Marketing An introduction 6th Canadian Edition - Test Bank

TEST ITEM FILE Judith Nash SAIT

MARKETING: AN INTRODUCTION Sixth Canadian Edition Gary Armstrong University of North Carolina Philip Kotler Northwestern University Valerie Trifts Dalhousie University Lilly Anne Buchwitz Wilfrid Laurier University Contributing Author: David Gaudet SAIT Polytechnic

Toronto ISBN: 9780134395753 Copyright © 2017 Pearson Canada Inc. All rights reserved.

This work is protected by Canadian copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the Internet) will destroy the integrity of the work and is not permitted. The copyright holder grants permission to instructors who have adopted Marketing: An Introduction, Sixth Canadian Edition, by Armstrong, Kotler, Trifts, Buchwitz, and Gaudet to post this material online only if the use of the website is restricted by access codes to students in the instructor’s class that is using the textbook and provided the reproduced material bears this copyright notice.

Marketing: An Introduction, Sixth Canadian Edition

Armstrong, Kotler, Trifts, Buchwitz, Gaudet

CONTENTS

PART ONE – DEFINING MARKETING AND THE MARKETING PROCESS CHAPTER 1: MARKETING: CREATING AND CAPTURING CUSTOMER VALUE CHAPTER 2: COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER RELATIONSHIPS CHAPTER 3: SUSTAINABLE MARKETING, SOCIAL RESPONSIBILITY, AND ETHICS PART TWO – UNDERSTA NDING THE MARKETPLACE AND CONSUMERS CHAPTER 4: ANALYZING THE MARKETING ENVIRONMENT CHAPTER 5: MANAGING MARKETING INFORMATION TO GAIN CUSTOMER INSIGHTS CHAPTER 6: UNDERSTANDING CONSUMER AND BUSINESS BUYER BEHAVIOUR PART THREE – DESIGNING A CUSTOMER-DRIVEN MARKETING STRAT EGY AND MARKETING MIX CHAPTER 7: SEGMENTATION, TARGETING, AND POSITIONING CHAPTER 8: DEVELOPING AND MANAGING PRODUCTS AND SERVICES CHAPTER 9: BRAND STRATEGY AND MANAGEMENT CHAPTER 10: PRICING: UNDERSTANDING AND CAPTURING CUSTOMER VALUE CHAPTER 11: MARKETING CHANNELS CHAPTER 12: RETAILING AND WHOLESALING CHAPTER 13: COMMUNICATING CUSTOMER VALUE: ADVERTISING AND PUBLIC RELATIONS CHAPTER 14: PERSONAL SELLING AND SALES PROMOTION CHAPTER 15: DIRECT, ONLINE, SOCIAL MEDIA, AND MOBILE MARKETING CHAPTER 16: THE GLOBAL MARKETPLACE

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 1 Marketing: Creating and Capturing Customer Value 1) Which of the following is most essential to even the simplest definition of marketing?

A) demand management B) the production concept C) customer relationships D) making a sale E) making a profit Answer: C Diff: 1 Type: MC Page Ref: 5 Skill: Concept Objective: 1-1 2) Which of the following is an accurate description of modern marketing today?

A) Marketing is the creation of products for customers.

B) Marketing is managing profitable customer relationships.

C) Selling and advertising are synonymous with marketing.

D) Marketing involves satisfying producers' needs first.

E) Marketing is used by for-profit organizations only.

Answer: B Diff: 1 Type: MC Page Ref: 5 Skill: Concept Objective: 1-1 3) According to management guru Peter Drucker, "The aim of marketing is to ________."

A) create customer demands B) identify customer demands C) make selling unnecessary D) set realistic customer expectations E) sell products Answer: C Diff: 1 Type: MC Page Ref: 6 Skill: Concept Objective: 1-1

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4) ________ is defined as a social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others.

A) Selling B) Advertising C) Bartering D) Marketing E) Negotiating Answer: D Diff: 2 Type: MC Page Ref: 6 Skill: Concept Objective: 1-1 5) The ________ steps of the five-step marketing process are about understanding customers, creating customer value, and building strong customer relationships.

A) first two B) first three C) first four D) last three E) last four Answer: C Diff: 2 Type: MC Page Ref: 7 Skill: Concept Objective: 1-2 6) According to the simple five-step model of the marketing process, a company needs to ________ before designing a customer-driven marketing strategy.

A) determine how to deliver superior value B) build profitable relationships with customers C) use customer relationship management to create full partnerships with key customers D) understand the marketplace and customer needs and wants E) construct key components of a marketing program Answer: D Diff: 1 Type: MC Page Ref: 7 Skill: Concept Objective: 1-2 7) ________ are human needs as shaped by individual personality and culture.

A) Deprivations B) Wants C) Demands D) Values E) Exchanges Answer: B Diff: 1 Type: MC Page Ref: 7 Skill: Concept Objective: 1-2 2 Copyright © 2017 Pearson Canada Inc.

8) When backed by buying power, wants become ________.

A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges Answer: B Diff: 1 Type: MC Page Ref: 7 Skill: Concept Objective: 1-2 9) Which of the following best encompasses market offerings?

A) products B) people, places, and ideas C) products and information D) products and experiences E) persons, places, organizations, information, and ideas Answer: E Diff: 1 Type: MC Page Ref: 8 Skill: Concept Objective: 1-2 10) ________ refers to sellers that pay more attention to their own products than to the benefits and experiences produced by these products.

A) Selling myopia B) Marketing management C) Value proposition D) Marketing myopia E) The product concept Answer: D Diff: 1 Type: MC Page Ref: 8 Skill: Concept Objective: 1-2 11) When marketers set low expectations for a market offering, they are most likely to run the risk of which of the following?

A) disappointing loyal buyers B) decreasing buyers satisfaction C) failing to attract enough buyers D) failing to understand their buyers' needs E) incorrectly identifying a target market Answer: C Diff: 2 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 3 Copyright © 2017 Pearson Canada Inc.

12) ________ is the act of obtaining a desired object from someone by offering something in return.

A) A value proposition B) Exchange C) Bribery D) Value E) Donation Answer: B Diff: 1 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 13) In addition to attracting new customers and creating transactions, the goal of marketing is to ________ customers and grow the company's business.

A) reward loyal B) sell more to C) build relationships with D) recognize loyal E) educate new Answer: C Diff: 2 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 14) ________ is the set of actual and potential buyers of a product.

A) A market B) An audience C) A group D) A segment E) An exchange Answer: A Diff: 1 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 15) Consumer research, product development, communication, distribution, pricing, and service are all most accurately described as core ________ activities.

A) exchange B) marketing C) management D) production E) customer relationship management Answer: B Diff: 1 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 4 Copyright © 2017 Pearson Canada Inc.

16) When it comes to communicating with customers, marketers have traditionally asked the question, "How can we influence our customers?" Effective marketers now ask, ________.

A) "How can we apply the production concept?"

B) "How can our customers influence us?"

C) "How can we apply the selling concept?"

D) "How can we apply the selling concept using social media?"

E) "How can we apply the product concept?"

Answer: B Diff: 2 Type: MC Page Ref: 9 Skill: Concept Objective: 1-2 17) Which of the following is the most likely result of a marketing strategy that attempts to serve all customers?

A) All customers will be delighted.

B) Customer-perceived value will be increased.

C) Customer evangelists will become unpaid salespersons for the service or product.

D) Perhaps no customers will be satisfied.

E) The company will likely need to follow up with a demarketing campaign.

Answer: D Diff: 2 Type: MC Page Ref: 10 Skill: Concept Objective: 1-3 18) The art and science of choosing target markets and building profitable relationships with them is called ________.

A) marketing management B) positioning C) segmentation D) selling E) societal marketing Answer: A Diff: 1 Type: MC Page Ref: 10 Skill: Concept Objective: 1-3 19) Selecting which segments of a population of customers to serve is called ________.

A) market segmentation B) positioning C) customization D) target marketing E) choosing a value proposition Answer: D Diff: 1 Type: MC Page Ref: 10 Skill: Concept Objective: 1-3 5 Copyright © 2017 Pearson Canada Inc.

20) Dollarama stores focus on serving buyers who have relatively modest means. This is an example of ________.

A) convenience B) value pricing C) market segmentation D) target marketing E) value packing Answer: D Diff: 1 Type: MC Page Ref: 10 Skill: Concept Objective: 1-3 21) ________ is the set of benefits or values a company promises to deliver to its consumers to satisfy their needs.

A) A money-back guarantee B) Low pricing C) Good customer service D) A value proposition E) An attribute Answer: D Diff: 1 Type: MC Page Ref: 11 Skill: Concept Objective: 1-3 22) An effective value proposition answers the question ________.

A) "Why should I buy your brand rather than a competitor's?"

B) "How does your brand benefit me and society?"

C) "What are the costs and benefits of your brand?"

D) "What kind of experience will I have with products and services associated with this brand?"

E) "What are the benefits of being a loyal consumer of your brand?"

Answer: A Diff: 2 Type: MC Page Ref: 11 Skill: Concept Objective: 1-3 23) Which of the following marketing management orientations focuses primarily on improving efficiencies along the supply chain?

A) production concept B) product concept C) selling concept D) marketing concept E) societal marketing concept Answer: A Diff: 3 Type: MC Page Ref: 11 Skill: Concept Objective: 1-3 6 Copyright © 2017 Pearson Canada Inc.

24) Which one marketing management concept, if the only one adopted, can lead manufacturers to develop marketing myopia?

A) customer-driven marketing B) customer-driving marketing C) societal marketing D) selling E) product concept Answer: E Diff: 2 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 25) Which of the following marketing management concepts is most closely aligned with the philosophy of continuous product improvement and the belief that customers will choose products that offer high quality, performance, and innovative features?

A) product B) production C) customer D) marketing E) promotion Answer: A Diff: 2 Type: MC Page Ref: 11 Skill: Concept Objective: 1-3 26) The product concept says that a company should ________.

A) improve marketing of its best products B) market only those products with high customer appeal C) focus on the target market and make products that meet those customers' demands D) devote its energy to making continuous product improvements E) make promoting products the top priority Answer: D Diff: 2 Type: MC Page Ref: 11 Skill: Concept Objective: 1-3 27) "Build a better mousetrap and the world will beat a path to your door" reflects the ________ concept.

A) production B) marketing C) selling D) product E) target marketing Answer: D Diff: 2 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 7 Copyright © 2017 Pearson Canada Inc.

28) The ________ concept calls for aggressive selling and promotion effort.

A) marketing B) production C) product D) selling E) societal marketing Answer: D Diff: 1 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 29) The ________ concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors do.

A) product B) production C) selling D) equity E) marketing Answer: E Diff: 1 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 30) According to the authors of your text, the ________ concept is a "sense and respond" philosophy rather than a "make and sell" philosophy.

A) product B) production C) marketing D) retailing E) societal marketing Answer: C Diff: 2 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3

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31) Which of the following consumer products would likely be marketed using the selling concept?

A) laundry detergent B) funeral services C) chocolate bars D) hair stylist services E) computer tablets Answer: B Diff: 3 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 32) Which of the following reflects the marketing concept philosophy?

A) "We don't have a marketing department, we have a customer department."

B) "We're in the business of making and selling superior products."

C) "We build them so you can buy them."

D) "When it's profits versus customers' needs, profits will always win out."

E) "You won't find a better deal anywhere."

Answer: A Diff: 2 Type: MC Page Ref: 12 Skill: Concept Objective: 1-3 33) Customer-driven marketing is most likely to work well when ________ and when customers ________.

A) a clear need exists; are difficult to identify B) customers do not know what they want; have limited budgets C) there are few competitors; are concerned about their long-run welfare D) a clear need exists; know what they want E) a want exists; cannot afford it Answer: D Diff: 2 Type: MC Page Ref: 13 Skill: Concept Objective: 1-3 34) When customers don't know what they want or don't even know what's possible, the most effective strategy is ________ marketing.

A) customer-driven B) customer-driving C) societal D) production E) product Answer: A Diff: 2 Type: MC Page Ref: 13 Skill: Concept Objective: 1-3 9 Copyright © 2017 Pearson Canada Inc.

35) The societal marketing concept seeks to establish a balance between consumer short-run wants and consumer ________.

A) short-run costs and profits B) short-run ethics C) long-run welfare D) immediate health E) value propositions Answer: C Diff: 2 Type: MC Page Ref: 13 Skill: Concept Objective: 1-3 36) The ________ concept holds that firms must strive to deliver value to customers in a way that maintains or improves both the consumer's and society's well being.

A) marketing B) selling C) product D) societal marketing E) equity Answer: D Diff: 1 Type: MC Page Ref: 13 Skill: Concept Objective: 1-3 37) The three areas of consideration that should be balanced in the societal marketing concept are consumer wants, society's interests, and ________.

A) human welfare B) want satisfaction C) company profits D) short-run wants E) long-term needs Answer: C Diff: 2 Type: MC Page Ref: 14 Skill: Concept Objective: 1-3 38) The set of marketing tools a firm uses to implement its marketing strategy is called the ________.

A) promotion mix B) product mix C) marketing mix D) TQM E) marketing effort Answer: C Diff: 2 Type: MC Page Ref: 14 Skill: Concept Objective: 1-3 10 Copyright © 2017 Pearson Canada Inc.

39) The authors of the text would argue that ________ is the most fundamental concept of modern marketing.

A) customer relationship management B) social media C) broadcast advertising D) properly trained sales people E) low prices Answer: A Diff: 2 Type: MC Page Ref: 14 Skill: Concept Objective: 1-4 40) Building and maintaining profitable value-laden relationships with satisfied customers of a company is called ________.

A) customer lifetime value B) customer perceived value C) customer relationship management D) database marketing E) societal marketing Answer: C Diff: 2 Type: MC Page Ref: 15 Skill: Concept Objective: 1-4 41) Which of the following is determined by a customer's personal evaluation of the benefits and costs of a market offering relative to those of competing offers?

A) customer-perceived value B) customer satisfaction C) customer-perceived performance D) customer relationship management E) market segmentation Answer: A Diff: 2 Type: MC Page Ref: 15 Skill: Concept Objective: 1-4

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42) It is most accurate to say that a customer will buy from the company that offers the highest ________.

A) value for the dollar B) customer-perceived value C) level of customer satisfaction D) company image E) concern for society's interests Answer: B Diff: 2 Type: MC Page Ref: 15 Skill: Concept Objective: 1-4 43) FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these aforementioned benefits against the monetary and psychic costs of using the service, they are acting upon ________.

A) loyalty B) relationship marketing C) customer-perceived value D) social relationships E) a societal marketing campaign Answer: C Diff: 3 Type: MC Page Ref: 15 Skill: Concept Objective: 1-4 44) Which of the following is the term for customers who make repeat purchases and tell others about their positive experiences with a product or service?

A) satisfied customers B) customer evangelists C) butterflies D) full partners E) social customers Answer: B Diff: 1 Type: MC Page Ref: 15 Skill: Concept Objective: 1-4

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45) Which of the following strategies would a company most likely use to increase customer satisfaction?

A) decreasing variety of services offered B) lengthening the supply chain C) lowering prices or increasing its services D) "firing" unprofitable customers E) limiting experiences with a brand Answer: C Diff: 2 Type: MC Page Ref: 18 Skill: Concept Objective: 1-4 46) Frequent flyer programs offered by airlines are an example of a ________.

A) frequency marketing program B) basic customer relationship C) club marketing program D) consumer-generated marketing program E) structural benefit provided for top customers Answer: A Diff: 1 Type: MC Page Ref: 18 Skill: Concept Objective: 1-4 47) Which of the following best explains why consumers have greater power and control in today's marketplace?

A) The production concept and competition have lowered prices.

B) Implementation of the product concept has resulted in continually improving products.

C) Customer-driving marketing creates products and services that meet customers' future needs.

D) More companies are implementing societal marketing and weighing long-run costs and benefits.

E) Through new communication technologies, customers have more access to information and more methods of sharing their opinions with other customers.

Answer: E Diff: 2 Type: MC Page Ref: 19 Skill: Concept Objective: 1-4

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48) The marketing world is embracing ________ because consumers can wield greater power and control in the marketplace through communication technologies.

A) partner relationship management B) supply chain management C) customer-managed relationships D) market segmentation E) target marketing Answer: C Diff: 2 Type: MC Page Ref: 19 Skill: Concept Objective: 1-4 49) Which of the following is an example of consumer-generated marketing?

A) Toyota's presence in online communities B) Nike's Nike Plus running Web site C) H. J. Heinz's use of brand-related consumer videos posted on video-sharing websites D) Neiman Marcus's InCircle Rewards program for its best customers E) The Lexus Covenant aimed at creating customer delight Answer: C Diff: 2 Type: MC Page Ref: 20 Skill: Concept Objective: 1-4 50) Through ________, many companies today are strengthening their connections to all partners, from providers of raw materials and components to final buyers who purchase final products.

A) supply chain management B) direct marketing C) partnership relationship marketing D) customized marketing E) deviated marketing Answer: A Diff: 1 Type: MC Page Ref: 23 Skill: Concept Objective: 1-4 51) The final step in the marketing process is ________.

A) capturing value from customers B) creating customer loyalty C) creating customer lifetime value D) understanding the marketplace E) designing a customer-driven marketing strategy Answer: A Diff: 1 Type: MC Page Ref: 23 Skill: Concept Objective: 1-4 14 Copyright © 2017 Pearson Canada Inc.

52) When the economy tightens, customer loyalty and customer retention become ________ for marketers.

A) even more important B) less important C) impossible D) long-term but not short-term goals E) short-term but not long-term goals Answer: A Diff: 2 Type: MC Page Ref: 23 Skill: Concept Objective: 1-4 53) Stew Leonard, owner/operator of supermarkets, reacts adversely to losing a single customer sale. He feels that this amounts to losing the entire stream of future purchases that a customer is likely to make if he or she remains in the area. This is an illustration of ________.

A) share of customer B) market share C) profitability D) customer lifetime value E) market share maintenance Answer: D Diff: 2 Type: MC Page Ref: 24 Skill: Concept Objective: 1-4 54) Phil just started a new habit of eating once a week at Mr. Sub restaurants. On average, he spends about $10 per meal. Phil says, "I'm 20 years old and I plan on eating at Mr. Sub until I am 50 years old." Phil's lifetime value at Mr. Sub could be best estimated by which calculation?

A) $10 × 50 B) $10 × 20 C) $10 × 52 × 50 D) $10 × 52 × 30 E) $10 × 52 × 20 Answer: D Diff: 2 Type: MC Page Ref: 24 Skill: Concept Objective: 1-4

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55) When an airline goes after a "share of travel" from its customers, it is attempting to increase ________.

A) its value proposition B) share of customer C) target markets D) customer variety E) customer ownership Answer: B Diff: 2 Type: MC Page Ref: 24 Skill: Concept Objective: 1-4 56) Amazon.com leverages relationships with its 35 million customers by offering them music, videos, gifts, toys, consumer electronics, and office products, among other product items. Based on previous purchase history, the company recommends related CDs, books, or videos that might be of interest. This helps Amazon.com capture a greater ________.

A) value proposition B) customer ownership C) share of customer D) social network E) customer base Answer: C Diff: 2 Type: MC Page Ref: 24 Skill: Concept Objective: 1-4 57) ________ is the total combined customer lifetime values of all the company's current and potential customers.

A) Share of customer B) Customer lifetime value C) Customer equity D) Profitability E) Share of market Answer: C Diff: 1 Type: MC Page Ref: 25 Skill: Concept Objective: 1-4

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58) The ultimate aim of customer relationship management is to produce ________.

A) customer delight B) customer satisfaction C) steady sales volume D) a reliable database E) sustainable business Answer: A Diff: 2 Type: MC Page Ref: 23 Skill: Concept Objective: 1-4 59) According to the authors, a highly profitable, short-term customer is a ________.

A) true friend B) butterfly C) stranger D) barnacle E) true believer Answer: B Diff: 2 Type: MC Page Ref: 26 Skill: Concept Objective: 1-4 60) The authors of your text classify customers into four relationship groups, according to the customers' profitability and projected loyalty. ________ are the customers with the highest profit potential and strong loyalty.

A) Barnacles B) Strangers C) Butterflies D) True friends E) Big fish Answer: D Diff: 1 Type: MC Page Ref: 26 Skill: Concept Objective: 1-4 61) Which of the following has contributed to the deeper, more interactive nature of today's customer relationships?

A) digital technologies B) television advertising C) newspaper ads D) radio advertising E) outdoor ads Answer: A Diff: 2 Type: MC Page Ref: 27 Skill: Concept Objective: 1-5 17 Copyright © 2017 Pearson Canada Inc.

62) As the economy emerges from the recent recession and heads into the post-recession era, one dominant consumer trend that has taken shape is ________.

A) ultra-spending B) sensible consumption C) purchase reticence D) "keeping up with the Jones'" consumption E) conspicuous consumption Answer: B Diff: 2 Type: MC Page Ref: 29 Skill: Concept Objective: 1-5 63) Which of the following statements is true about social media as a marketing tool?

A) Social media is a clumsy way to collect consumer research.

B) Social media is a relatively inexpensive way to collect market research.

C) Social media is a challenging tool to engage with customers.

D) Social media usage is declining.

E) Social media cannot be employed by government organizations, and non-profit organizations.

Answer: B Diff: 1 Type: MC Page Ref: 28 Skill: Concept Objective: 1-5 64) Which of the following trends is part of the changing marketing landscape?

A) decline in not-for-profit marketing B) a halt in globalization C) growing conspicuous consumption D) consumer desire for more sustainable marketing practices E) decline in digital/online marketing Answer: D Diff: 1 Type: MC Page Ref: 26-32 Skill: Concept Objective: 1-5 65) Which of the following is currently the fastest growing form of marketing?

A) consumer-generated marketing B) mobile marketing C) mass media marketing D) promotional sampling E) word-of-mouth marketing Answer: B Diff: 2 Type: MC Page Ref: 28 Skill: Concept Objective: 1-5

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66) It is most accurate to say that today almost every company, small and large, is affected in some way by which of the following?

A) the societal marketing concept B) customer relationship management C) global competition D) not-for-profit marketing E) customer-generated marketing Answer: C Diff: 2 Type: MC Page Ref: 31 Skill: Concept Objective: 1-5 67) As part of the rapid globalization of today's economy, companies are selling more locally produced goods in international markets and ________.

A) taking a local view of their industry B) purchasing more supplies abroad C) reducing competition within their industry D) downplaying concerns for social responsibility E) competing solely in traditional marketplaces Answer: B Diff: 2 Type: MC Page Ref: 31 Skill: Concept Objective: 1-5 68) The social-responsibility and environmental movements are expected to ________ in the future.

A) demand more from companies B) demand less from companies C) move away from sustainable marketing D) move toward partner relationship management E) move away from using social networking Answer: A Diff: 2 Type: MC Page Ref: 32 Skill: Concept Objective: 1-5

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69) Ben & Jerry's challenges all stakeholders, including employees, top management, and even ice cream scoopers in their stores, to consider individual and community welfare in their day-today decisions. Actions such as this by companies seizing the opportunity to do well by doing good reflects ________.

