer: The follow-up step is necessary if the salesperson wants to ensure customer satisfaction and repeat business. After closing, the salesperson should complete any details on delivery time, purchase terms, and other matters. The salesperson then should schedule a follow-up call when the initial order is received to make sure delivery went well and the customer is satisfied. This is an opportunity for the salesperson to bridge to the next purchase, developing a mutually beneficial relationship with the buyer.

Difficulty: Moderate LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 117) Why does a firm's number of prospects always equal or exceed its number of qualified customers?

Answer: Prospecting identifies the total number of potential customers in an area; qualifying breaks that number of prospects down into the actual group that it is worthwhile for the salesperson to target.

Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge

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118) What are four trends of note in the evolution of professional selling?

Answer: Artificial intelligence and machine learning are one of the most exciting trends in sales. AI means prioritizing the customers. This tells the salesperson which accounts he or she is most likely to finalize a deal with each day. Another important benefit of AI is what it means to salesperson productivity. By automatically handling time-consuming tasks such as logging emails and generating invoices, AI can spend time doing other things, like anticipating customer needs. The use of chatbots to connect with customers continues to gain in popularity.

A second sales trend is millennials. Millennials are making giant inroads into professional selling as both buyers and sellers. Millennials feel empowered by technology. They enjoy interacting with customers, but as in other parts of their lives, many are more comfortable doing so online rather than via in-person sales calls. As a result, we can expect to see a lot more sales activity occurring via text, video, etc., and perhaps a decrease in the amount of actual travel to call on clients at their IRL (in-real-life) offices. Soon, however, this focus will shift to Generation Z. A third trend is account-based selling, often used in B2B marketing. Account-based selling does away with the one-size-fits-all mentality and sells from an account-specific perspective. The sales organization evaluates individual accounts based upon their potential to become great customers. Then they choose the best way to develop relationships and sell to these preferred accounts.

A fourth trend is the growing focus on diversity and inclusion. From the greater visibility of LGBTQ+ equality to the increasing diversity of younger generations, including millennials and Gen Z, we are seeing more and more diversity on both the sales and buyer side Difficulty: Difficult LO: 14.3: Understand the important role of personal selling, the different types of sales jobs and the steps in the creative selling process AACSB: Application of knowledge 119) Public relations activities that are based on the company's marketing objectives is known as ________.

A) proactive PR B) publicity C) crisis management D) internal PR E) media relations Answer: A Difficulty: Easy LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication

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120) There are three steps involved in creating a public relations campaign. The first step is to ________.

A) conduct a SWOT analysis B) develop objectives C) formulate a mission statement D) recruit and train public relations specialists E) pretest components of the proposed public relations campaign Answer: B Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 121) The most common way for public relations specialists to communicate is through the use of ________.

A) sponsorship B) lobbying C) press releases D) special events E) speech writing Answer: C Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 122) Which of the following is a relatively inexpensive objective measurement that public relations (PR) specialists can use to gauge the effectiveness of their efforts?

A) personal evaluation of PR activities B) opinion surveys among the firm's publics C) coverage in print and broadcast media D) gross ratings points (GRP) E) cost per thousand (CPM) Answer: C Difficulty: Difficult LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication

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123) A company newsletter is an example of ________.

A) media relations B) sponsorship C) corporate identity D) internal PR E) publicity Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 124) Lobbying, or building and maintaining relations with legislators and government officials to influence legislation and regulation, is part of ________.

A) corporate identity management B) media relations C) buzz marketing D) crisis management E) public relations Answer: E Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 125) ________ in the form of logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company trucks can be used to help a company create an identity that the public immediately recognizes.

A) Direct marketing B) Social marketing C) Public service activities D) Investor relations E) Sponsorships Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication

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126) Viral marketing is most closely related to which of the following?

A) buzz marketing B) personal selling C) brand polarization D) internal PR E) direct marketing Answer: A Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 127) Which of the following is NOT a public relations activity?

A) speech writing B) advice and counsel to management C) creative strategy D) sponsorships E) investor relations Answer: C Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 128) Which of the following is a strategy that involves a company "ambushing" consumers with promotional content in places consumers would typically not expect to see information about a product or service?

A) sock puppeting B) guerrilla marketing C) direct selling D) brand polarizing E) crowdsourcing Answer: B Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication

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129) Internal PR activities target a company's ________.

A) current customers B) prospective customers C) brand ambassadors D) investors E) employees Answer: E Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 130) Annual and quarterly financial reports are both examples of ________ activities.

A) lobbying B) corporate identity C) sponsorship D) investor relations E) media relations Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 131) ________ materials include logos, brochures, building design, and stationery that communicate an image of the organization.

A) Crisis management B) Social marketing C) Press release D) Investor relations E) Corporate identity Answer: E Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign

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132) Which of the following is the placement of messages in nontraditional media, such as signs on elevator doors, in a restaurant's restrooms, or on the backs of supermarket carts?