A) virtual marketing B) caring capitalism C) profit marketing D) sustainable marketing E) myopia Answer: B Diff: 2 Type: MC Page Ref: 32 Skill: Concept Objective: 1-5 70) A church targeting different demographic groups to increase attendance is an example of ________.

A) for-profit marketing B) not-for-profit marketing C) mindless marketing D) ethics in marketing E) societal marketing Answer: B Diff: 2 Type: MC Page Ref: 30-31 Skill: Concept Objective: 1-5 71) The first four steps of the marketing process focus on ________.

A) understanding the market B) delivering customer service C) creating value for customers D) understanding customer demands and needs E) finding value from customers Answer: C Diff: 2 Type: MC Page Ref: 33 Skill: Concept Objective: 1-5

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72) Greg Williams now has the buying power to purchase the computer system he has wanted for the last six months. Greg's want now has become a ________.

A) need B) necessity C) demand D) satisfier E) transaction Answer: C Diff: 1 Type: MC Page Ref: 7 Skill: Application Objective: 1-2 73) Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further for increased consumer affordability. This reflects the ________.

A) product concept B) marketing concept C) societal marketing concept D) production concept E) selling concept Answer: D Diff: 3 Type: MC Page Ref: 11 Skill: Application Objective: 1-3 74) Railroads were once operated based on the thinking that users wanted trains rather than transportation, overlooking the challenge of other modes of transportation. This reflects the ________.

A) product concept B) production concept C) selling concept D) marketing concept E) societal marketing concept Answer: A Diff: 3 Type: MC Page Ref: 11 Skill: Application Objective: 1-3

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75) Jolene's firm believes that consumers will not buy enough of its products unless the firm undertakes a large-scale selling and promotion effort. Jolene's firm is practicing the ________.

A) production concept B) marketing concept C) selling concept D) relationship concept E) social advertising campaign Answer: C Diff: 1 Type: MC Page Ref: 12 Skill: Application Objective: 1-3 76) Which of the following phrases reflects the marketing concept?

A) The supplier is king.

B) Marketing should be viewed as hunting and not gardening.

C) This is what I make, won't you please buy it?

D) This is what I want, won't you please make it?

E) This is better than the competition, won't you please buy it?

Answer: D Diff: 3 Type: MC Page Ref: 12 Skill: Application Objective: 1-3 77) Marie Ortiz enjoys her work at Futuristic Designs, Inc. Her organization understands and anticipates customer needs even better than customers themselves do and creates products and services to meet current and future wants and demands. Marie's firm practices ________ marketing.

A) shared value B) customer-driven C) societal D) donor E) product Answer: B Diff: 2 Type: MC Page Ref: 13 Skill: Application Objective: 1-3

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78) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the ________ philosophy.

A) marketing concept B) product concept C) production concept D) societal marketing concept E) selling concept Answer: D Diff: 2 Type: MC Page Ref: 13 Skill: Application Objective: 1-3 79) The Niketown running club that organizes twice weekly evening runs for Nike customers is an example of a ________.

A) frequency marketing program B) basic customer relationship C) club marketing program D) consumer-generated marketing program E) structural benefit provided for top customers Answer: C Diff: 2 Type: MC Page Ref: 18 Skill: Application Objective: 1-4 80) You have just taken a new position in an organization and you're learning about the job functions of your new colleagues. You observe that your marketing manager is heavily involved in the process of building and maintaining profitable customer relationships. Your marketing manager frequently speaks about the need to deliver superior customer value and satisfaction.

Your manager is concerned with which one of the following?

A) database management B) website hits C) the societal marketing concept D) not-for-profit marketing E) customer relationship management Answer: E Diff: 1 Type: MC Page Ref: 15 Skill: Application Objective: 1-4

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81) Sally purchased Brand X lotion. In comparing her perception of how the lotion performed to her expectations for Brand X lotion, Sally was measuring her level of ________.

A) customer-perceived value B) customer satisfaction C) exchange D) demand E) customer lifetime value Answer: A Diff: 2 Type: MC Page Ref: 15 Skill: Application Objective: 1-4 82) Tommy Gray attempts to deliver customer satisfaction every day in his Audio Expressions installation business. The key to this goal is to match the customer-perceived performance of his product with ________.

A) company-perceived performance B) customer values C) customer expectations D) relationship levels E) company expectations Answer: C Diff: 2 Type: MC Page Ref: 15 Skill: Application Objective: 1-4 83) Shania works hard to foster an emotional relationship between her Internet customers and the beauty products and services that she and her staff sell. By promoting a company culture that values exceptional value and service, Shania aims to create ________ by going beyond the expected.

A) customer delight B) customer satisfaction C) customer equity D) customer value E) customer loyalty Answer: A Diff: 2 Type: MC Page Ref: 17-18 Skill: Application Objective: 1-4

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84) You are an assistant marketing director for a firm in a market with many low-margin customers. What type of relationship would it be most profitable for you to develop with these customers?

A) full partnerships B) basic relationships C) club programs D) selective relationships E) community relationships Answer: B Diff: 2 Type: MC Page Ref: 18 Skill: Application Objective: 1-4 85) Pete Sanchez, a recent graduate of business school, has a different approach than his marketing manager, who believes in keeping customers at arm's length and using television advertising. Pete knows that today few successful firms still practice this type of true ________ and are instead turning to selective relationship management.

A) club marketing B) frequency marketing C) mass marketing D) customer satisfaction E) marketing segmenting Answer: C Diff: 2 Type: MC Page Ref: 19 Skill: Application Objective: 1-4 86) A large department store segments its customers into 4 categories (butterflies, true friends, strangers, and barnacles) in order to evaluate customers on ________.

A) profitability and revenue B) revenue and customer loyalty C) profitability and customer loyalty D) revenue and communications costs E) profit and communications costs Answer: C Diff: 3 Type: MC Page Ref: 23-24 Skill: Application Objective: 1-4

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87) Elisandra, a marketing manager at a regional chain restaurant, has decided to create a contest calling for customers to create commercials for the restaurant. Winning entries will be posted on the organization's home page. Elisandra's plan is an example of ________.

A) consumer-generated marketing B) partner relationship management C) customer lifetime value D) community development around a brand E) share of customer Answer: A Diff: 2 Type: MC Page Ref: 20 Skill: Application Objective: 1-4 88) The concept of "saving money by firing your customers" refers to which type of customer?

A) customers that lay complaints B) unprofitable customers C) old customers D) new customers E) no customer should ever be fired Answer: B Diff: 2 Type: MC Page Ref: 26 Skill: Application Objective: 1-4 89) At Gina's Nails, the posted policy is "Without our customers, we don't exist." Gina and her staff aim to delight each customer, and they are quick to offer discounts or extra services whenever a customer is anything less than satisfied. Instead of focusing on each individual transaction, Gina and her staff put a priority on ________.

A) maintaining customer-perceived value B) managing partner relationships C) attracting "butterflies" D) converting "strangers" E) capturing customer lifetime value Answer: E Diff: 2 Type: MC Page Ref: 23 Skill: Application Objective: 1-4

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90) Afia, a team leader in charge of customer relationship management, is planning strategies for improving the profitability of her firm's least profitable but loyal customers. She is also examining methods for "firing" customers in this group who cannot be made profitable. To which of the following customer relationship groups do these customers belong?

A) butterflies B) true friends C) strangers D) barnacles E) short-term customers Answer: D Diff: 2 Type: MC Page Ref: 26 Skill: Application Objective: 1-4 91) Your local department of education has budgeted a significant amount of money for a radio, print, television, and online advertising campaign emphasizing the long-term benefits, both educational and professional, of reading every day. This is an example of a(n) ________ campaign.

A) ethical B) social marketing C) for-profit D) consumer-generated E) differentiated Answer: B Diff: 2 Type: MC Page Ref: 30 Skill: Application Objective: 1-5 92) All advertising is part of marketing, but not all marketing efforts are advertising.

Answer: TRUE Diff: 1 Type: TF Page Ref: 6 Skill: Communication Objective: 1-1 93) Selling is managing profitable customer relationships.

Answer: FALSE Diff: 2 Type: TF Page Ref: 6 Skill: Concept Objective: 1-1 94) Marketing is managing profitable customer relationships.

Answer: TRUE Diff: 1 Type: TF Page Ref: 5 Skill: Concept Objective: 1-1

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95) The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction.

Answer: TRUE Diff: 2 Type: TF Page Ref: 5 Skill: Concept Objective: 1-1 96) Human needs are shaped by culture and individual personality.

Answer: FALSE Diff: 2 Type: TF Page Ref: 7 Skill: Concept Objective: 1-2 97) The difference between human needs and wants is that needs are not influenced by culture.

Answer: TRUE Diff: 2 Type: TF Page Ref: 7 Skill: Concept Objective: 1-2 98) When backed by buying power, needs become wants.

Answer: FALSE Diff: 1 Type: TF Page Ref: 7 Skill: Concept Objective: 1-2 99) Market offerings are limited to physical products.

Answer: FALSE Diff: 2 Type: TF Page Ref: 8 Skill: Concept Objective: 1-2 100) Market offerings can include products, services, information, or experiences offered to a market to satisfy a need or want.

Answer: TRUE Diff: 1 Type: TF Page Ref: 8 Skill: Concept Objective: 1-2 101) When sellers focus on existing needs and lose sight of underlying customer wants, they suffer from marketing myopia.

Answer: FALSE Diff: 3 Type: TF Page Ref: 8 Skill: Concept Objective: 1-2

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102) Marketers should look beyond the attributes of the products and services they sell to also create brand experiences for consumers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 8 Skill: Concept Objective: 1-2 103) Only sellers of products, services, and ideas practice marketing, whereas buyers do not.

Answer: FALSE Diff: 2 Type: TF Page Ref: 9 Skill: Concept Objective: 1-2 104) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization.

Answer: FALSE Diff: 2 Type: TF Page Ref: 10 Skill: Concept Objective: 1-3 105) Marketing management is interested in serving all customers in every way to remain competitive in today's markets.

Answer: FALSE Diff: 2 Type: TF Page Ref: 10 Skill: Concept Objective: 1-3 106) Two important questions underlying marketing strategy are "Who is our target market?" and "What's our value proposition?"

Answer: TRUE Diff: 3 Type: TF Page Ref: 10 Skill: Concept Objective: 1-3 107) The production concept and product concept are orientations that can lead to marketing myopia.

Answer: TRUE Diff: 3 Type: TF Page Ref: 12 Skill: Concept Objective: 1-3

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108) Amy's law office has developed a new format and wording for wills. The staff believes they offer the most in quality, performance, and innovative features. Her law office is practicing the production concept.

Answer: FALSE Diff: 3 Type: TF Page Ref: 11 Skill: Application Objective: 1-3 109) The selling concept holds that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort.

Answer: TRUE Diff: 1 Type: TF Page Ref: 12 Skill: Concept Objective: 1-3 110) The major difference between the selling concept and the marketing concept is that the selling concept considers only existing needs.

Answer: FALSE Diff: 2 Type: TF Page Ref: 12 Skill: Application Objective: 1-3 111) The societal marketing concept calls on marketers to balance consumer wants and desires, company profits, and society's interest.

Answer: TRUE Diff: 2 Type: TF Page Ref: 13 Skill: Concept Objective: 1-3 112) In its broadest sense, customer relationship management (CRM) is a customer data management activity.

Answer: FALSE Diff: 2 Type: TF Page Ref: 15 Skill: Concept Objective: 1-4 113) Delivering superior customer value and customer satisfaction are the two keys to building lasting customer relationships.

Answer: TRUE Diff: 2 Type: TF Page Ref: 15 Skill: Concept Objective: 1-4

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114) Customer-perceived value is defined as the customer's evaluation of the perceived difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 15 Skill: Concept Objective: 1-4 115) Customer-perceived value depends on the product's perceived performance relative to a buyer's expectations.

Answer: FALSE Diff: 2 Type: TF Page Ref: 15 Skill: Concept Objective: 1-4 116) New communication technologies create challenges as well as advantages for marketers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 19 Skill: Concept Objective: 1-4 117) Consumer-generated marketing will have little impact as a marketing force.

Answer: FALSE Diff: 2 Type: TF Page Ref: 22 Skill: Concept Objective: 1-4 118) Every functional area of an organization, not only a marketing department, can and should interact with customers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 23 Skill: Concept Objective: 1-4 119) It is cheaper for a company to acquire new customers than to maintain relationships with current customers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 23 Skill: Concept Objective: 1-4 120) According to marketing theory, growing share of customer is certain if you build the best product in the market.

Answer: FALSE Diff: 2 Type: TF Page Ref: 24 Skill: Concept Objective: 1-4 31 Copyright © 2017 Pearson Canada Inc.

121) Since customers are the source of revenue for a firm, all customers are profitable.

Answer: FALSE Diff: 1 Type: TF Page Ref: 25 Skill: Concept Objective: 1-4 122) Before the marketing mix is developed, marketers need to understand the wants and needs of customers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 32 Skill: Communication Objective: 1-5 123) Many company websites also serve as online brand communities.

Answer: TRUE Diff: 1 Type: TF Page Ref: 27 Skill: Communication Objective: 1-5 124) Social media spending by companies is at a maximum today.

Answer: FALSE Diff: 2 Type: TF Page Ref: 28 Skill: Communication Objective: 1-5 125) Mobile marketing is slowly taking off.

Answer: FALSE Diff: 2 Type: TF Page Ref: 28 Skill: Communication Objective: 1-5 126) Briefly compare and contrast the concepts of needs, wants, and demands, giving an example of each. Discuss how these concepts relate to marketing practices.

Answer: Human needs are states of felt deprivation. Needs are part of the human make-up; they are not created by external forces. Humans have a basic physical need for food, clothing, warmth, and safety; a basic social need for belonging and affection; and a basic individual need for knowledge and self-expression. Unlike needs, wants are not innate; instead, wants are needs shaped by culture, society, and individual personality. For example, a Canadian needs food but wants a Big Mac and a soft drink. A Canadian with ten dollars needs food, wants a Big Mac and soft drink, and demands lunch at McDonalds. Wants become demands when they are backed by consumers' buying power. Marketers conduct extensive research to understand customers' wants and demands. They then attempt to fulfill customers' wants and demands through their market offerings.

Diff: 2 Type: ES Page Ref: 7 Skill: Application Objective: 1-2 32 Copyright © 2017 Pearson Canada Inc.

127) Explain how and why marketers go beyond selling a product or service to create brand experiences.

Answer: Sellers are most effective when they focus on the benefits and experiences produced by their products and services rather than on the specific products and services themselves. Smart marketers focus on creating a brand experience, incorporating several products and services for their customers. By doing so, marketers hope to increase customer satisfaction, creating a body of customers who will repeatedly purchase their market offerings and recommend those offerings to friends.

Diff: 2 Type: ES Page Ref: 8 Skill: Application Objective: 1-2 128) Compare the selling and marketing concepts, listing the key components of each philosophy.

Answer: The selling concept reflects an inside-out philosophy, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization is selling products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than on building long-term relationships with customers. The aim of the selling concept is to sell what the company makes rather than making what the customer wants. The marketing concept, on the other hand, is based upon identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. In contrast to the selling concept, marketing focuses on the customer, not the product, and aims to create long lasting relationships with customers through customer satisfaction.

Diff: 2 Type: ES Page Ref: 12-13 Skill: Application Objective: 1-3 129) Briefly explain the societal marketing concept. Give an example of an organization that has effectively used the societal marketing concept.

Answer: According to this concept, firms will succeed if they take underlying consumer needs and society's well being into account over the long term. A pure marketing concept can damage consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants.

Over a long period of time, this too-narrow focus can be damaging to the company. In setting their marketing strategies, marketers today need to balance company profits, consumer wants, and society's interests. Johnson & Johnson is an example of a company that has successfully implemented the societal marketing concept. The organization stresses honesty, integrity, and putting people before profits, an ethic that helped Johnson & Johnson quickly address and recover from the poisonous tampering of Tylenol capsules in 1982.

Diff: 2 Type: ES Page Ref: 13-14 Skill: Application Objective: 1-3

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130) One of the major developments in marketing can be summed up in one word: relationships.

Define customer relationship management and its associated tools and levels of relationships.

Answer: Customer Relationship Management (CRM) is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. A company with mostly low-margin customers is likely to seek basic relationships, using brandbuilding advertising and sales promotion. An organization with few customers and high margins, on the other hand, will work to create key partnerships with select customers. To create stronger bonds with customers, some marketers use tools such as financial benefits or rewards based on frequency of purchase. Other tools include social benefits, like offering key customers the opportunity to network and create communities through club marketing programs. To retain current customers and remain profitable, companies today are going beyond transactional marketing to customer relationship management. The key is to create and sustain relationships for the long term.

Diff: 2 Type: ES Page Ref: 15-23 Skill: Application Objective: 1-4 131) The aim of customer relationship management is to create not just customer satisfaction, but customer delight. Explain.

Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Firms create customer delight by promising only what they can deliver and then delivering more than what they promised. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become customers for life. More importantly, they also essentially become an unpaid sales force for the firm as "customer evangelists" who tell other potential customers about their positive experiences with the product.

Diff: 2 Type: ES Page Ref: 15 Skill: Application Objective: 1-4

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132) Discuss the opportunities and advantages that new communication technologies have created for marketers.

Answer: Through the Internet and related technologies, people can now interact in direct and surprisingly personal ways with large groups of others, from neighbors within a local community to people across the world. With communication technologies such as email, blogs, websites, online communities, and online social networks (from Twitter to Vine), today's marketers incorporate interactive approaches that help build targeted, two-way customer relationships.

Marketers can create deeper consumer involvement and a sense of community surrounding a brand, making a brand a meaningful part of consumers' conversations and lives. However, while new communication tools create relationship-building opportunities for marketers, they also create challenges. They give consumers a greater voice, and therefore greater power and control in the marketplace. Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. This benefits companies when views of its products are positive, but can be damaging when customers share stories of negative experiences with a company's products.

Diff: 2 Type: ES Page Ref: 19-20 Skill: Application Objective: 1-4 133) Define customer equity and explain why it is important to a company.

Answer: Customer equity is the sum of the lifetime values of all a company's current and potential customers. Customer equity is dependent upon customer loyalty from a firm's profitable customers. Because customer equity is a reflection of a company's future, companies must manage it carefully, viewing customers as assets that need to be maximized.

Diff: 1 Type: ES Page Ref: 25 Skill: Application Objective: 1-4

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134) Describe and compare the four types of customers classified by their potential profitability to an organization. Identify how an organization should manage each type of customer.

Answer: The four types of customers are strangers, butterflies, true friends, and barnacles. They are categorized according to 2 dimensions: profitability and loyalty. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customer.

Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired." Like strangers, "butterflies" are not loyal. However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should use promotional blitzes to attract these customers, create satisfying and profitable transactions with them, and then cease investing in them until the next time around. The final type of customers is "true friends"; they are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to delight true friends so they will tell others about their good experiences with the company.

Diff: 2 Type: ES Page Ref: 25-26 Skill: Application Objective: 1-4 135) Discuss how the Internet, social networks and mobility have transformed business.

Answer: The Internet and social networks have changed the way business is conducted. First, the Internet has global reach, meaning both customers and competitors can come from all over the world. In other words, both the potential customer base and competitive base are larger than ever before. Second, every customer has a virtual "trumpet" to blast his/her satisfaction or dissatisfaction with the company. Third, customers have access to more information and referrals (via sites like Yelp and Trip Advisor), meaning customers can be more informed about the choices they make. This instant information is also available to customers wherever they go via smart phones. In addition, advances like single-click purchasing have made purchasing faster and easier. Fourth, the Internet has made it easier to find hard-to-find items. Finally, as described in this chapter, the Internet provides many opportunities for faster and easier communication with customers ("How should they reach us?").

Diff: 1 Type: ES Page Ref: 27-29 Skill: Application Objective: 1-5

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136) The management team at Big Burritos, a new fast-food restaurant, wants to develop a new marketing plan. What would a marketing manager tell Big Burritos' management team their twofold goal of marketing should be?

Answer: The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction (or delight!).

Diff: 2 Type: ES Page Ref: 5 Skill: Application Objective: 1-1 137) Culture and individual personality shape human needs into wants. What transforms wants into demands?

Answer: Wants become demands when they are backed by purchasing power.

Diff: 2 Type: ES Page Ref: 7 Skill: Application Objective: 1-2 138) How might a seller avoid marketing myopia?

Answer: Marketing myopia is the mistake of paying more attention to a company's offerings.

Sellers should consider the particular benefits and experiences produced by their products, rather than focusing primarily on the specific products they offer. In addition, sellers must not lose sight of underlying customer needs.

Diff: 2 Type: ES Page Ref: 8 Skill: Application Objective: 1-2 139) How might a manufacturer of tents and camping equipment create brand experiences for consumers?

Answer: A manufacturer of camping equipment might produce tents, sleeping bags, cooking equipment, and other items that are integral to the camping experience. Then the manufacturer might market these products and related services, such as camping communities or an informational camping Web site, to satisfy the total camping needs of their customers.

Diff: 3 Type: ES Page Ref: 8 Skill: Application Objective: 1-2 140) A modern marketing system relies on profitable relationships, including the relationship sellers have with buyers, competitors and suppliers Considering this, what might Walmart rely on in order to offer low prices?

Answer: The main elements of a marketing system include suppliers, the producer, its competitors, marketing intermediaries like Walmart, and consumers. Each party in the system adds value to the next level of reaching the end user. Walmart's success at building profitable relationships depends not only on how it relates to customers, but also, how well the entire system serves the end user. Walmart must rely on suppliers that will provide merchandise at low costs.

Diff: 2 Type: ES Page Ref: 10 Skill: Application Objective: 1-2 37 Copyright © 2017 Pearson Canada Inc.

141) The marketing team at Bead Beautiful, a line of jewellery targeted at pre-teenage girls, is meeting to formulate the products' value proposition. What should team members consider as they define a value proposition for Bead Beautiful?

Answer: In considering Bead Beautiful's value proposition, the marketing team should identify the benefits and values the company promises to deliver to customers to satisfy their needs. The value proposition should differentiate Bead Beautiful from other similar products, answering the customer's question "Why should I buy this brand rather than a competitor's?"

Diff: 2 Type: ES Page Ref: 10 Skill: Application Objective: 1-3 142) When demand for Beanie Babies was at its highest, manufacturers purposefully maintained strong demand by limiting supply, which drove the price of Beanie Babies up. These manufacturers were doing the opposite of what the production concept believes. Explain.

Answer: The production concept holds that consumers favour products that are available and affordable. According to this concept, manufacturers work to increase production and improve manufacturing efficiency. Beanie Babies manufacturers purposefully limited production, making their products less available and less affordable, a technique that contradicts the philosophy of the production concept.

Diff: 3 Type: ES Page Ref: 11 Skill: Application Objective: 1-3 143) Company X carries organizational and office supplies and follows the selling concept.

Explain how Company X may lose sight of customer relationships with their marketing orientation.

Answer: The selling concept holds that consumers will not buy enough products unless the seller undertakes a large-scale selling and promotion effort. This approach focuses on creating sales transactions rather than on building long term, profitable customer relationships. The goal is to sell what the company makes, rather than make what the customer wants. It assumes customers coaxed into buying the product will be happy or forget their disappointment if not satisfied.

Diff: 2 Type: ES Page Ref: 12 Skill: Application Objective: 1-3 144) Many companies, such as WestJet Airlines, take an outside-in perspective. How do such companies address their customers' desires?

Answer: Outside represents consumers while inside represents the seller. Companies that apply the marketing concept, an outside-in perspective, begin with researching and understanding the needs of a well-defined market. These companies then integrate all the marketing activities that will affect their targeted customers, creating strong relationships based on identifying customer needs and delivering customer value and satisfaction.

Diff: 2 Type: ES Page Ref: 12 Skill: Application Objective: 1-3 38 Copyright © 2017 Pearson Canada Inc.

145) A nineteenth-century street vendor in London sang, "Who will buy my fresh, red roses?"

Did the vendor take an outside-in or inside-out perspective? Explain.

Answer: Outside represents consumers while inside represents the seller. The vendor's approach was inside-out. The roses were picked and available, so they were an existing product. The vendor's job was then to attract willing buyers for this existing product rather than determine what his customers wanted and provide a product to satisfy that want.

Diff: 3 Type: ES Page Ref: 12 Skill: Application Objective: 1-3 146) Explain why electronics and pharmaceuticals manufacturers may use customer-driven marketing.

Answer: Customer-driven companies research customers to learn about their desires, gather new product ideas and test product improvements. In such industries that evolve so quickly, consumers do not know exactly what is possible or what they may want in the future. When customers don't know what new products are available and how those products might fit their current and future needs, companies should use customer-driven marketing to lead customers to the products they want even if those wants are latent.

Diff: 3 Type: ES Page Ref: 13 Skill: Application Objective: 1-3 147) Company ABC implements its marketing strategy through a well-defined and complete marketing mix. What elements does Company ABC address in its marketing mix?

Answer: As part of its complete marketing mix, Company ABC has created a marketing offer that satisfies an identified customer need (product), determined a selling price, decided how to distribute (place) the offer, and communicated with the target customer about the offer (promotion). Company ABC must blend these four P's into an integrated marketing program that communicates and delivers the intended value to chosen customers.

Diff: 2 Type: ES Page Ref: 14 Skill: Application Objective: 1-3 148) What determines whether sellers create basic relationships or full partnerships with customers?

Answer: To build long lasting customer relationships a company must offer superior customer value and satisfaction. Satisfied customers are likely to be loyal customers and give the company a larger share of business. Companies can build customer relationships at many levels. At one extreme are basic relationships. This is appropriate when there are many low profit customers who are not brand loyal. At the other extreme are full partnerships with key customers. This is appropriate when there are high profit customers who are loyal.

Diff: 2 Type: ES Page Ref: 18 Skill: Application Objective: 1-4

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149) Explain why a supermarket owner might consider customer lifetime value when a disgruntled customer leaves the store dissatisfied.

Answer: Customer lifetime value is the entire stream of purchases a customer would make over a lifetime. If a supermarket customer is dissatisfied and decides to shop for his or her weekly groceries elsewhere, the owner does not lose only the profit from one week's worth of groceries.

Instead, the owner loses the possible profit of a week's worth of groceries for each and every week—up to the customer's lifetime of weeks—the dissatisfied customer takes his or her business elsewhere.

Diff: 2 Type: ES Page Ref: 23 Skill: Application Objective: 1-4 150) The Electronic Edge, a retail chain that sells all types of electronics, wants to increase its share of customer. What steps should the company take to achieve this goal?

Answer: Share of customer is the portion of the customer's purchasing that a company gets in its product categories. The Electronic Edge can offer greater variety to customers, encouraging them to buy more products. Also, the company can train employees to cross-sell and up-sell in order to market additional and more expensive products and services to existing customers.

Diff: 2 Type: ES Page Ref: 24 Skill: Application Objective: 1-4 151) Explain what marketers can expect from individuals in the customer relationship group classified as "butterflies."

Answer: "Butterflies" are profitable but not loyal. Marketers should enjoy this type of customer "for the moment" because they soon flutter off. Marketers should create profitable and satisfying transactions with "butterflies," then cease investing in them until the next time around. Marketers can expect transactions with butterflies when conditions are optimal for the customer, but they should not expect butterflies to become loyal customers.

Diff: 2 Type: ES Page Ref: 26 Skill: Application Objective: 1-4 152) In what ways might even a local retailer find itself touched by global competition?

Answer: A local retailer might have global suppliers and customers. The retailer's goods may come from abroad, or components of those goods may be produced or assembled abroad. In addition, a local retailer may sell goods over the Internet to international customers.

Diff: 2 Type: ES Page Ref: 31 Skill: Application Objective: 1-5

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153) If a firm practices environmentalism in its social responsibility efforts, where would the firm place its focus?

Answer: The firm needs to develop sustainable marketing practices. Every company action can affect customer relationships. Customers today expect companies to deliver value in a socially and environmentally responsible way. The firm should live its beliefs and authentically live the values that it is espousing. They view sustainable marketing as an opportunity to to do well by doing good. They seek ways to profit by serving immediate needs and long-term interests of their customers and communities.

Diff: 2 Type: ES Page Ref: 31-32 Skill: Application Objective: 1-5 154) How is marketing being applied in the not-for-profit sector?

Answer: Not-for-profits today face stiff competition for support and membership. Firms in the not-for-profit sector may use marketing to enhance their images or to attract memberships and donors. Some organizations, such as government agencies, may design social marketing campaigns to encourage specific causes.

Diff: 2 Type: ES Page Ref: 30-31 Skill: Application Objective: 1-5

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Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a bluff overlooking the Maine coast, Seagull Terrace had attracted thousands of visits during the summer months, but then faced a tremendous downturn in business during the winter months. "But, given the industry in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"

So Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan, then, involved a seasonal promotional gimmick—to be implemented from early winter to late spring—that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers—both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.

"We still have a long way to go," Carol admitted. "Our delicatessen offers delicious entrees, but we'd like to expand that. We provide health club privileges off-site, but we'd like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities! With an indoor pool area, I will eventually offer weekend getaways throughout winter."

155) Based on the marketing process, what are Carol Veldt's strengths?

Answer: The marketing process builds profitable customer relationships by creating value for customers and capturing value in return. Although her main activities involved heavy promotion, as well as room renovations, Carol was suffering from marketing myopia. She was focused more on the products she offered and on existing customer wants. Carol started to develop relationships with customers during her second season, hopefully learning about her customers' underlying needs. In the future, Carol can be successful at delighting customers if she creates and modifies her offerings to suit customer needs and wants.

Diff: 1 Type: ES Page Ref: 6-7 Skill: Application Objective: 1-2 156) What is included in the marketing offering at Seagull Terrace?

Answer: Market offerings are some combination of products, services, information or experiences offered to a market to satisfy a need or want. Seagull Terrace provides activities and amenities—such as a delicatessen, offsite health club privileges, and renovated rooms—that make the experience of a night's stay more satisfying. These various activities and amenities are sought by two targeted groups—seasonal visitors and year-round business travelers. Seagull Terrace also offers information when the owner greets guests.

Diff: 2 Type: ES Page Ref: 8 Skill: Application Objective: 1-2

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157) How is Carol Veldt attempting to create a brand experience for her visitors?

Answer: Brand experiences are created by integrating several services and products for consumers. Carol is attempting to include numerous services and amenities for her visitors from greeting guests upon arrival, to offering delicious entrees at the delicatessen and providing offsite health club privileges. Eventually, everything the visitors want or need will be offered at Seagull Terrace such as an indoor pool for winter weekend getaways.

Diff: 2 Type: ES Page Ref: 8 Skill: Application Objective: 1-2 158) Define the target market at Seagull Terrace.

Answer: A target market is a selection of market segments that a company will focus on serving.

Two types of guest are being lured: seasonal visitors during the summer and year-round business travelers. The target market include both satisfied repeat guests as well as new guests.

Eventually, Seagull Terrace hopes to attract winter weekend getaway visitors.

Diff: 1 Type: ES Page Ref: 10 Skill: Application Objective: 1-3 159) In what ways might Carol Veldt be implementing the product concept?

Answer: The product concept holds that customers will favour products that offer the most quality, performance and features. Believers in this concept devote energy to continually improving their product offerings. Carol understands that guests will favor services that offer the most in quality and innovative features. Carol's strategy currently focuses on making continuous improvements, such as expanding entrees at the delicatessen, renovating guest rooms, and eventually adding an indoor pool.

Diff: 3 Type: ES Page Ref: 11 Skill: Application Objective: 1-3 160) In what ways might Carol Veldt be implementing the selling concept?

Answer: The selling concept says that consumers will not buy enough of a firm's products unless the firm undertakes a large-scale selling and promotion effort. Carol believed that the success of Seagull Terrace, as she views it, requires a large-scale selling effort with promotional "gimmicks." She put together a promotional package designed to attract business travelers yearround. Carol's plan, then, involved a seasonal promotional gimmick–to be implemented from early winter to late spring–that would attract the same numbers as the large summer crowd.

Diff: 3 Type: ES Page Ref: 12 Skill: Application Objective: 1-3

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161) How might the marketing mix at Seagull Terrace differ between its two target markets?

Answer: A company's marketing mix is the integration of the product, price, place and promotion in order to deliver on its value proposition. The current target markets at Seagull Terrace are year round business travelers, and seasonal summer vacationers. Although the product and the place are virtually the same for the two target markets, promotions and price can differ. Business travelers may be offered a discount business rate Summer guests may pay higher rates, but the beauty of Maine's coast and the beach, as well as Seagull Terrace's variety of services, will be the main attractions. In addition, the placement of advertising will likely be different to reach the two groups.

Diff: 2 Type: ES Page Ref: 14 Skill: Application Objective: 1-3 162) How should Carol Veldt guarantee customer satisfaction?

Answer: Customer satisfaction is the extent to which a product's perceived performance matches a buyer's expectations. First, Carol must discover what expectations her customers have.

Gathering and responding to feedback from customers is one method for determining customer expectations and how they've been satisfied. Secondly, she should create product offerings that exceed customer expectations. This will result in delighted customers who will not only come back but will also act as customer "evangelists," spreading the word about their good experience to others.

Diff: 2 Type: ES Page Ref: 15 Skill: Application Objective: 1-4 163) Explain how Carol Veldt is engaging in partner relationship management. Explain how this could be enhanced.

Answer: Partner relationship management is working closely with partners throughout the company as well as outside the company to jointly bring greater value to customers. Repeat guests, we assume, are satisfied with their experience at Seagull Terrace. This is probably because everyone who works at Seagull is jointly working together to meet or exceed customer expectations. Carol should ensure that food provided at the delicatessen continues to provide delicious food and that her staff continue to provide exceptional service. Carol also has an arrangement with an offsite health club where guests at Seagull Terrace currently receive health club privileges. Guests during the summer could receive sailboat rentals through such arrangements.

Diff: 3 Type: ES Page Ref: 23 Skill: Application Objective: 1-4

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164) Which social networks should Carol Veldt use to strengthen relationships with customers and attract new customers to Seagull Terrace?

Answer: Social networks are virtual places that customers, companies, and prospective customers can meet and share questions and experiences. A company's website can be a social network as well as links to social media such as Facebook, Twitter, Google+, You Tube, Pinterest, Instagram and many others. Answers will vary. The idea here is that students will identify social networks in which the target audience is present. Communications from Seagull Terrace can then be sent to prospective customers. Carol can "listen" to social media conversations and respond where appropriate. In addition, Carol should link the various social media to her website. She should also have a blog, and or comment page from guests that she can respond to.

Diff: 3 Type: ES Page Ref: 27-28 Skill: Application Objective: 1-5

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Relationships 1) ________ is the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

A) Strategic planning B) Annual market planning C) Short-term planning D) Long-range planning E) Advertising Answer: A Diff: 2 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1 2) ________ deals with the company's current business and ________ involves adapting a firm to take advantage of opportunities in its constantly changing environment.

A) Long-range planning; strategic planning B) Short-range planning; long-range planning C) Annual planning; long-range planning D) Strategic planning; short-range planning E) Environmental scanning; strategic planning Answer: A Diff: 2 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1 3) Starbucks has an annual plan in place to deal with the company's current SBUs and their operations. However, as a growth-oriented firm, Starbucks is interested in both domestic and international markets. This requires Starbucks to constantly monitor the environment and adapt to the opportunities with which it is presented. To take advantage of its changing marketing opportunities, it is most important for Starbucks to have which of the following in place?

A) value-delivery network B) mission statement C) supporting objectives D) profit analysis E) strategic plan Answer: E Diff: 2 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1

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4) The first step in strategic planning is to ________.

A) set objectives and goals B) develop the business portfolio C) define the company mission D) plan marketing strategies E) identify a problem Answer: C Diff: 1 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1 5) Which of the following is the final step in the strategic planning process?

A) defining the company mission B) setting company objectives and goals C) designing the business portfolio D) planning marketing and other functional strategies E) identifying the company's culture Answer: D Diff: 1 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1 6) Which of the following provides an answer to these questions: What is our business? Who are our customers? What do our customers value? What should our business be?

A) objectives and goals B) mission statement C) business portfolio D) marketing and functional strategies E) operational strategies Answer: B Diff: 1 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1

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7) A vendor for Ford Motor Company received the following message from one of Ford's marketing managers: "As we move forward during the twenty-first century, it is incumbent upon us to inform you that Ford is committed to building profitable customer relationships by creating environmentally better cars and getting them to market faster at lower costs." The marketing manager is most likely referring to Ford's ________.

A) vision statement B) market tactics C) business portfolio D) mission statement E) business objectives Answer: D Diff: 2 Type: MC Page Ref: 46 Skill: Concept Objective: 2-1 8) ________ should be market oriented and defined in terms of ________.

A) Strategic plans; company needs B) Annual plans; product needs C) Long-range plans; company needs D) Mission statements; customer needs E) Objectives; customer needs Answer: D Diff: 2 Type: MC Page Ref: 47 Skill: Concept Objective: 2-1 9) A(n) ________ defines a business in terms of satisfying basic customer needs.

A) market-oriented mission statement B) product-oriented mission statement C) technology-oriented mission statement D) environment-oriented mission statement E) strategic plan Answer: A Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1

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10) When the makers of a ballpoint pen state they are in the communication equipment business, they are defining their mission in terms of the ________.

A) environment B) technology used C) company D) product E) market Answer: D Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1 11) Which of the following is an accurate guideline for a clear mission statement?

A) A mission statement should focus on sales.

B) A mission statement should declare how the company intends to win in the marketplace.

C) A mission statement should focus on profits.

D) A mission statement should be very general.

E) A mission statement should be very specific.

Answer: B Diff: 2 Type: MC Page Ref: 47 Skill: Concept Objective: 2-1 12) Which of the following is a market-oriented business definition?

A) "to provide a local trading platform where practically anyone can trade practically anything" B) "to sell tools and home repair and improvement items" C) "to be the best company in our industry" D) "to bring inspiration and innovation to everyone in the world" E) "to make sports equipment" Answer: D Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1 13) Which of the following is an example of a market-oriented mission statement?

A) "We help you organize the world's information and make it universally accessible and useful."

B) "We run theme parks."

C) "We make customer food and drink products."

D) "We hold online auctions."

E) "We sell tools and home repair items."

Answer: A Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1

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14) Which of the following is an example of a product-oriented mission statement?

A) "At Home Depot, we empower consumers to achieve the homes of their dreams."

B) "At Canada's Wonderland theme park, we create fantasies—a place where dreams come true."

C) "At Nike, we bring innovation and inspiration to every athlete in the world."

D) "At Revlon, we make high quality cosmetics reasonably priced.

E) "At CP Hotels, we rent rooms."

Answer: E Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1 15) Revlon has clearly defined its "mission" of selling lifestyle and self-expression. In order for the firm to launch its strategic plan, the mission needs to be turned into detailed ________ that guide each level of the company.

A) strategies B) tactics C) product mixes D) supporting objectives E) promotional tools Answer: D Diff: 2 Type: MC Page Ref: 48 Skill: Concept Objective: 2-1 16) Paul Pierce is busy working with other managers evaluating the products and businesses making up their company. Paul is engaged in ________.

A) defining the company's mission statement B) preparing a business portfolio C) portfolio analysis D) marketing planning E) marketing control Answer: C Diff: 2 Type: MC Page Ref: 49 Skill: Concept Objective: 2-2 17) The collection of businesses and products that make up a company is called its ________.

A) strategic business unit B) mission statement C) strategic plan D) business portfolio E) operational factors Answer: D Diff: 1 Type: MC Page Ref: 49 Skill: Concept Objective: 2-2 5 Copyright © 2017 Pearson Canada Inc.

18) Business portfolio planning involves two steps: ________ and ________.

A) identifying SBUs; assessing the attractiveness of SBUs B) analyzing the current business portfolio; shaping the future business portfolio C) identifying internal strengths; identifying external opportunities D) conducting a SWOT analysis; establishing marketing controls E) identifying growth opportunities; evaluating growth opportunities Answer: B Diff: 2 Type: MC Page Ref: 49 Skill: Concept Objective: 2-2 19) ________ can be a company division, a product line within a division, or sometimes a single product or brand.

A) A market B) The BCG C) An SBU D) A PLC E) A value delivery network Answer: C Diff: 2 Type: MC Page Ref: 49 Skill: Concept Objective: 2-2 20) After management has identified the key businesses making up its company, what is the next step?

A) Identify businesses in which to invest.

B) Assess the attractiveness of its SBUs. C) Decide whether to harvest any businesses.

D) Complete short-range planning.

E) Complete SBU identification.

Answer: B Diff: 2 Type: MC Page Ref: 49 Skill: Concept Objective: 2-2 21) According to the text the best known product portfolio planning method was developed by ________.

A) Philip Kotler B) Harvard University C) the SRI Consulting Firm D) the Boston Consulting Group E) James P. Hess Answer: D Diff: 1 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 6 Copyright © 2017 Pearson Canada Inc.

22) Most portfolio analysis methods evaluate SBUs on two dimensions, namely ________ and ________.

A) market share; strength of the SBU's position B) market or industry growth rate; market or industry attractiveness C) market or industry attractiveness; strength of the SBU's position in that market or industry D) market growth rate; profits E) market penetration; market development Answer: C Diff: 2 Type: MC Page Ref: 49-50 Skill: Concept Objective: 2-2 23) In the Boston Consulting Group approach, ________ provide(s) a measure of market attractiveness.

A) relative market share B) SBUs C) cash cows D) market growth rate E) dogs Answer: D Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 24) In the Boston Consulting Group approach, ________ serve(s) as a measure of company strength in the market.

A) relative market share B) SBUs C) cash cows D) market growth rate E) market segmentation Answer: A Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 25) The BCG growth-share matrix classifies four types of SBUs. They are ________.

A) product, price, promotion, and placement B) sales, market share, price, and promotion C) stars, cash cows, question marks, and dogs D) planning, organizing, leading, and controlling E) market penetration, market development, product development, and diversification Answer: C Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 7 Copyright © 2017 Pearson Canada Inc.

26) In the BCG approach, ________ are high-share, high-growth businesses or products. They need heavy investment to finance rapid growth. When their growth slows down, they turn into ________.

A) cash cows; stars B) question marks; dogs C) stars; question marks D) stars; cash cows E) dogs; cash cows Answer: D Diff: 3 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 27) ________ are low-growth, high share businesses or products. They generate a lot of cash that the firm uses to pay its bills and support other SBUs that need investment.

A) Stars B) Cash cows C) Question marks D) Dogs E) Cats Answer: B Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 28) When dealing with a ________, managers must decide whether to invest in it in an attempt to build it into a star or cash cow or whether to phase it out.

A) star B) dog C) question mark D) cash cow E) cat Answer: C Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2

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29) In the BCG matrix, income from ________ can be used to help finance the company's question marks and stars.

A) dogs B) SBUs C) cash cows D) sales revenue E) overseas operations Answer: C Diff: 2 Type: MC Page Ref: 50 Skill: Concept Objective: 2-2 30) The four possible strategies that can be pursued for each SBU are building, holding, ________, and ________.

A) harvesting; divesting B) promoting; selling C) downsizing; expanding D) diversifying; penetrating E) developing; growing Answer: A Diff: 2 Type: MC Page Ref: 50-51 Skill: Concept Objective: 2-2 31) Which of the following accurately reflects a problem with a matrix approach to strategic planning?

A) It focuses on future planning.

B) It can be costly to conduct.

C) It detracts from the focus on profit maximization.

D) It can lead to over estimation of profits.

E) It focuses on classifying future businesses.

Answer: B Diff: 2 Type: MC Page Ref: 51 Skill: Concept Objective: 2-2 32) Unlike strategic-planning efforts of the past, which were conducted primarily by senior managers, today's strategic planning is more ________.

A) short-term oriented B) decentralized C) limitation-free D) product-oriented E) centralized Answer: B Diff: 2 Type: MC Page Ref: 51 Skill: Concept Objective: 2-2 9 Copyright © 2017 Pearson Canada Inc.

33) Which of the following is a useful tool for identifying future growth opportunities?

A) the BCG matrix B) the business portfolio C) the product/market expansion grid D) the value chain E) the value delivery network Answer: C Diff: 1 Type: MC Page Ref: 52 Skill: Concept Objective: 2-2 34) Mountain Home Farms is now using the product/market expansion grid to develop strategies.

The owners of the company have most likely found the grid to be quite useful for identifying ________.

A) target markets B) growth opportunities C) key customers D) new products E) suppliers Answer: B Diff: 1 Type: MC Page Ref: 52 Skill: Concept Objective: 2-2 35) Making more sales to current customers without changing a firm's products is called ________.

A) market development B) market growth C) market penetration D) product development E) market attractiveness Answer: C Diff: 1 Type: MC Page Ref: 52 Skill: Concept Objective: 2-2

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36) Canada's Wonderland is identifying and developing new markets for its current theme parks.

Canada's Wonderland is exploring possibilities for ________.

A) market penetration B) market development C) downsizing D) diversification E) product development Answer: B Diff: 2 Type: MC Page Ref: 52 Skill: Concept Objective: 2-2 37) If Under Armour, the successful maker of moisture-wicking shirts and shorts, considered introducing a line of Under Armour fitness equipment, the company would be considering ________.

A) marketing controls B) market development C) diversification D) market penetration E) product adaptation Answer: C Diff: 3 Type: MC Page Ref: 52-53 Skill: Concept Objective: 2-2 38) ________ entails reducing the business portfolio by eliminating products that no longer fit the company's overall strategy.