A) lobbying B) mobbing C) sponsorship D) ambient advertising E) direct marketing Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 133) When a company provides financial support for an event such as a concert or tournament in return for publicized recognition it is using the public relations activity of ________.

A) lobbying B) sponsorship C) ambient advertising D) guerilla marketing E) tryvertising Answer: B Difficulty: Easy LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 134) The gap between good buzz and bad buzz is referred to as ________.

A) groundswell B) viral marketing C) sock puppeting D) brand polarization E) the magnifying effect Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication

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135) Advertising by sampling that is designed to create buzz is called ________.

A) tryvertising B) groundswelling C) brand evangelizing D) sock puppeting E) paid influencing Answer: A Difficulty: Easy LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 136) A manufacturer of toilet tissue sent its brand mascot to help refurbish restrooms at fairgrounds across the country. As part of this project, each restroom was to provide fairgoers with a clean oasis featuring aromatherapy, soothing music, constant maintenance, and premium toilet tissue. Newspaper articles about the company's role in making restrooms inviting are an example of ________.

A) corporate advertising B) a sales promotion C) media planning D) publicity E) sponsorship Answer: D Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Analytical thinking 137) In an attempt to set the company apart from its competitors, United Parcel Service has its employees wear brown uniforms and drive brown trucks. What type of public relations tool is UPS using?

A) buzz marketing B) social networking C) corporate identity materials D) product publicity E) public service materials Answer: C Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Analytical thinking

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138) The Red Baron Gallery has provided funding to Georgia Public Television to help pay for the rights to broadcast the Antiques Roadshow and is credited at the beginning of the show for its financial support. This is an example of ________.

A) ambient advertising B) a special event C) a sponsorship D) a sales promotion E) guerilla marketing Answer: C Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Analytical thinking 139) E-commerce that takes place on Facebook is known as f-commerce.

Answer: TRUE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 140) Crisis management is typically a public relations function.

Answer: TRUE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign 141) Introducing new products to consumers is not an objective that falls within the responsibilities of the PR department.

Answer: FALSE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 142) Planning a public relations campaign is a two-step process: develop objectives and then execute those objectives.

Answer: FALSE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign

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143) It is more difficult to assess the bottom-line impact of public relations activities than the bottom-line impact of advertising.

Answer: TRUE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign 144) Special events are public relations activities for which companies provide financial support to help fund an event in return for publicized recognition of the company's contribution.

Answer: FALSE Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign 145) When the Pharmaceutical Manufacturers Association spent eight million dollars creating and placing a print campaign arguing that the most expensive drugs represent just five percent of national health care expenditures, the association was using public relations.

Answer: TRUE Difficulty: Difficult LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Written and oral communication 146) Compare and contrast proactive public relations activities and crisis management.

Answer: Proactive public relations activities stem from the company's marketing objectives.

They may include creating and managing publicity, announcing new products, developing press releases about industry events, and developing buzz. Crisis management is a PR activity that does not stem from the company's marketing objectives; instead, it arises from unanticipated negative publicity. The goal of crisis management is to address the concerns of consumers and channel members so that the brand's or company's image is not negatively affected.

Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Application of knowledge

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147) Describe public relations and four objectives it is often used to achieve.

Answer: Public relations departments build good relations with the company's various publics and handle or head off unfavorable rumors, stories, and events. Public relations objectives include: a. introducing new products to retailers and consumers b. enhancing the image of the organization c. influencing government legislation d. providing advice and counsel for top management e. enhancing the image of a city, region, or country f. calling attention to a firm's involvement with the community Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Analytical thinking 148) Why might public relations efforts have a strong impact on public awareness at a substantially lower cost than advertising?

Answer: With public relations, the company is paying for a staff to develop and circulate information and plan events instead of paying for space or time in the media.

Difficulty: Difficult LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Application of knowledge 149) Why might a company with a small advertising budget turn to guerilla marketing?

Answer: Guerrilla marketing involves "ambushing" customers with promotional materials and content in unexpected places. Guerrilla marketing activities are increasingly popular because they are relatively cheap and can generate buzz.

Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Application of knowledge 150) Explain what is meant by the term sock puppeting.

Answer: Sock puppeting describes a company executive or other biased source that poses as someone else to plug a product in social media. For example, it came to light that the CEO of Whole Foods had posted derogatory comments about rival Wild Oats without revealing his true identity. Another form of sock puppeting is so-called paid influencer programs that attempt to start online conversations about brands when they encourage bloggers to write about them. As a typical example, Mercedes gave a blogger use of an SUV for a week in exchange for posts about it. These "sponsored conversations" can be effective, but they are unethical if the blogger doesn't reveal that he or she has actually received payment in the form of cash or free products to promote a sponsor's product.

Difficulty: Moderate LO: 14.4: Explain the role of public relations and the steps in developing a public relations campaign AACSB: Application of knowledge 41 Copyright © 2022 Pearson Education, Inc.