A) Market segmentation B) BCG C) Product line extension D) Downsizing E) Market redesign Answer: D Diff: 1 Type: MC Page Ref: 53 Skill: Concept Objective: 2-2 39) Which of the following is a reason that a firm might want to abandon products or markets?

A) The market environment has changed, making a product more profitable.

B) The firm has entered areas in which it does not have experience.

C) The economic climate is showing signs of recovery.

D) The firm has grown too slowly.

E) The firm has products which are slowly becoming more appealing to the customer.

Answer: B Diff: 2 Type: MC Page Ref: 53 Skill: Concept Objective: 2-2 11 Copyright © 2017 Pearson Canada Inc.

40) The marketing concept is best thought of as which of the following?

A) a guiding philosophy for the company's marketing strategy B) a specific company tactic to build relationships with customers, vendors, and suppliers C) the overall purpose of the company D) the position the company's product holds in customers' minds E) the organization of the company's marketing department Answer: A Diff: 2 Type: MC Page Ref: 53 Skill: Concept Objective: 2-3 41) Each department in a company that carries out activities to serve the customer can be thought of as a partner in the company's internal ________.

A) market development B) product development C) business portfolio D) value chain E) value delivery network Answer: D Diff: 2 Type: MC Page Ref: 53 & 55 Skill: Concept Objective: 2-3 42) A value delivery network includes ________.

A) employees within the company B) different departments in the company C) the company and its suppliers, distributors and customers D) consumers E) company departments and consumers Answer: C Diff: 2 Type: MC Page Ref: 53 & 55 Skill: Concept Objective: 2-3 43) Multinationals like Honda Motor Co. and Walmart stores have designed programs to work closely with their suppliers to help them reduce their costs and improve quality. This illustrates the importance of an efficient ________.

A) business model B) low-cost operator C) product mix D) value-delivery network E) problem-solver Answer: D Diff: 2 Type: MC Page Ref: 53 & 55 Skill: Concept Objective: 2-3 12 Copyright © 2017 Pearson Canada Inc.

44) ________ is the marketing logic by which a company hopes to create customer value and achieve profitable customer relationships.

A) Price B) Being a low-cost operator C) A consistent product mix D) Marketing strategy E) Implementing a differentiation strategy Answer: D Diff: 1 Type: MC Page Ref: 57 Skill: Concept Objective: 2-4 45) A sound marketing strategy begins with ________.

A) positioning B) customer analysis C) differentiation D) promotion E) SWOT analysis Answer: B Diff: 2 Type: MC Page Ref: 57 Skill: Concept Objective: 2-4 46) The process of customer-driven marketing involves ________.

A) product, price, promotion, and adaptation B) market segmentation, market targeting, differentiation, and positioning C) marketing analysis, planning, implementation, and feedback D) analysis, targeting, implementation, and control E) problem identification, information search, decision, and implementation Answer: B Diff: 2 Type: MC Page Ref: 58 Skill: Concept Objective: 2-4 47) The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors is called ________.

A) market targeting B) positioning C) marketing strategy D) market segmentation E) market extension Answer: D Diff: 1 Type: MC Page Ref: 58 Skill: Concept Objective: 2-4

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48) For Hyundai Corporation, customers who care primarily about the price of a car make up one ________.

A) market position B) value network C) market segment D) customer extension E) value chain Answer: C Diff: 2 Type: MC Page Ref: 58 Skill: Concept Objective: 2-4 49) ________ involves evaluating each market segment's attractiveness and selecting one or more segments to enter.

A) Market segmentation B) Product differentiation C) Market targeting D) Market mixing E) Positioning Answer: C Diff: 1 Type: MC Page Ref: 59 Skill: Concept Objective: 2-4 50) Most companies today enter a new market by serving a ________; if this proves successful, they ________.

A) single market segment; add segments B) multitude of segments; add more segments C) few segments; add more segments D) niche; differentiate E) target market; reposition Answer: A Diff: 2 Type: MC Page Ref: 59 Skill: Concept Objective: 2-4 51) ________ is the place a product occupies in consumer's mind relative to competitors' products.

A) Product placement B) Product position C) Market segmentation D) Market targeting E) Product promotion Answer: B Diff: 1 Type: MC Page Ref: 59 Skill: Concept Objective: 2-4 14 Copyright © 2017 Pearson Canada Inc.

52) Jill Reno has researched new markets and has decided which segments to enter. Next she should decide what ________ her company's offerings should occupy in those segments.

A) position B) place C) rank D) rating E) percentage of space Answer: A Diff: 1 Type: MC Page Ref: 59 Skill: Concept Objective: 2-4 53) Effective positioning begins with ________ the company's marketing offer from the competition in order to give consumers more perceived value.

A) pricing B) aligning C) differentiating D) promoting E) placing Answer: C Diff: 2 Type: MC Page Ref: 61 Skill: Concept Objective: 2-4 54) In the four Ps of the marketing mix, design, packaging, services, and variety all fall under the category of ________.

A) product B) price C) promotion D) place E) position Answer: A Diff: 2 Type: MC Page Ref: 62 Skill: Concept Objective: 2-4 55) The four Ps concept takes the seller's or marketer's view of the market. What are the buyer's four Cs? A) convenience, cost, competition, and communication B) customer solution, customer cost, convenience, and communication C) customer solution, customer satisfaction, convenience, and communication D) customer satisfaction, customer value, convenience, and customer relationships E) customer solution, customer value, convenience, and communication Answer: B Diff: 2 Type: MC Page Ref: 63 Skill: Concept Objective: 2-4 15 Copyright © 2017 Pearson Canada Inc.

56) The text suggests that instead of thinking of selling products, marketers would be wise to take the customer's view and think of ________.

A) providing convenience B) offering solutions to problems C) initiating two-way communication D) offering discounts E) connecting services and products Answer: B Diff: 2 Type: MC Page Ref: 63 Skill: Concept Objective: 2-4 57) In the marketing management functions, a SWOT analysis should ________ a marketing plan.

A) precede B) coincide with C) follow D) evaluate E) take priority over Answer: A Diff: 2 Type: MC Page Ref: 64 Skill: Concept Objective: 2-5 58) In a SWOT analysis, which of the following would be considered a strength?

A) internal limitations B) trends in the market C) favorable factors in the environment D) factors that challenge the company's performance E) internal resources Answer: E Diff: 2 Type: MC Page Ref: 64 Skill: Concept Objective: 2-5 59) In a SWOT analysis, which of the following refers to factors in the external environment?

A) strengths B) strategies C) weaknesses D) opportunities E) trends Answer: D Diff: 2 Type: MC Page Ref: 64 Skill: Concept Objective: 2-5

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60) To be successful at marketing, companies must effectively turn marketing planning into ________.

A) marketing analysis B) marketing implementation C) marketing control D) marketing audits E) marketing budgeting Answer: B Diff: 2 Type: MC Page Ref: 66 Skill: Concept Objective: 2-5 61) Under the ________ organizational format of marketing departments, different marketing activities are headed by a specialist such as a sales manager, advertising manager, marketing research manager, or customer-service manager.

A) geographic B) product management C) market management D) customer-centered E) functional Answer: E Diff: 2 Type: MC Page Ref: 67 Skill: Concept Objective: 2-5 62) Modern marketing departments are changing their focus to ________.

A) customer management B) product management C) brand management D) functional management E) market organization management Answer: A Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 63) The ________ organizational format requires that a complete strategy and marketing program is developed and implemented for a specific brand.

A) functional B) market management C) geographic D) product management E) customer management Answer: D Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 17 Copyright © 2017 Pearson Canada Inc.

64) The ________ organizational system's main advantage is that the company is organized around the needs of specific market segments.

A) product management B) market management C) geographic management D) vertical management E) functional management Answer: B Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 65) An increasingly large number of firms are changing their organizational focus from ________ to ________.

A) product management; functional management B) product management; geographic management C) brand management; customer relationship management D) geographic management; functional management E) global management; regional management Answer: C Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 66) Evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained is called ________.

A) marketing control B) strategic control C) operating control D) developmental control E) efficiency Answer: A Diff: 1 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 67) The marketing control process entails the following steps in order: setting goals, ________, evaluating performance, and ________.

A) evaluating goals; measuring performance B) achieving goals; measuring performance C) taking corrective action; measuring performance D) measuring performance; taking corrective action E) taking corrective action; following up Answer: D Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 18 Copyright © 2017 Pearson Canada Inc.

68) Which of the following may be required in the marketing control process?

A) setting long term goals B) assigning profit C) changing the action programs D) defining the mission E) discounting the causes of gaps in performance Answer: C Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 69) Ensuring that the company achieves the sales, profits, and other goals set out in its annual marketing plan is the purpose of ________.

A) marketing control B) operating control C) strategic control D) anticipatory control E) a marketing audit Answer: B Diff: 2 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 70) ________ involves looking at whether a company's basic strategies are well matched to its opportunities.

A) Operating control B) Market management organization C) Marketing control D) Strategic control E) Distribution Answer: D Diff: 1 Type: MC Page Ref: 68 Skill: Concept Objective: 2-5 71) With the rise of social media, two major challenges facing marketers today are ________.

A) keeping up with the changing technology and learning how to use it B) keeping up with changing technology and choosing the best ones to use C) understanding how to use the tools in a way that achieves marketing goals and measuring the effects of social media programs D) understanding how to use the tools in a way that achieves marketing goals and interpreting the information gathered E) measuring the most effective tools for use and measuring the effects of social media programs Answer: C Diff: 2 Type: MC Page Ref: 69 Skill: Concept Objective: 2-5 19 Copyright © 2017 Pearson Canada Inc.

72) Which of the following measures the profits generated by investments in marketing activities?

A) SWOT analysis B) marketing audits C) costs of the marketing investment D) marketing ROI E) budgets Answer: D Diff: 2 Type: MC Page Ref: 69 Skill: Concept Objective: 2-5 73) Which of the following is a customer-centered measure of marketing impact?

A) customer management B) company acquisitions C) customer equity D) customer retention of promotions E) producer lifetime value Answer: C Diff: 1 Type: MC Page Ref: 70 Skill: Concept Objective: 2-5 74) Monsanto operates in many businesses, including pharmaceuticals and food products. The company defines its ________ as creating "abundant food and a healthy environment."

A) strategy B) market development C) business portfolio D) mission E) value-delivery network Answer: D Diff: 2 Type: MC Page Ref: 45 - 48 Skill: Application Objective: 2-1 75) 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) matrix D) division E) business portfolio Answer: B Diff: 2 Type: MC Page Ref: 49 Skill: Application Objective: 2-2 20 Copyright © 2017 Pearson Canada Inc.

76) The pharmaceuticals division of Omni Healthcare holds low market share in a high-growth market. In order to increase market share, managers may decide to ________.

A) hold the pharmaceuticals division's share B) implement a harvest strategy C) use money from a cash cow to promote the pharmaceuticals division D) divest the SBU E) diversify the pharmaceutical division Answer: C Diff: 3 Type: MC Page Ref: 50 - 51 Skill: Application Objective: 2-2 77) The Bank of Ontario bought Pershing, an off-shore investment firm with operations in India, from Credit Suisse First Boston. The Bank of Ontario is pursuing a ________.

A) product development strategy B) downsizing strategy C) diversification strategy D) market penetration strategy E) product adaptation Answer: C Diff: 2 Type: MC Page Ref: 52 Skill: Application Objective: 2-2 78) Acme, Inc., has modified the distribution process of its widgets and gadgets in order to tap into the Eastern European market. Acme is likely following a ________ strategy.

A) market penetration B) market development C) diversification D) harvesting E) product development Answer: B Diff: 2 Type: MC Page Ref: 52 Skill: Application Objective: 2-2 79) Starbucks has introduced a debit card that lets customers prepay for coffee and snacks. This effort by Starbucks management is an example of ________.

A) market development B) product development C) diversification D) market penetration E) product adaptation Answer: D Diff: 2 Type: MC Page Ref: 52 Skill: Application Objective: 2-2 21 Copyright © 2017 Pearson Canada Inc.

80) The U.S.-based company Walmart, the world's largest retailer, has successfully launched its stores in Mexico, Canada, the U.K., and Germany, and other nations. This is an example of how Walmart is pursuing ________ as a growth strategy.

A) market penetration B) product development C) downsizing D) market development E) diversification Answer: D Diff: 2 Type: MC Page Ref: 52 Skill: Application Objective: 2-2 81) Walmart relies on sound relationships with its low-cost suppliers in order to pass low prices on to consumers. Thus, forming a ________ is crucial to Walmart's success.

A) value delivery network B) growth-share matrix C) customer relationship management policy D) market concept philosophy E) diversification strategy Answer: A Diff: 2 Type: MC Page Ref: 56 Skill: Application Objective: 2-3 82) AllPro Plastics is in the process of dividing a market into distinct groups of buyers with different needs, characteristics, and behaviors who might require separate products or marketing programs. Which of the following is this firm doing?

A) market development B) market diversification C) market penetration D) market targeting E) market segmentation Answer: E Diff: 1 Type: MC Page Ref: 58 Skill: Application Objective: 2-4

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83) Paul Pendergraff has identified a group of potential customers who seem to respond in a similar way to a series of magazine and radio advertisements for his company's product. Paul has identified a(n) ________.

A) target market B) market segment C) market D) market position E) undefined niche Answer: B Diff: 1 Type: MC Page Ref: 58 Skill: Application Objective: 2-4 84) Paul Pendergraff is evaluating each market segment's attractiveness and is in the process of selecting one or more segments for his firm's product to enter. What is Paul doing?

A) market targeting B) marketing segmenting C) marketing D) market positioning E) market penetrating Answer: A Diff: 1 Type: MC Page Ref: 59 Skill: Application Objective: 2-4 85) Memories R Us specializes in serving market segments that major competitors overlook and ignore. Which of the following best describes Memories R Us'?

A) market follower B) marketer challenger C) market seeker D) market nicher E) full market coverer Answer: D Diff: 1 Type: MC Page Ref: 59 Skill: Application Objective: 2-4

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86) Saturn is "a different kind of company, a different kind of a car"; the Hummer is "like nothing else." These statements reflect a firm's ________.

A) product portfolio B) target markets C) positioning D) strategy E) market niche Answer: C Diff: 2 Type: MC Page Ref: 59 Skill: Application Objective: 2-4 87) Of the following, it is most important for Nike to develop ________ for their products.

A) customer management organizations B) unique market positions C) market management organizations D) marketing ROI data E) marketing dashboards Answer: B Diff: 1 Type: MC Page Ref: 59 Skill: Application Objective: 2-4 88) Environmental Service Company wants to practice effective positioning. To do so, the owners must ________ their marketing offering to give consumers more value than the services offered by competitors.

A) differentiate B) promote C) advertise D) sell E) represent Answer: A Diff: 1 Type: MC Page Ref: 61 Skill: Application Objective: 2-4

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89) Harris, the marketing manager at a small sports retail chain, has conducted a marketing analysis. He has investigated the company's internal resources and situational factors, as well as factors and trends in the competitive sports retail chain market. Which of the following has Harris completed?

A) SWOT analysis B) business portfolio analysis C) executive summary D) marketing plan E) marketing mix Answer: A Diff: 1 Type: MC Page Ref: 64 Skill: Application Objective: 2-5 90) Michelin is in the process of doing a SWOT Analysis. Which of the following most accurately identifies a difference between a weakness and a threat in SWOT analysis?

A) Michelin is more able to change a threat than a weakness.

B) Michelin is more able to change a weakness than a threat.

C) Michelin can be more negatively affected by a weakness than by a threat.

D) Michelin can be more negatively affected by a threat than by a weakness.

E) Michelin can more easily identify threats than weaknesses.

Answer: B Diff: 3 Type: MC Page Ref: 64-65 Skill: Application Objective: 2-5 91) Emerson Studios, a chain of 25 portrait stores in five provinces and territories, has organized its marketing into different activities that are headed by specialists. What type of marketing organization is this?

A) geographic B) product C) organic D) functional E) market Answer: D Diff: 2 Type: MC Page Ref: 67 Skill: Application Objective: 2-5

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92) Peter Cramer is constantly involved in evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Peter's current work is most accurately classified as ________.

A) marketing control B) marketing planning C) strategic planning D) tactical planning E) strategic control Answer: A Diff: 1 Type: MC Page Ref: 68 Skill: Application Objective: 2-5 93) Juanita Castro is looking at whether her company's strategies are well matched to its opportunities. Juanita is utilizing ________.

A) marketing control B) operating control C) strategic control D) SWOT analysis E) marketing auditing Answer: C Diff: 2 Type: MC Page Ref: 68 Skill: Application Objective: 2-5 94) ABC Financial Services has just developed a formal statement of its purpose. This firm has put together a mission statement.

Answer: TRUE Diff: 1 Type: TF Page Ref: 46 Skill: Concept Objective: 2-1 95) Mission statements should be realistic and general in nature.

Answer: FALSE Diff: 2 Type: TF Page Ref: 47 Skill: Concept Objective: 2-1 96) Mission statements should be both meaningful motivating.

Answer: TRUE Diff: 1 Type: TF Page Ref: 47 Skill: Concept Objective: 2-1

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97) At Google, "we help you organize the world's information and make it universally accessible," is a product-oriented mission.

Answer: FALSE Diff: 2 Type: TF Page Ref: 48 Skill: Application Objective: 2-1 98) "At Nike, we sell shoes" is a market-oriented business definition.

Answer: FALSE Diff: 2 Type: TF Page Ref: 48 Skill: Application Objective: 2-1 99) A firm's mission statement should be the basis for both its business and marketing objectives.

Answer: TRUE Diff: 2 Type: TF Page Ref: 47 Skill: Concept Objective: 2-1 100) Marketing strategies must be developed to support marketing objectives.

Answer: TRUE Diff: 2 Type: TF Page Ref: 48 Skill: Concept Objective: 2-2 101) When designing business portfolios, most companies are well advised to start with adding a broad range of products and businesses to their organization.

Answer: FALSE Diff: 2 Type: TF Page Ref: 49 Skill: Concept Objective: 2-2 102) In the BCG matrix, "dogs" by definition are businesses and products that do not generate enough cash to maintain themselves.

Answer: FALSE Diff: 2 Type: TF Page Ref: 50 Skill: Concept Objective: 2-2 103) More and more companies involve only centralized upper-level management teams in strategic planning.

Answer: FALSE Diff: 2 Type: TF Page Ref: 51 Skill: Concept Objective: 2-2

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104) Though companies need to grow to compete effectively and satisfy their stakeholders, growth itself should not be a company's objective.

Answer: TRUE Diff: 2 Type: TF Page Ref: 51 Skill: Concept Objective: 2-2 105) The growth strategy of diversification involves offering modified or new products to current markets.

Answer: FALSE Diff: 2 Type: TF Page Ref: 52 Skill: Concept Objective: 2-2 106) A company should consider downsizing when products of an SBU no longer fit the company's overall strategy.

Answer: TRUE Diff: 2 Type: TF Page Ref: 53 Skill: Concept Objective: 2-2 107) The marketing department alone cannot produce superior value for customers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 53 Skill: Concept Objective: 2-3 108) A company's value chain is only as strong as its strongest link, or most effective department.

Answer: FALSE Diff: 2 Type: TF Page Ref: 56 Skill: Concept Objective: 2-3 109) To improve its value delivery network, a company needs to examine the value chains of its suppliers and distributors.

Answer: TRUE Diff: 2 Type: TF Page Ref: 56 Skill: Application Objective: 2-3 110) The image of a product in the minds of consumers is called market segmentation.

Answer: FALSE Diff: 1 Type: TF Page Ref: 59 Skill: Concept Objective: 2-4 28 Copyright © 2017 Pearson Canada Inc.

111) A market segment consists of consumers who respond in different ways to a given set of marketing efforts.

Answer: FALSE Diff: 1 Type: TF Page Ref: 58 Skill: Concept Objective: 2-4 112) Holiday Inn has divided the total customer market into smaller segments and selected the most promising segments. Deciding what position it wants to occupy in these segments is called targeting.

Answer: FALSE Diff: 2 Type: TF Page Ref: 59 Skill: Application Objective: 2-4 113) A company with limited resources would likely decide to serve all segments of a market.

Answer: FALSE Diff: 2 Type: TF Page Ref: 59 Skill: Concept Objective: 2-4 114) When a company positions its product, it must first identify possible customer value differences within a market segment that could be the basis of a competitive advantage for the product.

Answer: TRUE Diff: 2 Type: TF Page Ref: 59 Skill: Concept Objective: 2-4 115) Guided by marketing strategy, the company designs a marketing mix made up of factors under its control: product, price, place, and promotion.

Answer: TRUE Diff: 2 Type: TF Page Ref: 62 Skill: Concept Objective: 2-4 116) In the four Ps of the marketing mix, promotion refers solely to advertising.

Answer: FALSE Diff: 1 Type: TF Page Ref: 63 Skill: Concept Objective: 2-4 117) One valid criticism of the four Ps concept is that services are not considered.

Answer: FALSE Diff: 3 Type: TF Page Ref: 63 Skill: Concept Objective: 2-4 29 Copyright © 2017 Pearson Canada Inc.

118) The four Ps concept takes the seller's view of the market.

Answer: TRUE Diff: 2 Type: TF Page Ref: 63 Skill: Concept Objective: 2-4 119) The four marketing management functions are analysis, planning, implementation, and control.

Answer: TRUE Diff: 2 Type: TF Page Ref: 64 Skill: Concept Objective: 2-5 120) In SWOT analysis, strengths and weaknesses refer to a firm's internal environment, while opportunities and threats refer to the external environment.

Answer: TRUE Diff: 2 Type: TF Page Ref: 64 Skill: Concept Objective: 2-5 121) Through annual marketing planning, the company decides what it wants to do with each business unit.

Answer: FALSE Diff: 2 Type: TF Page Ref: 65 Skill: Concept Objective: 2-5 122) Marketing planning is the task of selecting marketing strategies for each business, product, or brand in a company with the goal of helping the company attain its overall objectives.

Answer: TRUE Diff: 2 Type: TF Page Ref: 65-66 Skill: Concept Objective: 2-5 123) The final step in the marketing control process is taking corrective action to erase any gaps between goals and performance.

Answer: TRUE Diff: 2 Type: TF Page Ref: 68 Skill: Concept Objective: 2-5

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124) Define strategic planning. Discuss the steps involved.

Answer: The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities is called strategic planning. At the outset, beginning at the corporate level, each company must define its overall purpose and mission. What is our business? Who is the customer? What do our customers value? Answers to these questions are crucial in writing a clear mission statement. Mission statements need to be carefully defined in terms of customer needs. Missions should be realistic, motivating, and fit the market environment. Missions then lead to setting business and marketing objectives/goals in the planning process. This is followed by decisions regarding what portfolio of businesses and products is best for the company and how much support to give each one. Next, each business and product develops detailed marketing and other functional strategies. In this step, plans are drawn at the business unit, product, and market levels in support of company-wide plans.

Diff: 2 Type: ES Page Ref: 46-47 Skill: Concept Objective: 2-1 125) What is business portfolio planning? Discuss how a company might use the Boston Consulting Group's product portfolio analysis method.

Answer: A business portfolio is the collection of businesses and products that make up the company. Business portfolio planning entails two steps. First, there is an analysis of the company's current business portfolio, followed by decisions about what businesses should receive more, less, or no investment. Second, planners must shape the future portfolio by developing strategies for growth and/or downsizing. The Boston Consulting Group matrix evaluates SBUs on two important dimensions: the attractiveness of the SBU's market or industry growth rate and the strength of the SBU's position or relative market share in that market or industry. The growth-share matrix defines four types of SBUs: stars, cash cows, question marks, and dogs. Once each SBU has been defined, a company can determine what role each will play in the firm's future, using strategies of building, holding, harvesting, or divesting each SBU. Diff: 2 Type: ES Page Ref: 49-53 Skill: Application Objective: 2-2 126) What are some problems with matrix approaches?

Answer: The BCG and other portfolio planning approaches can be difficult to execute, time consuming, and also costly to implement. Defining SBUs and measuring relative market share and growth can be a difficult task as well. A serious flaw with these approaches is that, while they are helpful for classifying current businesses, they offer little or no advice for future planning. Also, the BCG and other formal methods are centralized, involving mainly upper management.

Diff: 2 Type: ES Page Ref: 51 Skill: Concept Objective: 2-2

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127) The BCG is a useful approach to evaluate current businesses. Describe a device that a firm could use to identify future growth opportunities.

Answer: The product/market expansion grid is a useful device for identifying growth opportunities in the future. It examines products, both current and new, against markets, both current and new. 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.

However, diversifying too broadly can be detrimental in the long run.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 128) Explain the term "value-delivery network" Answer: For decades, marketers have traditionally created value to satisfy customer needs and wants. They did this through focusing on internal marketing departments and functions. Today, the manufacturer or retailer needs to look beyond its own value chain and into the value chains of suppliers and distributors to create value throughout the entire supply chain. More companies are partnering with other members of the supply chain to improve the performance of the customer value-delivery network. In fact, today competition takes place between entire value delivery networks instead of between individual competitors.

Diff: 2 Type: ES Page Ref: 55-57 Skill: Concept Objective: 2-3 129) Define marketing strategy. Discuss the steps in formulating marketing strategy.

Answer: The marketing logic by which a company hopes to achieve profitable relationships is called its marketing strategy. Marketing strategy formulation entails four specific steps: market segmentation, market targeting, differentiation, and positioning. The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior is called market segmentation. Market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain that value over time. Effective positioning begins with actually differentiating the company's marketing offer so that it gives consumers greater value. Positioning is defined as creating a distinct image of a product in the eyes of target consumers relative to the competition. A product's positioning should take advantage of a competitive difference within the market target.

Diff: 2 Type: ES Page Ref: 57-62 Skill: Concept Objective: 2-4

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130) Explain why, according to the authors of your text, the four Ps concept of the marketing mix takes a seller's view of the market, not the buyer's view. How should marketers consider the buyer's view?

Answer: The four Ps are described in terms of how the seller conceives of each; product, price, place, and promotions. In today's day and age of customer relationship marketing, the four Ps can be described as the four Cs from the customer's point of view. In lieu of product, there is customer solution; that is, customers buy solutions to their problems or look for value in products. In lieu of price, customer cost takes into consideration customers' interest in the total costs of obtaining, using, and disposing of a product. The place element of the marketing mix focuses on delivering the product to the right customer at the right time and place. Place can be redefined from the customer's point of view as how convenient it is to obtain a product.Finally, Promotions is not only what the company is doing to reach the customer, today is is about customers communicating back to the company. Thus promotions is replaced by communication.

Marketers should use the four Cs as a base for the four Ps of their marketing mix.

Diff: 3 Type: ES Page Ref: 63 Skill: Concept Objective: 2-4 131) Define marketing planning. Briefly outline the major steps in a marketing plan.

Answer: Marketing planning involves deciding on marketing strategies that will help the company achieve its overall strategic objectives. A detailed marketing plan is needed at the business, product, or brand level. An executive summary is the first step in the plan. It contains a brief summary of the main goals and recommendations of the plan for management review. The main section of the plan presents a detailed SWOT analysis of the current marketing situation, along with potential threats and opportunities. The plan then states major objectives for the brand and outlines the specifics of a marketing strategy for achieving them. In addition, action programs for implementing the marketing strategy along with the details of a supporting marketing budget are presented. The final section outlines the controls used to monitor progress and corrective action.

Diff: 2 Type: ES Page Ref: 65-68 Skill: Concept Objective: 2-5

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132) Marketing departments are organized in several ways. Compare and contrast the most common forms of marketing organizations.

Answer: Some common forms of marketing department organization include functional organization, geographical organization, product management organization, and market management organization. Under a functional department organization, a functional specialist, such as a sales manager, advertising manager, or market research manager, is responsible for all marketing activities. Under a geographic organization, sales and marketing people are assigned to specific countries, regions, and districts. Product management organization first appeared at P&G in 1929. Under this approach, a product manager develops and implements a complete strategy and marketing program for a specific product or brand. Under a market or customer management organization, the company is organized around the needs of specific customer segments. In firms that use this organization, one product line is sold to many different types of markets and customers that have different needs and preferences. Finally, large companies that produce many products sold in many geographic areas typically use some combination of these organizational forms.

Diff: 2 Type: ES Page Ref: 66-68 Skill: Application Objective: 2-5 133) Briefly discuss how marketers measure return on marketing investment, explaining why this figure can be difficult to assess.

Answer: Marketing ROI (return on investment) is the net return from a marketing investment divided by the costs of the marketing investment. In other words, ROI is a measure of the profits generated by investments in a marketing activity. Marketing ROI can be difficult to assess because the benefits of marketing are not always easily translated in dollar amounts. However, marketing ROI can be assessed in terms of brand awareness, sales, or market share. Some companies are now using marketing dashboards, which are single displays showing several sets of marketing performance measures. And beyond standard performance measures, many marketers are using customer–centered measures such as customer acquisition, retention, and lifetime value.

Diff: 3 Type: ES Page Ref: 69-70 Skill: Application Objective: 2-5 134) Why should a mission statement be market oriented instead of product or technology oriented?

Answer: A market-oriented mission statement defines the business in terms of customer needs; products and technologies become outdated, but basic market needs may last forever.

Diff: 2 Type: ES Page Ref: 47-48 Skill: Application Objective: 2-1

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135) Why should a mission statement be "motivating" instead of stated in terms of sales or profits?

Answer: Sales and profits are only a reward for creating value for customers. A mission statement should emphasize a company's strengths and how these will create a planned customer experience. A company's employees will be more dedicated to the company's mission if they feel that their work is creating this customer experience.

Diff: 3 Type: ES Page Ref: 47 Skill: Application Objective: 2-2 136) What is a strategic business unit (SBU) and how is it involved in a business portfolio analysis?

Answer: An SBU is a key part of a company—whether a brand, product, product line, department, or an entire division—that act as a unique business. Identifying and analyzing a company's SBUs are the first two steps in business portfolio analysis.

Diff: 1 Type: ES Page Ref: 51 Skill: Application Objective: 2-2 137) Into what BCG quadrant does a high-share, high-growth SBU fall?

Answer: It falls into the "star" category. They need heavy investment to finance their growth.

Diff: 1 Type: ES Page Ref: 50 Skill: Application Objective: 2-2 138) 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. Diff: 1 Type: ES Page Ref: 50 Skill: Application Objective: 2-2 139) How might the BCG matrix represent a life cycle?

Answer: Many SBUs start out as question marks, then move into the star category if they succeed; stars eventually become cash cows, and then perhaps, dogs.

Diff: 3 Type: ES Page Ref: 50-51 Skill: Application Objective: 2-2 140) Give a situation in which the suggested strategy for a dog might be to divest.

Answer: Consider a new technology that is being launched into a market. Assume it is not very attractive to customers, generating low sales. The new technology is thus a dog. Managers should divest the SBU by selling or phasing it out and using the resources elsewhere.

Diff: 3 Type: ES Page Ref: 50-51 Skill: Application Objective: 2-2 35 Copyright © 2017 Pearson Canada Inc.

141) According to the product/market expansion grid, what strategy is a company following when it attempts to increase sales of current products to current customers?

Answer: This is a market penetration strategy. This might be adding new stores in current market areas or offering current customers new ways of using the current product.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 142) How might Party Planning Paradise, a company that sells a wide range of party supplies for all occasions, implement a market development strategy?

Answer: Party Planning Paradise might attempt to identify and develop new markets for its current products, looking for different demographic and geographical markets that might have a need its products would satisfy.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 143) According to the product/market expansion grid, what strategy would a fast-food hamburger restaurant follow if it offered a salad bar option during lunch hours?

Answer: The salad bar is new offering to current customers. Therefore the restaurant is using a product development strategy.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 144) Into what quadrant of the product/market expansion grid would a "new and improved" product fall?

Answer: The "new and improved" product is considered a new product. It is offered to the current market so would fall into the product development quadrant.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 145) What are two situations in which a company may develop strategies for downsizing its business portfolio?

Answer: Downsizing is a good strategy if a company has grown too fast or has entered areas where it lacks experience.

Diff: 2 Type: ES Page Ref: 53 Skill: Application Objective: 2-2

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146) How are partner relationship management and the value chain related?

Answer: Marketers must work closely and coordinate activities with partners in other company departments to form an effective value chain, with each department executing value-creating activities to design, produce, market, deliver, and support the company's products.

Diff: 2 Type: ES Page Ref: 55 Skill: Application Objective: 2-3 147) Explain how a marketer of baking soda may attempt to attract more than one market segment.

Answer: Some consumers buy baking soda as a baking ingredient and some consumers buy baking soda to use as a deodorizer, for example. The marketer will focus on both distinct uses in the marketing mix, such as how the product is promoted.

Diff: 3 Type: ES Page Ref: 58 Skill: Application Objective: 2-4 148) How might a marketer of pens alter the "product" portion of the marketing mix when targeting female college students versus male college students?

Answer: The marketer may use feminine colors and a spiral-flower stripe, for example, when marketing its pens to the females; when targeting males, the marketer might use more neutral colors and wider barrel.

Diff: 2 Type: ES Page Ref: 59 Skill: Application Objective: 2-4 149) What role does the marketing mix play in positioning?

Answer: The marketing mix components of product, price, place, and promotion are the tools that a company can use to differentiate its products from competitors' products in the minds of the target market, Diff: 2 Type: ES Page Ref: 59-61 Skill: Application Objective: 2-4 150) Why is marketing analysis such an important part of marketing management?

Answer: Analysis allows the marketer to evaluate internal strengths and weaknesses and identify environmental opportunities and threats. This analysis allows the marketer to match the company's strengths to opportunities to pursue. From this starting point, the market can continue with planning, implementation, and control.

Diff: 2 Type: ES Page Ref: 64 Skill: Application Objective: 2-5

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151) In SWOT analysis, what is the difference between a weakness and a threat?

Answer: In SWOT analysis, weaknesses are internal factors that may interfere with a company's objectives, while threats are external factors that challenge the company.

Diff: 2 Type: ES Page Ref: 64 Skill: Application Objective: 2-5 152) Why is marketing implementation often difficult to carry out?

Answer: While marketing planning may directly involve a small percentage of a firm's employees, marketing implementation must be carried out by people at all levels of the marketing system. The decisions employees make each day must be aligned with the marketing strategy.

Diff: 2 Type: ES Page Ref: 66 Skill: Application Objective: 2-5 153) Why are many marketers today using customer-centered measures of marketing ROI? Answer: Companies are looking at marketing expenditures as investments in profitable customer relationships, with the goal of increasing individual customer lifetime values and overall customer equity.

Diff: 2 Type: ES Page Ref: 69-70 Skill: Application Objective: 2-5

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Fun-Spot Fun Park began as a small amusement park in 1985. Starting with nothing more than a merry-go-round, a slide, pony rides, and an ice cream stand, Fun-Spot grew into a popular family attraction with 20 rides, a restaurant, and an outdoor performing arts theater.

"My wife, Gail, and I didn't know what we were getting into," commented Ron Hart, the owner.

"We just knew that weekenders coming to the lakes in our rural area represented an untapped market."

Today, thousands of visitors flock to Fun-Spot—families, children of all ages, and even senior citizens who enjoy strolling through the gardens and arbor.

"There's something here for everyone," Gail Hart said with a smile. "Dozens of companies hold annual company picnics here. We have welcomed class field trips. And we even had one wedding here at the park!"

"Here's the funny thing," Ron chimed in. "We really don't know why we've been so successful!

There is nothing else like Fun-Spot Fun Park in the area. We were just lucky."

"I think it's the ambience of the park," Gail added, "that has brought so many visitors. We provide a 'total package' of entertainment. Plus, we try to change our rides and various attractions from time to time."

Ron and Gail Hart admitted that making every visitor happy is a priority. "That has always been our philosophy," they said. "And we've always been able to deliver on that because we've never allowed ourselves to grow too big too quickly."

154) Describe two critical factors affecting the strategic plan at Fun-Spot.

Answer: A strategic plan is the process of developing and maintaining a strategic fit between the company's goals and capabilities and its changing marketing opportunities. From the case, it would seem that Ron and Gail did not have a strategic planning process in place: Ron said they "didn't know what we were getting into." Without a strategic plan the growth of the amusement park can be reactive to demand rather than proactive by the owners. Ron and Gail's continued success will depend on clearly defining the company's mission, then setting SMART objectives that follow their company's mission, and designing the business portfolio with a focus on creating value for visitors of Fun-Spot.

Diff: 2 Type: ES Page Ref: 46 Skill: Application Objective: 2-1

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155) Would you consider Fun-Spot's mission statement to be market oriented? Explain.

Answer: A mission statement defines the company's purpose—what it wants to accomplish in the larger environment. The mission at Fun-Spot seems to be "making every visitor happy." It is defined in terms of customer needs, so it is market oriented. Rather than focusing on the entertainment provided, Fun-Spot focuses on the customer. Providing the fastest roller coaster, the greatest variety of ice cream flavors, or the scariest spook house is not as important, for example, as providing top-notch customer attention and attractions appealing to a variety of visitors at this small, rural park.

Diff: 2 Type: ES Page Ref: 46-48 Skill: Application Objective: 2-1 156) At this point, how do Ron and Gail monitor Fun-Spot's business portfolio?

Answer: A growth-share matrix is a portfolio planning method that evaluates a company's SBU's in terms of its market growth and relative market share. It seems the only way Ron and Gail make a continuous assessment of Fun-Spot's business portfolio is to note the number of visitors. They do not seem to have a strategic plan for evaluating their objectives, strategies or tactics and they do not plan or seek out opportunities in the environment "We really don't know why we've been so successful! There is nothing else like Fun-Spot Fun Park in the area. We were just lucky." If a competitor should appear within a relatively close distance, for example, Ron and Gail will likely have to alter the business portfolio to offset the competition.

Diff: 3 Type: ES Page Ref: 49 Skill: Application Objective: 2-2 157) Into which quadrant of the BCG matrix does Fun-Spot fall? Why? Answer: Fun-Spot Fun Park is a star, defined as a high-growth, high-share position. As mentioned in the case, "Fun-Spot Fun Park began as a small amusement park in 1985. Starting with nothing more than a merry-go-round, a slide, pony rides, and an ice cream stand, Fun-Spot grew into a popular family attraction with 20 rides, a restaurant, and an outdoor performing arts theater." "Today, thousands of visitors flock to Fun-Spot—families, children of all ages, and even senior citizens who enjoy strolling through the gardens and arbor." We assume that there is even more potential for growth since the number of visitors continue to rise. Fun-Spot Park has all the market share in the area since, as Ron states, "There is nothing else like Fun-Spot Fun Park in the area."

Diff: 1 Type: ES Page Ref: 50 Skill: Application Objective: 2-2

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158) How might Ron and Gail implement a market penetration strategy at Fun-Spot?

Answer: A market penetration strategy is one where a company sells more to the same target customer without changing their current offerings. Ron and Gail would maintain their current entertainment offering and continue to deliver customer attention to their existing customers, but might improve advertising or lower prices in an effort to encourage customers to stay longer, visit more often, and spend more money during each visit.

Diff: 2 Type: ES Page Ref: 52 Skill: Application Objective: 2-2 159) In what way do Ron and Gail currently implement a product development strategy at FunSpot?

Answer: A product development strategy is where a company grows by developing new offerings to the same target customer. The owners at Fun-Spot strive to provide new offerings and entertainment options for their visitors. As Gail said, "We provide a 'total package' of entertainment. Plus, we try to change our rides and various attractions from time to time."

Diff: 2 Type: ES Page Ref: 53 Skill: Application Objective: 2-2 160) What are three possible emerging conditions that may cause the Harts to develop a downsizing strategy at Fun-Spot?

Answer: A downsizing strategy eliminates products or business units that are no longer profitable or no longer fit a company's overall strategy. Downsizing would be an appropriate strategy for Fun-Spot if (1) one or more competitors set up entertainment parks close by; or (2) the cost of maintaining live animals such as ponies eliminates profits; or (3) the target audience has found other more appealing forms of family entertainment.

Diff: 3 Type: ES Page Ref: 53 Skill: Application Objective: 2-2 161) Who comprises Fun-Spot's target markets?

Answer: The target market is a market segment in which a company can profitably generate the greatest customer value and sustain it overtime. It seems that the target market for Fun-SPot includes anyone who desires a relaxing, fun day or evening at a small amusement park—" families, children of all ages, and even senior citizens who enjoy strolling through the gardens and arbor." People/companies needing to host special events are also market segments: "Dozens of companies hold annual company picnics here. We have welcomed class field trips. And we even had one wedding here at the park!"

Diff: 1 Type: ES Page Ref: 59 Skill: Application Objective: 2-4

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162) If you had to select a primary market segment that is crucial to the success of Fun-Spot, who would it be? Why? Answer: The primary target market is the market segment that regularly results in a profit for the company and that the company can create value for the customer with their resources. From the case it would appear that Fun-Spot likely relies most on families with children for a steady stream of revenues.

Diff: 2 Type: ES Page Ref: 57 Skill: Application Objective: 2-4 163) What role do service products play at Fun-Spot?

Answer: Service products are the intangible aspect associated with customer products. For FunSpot, services are the experiences visitors have, including the ambience of the park. Visitor experiences are directly tied to such products as the 20 rides, the restaurant, and the outdoor performing arts theater.

Diff: 1 Type: ES Page Ref: 63 Skill: Application Objective: 2-4

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 3 Sustainable Marketing, Social Responsibility and Ethics 1) The marketing concept recognizes that organizations thrive from day to day by determining ________ of target group customers and fulfilling those more effectively and efficiently than competitors do.

A) demands B) needs and wants C) innovations D) personal benefits E) social benefits Answer: B Diff: 2 Type: MC Page Ref: 82 Skill: Concept Objective: 3-1 2) ________ calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

A) Sustainable marketing B) Innovation C) The marketing concept D) Global marketing E) The strategic planning concept Answer: A Diff: 1 Type: MC Page Ref: 82 Skill: Concept Objective: 3-1 3) The ________ specifically focuses on future company needs rather than both future company and future customer needs.

A) societal marketing concept B) strategic planning concept C) sustainable marketing concept D) marketing concept E) consumer business concept Answer: B Diff: 2 Type: MC Page Ref: 82 Skill: Concept Objective: 3-1

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4) Many critics charge that the North American marketing system causes ________ to be higher than they would be under more "sensible" systems.

A) imports B) exports C) prices D) product safety measures E) employee morals Answer: C Diff: 1 Type: MC Page Ref: 83 Skill: Concept Objective: 3-2 5) Critics of the marketing system are most likely to charge that intermediaries ________.

A) are too few in number B) are inefficient C) provide only necessary services D) underprice their services E) are too competitive Answer: B Diff: 2 Type: MC Page Ref: 83 Skill: Concept Objective: 3-2 6) A long-standing charge against intermediaries is that they mark up prices beyond the ________.

A) value of their services B) delivery charges C) going market price D) range most Canadians can afford to pay E) resale value Answer: A Diff: 2 Type: MC Page Ref: 83 Skill: Concept Objective: 3-2 7) Critics charge that high advertising and promotion costs unnecessarily increase retail prices.

Marketers would most likely respond to this criticism by arguing that advertising adds ________.

A) only psychological value B) value by providing information about product availability and merits of a product C) quality to the product D) functional value to the product E) economic value to the product Answer: B Diff: 2 Type: MC Page Ref: 84 Skill: Concept Objective: 3-2 2 Copyright © 2017 Pearson Canada Inc.

8) Critics point out that in the drug industry, where a pill costing five cents to make may cost the consumer $2 to buy. This is an example of which of the following?

A) deceptive advertising B) redlining C) excessive markups D) high-pressure selling E) shoddy products Answer: C Diff: 2 Type: MC Page Ref: 84 Skill: Concept Objective: 3-2 9) Deceptive marketing practices fall into three groups: deceptive ________, deceptive ________, and deceptive ________.

A) product; pricing; promotion B) pricing; promotion; placement C) pricing; promotion; packaging D) packaging; product; promotion E) product; packaging; placement Answer: C Diff: 2 Type: MC Page Ref: 85 Skill: Concept Objective: 3-2 10) Deceptive promotion differs from deceptive pricing in that deceptive promotion overstates the product's ________ or ________.

A) true price; performance B) features; performance C) packaging; costs D) design; features E) availability; package contents Answer: B Diff: 2 Type: MC Page Ref: 85 Skill: Concept Objective: 3-2 11) Companies that "greenwash" ________.

A) are environmentally friendly and have policies already in place to help protect the environment B) are not environmentally friendly but strive to implement environmentally friendly practices C) claim to be environmentally friendly but do not do what they claim to be doing D) practice societal marketing E) practice sustainable marketing Answer: C Diff: 2 Type: MC Page Ref: 85 Skill: Concept Objective: 3-2 3 Copyright © 2017 Pearson Canada Inc.

12) A major step in regulating "unfair or deceptive acts or practices" was the development of the ________.

A) Grusko Act B) Competition Bureau C) Canadian Commerce Commission D) Industry Act E) Business Improvement Bureau Answer: B Diff: 2 Type: MC Page Ref: 85 Skill: Concept Objective: 3-2 13) Advertising "puffery" is a term for ________.

A) a straightforward promotional message B) innocent exaggeration for effect C) emotional appeals to consumers D) subliminal appeals to consumers E) value-added promotions Answer: B Diff: 2 Type: MC Page Ref: 86 Skill: Concept Objective: 3-2 14) ________ persuades people to buy goods they had no thought of buying.

A) Sustainable marketing B) High-pressure selling C) Deceptive placement D) Redlining E) Reverse redlining Answer: B Diff: 1 Type: MC Page Ref: 87 Skill: Concept Objective: 3-2 15) In which of the following scenarios would high-pressure selling tactics typically be most advantageous for marketers?

A) selling situations with long-time customers B) selling situations with new customers with a high likelihood of becoming repeat customers C) selling situations with a company's most highly valued customers D) one-time selling situations E) selling situations with dissatisfied customers Answer: D Diff: 3 Type: MC Page Ref: 87 Skill: Concept Objective: 3-2 4 Copyright © 2017 Pearson Canada Inc.

16) Critics have charged that some companies intentionally manufacture their products with materials or components that cause the product to need to be replaced before it actually should need replacement. What is this called?

A) product failure B) short-term planning C) planned obsolescence D) nonfunctional warranty E) expressed dissatisfaction Answer: C Diff: 1 Type: MC Page Ref: 87 Skill: Concept Objective: 3-2 17) Perceived obsolescence might involve which of the following?

A) the use of safe materials B) changing consumer styles C) the holding back of attractive functional features, then introducing them later to make older models obsolete D) the use of materials that will rust E) the use of components that will break Answer: B Diff: 2 Type: MC Page Ref: 87-88 Skill: Concept Objective: 3-2 18) Critics claim that companies in the ________ industries introduce planned streams of new products that make older models obsolete, a form of planned obsolescence that harms consumers.

A) services B) housing and construction C) food and beverage D) consumer electronics and computer E) financial and entertainment Answer: D Diff: 2 Type: MC Page Ref: 88 Skill: Concept Objective: 3-2

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19) Marketers respond to charges of planned obsolescence with the following.

A) Consumers lead change and innovation.

B) The product sells itself.

C) The product will eventually wear out anyway.

D) For most technical products, customers want the latest innovations, even if the older model still works.

E) Companies do not want to lose their brands.

Answer: D Diff: 2 Type: MC Page Ref: 88 Skill: Concept Objective: 3-2 20) Critics of the North American economic marketing system have charged that marketers have created a culture in which people are judged by what they ________.

A) are B) own C) do D) know E) avoid Answer: B Diff: 1 Type: MC Page Ref: 88 Skill: Concept Objective: 3-2 21) Critics say marketing is seen as creating false wants that benefit ________ more than ________.

A) consumers; industry B) industry; consumers C) stores; manufacturers D) exporters; importers E) independent sellers; chain stores Answer: B Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 22) It is most accurate to say that the 2008-2009 recession has resulted in which of the following?

A) an overselling of private goods B) a widespread disbelief in the possibility of achieving prosperity C) a decline in conspicuous spending D) an increase in materialism E) the elimination of false wants Answer: C Diff: 1 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 6 Copyright © 2017 Pearson Canada Inc.

23) Marketers are most effective when they appeal to ________ rather than when they ________.

A) exciting new inventions; use old ones B) teenagers; target older people C) existing wants; attempt to create new ones D) emotions; appeal to actual needs E) the mass market; appeal to market segments Answer: C Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 24) The high failure rate of new products shows that companies are not able to ________.

A) control demand B) advertise enough C) find manufacturers D) find outlets E) identify consumer needs Answer: A Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 25) The overselling of private goods results in ________, such as cars causing traffic jams, air pollution, injuries, and deaths.

A) cultural pollution B) misdirected funding C) social costs D) materialism E) opportunity costs Answer: C Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 26) To restore the balance between private and public goods, producers could be required to bear the full ________ costs of their operations.

A) promotional B) cultural C) environmental D) social E) safety Answer: D Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 7 Copyright © 2017 Pearson Canada Inc.

27) A second option to restore the balance between private and public goods is to make the consumers pay the ________ costs.

A) promotional B) cultural C) environmental D) social E) safety Answer: D Diff: 2 Type: MC Page Ref: 89 Skill: Concept Objective: 3-2 28) Cultural pollution can be described as ________.

A) constant marketing communications B) air pollution C) language barriers D) a marketer's inability to identify a target market E) zipping or zapping Answer: A Diff: 2 Type: MC Page Ref: 90 Skill: Concept Objective: 3-2 29) According to the authors, which of the following is an example of cultural pollution?

A) commercial businesses B) opinion editorials in magazines C) street signs in an urban area D) billboards on truck trailers E) spam in an email inbox Answer: E Diff: 2 Type: MC Page Ref: 90 Skill: Concept Objective: 3-2 30) In response to charges of cultural pollution, marketers should ________.

A) target their communications as much as possible B) stop creating false wants C) stop creating too much materialism D) lower promotion costs E) use social media only Answer: A Diff: 2 Type: MC Page Ref: 90 Skill: Concept Objective: 3-2

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31) Critics charge that a company's marketing practices can harm other companies and reduce competition among companies. Problems involved include which of the following?

A) competitor's acquisitions B) barriers to entry C) confusing marketing communications D) highly competitive marketing practices E) information overload Answer: B Diff: 2 Type: MC Page Ref: 90 Skill: Concept Objective: 3-2 32) Which of the following is most responsible for the shrinking number of competitors in almost every major industry?

A) declining materialism and a return to more basic values B) acquisition of competitors C) patents that create barriers to entry D) unfair antitrust regulations E) predatory pricing Answer: B Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-2 33) Patents and heavy promotional spending are sometimes used to ________.

A) acquire smaller companies B) bear the social costs of their operations C) set up barriers for potential competitors wanting to enter the industry D) achieve economies of scale E) offset cultural pollution Answer: C Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-2 34) Which of the following is a potential advantage of the practice of acquisition?

A) The acquiring company can gain economies of scale.

B) Acquisitions require little government oversight.

C) An acquired company may improve the efficiency of an acquiring company.

D) An industry might become more competitive after an acquisition.

E) Acquisitions create work for government regulators.

Answer: A Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-2

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35) Setting prices below cost, threatening to cut off business with suppliers, and discouraging the purchase of a competitor's products are all examples of ________.

A) routine competition B) excessive materialism C) unfair competitive marketing practices D) acquisitions E) barriers to entering a market Answer: C Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-2 36) The two major movements to keep business in line are environmentalism and ________.

A) consumer activism B) protectionism C) antimonopoly legislation D) regulating interstate commerce E) innovation Answer: A Diff: 1 Type: MC Page Ref: 91 Skill: Concept Objective: 3-3 37) The first organized consumer movement in North America took place in the early 1900s. It was fueled by which of the following?

A) rising prices B) worsening economic conditions C) unsafe merchandise D) scandals in the automotive industry E) a populous government Answer: A Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-3 38) ________ is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.

A) Environmentalism B) The Charter of Rights and Freedoms C) Grassroots politics D) Consumer activism E) The Human Relations Movement Answer: D Diff: 1 Type: MC Page Ref: 92 Skill: Concept Objective: 3-3 10 Copyright © 2017 Pearson Canada Inc.

39) Which of the following is a traditional sellers' right?

A) the right to charge any price, provided that no discrimination exists among similar buyers B) the right to be well informed C) the right to sell consumer information D) the right to use any buying incentive programs E) the right to introduce any product in any size and style Answer: A Diff: 2 Type: MC Page Ref: 92 Skill: Concept Objective: 3-3 40) Consumer advocates call for which of the following additional consumer rights?

A) The right to be protected from all marketing messages.

B) The right to be well informed about important product aspects.

C) The right to be protected against high prices.

D) The right to influence marketing practices.

E) The right to influence products.

Answer: B Diff: 3 Type: MC Page Ref: 92 Skill: Concept Objective: 3-3 41) Proposals related to the consumer's right to ________ include controlling the ingredients that go into certain products and reducing the level of advertising "noise."

A) not buy a product that is offered for sale B) expect the product to perform as claimed C) be well informed about important aspects of the product D) be protected against questionable marketing practices E) influence products and marketing practices in ways that will improve quality of life Answer: E Diff: 2 Type: MC Page Ref: 92 Skill: Concept Objective: 3-3 42) ________ is an organized movement of concerned citizens and government agencies to protect and improve people's current and future living environment.

A) Consumer activism B) Environmentalism C) Social responsibility D) Enlightened marketing E) Sense-of-mission marketing Answer: B Diff: 1 Type: MC Page Ref: 93 Skill: Concept Objective: 3-3

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43) Environmentalists assert that the marketing system's goal should be to maximize ________.

A) consumer protection B) consumer satisfaction C) people's current and future living environment D) consumer choice E) consumption Answer: C Diff: 2 Type: MC Page Ref: 93 Skill: Concept Objective: 3-3 44) According to Unilever CEO Paul Polman, people must move away from mindless consumption to ________.

A) responsible consumption B) reduced consumption C) technical consumption D) less pricey consumption E) no consumption Answer: A Diff: 2 Type: MC Page Ref: 94 Skill: Concept Objective: 3-3 45) ________ is a management approach that involves developing strategies that both sustain the environment and produce profits for the company.

A) Consumerism B) Environmentalism C) Environmental sustainability D) Social responsibility E) Ethical decision making Answer: C Diff: 1 Type: MC Page Ref: 94 Skill: Concept Objective: 3-3 46) Companies emphasizing ________ are developing "green marketing" programs that eliminates or minimizes waste before it is created.

A) pollution prevention B) product stewardship C) "beyond greening" D) new clean technology E) sustainability vision Answer: A Diff: 2 Type: MC Page Ref: 94 Skill: Concept Objective: 3-3 12 Copyright © 2017 Pearson Canada Inc.

47) Minimizing pollution from production and all environmental impacts throughout the full product life cycle is called ________.

A) green marketing B) design for environment (DFE) C) product stewardship D) environmental sustainability E) pollution prevention Answer: C Diff: 2 Type: MC Page Ref: 94 Skill: Concept Objective: 3-3 48) Design for environment (DFE) involves thinking ahead in the design stage to create products that are easier to reuse, recycle, or ________.

A) service B) recover C) maintain D) export E) store Answer: B Diff: 2 Type: MC Page Ref: 95 Skill: Concept Objective: 3-3 49) Companies can develop ________ to serve as a guide to the future, laying out how the company's products and services, processes, and policies must evolve and what new technologies must be developed to get there.

A) design for the environment (DFE) practices B) cradle-to-grave practices C) pollution prevention D) product stewardship E) a sustainability vision Answer: E Diff: 2 Type: MC Page Ref: 98 Skill: Concept Objective: 3-3 50) What do most companies today focus on when it comes to protecting the environment?

A) investing heavily in pollution prevention B) practicing product stewardship C) developing a sustainable vision D) investing heavily in environmental technology E) biodegradability Answer: A Diff: 3 Type: MC Page Ref: 98 Skill: Concept Objective: 3-3 13 Copyright © 2017 Pearson Canada Inc.

51) Xavier Rentals, Inc., is now looking into the future and working internally on beyond greening, which is called ________.

A) sustainable vision B) new clean technology C) corporate citizenship D) green marketing E) greening activity Answer: B Diff: 2 Type: MC Page Ref: 97 Skill: Concept Objective: 3-3 52) International companies have found it difficult to develop ________ environmental practices that work everywhere.

A) standard B) flexible C) custom designed D) meaningful E) interesting Answer: A Diff: 2 Type: MC Page Ref: 99 Skill: Concept Objective: 3-3 53) Creating barriers to entry and predatory competition are both ________ decisions made by marketers that may be called into question under the law.

A) advertising B) product C) packaging D) channel E) competitive marketing Answer: E Diff: 2 Type: MC Page Ref: 91 Skill: Concept Objective: 3-3

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54) The concept of ________ holds that a company's marketing should support the best long-run performance of the marketing system.

A) consumerism B) global marketing C) sustainable marketing D) the free enterprise system E) consumer-oriented marketing Answer: C Diff: 1 Type: MC Page Ref: 99 Skill: Concept Objective: 3-4 55) Which of the following is a sustainable marketing principle?

A) product-oriented marketing B) customer-value marketing C) international marketing D) value marketing E) cultural marketing Answer: B Diff: 2 Type: MC Page Ref: 99 Skill: Concept Objective: 3-4 56) Which sustainable marketing principle emphasizes building long-run consumer loyalty and relationships?

A) environmentalist B) innovative C) customer-value D) consumerist E) market-oriented Answer: C Diff: 1 Type: MC Page Ref: 99 Skill: Concept Objective: 3-4 57) Innovative marketing is ________.

A) a principle of environmentalism B) based on the consumer's point of view C) the attempt to continuously seek product and marketing improvements D) defined in broad social terms E) a marketing concept that places the emphasis on building customer relationships Answer: C Diff: 1 Type: MC Page Ref: 100 Skill: Concept Objective: 3-4

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58) Some firms define their purpose in narrow product terms. Others that define their purpose in broad social terms follow ________.

A) societal marketing B) sense-of-mission marketing C) consumer-oriented marketing D) customer-value marketing E) innovative marketing Answer: B Diff: 1 Type: MC Page Ref: 100 Skill: Concept Objective: 3-4 59) When a company makes marketing decisions by considering consumers' wants and interests, the company's requirements, and society's long-run interests, it is practicing ________ marketing.

A) value B) societal C) sense-of-mission D) consumer-oriented E) customer-value Answer: B Diff: 1 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 60) What are deficient products?

A) products that have neither immediate appeal nor long-run benefits B) products that give high immediate satisfaction but only hurt consumers in the long run C) products that have low appeal but may benefit consumers in the long run D) products that are either unsafe or inferior E) any product in the decline stage of the product life cycle Answer: A Diff: 1 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 61) A company that makes products that give high immediate satisfaction but may hurt consumers in the long run makes ________ products.

A) deficient B) pleasing C) salutary D) desirable E) threatening Answer: B Diff: 1 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 16 Copyright © 2017 Pearson Canada Inc.

62) Examples of pleasing products include ________.

A) cigarettes and junk food B) dental services and medications C) seat belts and air bags D) fruits and vegetables E) none of the above Answer: A Diff: 1 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 63) ________ products give both high immediate satisfaction and high long-run benefits.

A) Deficient B) Pleasing C) Desirable D) Salutary E) Threatening Answer: C Diff: 1 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 64) Which of the following is the best example of a desirable product?

A) healthy and delicious breakfast food B) cigarettes C) effective but bad-tasting medicine D) junk food E) dental insurance Answer: A Diff: 2 Type: MC Page Ref: 103 Skill: Concept Objective: 3-4 65) In societal marketing, the ideal goal for companies is to turn all of their products into ________ ones.

A) salutary ones B) desirable ones C) pleasing ones D) durable ones E) serviceable ones Answer: B Diff: 2 Type: MC Page Ref: 104 Skill: Concept Objective: 3-4

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66) The societal marketing challenge for makers of which type of product is to add long-run benefits without reducing the product's attracting qualities?

A) salutary B) desirable C) pleasing D) durable E) deficient Answer: C Diff: 2 Type: MC Page Ref: 104 Skill: Concept Objective: 3-4 67) The societal marketing challenge for makers of which type of product is to add some pleasing qualities so that it will become more desirable in the consumers' minds?

A) salutary B) desirable C) pleasing D) durable E) aesthetic Answer: A Diff: 2 Type: MC Page Ref: 104 Skill: Concept Objective: 3-4 68) Companies must decide what principle they should use as a guide on issues of ethics and social responsibility. Which one of the following is likely to be the least common philosophy to accomplish this end?

A) Let the free market decide.

B) Let the legal system decide.

C) Let history decide.

D) Let individual managers decide.

E) Let individual companies decide.

Answer: C Diff: 2 Type: MC Page Ref: 104 Skill: Concept Objective: 3-5

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69) One major issue in foreign trade is bribery. According to a study by the World Bank bribery and corruption are least likely to be a problem in which of the following countries?

A) Russia B) China C) Iraq D) Netherlands E) Haiti Answer: D Diff: 2 Type: MC Page Ref: 105 Skill: Concept Objective: 3-5 70) Which of the following statements is not true?

A) Bribery is illegal in Canada.

B) Kickbacks are illegal in Canada.

C) Different countries have different levels of corruption.

D) A Canadian company must lower its ethical standards to compete effectively in countries with low standards.

E) Worldwide bribery is a large "business," constituting over $1 trillion per year.

Answer: D Diff: 3 Type: MC Page Ref: 105 Skill: Concept Objective: 3-5 71) Buyers have rights. Which of the following is not a buyer's rights in Canada?

A) the right not to buy a product that is offered for a sale B) the right to expect the product to be safe C) the right to refuse to buy D) the right to expect the product to perform as claimed E) the right to a 20-day money-back guarantee Answer: E Diff: 2 Type: MC Page Ref: 92 Skill: Concept Objective: 3-3 72) The Canadian Marketing Association has created a mission statement that includes which of the following?

A) responsible growth of marketing B) fairness C) citizenship D) competitiveness E) responsibility Answer: A Diff: 2 Type: MC Page Ref: 106 Skill: Concept Objective: 3-5 19 Copyright © 2017 Pearson Canada Inc.

73) It is most accurate to say that within a company, ethics and social responsibility require a ________.

A) future-looking approach B) total corporate commitment C) separate budget D) time commitment that most firms do not have E) high-level ethical officer Answer: B Diff: 2 Type: MC Page Ref: 104—108 Skill: Concept Objective: 3-5 74) A heavily promoted brand of flu medicine sells for much more than a virtually identical store-branded product. Critics would likely charge that promotion for the branded flu medicine adds only ________ to the product rather than functional value.

A) consistency B) strength C) psychological value D) quality E) informational value Answer: C Diff: 2 Type: MC Page Ref: 84 Skill: Application Objective: 3-2 75) Albatross Enterprises was accused of deceptive pricing. Which of the following explains what might have happened?

A) Albatross refused to advertise sale prices in the local paper.

B) Albatross lured customers to the store for a bargain that is out of stock.

C) Albatross advertised a large price reduction from a phony high retail list price.

D) Albatross misrepresented a product's features in an ad.

E) any of the above Answer: C Diff: 2 Type: MC Page Ref: 85 Skill: Application Objective: 3-2

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76) Hart's Department Store was accused of deceptive promotion. Which of the following best explains what might have happened?

A) Hart's refused to advertise sale prices in the local paper.

B) Hart's lured customers to the store for a bargain that is out of stock.

C) Hart's advertised a large price reduction from a high retail list price.

D) Hart's used misleading labeling.

E) Hart's mistakenly put the wrong price for a product in an ad Answer: B Diff: 2 Type: MC Page Ref: 85 Skill: Application Objective: 3-2 77) Which of the following advertising situations would least likely be considered "puffery"?

A) Mr. Clean coming to a housewife's rescue B) instantly 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 Diff: 2 Type: MC Page Ref: 86 Skill: Application Objective: 3-2 78) The success of the Tom Dennis Ford dealership has been built largely on return customers and word-of-mouth recommendations. The majority of sales are made to customers who have purchased a vehicle at the dealership before or who know someone who had a positive experience purchasing a vehicle there. The sales force at the Tom Dennis Ford dealership most likely knows that using high-pressure selling does not work if the dealership wants to ________.

A) achieve short-term gains B) move last year's models C) obey local and federal law D) build long-term relationships with customers E) maintain a database Answer: D Diff: 3 Type: MC Page Ref: 87 Skill: Application Objective: 3-2

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79) Recently, a class-action lawsuit was brought against McDonald's, charging that its food has contributed to the nationwide obesity epidemic. The suit was eventually dismissed, but many critics continue to point out the health dangers of many "fast food" menu items. These critics are concerned that the fast food industry is pushing ________.

A) high-pressure selling B) deceptive promotions C) deceptive pricing D) deceptive packaging E) harmful products Answer: E Diff: 2 Type: MC Page Ref: 87 Skill: Application Objective: 3-2 80) Trendy Teens manufactures fashionable clothing and accessories for the tween and teen female markets. New merchandise with a very different look is rolled out each season and heavily promoted as the "must-have" style in a variety of media. Trendy Teens could most easily be criticized for which of the following?

A) deceptive promotions B) shoddy products C) high-pressure selling D) poor service to disadvantaged consumers E) planned obsolescence Answer: E Diff: 2 Type: MC Page Ref: 87-88 Skill: Application Objective: 3-2 81) Several companies, some of them operating through the Internet, offer "paycheck advances."

Consumers are encouraged to take out a loan against a paycheck they expect to receive in the near future. These short-term loans with high-interest rates, and high penalties for late payments, are often marketed to consumers who do not have traditional bank accounts. These companies could most easily be criticized for which of the following?

A) shoddy products B) poorly serving disadvantaged consumers C) high-pressure selling D) high advertising and promotion costs E) excessive markups Answer: B Diff: 2 Type: MC Page Ref: 83 Skill: Application Objective: 3-2

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82) Adbusters, a social critic group from Vancouver, sponsors the Buy Nothing Day campaign.

The campaign asks people to stop shopping for one day and to reflect on future purchases. This campaign is in response to criticism about the North American marketing system for creating ________ A) too few social goods B) environmental problems C) shoddy products D) false wants and too much materialism E) predatory competition Answer: D Diff: 2 Type: MC Page Ref: 88—89 Skill: Application Objective: 3-2 83) TerraPass is a company that offers consumers the opportunity to buy carbon offsets, which are contributions to projects that combat global warming by reducing carbon emissions.

TerraPass offers contribution packages for driving, flying, and home energy use. Through TerraPass, consumers can pay some of the ________ costs of their private goods and services.

A) promotional B) safety C) health D) distribution E) social Answer: E Diff: 2 Type: MC Page Ref: 89 Skill: Application Objective: 3-2 84) Karl Lagaros, a marketing critic, is concerned about the pervasiveness of marketing. He points to advertising messages everywhere, from Web sites and emails to unwanted direct mail and catalogues to television commercials and product tie-ins to billboards and store signage. Karl is concerned about ________.

A) high advertising and promotion costs B) cultural pollution C) deceptive practices D) false wants and too much materialism E) the balance between private goods and social goods Answer: B Diff: 2 Type: MC Page Ref: 90 Skill: Application Objective: 3-2

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85) When ABC, Inc., worked to design products that are easier to reuse or recycle, ABC was adopting ________.

A) pollution prevention B) green marketing C) a sustainability vision D) design for environment (DFE) practices E) new environmental technologies Answer: D Diff: 2 Type: MC Page Ref: 95 Skill: Application Objective: 3-3 86) ABC, Inc. is currently designing a new product line with the goal of making each product easy to recover, reuse, or recycle. ABC, Inc. hopes to recover many of these products when they reach the end of their lifecycle and reuse components in new products. ABC, Inc. is in the ________ stage of environmental sustainability.

A) pollution prevention B) new clean technology C) product stewardship D) beyond greening E) sustainability vision Answer: C Diff: 2 Type: MC Page Ref: 95 Skill: Application Objective: 3-3 87) Jacob Engineering Group views and organizes its marketing activities from the viewpoint of its buyers. Management works hard to sense, serve, and satisfy the needs of its well-defined group of buyers. What does Jacob Engineering Group practice?

A) consumer-oriented marketing B) societal marketing C) sense-of-mission marketing D) customer-value marketing E) innovative marketing Answer: A Diff: 2 Type: MC Page Ref: 99 Skill: Application Objective: 3-4

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88) When Hancock & Dunberry developed and introduced new simplified wills for the elderly and less educated markets, less expensive home visits, and a free legal referral service, the law firm began practicing ________ marketing.

A) consumer-oriented B) innovative C) customer-value D) societal E) sense-of-mission Answer: B Diff: 3 Type: MC Page Ref: 100 Skill: Application Objective: 3-4 89) Timberland employees get 40 hours paid leave each year to pursue volunteer projects. The company runs a service day that hosts projects in 25 countries, and it supports a nonprofit that brings young people into public service for a year. CEO Jeffrey Swartz sees such service as a powerful differentiator for Timberland with its current and potential customers. Timberland could be most accurately described as practicing ________.

A) consumerism B) environmental sustainability C) sustainability vision D) innovative marketing E) sense-of-mission marketing Answer: E Diff: 2 Type: MC Page Ref: 100 Skill: Application Objective: 3-4 90) Baker Enterprises produces several new products that have low immediate appeal but may benefit consumers in the long run. What is the most accurate classification of these products?

A) deficient B) pleasing C) salutary D) desirable E) unpleasing Answer: C Diff: 2 Type: MC Page Ref: 103 Skill: Application Objective: 3-4

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91) Maytag's front-loading Neptune washer provides superior cleaning and energy efficiency.

The Neptune washer is an example of a ________ product.

A) deficient B) pleasing C) salutary D) desirable E) satisfying Answer: D Diff: 2 Type: MC Page Ref: 103 Skill: Application Objective: 3-4 92) Monica Carey is a conscientious marketing manager. Sometimes it is unclear what decisions to make when she and her staff are faced with moral dilemmas. Monica and other managers could create broad guidelines that everyone in the organization must follow in the form of ________.

A) a company value statement B) a company mission statement C) a company vision statement D) a corporate marketing ethics policy E) a financial statement Answer: D Diff: 2 Type: MC Page Ref: 104 Skill: Application Objective: 3-5 93) A company that produces and heavily markets cigarettes, with many promotions aimed at young (although legal age) nonsmokers, most likely follows which of the following philosophies?

A) companies should have a social conscience B) companies can do in good conscience whatever the market and legal systems allow C) sustainable marketing D) consumer-oriented marketing E) consumerism Answer: B Diff: 2 Type: MC Page Ref: 104 Skill: Application Objective: 3-5 94) The major criticisms of marketing include harming consumers through high prices, deceptive practices, high-pressure selling, shoddy or unsafe products, planned obsolescence, and poor service to disadvantaged countries.

Answer: TRUE Diff: 2 Type: TF Page Ref: 83 Skill: Concept Objective: 3-2 26 Copyright © 2017 Pearson Canada Inc.

95) Consumers can rarely buy functional versions of highly promoted branded products at lower prices.

Answer: FALSE Diff: 2 Type: TF Page Ref: 84 Skill: Concept Objective: 3-2 96) When responding to consumer complaints about high prices, marketers often explain that consumers do not understand the costs involved that justify the prices.

Answer: TRUE Diff: 1 Type: TF Page Ref: 84 Skill: Concept Objective: 3-2 97) The Competition Bureau in Canada takes action on customer complaints about deceptive practices.

Answer: TRUE Diff: 1 Type: TF Page Ref: 85 Skill: Concept Objective: 3-2 98) Canadians are unprotected from buying things under high pressure selling.

Answer: FALSE Diff: 2 Type: TF Page Ref: 87 Skill: Concept Objective: 3-2 99) Jones Toy Company has been accused of producing shoddy and unsafe children's toys. If Jones is typical of most companies, the complaints will center on manufacturer indifference, increased production complexity, and poorly trained labor.

Answer: FALSE Diff: 2 Type: TF Page Ref: 87 Skill: Concept Objective: 3-2 100) A common accusation aimed at marketers is that they make you buy things you don't need.

Answer: TRUE Diff: 2 Type: TF Page Ref: 88 Skill: Concept Objective: 3-2 101) Critics of the North American marketing system rarely target advertising as a problem.

Answer: FALSE Diff: 1 Type: TF Page Ref: 90 Skill: Concept Objective: 3-2 27 Copyright © 2017 Pearson Canada Inc.

102) Many marketers have been accused of overselling private goods at the expense of public goods because many private goods require more public services that are usually not forthcoming.

Answer: TRUE Diff: 2 Type: TF Page Ref: 89 Skill: Concept Objective: 3-2 103) When a company expands by developing its own products rather than acquiring a competitor, the company is likely to be accused of reducing competition.

Answer: FALSE Diff: 2 Type: TF Page Ref: 91 Skill: Concept Objective: 3-2 104) Consumer activism's early beginnings were fueled by rising prices, conditions in the meat industry, and scandals in the drug industry in the early 1900s.

Answer: TRUE Diff: 2 Type: TF Page Ref: 91 Skill: Concept Objective: 3-3 105) Basic consumers rights have led to more specific proposals from consumerists, such as nutritional and ingredient labeling.

Answer: TRUE Diff: 2 Type: TF Page Ref: 92 Skill: Concept Objective: 3-3 106) The management strategy of environmental sustainability focuses on developing ways to sustain the environment while also producing profits.

Answer: TRUE Diff: 2 Type: TF Page Ref: 94 Skill: Concept Objective: 3-3 107) In the progress toward environmental sustainability, a company must first strive for pollution prevention and product stewardship before developing "beyond greening" plans.

Answer: FALSE Diff: 2 Type: TF Page Ref: 94 Skill: Concept Objective: 3-3

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108) Conflicts can arise when Canadian companies conduct business in Denmark and Germany, countries that are only in the beginning stages of policy formulation.

Answer: FALSE Diff: 3 Type: TF Page Ref: 98 Skill: Concept Objective: 3-3 109) Citizen concerns about marketing practices will usually lead to public attention and legislative proposals Answer: TRUE Diff: 2 Type: TF Page Ref: 99 Skill: Concept Objective: 3-3 110) Sustainable marketing consists of five principles: consumer-oriented marketing, customervalue marketing, innovative marketing, sense-of-mission marketing, and societal marketing.

Answer: TRUE Diff: 1 Type: TF Page Ref: 99 Skill: Concept Objective: 3-4 111) Using customer-value marketing, a company should put most of its resources into customer-value-building marketing investments.

Answer: TRUE Diff: 1 Type: TF Page Ref: 99 Skill: Concept Objective: 3-4 112) Sunset Lawn Service puts most of its resources into value-building marketing investments.

The management at Sunset is practicing consumer-oriented marketing.

Answer: FALSE Diff: 1 Type: TF Page Ref: 99 Skill: Application Objective: 3-4 113) New World Food Supplements continuously seeks real product and marketing improvements. New World is involved in consumer-oriented marketing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 99 Skill: Application Objective: 3-4

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114) In sense-of-mission marketing, a company defines its mission in broad social terms rather than narrow product terms.

Answer: TRUE Diff: 1 Type: TF Page Ref: 100 Skill: Concept Objective: 3-4 115) When a company views and organizes its marketing activities from only the consumer's point of view, it is practicing societal marketing.

Answer: FALSE Diff: 1 Type: TF Page Ref: 103 Skill: Concept Objective: 3-4 116) A company that makes marketing decisions by considering consumers' wants and long-run interests, the company's requirements, and society's long-run interest must be practicing consumer-oriented marketing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 99 Skill: Concept Objective: 3-4 117) "Pleasing" products have low appeal but may benefit consumers in the long run.

Answer: FALSE Diff: 2 Type: TF Page Ref: 103 Skill: Concept Objective: 3-4 118) Seatbelts are considered to be "salutary" products.

Answer: TRUE Diff: 2 Type: TF Page Ref: 103 Skill: Application Objective: 3-4 119) Xorbate Blue is a relatively new food supplement that provides both high immediate satisfaction and high long-run benefits. Xorbate Blue is best classified as a pleasing product.

Answer: FALSE Diff: 2 Type: TF Page Ref: 103 Skill: Application Objective: 3-4

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120) When a company chooses which principle to follow on issues of ethics and social responsibility, there are two common philosophies to use as guides: first, let the free market and legal system decide, and second, let individual managers and companies choose.

Answer: TRUE Diff: 2 Type: TF Page Ref: 104 Skill: Concept Objective: 3-5 121) The finest guidelines can be relied upon to resolve all the difficult ethical situations that marketers face.

Answer: FALSE Diff: 2 Type: TF Page Ref: 104 Skill: Concept Objective: 3-5 122) A company must lower its ethical standards to successfully conduct business in countries with lower standards.

Answer: FALSE Diff: 1 Type: TF Page Ref: 105 Skill: Concept Objective: 3-5 123) Bribery is illegal for Canadian firms.

Answer: TRUE Diff: 1 Type: TF Page Ref: 105 Skill: Concept Objective: 3-5 124) Critics of marketing believe that sellers have more power than buyers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 92 Skill: Concept Objective: 3-3 125) Chet's House of Furniture produces one type of chair in one colour. Competing restaurants, Bonnie's Restaurants and Billy's Restaurants, are both picking up 30 chairs today and paying cash. Chet's House of Furniture is legally allowed to charge Bonnie's and Billy's different amounts.

Answer: FALSE Diff: 3 Type: TF Page Ref: 92 Skill: Concept Objective: 3-3

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126) Briefly describe the ways marketing is accused of harming the consumer.

Answer: Marketers are charged with causing prices to be higher than they need to be. They are sometimes accused of deceptive practices that lead consumers to believe they will get more value than they actually do. Sometimes salespeople pressure consumers to purchase products they neither want nor can afford. Others are accused of selling shoddy or unsafe products. Others are blamed for developing products that become obsolete before they actually need replacement.

Last, marketers are accused of delivering poor service to disadvantaged consumers or not making products available to them.

Diff: 2 Type: ES Page Ref: 83-88 Skill: Application Objective: 3-2 127) Describe the three different categories of deceptive marketing practices.

Answer: Deceptive pricing includes practices such as falsely advertising factory or wholesale prices or advertising a large price reduction from a phony high retail list price. Deceptive promotion includes practices such as misrepresenting the product's features or performance or luring customers to the store for a bargain that is out of stock. Deceptive packaging includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms.

Diff: 2 Type: ES Page Ref: 85-87 Skill: Application Objective: 3-2 128) Identify the major social criticisms of marketing.

Answer: Marketing's impact on society has been criticized for creating false wants and too much materialism, too few social goods, and cultural pollution. People have also criticized marketing's impact on other businesses. Businesses have harmed competitors and reduced competition through acquisitions, practices that create barriers to entry, and unfair competitive marketing practices.

Diff: 2 Type: ES Page Ref: 88-91 Skill: Application Objective: 3-2

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129) Identify the social costs of increased automobile ownership, and then describe two options for restoring the balance between private and public goods. Give specific examples.

Answer: For cars, some of the social costs include traffic congestion, gasoline shortages, and air pollution. One option for restoring the balance between private and public goods is to make producers bear the full social costs of their operations. The government could require automobile manufacturers to build cars with more efficient engines and better pollution control systems.

Automakers would then raise their prices to cover extra costs. A second option is to make consumers pay the social costs. For example, many cities around the world are starting to charge "congestion tolls" in an effort to reduce traffic congestion; drivers entering high-traffic areas are required to pay a fee. In the United States, some urban areas now charge a toll to drivers carrying too few passengers in high-occupancy vehicle (HOV) lanes, with different rates during rush hours and non-rush hours.

Diff: 3 Type: ES Page Ref: 89-90 Skill: Application Objective: 3-2 130) Compare the consumer activism and environmentalism movements.

Answer: Consumer activism is an organized social movement intended to strengthen the rights and power of consumers relative to sellers. Environmentalism is an organized social movement seeking to minimize the harm done to the environment and quality of life by marketing practices.

Citizens and government agencies are involved in both movements. The first consumer movement took place in the early 1900s. and was followed by two more movements in the mid1930s and the 1960s. Environmentalists are not against consumption. They simply want people and companies to operate with more care for the environment.

Diff: 2 Type: ES Page Ref: 91-95 Skill: Application Objective: 3-3 131) How do consumer activism and environmentalism affect marketing strategies?

Answer: Alert marketers view consumer activism as an opportunity to serve consumers better by providing more consumer information, education, and protection. Environmental groups have improved conditions in many industries, including the meat and drug industries, and have helped pass legislation to protect the environment. The latest move is for companies to be proactive and take the responsibility for not doing environmental harm. They are practicing environmental sustainability by developing strategies that both sustain the environment and produce profits for the company. Many companies have responded positively to consumer activism and environmentalism as ways to create greater customer value and to strengthen customer relationships.

Diff: 3 Type: ES Page Ref: 91-99 Skill: Application Objective: 3-3

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132) Describe the five principles of sustainable marketing.

Answer: (1) Consumer-oriented marketing acts from the consumers' point of view. (2) Customer-value marketing exists when a firm puts most of its resources into value-building investments. (3) Innovative marketing seeks real product and marketing improvements. (4) When a company defines its mission in broad social terms rather than narrow product terms, it is practicing sense-of-mission marketing. (5) Finally, societal marketing is in use when the company makes its decisions by considering its own, consumers', and society's long-run interests.

Diff: 3 Type: ES Page Ref: 99 -104 Skill: Application Objective: 3-4 133) Compare and contrast the four types of products in the societal classification of products.

Answer: Deficient products are at the bottom because they have low immediate appeal and low long-run benefits. Desirable products are at the top because they give both high immediate satisfaction and high long-run benefits. In between are pleasing products and salutary products.

Pleasing products give high immediate satisfaction but may hurt consumers in the long run.

Salutary products have low appeal but may benefit consumers in the long run.

Diff: 2 Type: ES Page Ref: 103 Skill: Application Objective: 3-4 134) What can conscientious marketers do to act ethically when faced by ethical dilemmas?

Answer: Companies can develop corporate marketing ethics policies to provide broad guidelines for everyone in the organization to follow. These policies should cover distributor relations, advertising standards, customer service, pricing product development, and general ethical standards. Companies must develop a set of principles that will help employees figure out the moral importance and implications of each situation and decide how far they can go in good conscience.

Diff: 3 Type: ES Page Ref: 104-105 Skill: Application Objective: 3-5 135) Compare and contrast the two common principles that can be used to guide companies and marketing managers on issues of ethics and social responsibility.

Answer: One principle states that such issues should be decided by the free market and legal system. A second, and more enlightened principle, puts responsibility not in the system but in the hands of individual companies and managers. Each firm and marketing manager must work out a philosophy of socially responsible and ethical behavior. Under the societal marketing concept, managers must look beyond what is legal and allowable and develop standards based on personal integrity, corporate conscience, and long-term consumer welfare.

Diff: 2 Type: ES Page Ref: 103-108 Skill: Application Objective: 3-5

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136) How do resellers answer criticism of the high costs of distribution?

Answer: Resellers argue that intermediaries provide services that customers want, such as more convenience, more service, longer store hours, and return privileges. Also, retail competition is so intense that profit margins are actually quite low.

Diff: 2 Type: ES Page Ref: 83 Skill: Application Objective: 3-2 137) Explain how marketers and marketing critics disagree about the psychological value of advertising.

Answer: Marketing critics believe that the psychological value advertising may add to a product is not worth the higher retail prices that must be charged to finance the advertising that creates the psychological value. Marketers believe that consumers want and are willing to pay more for the psychological benefits—such as feeling wealthy, attractive, or special—created by advertising.

Diff: 3 Type: ES Page Ref: 84 Skill: Application Objective: 3-2 138) "Marketers at Hershey's Kisses took normal chocolate, gave it a cutesy name and advertised it as a romantic chocolate. Now they charge a higher price. The marketers are just gouging on the regular chocolate." How would a marketer respond to this challenge?

Answer: Marketers believe in choice. Consumers have the choice to buy Hershey's Kisses or any other chocolate. If a consumer purchases Hershey's Kisses, they ascribe value beyond just the chocolate. Hershey's Kisses are symbolic expressions of fondness, liking, flirtation, and love.

The intangible benefits are endowed through marketing (name, advertising, packaging, etc.) but come at a cost. Consumers have the choice to pay extra to have these intangible benefits.

Diff: 2 Type: ES Page Ref: 84 Skill: Application Objective: 3-2 139) Explain why most marketers avoid deceptive practices.

Answer: Deceptive practices make consumers believe they are buying something other than what they are actually getting; when consumers do not get what they expect, they will switch to more reliable products. Deceptive practices prohibit marketers from building value and trust with their customers, both keys to profitable customer relationships.

Diff: 2 Type: ES Page Ref: 85 Skill: Application Objective: 3-2 140) Why might salespeople use high-pressure selling tactics that do not lead to long-term relationships with customers?

Answer: Salespeople might be more motivated by short-term gains, particularly when sales contests promise big rewards to those who sell most. Also, they are trained to be persuasive.

Diff: 2 Type: ES Page Ref: 87 Skill: Application Objective: 3-2 35 Copyright © 2017 Pearson Canada Inc.

141) What are two risks a company takes when producing shoddy, harmful, or unsafe products?

Answer: Companies that market shoddy, harmful, or unsafe products risk damaging their reputation, conflicts with consumer groups and regulators, liability lawsuits, and loss of customers.

Diff: 2 Type: ES Page Ref: 87 Skill: Application Objective: 3-2 142) Why do critics see the North American interest in material things as a matter of false wants created by marketing?

Answer: Critics charge that businesses hire advertising firms to stimulate people's desires for goods, and then those firms use mass media to create materialistic models of the good life.

Consumers then aspire to and work to achieve that "good life" through acquiring more material things.

Diff: 2 Type: ES Page Ref: 88-89 Skill: Application Objective: 3-2 143) Other than marketing, what other sources might be responsible for the high level of materialism in North American culture?

Answer: Family, peer groups, religion, cultural background, and education are all major influences on values. Canadian and American materialism is partially a result of socialization.

The economy is also an influencer. During a recession, consumers re-evaluate their spending habits.

Diff: 2 Type: ES Page Ref: 89 Skill: Application Objective: 3-2 144) What is meant by cultural pollution? Give two examples.

Answer: Cultural pollution is the constant assault on our senses by advertising. Examples will vary but may include: commercials that interrupt serious programs, pages of ads that obscure magazine, spam that fills emailboxes, branded entertainment that blurs advertising from surrounding content, and billboards that mar beautiful scenery.

Diff: 2 Type: ES Page Ref: 90 Skill: Application Objective: 3-2 145) Why are critics concerned about companies acquiring competitors?

Answer: Critics are concerned that such acquisitions harm the acquired firms and reduce competition within an industry; also, there is concern that acquisitions discourage new competitors from entering the market.

Diff: 2 Type: ES Page Ref: 91 Skill: Application Objective: 3-2

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146) How does environmentalism contribute to "responsible consumption"?

Answer: "Responsible consumption" means not only the quantity and quality of consumer goods and services, but also the quality of the environment. Environmentalists want environmental costs included in both producer and consumer decision making.

Diff: 3 Type: ES Page Ref: 94 Skill: Application Objective: 3-2 147) Is environmental sustainability possible? Explain.

Answer: Environmental sustainability involves the development of strategies that both sustain the environment and produce profits for the firm. In some cases, environmental sustainability may not be totally achievable, but it is something worth striving for. Internal strategies that can be done today include pollution prevention. For the future, companies can develop new clean technology. Today, product stewardship is minimizing the environmental impact throughout the entire product life cycle. In the future, companies can include sustainability in their vision.

Diff: 3 Type: ES Page Ref: 94 Skill: Application Objective: 3-3 148) What is involved in pollution prevention? Give at least one example.

Answer: Pollution prevention means more than pollution control, or the cleaning up of waste after it has been created. It involves the elimination or minimization of waste before it is created.

Biodegradable packaging, better pollution controls, and more energy-efficient operations are all examples of pollution prevention.

Diff: 2 Type: ES Page Ref: 94 Skill: Application Objective: 3-3 149) How do design for environment (DFE) practices relate to product stewardship?

Answer: Product stewardship is minimizing pollution from both production and design of products as well as from environmental impacts throughout the product life cycle. DFE practices involve thinking ahead to design products that are easier to recover, reuse, recycle or return to the nature after usage; these practices are a part of product stewardship.

Diff: 2 Type: ES Page Ref: 95 Skill: Application Objective: 3-3 150) What types of firms adopt sustainability visions?

Answer: Forward-looking firms use this vision as a guide to the future; a sustainability vision shows how the company's products and services, processes, and policies must evolve and what new technologies must be developed to get there. This vision provides a framework for pollution control, product stewardship, and new environmental technology for the company to follow.

Diff: 3 Type: ES Page Ref: 98 Skill: Application Objective: 3-3

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151) Why is environmentalism especially challenging for global marketers?

Answer: As international barriers come down and global marketers expand, environmental issues are having an even greater impact on international trade; different environmental standards between and among various countries make environmentalism especially challenging. Also, environmental factors that motivate consumers in one country may not concern consumers in another country.

Diff: 2 Type: ES Page Ref: 98-99 Skill: Application Objective: 3-3 152) How is consumer-oriented marketing different from customer-value marketing?

Answer: Consumer-oriented marketing means that the company should view and organize its marketing activities from the consumer's point of view. Customer-value marketing takes that a step further, as the customer-value marketer invests resources to continue developing customer value.

Diff: 2 Type: ES Page Ref: 99 Skill: Application Objective: 3-4 153) How does a firm benefit from innovative marketing?

Answer: Innovative marketing requires that the company continuously seeks real product and marketing improvements. This is an extremely proactive approach in which the marketer attempts to stay ahead of competitors.

Diff: 3 Type: ES Page Ref: 100 Skill: Application Objective: 3-4 154) Explain how a firm benefits from using sense-of-mission marketing.

Answer: Sense-of-mission marketing means that the company should define its mission in broad social terms rather than narrow product terms; when a company defines a social mission, employees feel better about their work and have a clearer sense of direction.

Diff: 3 Type: ES Page Ref: 100 Skill: Application Objective: 3-4 155) What is the difference between deficient products and pleasing products?

Answer: Deficient products have neither immediate appeal nor long-run benefits; pleasing products, on the other hand, give high immediate satisfaction but may hurt consumers in the long run.

Diff: 2 Type: ES Page Ref: 103 Skill: Application Objective: 3-4

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156) What is the difference between salutary products and desirable products?

Answer: Salutary products have low appeal but may benefit consumers in the long run; desirable products give both high immediate satisfaction and high long-run benefits.

Diff: 2 Type: ES Page Ref: 103 Skill: Application Objective: 3-4 157) How is the societal marketing concept related to marketing ethics?

Answer: The societal marketing concept requires a company and its marketing managers to work out a philosophy of responsible and ethical behavior, looking beyond what is legal and allowed and developing standards based on personal integrity, corporate conscience, and longrun consumer welfare.

Diff: 2 Type: ES Page Ref: 103 Skill: Application Objective: 3-5 Donald Eagle acquired Benning's at a low point. The distributor of automotive parts and accessories had been criticized for a number of wrongdoings. Without fully realizing the extent of Benning's problems, Mr. Eagle purchased the distributorship in hopes of turning it around.

"But the harder I work," Mr. Eagle admitted, "the more Benning's earlier problems seem to unfold."

Donald Eagle began to rethink his strategy, trying to put a sound plan in place that would allow Benning's to move forward.

158) According to various possibilities highlighted in the textbook, in what ways might Mr. Eagle have previously "harmed" consumers?

Answer: Benning's could have charged exorbitantly high prices, engaged in deceptive practices or high-pressure selling, sold shoddy or unsafe products, or provided poor service to disadvantaged consumers.

Diff: 1 Type: ES Page Ref: 83-88 Skill: Application Objective: 3-2 159) Under its previous ownership, Benning's engaged in deceptive promotion in an attempt to increase business. How could the company have increased business while avoiding deceptive promotion?

Answer: For example, Benning's could have represented its products' features as honestly as possible and only brought customers to the store for a bargain that was sure to be in stock.

Diff: 2 Type: ES Page Ref: 85-87 Skill: Application Objective: 3-2

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160) How could obsolescence strategies carried out by this distributor's suppliers have harmed Benning's?

Answer: Benning's could have been left with excess inventory in the event that Benning's was not made aware of the obsolescence plan. In addition, Benning's could have suffered from an image standpoint; disgruntled customers may have blamed Benning's merely because the firm is a player in the supply chain.

Diff: 3 Type: ES Page Ref: 87-88 Skill: Application Objective: 3-2 161) What possible social costs may have previously been associated with Benning's?

Answer: Benning's may have oversold private goods with a lack of public services to accommodate the sales. For example, Benning's automotive parts sales may not have focused on safety features, efficient engines, or pollution control.

Diff: 3 Type: ES Page Ref: 89-90 Skill: Application Objective: 3-2 162) If Benning's, under its new owner, were to adopt a policy of environmental sustainability, on what would it focus?

Answer: Benning's could focus on pollution prevention, product stewardship, DFE practices, and new environmental technologies.

Diff: 2 Type: ES Page Ref: 94 Skill: Application Objective: 3-3 163) Might product stewardship be a major focus for Benning's under its new ownership?

Explain.

Answer: Product stewardship is not likely to be a major focus for Benning's, as the company is a distributor, not producer, of automotive parts and accessories. Benning's could seek out automotive parts and accessories from suppliers using DFE and cradle-to-cradle practices.

Diff: 3 Type: ES Page Ref: 95 Skill: Application Objective: 3-3 164) With a consumer-oriented marketing plan, what would be Benning's primary focus?

Answer: Consumer-oriented marketing would allow Benning's to view and organize its marketing activities from the consumers' point of view; Benning's would work to deliver superior value to customers.

Diff: 2 Type: ES Page Ref: 99 Skill: Application Objective: 3-4

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165) Explain how Mr. Eagle's mission may change under a sense-of-mission marketing approach.

Answer: Sense-of-mission marketing would allow Benning's to define its mission in broad social terms instead of narrow product terms. Based on the negative image of Benning's in the marketplace, such a strategy will take time.

Diff: 3 Type: ES Page Ref: 100 Skill: Application Objective: 3-4

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 4 Analyzing the Marketing Environment 1) Which of the following terms is used to describe the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers?

A) the marketing environment B) strategic planning C) target markets D) the marketing mix E) strategic mix Answer: A Diff: 1 Type: MC Page Ref: 119 Skill: Concept Objective: 4-1 2) The marketing environment is composed of ________.

A) the green environment and the demographic environment B) strategic planning and the natural environment C) the microenvironment and the macroenvironment D) the minienvironment and the macroenvironment E) the tactical environment and the strategic environment Answer: C Diff: 1 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 3) You are directed to study the actors close to the company that affect its ability to serve its customers—departments within the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. What are you studying?

A) the macroenvironment B) the microenvironment C) the marketing environment D) the green movement E) the global environment Answer: B Diff: 2 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1

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4) The collection of larger societal forces affecting a company is referred to as ________.

A) the macroenvironment B) the microenvironment C) the marketing environment D) the marketing mix E) the global environment Answer: A Diff: 1 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 5) Which of the following factors is part of the microenvironment?

A) demographics B) economics C) technology D) cultural forces E) intermediaries Answer: E Diff: 2 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 6) The players close to the company that impact a firm's ability to serve its customers constitute ________.

A) the macroenvironment B) the microenvironment C) the marketing environment D) the marketing mix E) the global environment Answer: B Diff: 1 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 7) Which of the following factors is part of the microenvironment?

A) natural environment B) cultural shifts C) technological trends D) competitors E) political trends Answer: D Diff: 2 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1

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8) According to the authors, which of the following would be part of the microenvironment?

A) competitors B) company C) marketing intermediaries D) political organizations E) suppliers Answer: E Diff: 2 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 9) All of the groups within a company are called the ________.

A) culture B) diversity C) internal environment D) climate E) range Answer: C Diff: 2 Type: MC Page Ref: 120 Skill: Concept Objective: 4-1 10) Which type of organization helps companies to stock and move goods from their points of origin to their destination?

A) financial intermediary B) physical distribution firm C) marketing service firm D) reseller E) supplier Answer: B Diff: 2 Type: MC Page Ref: 121 Skill: Concept Objective: 4-1 11) According to our conceptualization of marketing intermediaries, which of the following would likely be a marketing intermediary for Pepsi-Cola?

A) Pepsi's ad agency B) Pepsi's sugar supplier C) Pepsi's bank D) Pepsi's marketing consultants E) Pepsi's insurance companies Answer: B Diff: 3 Type: MC Page Ref: 121 Skill: Application Objective: 4-1

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12) Banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods and services are referred to as ________.

A) financial intermediaries B) physical distribution firms C) marketing service agencies D) resellers E) wholesalers Answer: A Diff: 1 Type: MC Page Ref: 121 Skill: Concept Objective: 4-1 13) A company's marketing environment includes various ________ that are made up of groups that have an actual or potential interest in, or impact on, an organization's ability to achieve its objectives.

A) teams B) audiences C) markets D) publics E) intermediaries Answer: D Diff: 2 Type: MC Page Ref: 122 Skill: Concept Objective: 4-1 14) Which of the following is considered part of a company's marketing intermediaries?

A) stockholders B) government officials who may regulate the company's industry C) media groups that may cover stories on the company D) marketing services agencies E) unions Answer: D Diff: 3 Type: MC Page Ref: 121 Skill: Concept Objective: 4-1

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15) A popular blogger who writes and passes along news, features, and editorial opinions about your area is best classified as which type of public?

A) financial B) media C) citizen-action D) local E) regional Answer: B Diff: 1 Type: MC Page Ref: 122 Skill: Application Objective: 4-1 16) Consumer organizations and environmental groups are examples of ________ publics.

A) general B) local C) government D) citizen-action E) media Answer: D Diff: 2 Type: MC Page Ref: 122 Skill: Concept Objective: 4-1 17) Workers, managers, and members of the board of directors are all part of a company's ________.

A) general public B) internal public C) local public D) intermediary public E) market public Answer: B Diff: 1 Type: MC Page Ref: 123 Skill: Concept Objective: 4-1 18) Percy Original caters to a market of individuals and households that buy goods and services for personal consumption. What type of market does Percy Original cater to?

A) business B) reseller C) government D) consumer E) marketing intermediary Answer: D Diff: 2 Type: MC Page Ref: 123 Skill: Application Objective: 4-1 5 Copyright © 2017 Pearson Canada Inc.

19) Which type of market buys goods and services to produce public services or to transfer them to others who need them?

A) government B) reseller C) wholesale D) consumer E) retail Answer: A Diff: 1 Type: MC Page Ref: 123 Skill: Concept Objective: 4-1 20) Members of which type of market buy goods and services for further processing or for use in the production process?

A) business B) reseller C) wholesale D) consumer E) retail Answer: A Diff: 2 Type: MC Page Ref: 123 Skill: Concept Objective: 4-1 21) Your marketing department is currently researching the size, density, location, age, and occupations of your target market. Which environment is being researched?

A) demographic B) psychographic C) economic D) geographic E) cultural Answer: A Diff: 2 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 22) The Canadian population contains several generational groups including the baby boomers, Generation Xers, and ________.

A) Seniors B) Millennials C) Teens D) Tweens E) Toddlers Answer: B Diff: 1 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 6 Copyright © 2017 Pearson Canada Inc.

23) According to the authors, the single most important demographic trend facing marketers is the ________.

A) changing age structure of the population B) mobility of the population C) slowing birth rate D) increasing growth in professional jobs E) changing structure of the family Answer: A Diff: 2 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 24) This demographic segment of the Canadian population includes about 10 million people born between the 2nd World War and the mid 1960s.

A) Seniors B) Baby boomers C) Generation X D) Generation Y E) Generation Z Answer: B Diff: 2 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 25) This group is the wealthiest generation in Canadian history.

A) Generation X B) Baby boomers C) Millennials D) Seniors E) Tweens Answer: B Diff: 2 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 26) The youngest of the baby boomers are now in their ________.

A) late 20s B) 30s C) late 40s D) early 50s E) early 60s Answer: D Diff: 2 Type: MC Page Ref: 124 Skill: Concept Objective: 4-2 7 Copyright © 2017 Pearson Canada Inc.

27) Which of the following descriptions most accurately characterizes the baby boomers?

A) They are aging and slowing down.

B) They are a shrinking market for new housing and home remodeling.

C) They are past their peak earning and spending years.

D) They account for about 1/3 of the population and hold 50% of Canada's wealth.

E) They were largely unaffected by the recent recession.

Answer: D Diff: 2 Type: MC Page Ref: 126 Skill: Concept Objective: 4-2 28) This demographic segment of the Canadian population includes about 7 million people born between 1967 and 1976.

A) Seniors B) Baby boomers C) Generation X D) Generation Y E) The Great Generation Answer: C Diff: 2 Type: MC Page Ref: 127 Skill: Concept Objective: 4-2 29) Which of the following statements about Generation X is accurate?

A) There are more Millennials than Gen Xers B) To Gen Xers, family is a low priority.

C) The values of Boomers are replacing the values of the Gen Xers.

D) Gen Xers tend to value possessions over experiences.

E) Gen Xers tend to be more trusting of marketing pitches.

Answer: A Diff: 2 Type: MC Page Ref: 127 Skill: Concept Objective: 4-2 30) Given the characteristics of Gen Xers, on which categories would a typical Gen Xer likely spend more than his Boomer and Millennial counterparts?

A) financial services B) medicine C) travel D) cars E) computers Answer: C Diff: 3 Type: MC Page Ref: 127 Skill: Application Objective: 4-2

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31) The youngest of Gen X are now in their ________.

A) late 20s B) late 30s C) early 40s D) late 50s E) early 60s Answer: C Diff: 2 Type: MC Page Ref: 127 Skill: Concept Objective: 4-2 32) This demographic segment of the Canadian population has about 10 million people born between 1977 and 2000.

A) Seniors B) Baby boomers C) Generation X D) Generation Y E) Generation Hope Answer: D Diff: 2 Type: MC Page Ref: 128 Skill: Concept Objective: 4-2 33) Which of the following characteristics describes Millennials (Generation Y)?

A) They are the most financially strapped generation.

B) They are the children of the Gen Xers.

C) They have short life expectancies.

D) They are the least computer savvy generation.

E) They find social media boring.

Answer: A Diff: 2 Type: MC Page Ref: 126 Skill: Concept Objective: 4-2 34) Which demographic group includes large tween and teen markets?

A) Generation X B) Millennials C) Generation Z D) Baby boomers E) The Go Getters Answer: C Diff: 1 Type: MC Page Ref: 128 Skill: Concept Objective: 4-2

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35) Which demographic group is characterized by a total fluency and comfort with computer, digital, and Internet technology?

A) Generation X B) Millennials C) Seniors D) Generation Z E) Baby boomers Answer: D Diff: 2 Type: MC Page Ref: 128 Skill: Concept Objective: 4-2 36) Which of the following demographic groups has seen a percentage increase in the past 50 years?

A) households with children B) households with tweens with full time jobs C) households with teenagers working full time D) single income households E) "crowded nest" households (those aged 20-29 that live with their parents) Answer: E Diff: 3 Type: MC Page Ref: 130 Skill: Concept Objective: 4-2 37) The number of ________ households is now growing faster than the number of ________ households.

A) traditional; nontraditional B) large; traditional C) nontraditional; smaller D) nontraditional; traditional E) male-dominant; female-dominant Answer: D Diff: 2 Type: MC Page Ref: 130 Skill: Concept Objective: 4-2 38) Women now make up ________ of the paid workforce.

A) 25 percent B) 35 percent C) 41 percent D) 45 percent E) more than 50 percent Answer: E Diff: 1 Type: MC Page Ref: 130 Skill: Concept Objective: 4-2 10 Copyright © 2017 Pearson Canada Inc.

39) Canadians are very mobile. From 2010 to 2014, the Canadian population has grown the most in ________.

A) Prince Edward Island B) Ontario C) Alberta D) Quebec E) southern areas Answer: C Diff: 2 Type: MC Page Ref: 131 Skill: Concept Objective: 4-2 40) Which of the following provinces and territories experienced zero population increase between 2010 and 2014?

A) the prairie provinces B) British Columbia C) Northwest Territories D) Nova Scotia and New Brunswick E) Yukon and Nunavut Answer: D Diff: 2 Type: MC Page Ref: 131 Skill: Concept Objective: 4-2 41) As more and more Canadians are moving to "Census Metropolitan Areas," marketers can most reasonably assume that ________.

A) geographic segmentation may be less critical B) rural populations will offer an expanding market C) there is an associated boom in the small office/home office market D) congested areas may become more ensnarled E) crime rates in metropolitan areas will increase Answer: C Diff: 3 Type: MC Page Ref: 131 Skill: Concept Objective: 4-2

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42) An increasing number of Canadian workers work out of their homes with technological conveniences such as personal computers, high-speed Internet access, and fax machines. These workers are referred to as the ________ market.

A) LOHAS B) SOHO C) Gen X D) Millennial E) Micropolitan Answer: B Diff: 2 Type: MC Page Ref: 131 Skill: Concept Objective: 4-2 43) Which of the following most accurately reflects the popularity of telecommuting?

A) Almost all Canadian businesses are expected to offer telecommuting options within the next decade.

B) The majority of Canadian businesses currently offer telecommuting programs for their employees.

C) About 24% of Canadian households report having a home office.

D) About 5% of Canadian businesses currently offer telecommuting programs for their employees.

E) The percentage of Canadian businesses offering telecommuting programs is expected to decline within the next decade.

Answer: C Diff: 2 Type: MC Page Ref: 131 Skill: Concept Objective: 4-2 44) Which of the following projections is least likely to occur for the Canadian workforce?

A) a labour shortage in construction B) a labour shortage in nursing C) a labour shortage in the hotel industry D) a labour shortage in the acting industry E) a labour shortage in trucking Answer: D Diff: 2 Type: MC Page Ref: 132 Skill: Application Objective: 4-2

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45) Which of the following is an accurate statement about the diversity of the Canadian population?

A) African Canadians represent the smallest non-white segment of the population.

B) More than 19.1% identified themselves as visible minorities in the 2011 census C) The Asian Canadian percentage of the population is expected to remain steady in the next 50 years.

D) In terms of ethnic diversity, Canada has about 100 ethnic populations reported in the 2006 census.

E) Canadian ethnic populations are expected to slowly increase in the next few decades.

Answer: B Diff: 3 Type: MC Page Ref: 132 Skill: Concept Objective: 4-2 46) According to Statistics Canada population projections, visible minorities could account for over ________ of the total population by 2031.

A) 5% B) 10% C) 20% D) 30% E) 40% Answer: D Diff: 2 Type: MC Page Ref: 132 Skill: Concept Objective: 4-2 47) Because of an expected increase in ethnic populations, marketers are likely to place a greater emphasis on ________.

A) geographic segmentation B) targeted advertising messages C) mass marketing D) mainstream advertising E) cause-related marketing Answer: B Diff: 2 Type: MC Page Ref: 132 Skill: Concept Objective: 4-2

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48) According to your text, members of which of the following groups tend to be cosmopolitan and professional with large buying power.

A) Gen Xers B) LGBT C) Millennials D) Echo boomers E) Environmentalists Answer: B Diff: 2 Type: MC Page Ref: 133 Skill: Concept Objective: 4-2 49) Of the following diversity segments in the Canadian population, which has considerable spending power as well as great need for tailored products and services?

A) adults with disabilities B) Hispanics C) African Canadians D) telecommuters E) Asian Canadians Answer: A Diff: 2 Type: MC Page Ref: 133 Skill: Concept Objective: 4-2 50) The ________ environment consists of factors that affect consumer purchasing power and spending patterns.

A) geological B) political C) technological D) economic E) natural Answer: D Diff: 1 Type: MC Page Ref: 134 Skill: Concept Objective: 4-2 51) A country with a(n) ________ economy consumes most of its own agricultural and industrial outputs and offers few market opportunities.

A) industrial B) service C) technological D) subsistence E) developed Answer: D Diff: 2 Type: MC Page Ref: 134 Skill: Concept Objective: 4-2 14 Copyright © 2017 Pearson Canada Inc.

52) A country with a(n) ________ economy has rich markets for many different kinds of goods.

A) industrial B) service C) rural D) subsistence E) multicultural Answer: A Diff: 2 Type: MC Page Ref: 134 Skill: Concept Objective: 4-2 53) Which of the following statements about income distribution in Canada is true?

A) In recent decades, the rich have gotten poorer.

B) In recent decades, the middle class has gotten richer.

C) In recent decades, the poor have gotten richer.

D) The top 5 percent of Canadian earners account for almost 25% of all income.

E) Incomes are generally equal across all visible minority groups.

Answer: D Diff: 3 Type: MC Page Ref: 134-135 Skill: Concept Objective: 4-2 54) The natural resources that are needed as inputs by marketers or that are affected by marketing activities are referred to as the ________.

A) raw material market B) natural environment C) endangered environment D) green movement E) factors of production Answer: B Diff: 1 Type: MC Page Ref: 135 Skill: Concept Objective: 4-3 55) Which of the following Canadian government initiatives established stringent pollution control standards?

A) the Environmental Protection Agency B) the Federal Trade Commission C) the Food and Drug Administration D) the Consumer Product Safety Commission E) the Environmental Protection Act Answer: E Diff: 1 Type: MC Page Ref: 136 Skill: Concept Objective: 4-3 15 Copyright © 2017 Pearson Canada Inc.

56) What movement has encouraged marketers to pursue environmentally sustainable strategies?

A) the EPA B) the black market C) the green movement D) the SOHO movement E) green intervention Answer: C Diff: 2 Type: MC Page Ref: 136 Skill: Concept Objective: 4-3 57) The authors argue that the ________ is most dramatically changing society's destiny.

A) demographic environment B) cultural environment C) technological environment D) competitive environment E) natural environment Answer: C Diff: 2 Type: MC Page Ref: 137 Skill: Concept Objective: 4-3 58) Tech trends should be tracked by marketers because technology can represent ________.

A) opportunities for the organization.

B) threats to the organization.

C) risks for the organization.

D) both threats and opportunities for the organization.

E) regulatory headaches.

Answer: D Diff: 2 Type: MC Page Ref: 137 Skill: Concept Objective: 4-3 59) Marketers should be aware of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. This is the ________ environment.

A) socio-legal B) cultural C) political D) legal-technological E) economic Answer: C Diff: 1 Type: MC Page Ref: 138 Skill: Concept Objective: 4-4

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60) Even the strongest advocates of free-market economies agree that the system works best with ________ regulation.

A) private B) maximum C) intermittent D) at least some E) no Answer: D Diff: 2 Type: MC Page Ref: 138 Skill: Concept Objective: 4-4 61) Around the world, legislation affecting business will continue to ________.

A) become simplified B) increase C) stabilize D) decrease E) relax consumer protections Answer: B Diff: 1 Type: MC Page Ref: 138 Skill: Concept Objective: 4-4 62) A major legislation created to regulate marketing activities in Canada is called the ________.

A) Marketer's Act B) Consumer Protection Act C) Commercial Product Act D) Competition Act E) Business Fairness Promotion Act Answer: D Diff: 2 Type: MC Page Ref: 139 Skill: Concept Objective: 4-4 63) Business legislation has been created for three basic reasons: to protect companies from each other, to protect consumers, and to ________.

A) protect the interests of society B) regulate prices C) increase world trade D) regulate monopolies E) promote environmental sustainability Answer: A Diff: 2 Type: MC Page Ref: 139 Skill: Concept Objective: 4-4

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64) The recent rash of business scandals and increased concerns about the environment have created fresh interest in the issues of ________ and ________.

A) ethics; promotion responsibility B) ethics; social responsibility C) finances; employee discrimination D) management ethics; cultural bias E) promotion; pricing Answer: B Diff: 2 Type: MC Page Ref: 139 Skill: Concept Objective: 4-4 65) A company or association's ________ is designed to help guide responses to complex social responsibility issues.

A) code of ethics B) cause-related marketing C) discretion in enforcing regulations D) privacy policy E) core value system Answer: A Diff: 2 Type: MC Page Ref: 140 Skill: Concept Objective: 4-4 66) The primary concern for consumers with the boom in Internet marketing is ________.

A) social networking B) false advertising C) privacy D) sustainability E) social responsibility Answer: C Diff: 2 Type: MC Page Ref: 140 Skill: Concept Objective: 4-4 67) Cause-related marketing is ________.

A) a response to customer needs B) a primary form of environmental awareness C) a primary form of corporate giving D) a response to corporate political problems E) an attempt to influence customers' core beliefs Answer: C Diff: 2 Type: MC Page Ref: 140 Skill: Concept Objective: 4-4

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68) A society's basic values, perceptions, preferences, and behaviours are all part of its ________ environment.

A) social B) cultural C) political D) cultural-economic E) natural Answer: B Diff: 1 Type: MC Page Ref: 141 Skill: Concept Objective: 4-4 69) A society's core beliefs and values have a high degree of ________.

A) persistence B) simplicity C) similarity D) ethnocentrism E) conformity Answer: A Diff: 2 Type: MC Page Ref: 141 Skill: Concept Objective: 4-4 70) A society's ________ are expressed in how people view themselves, organizations, society, nature, and the universe.

A) marketing responses B) cultural values C) demographics D) public policies E) economies Answer: B Diff: 1 Type: MC Page Ref: 141 Skill: Concept Objective: 4-4 71) Watching the cultural trends of how people view others, observers have noted an increased interest in ________.

A) socializing with coworkers B) connecting with others C) patriotism D) do-it-yourself projects E) adventurous experiences Answer: B Diff: 2 Type: MC Page Ref: 142 Skill: Concept Objective: 4-4 19 Copyright © 2017 Pearson Canada Inc.

72) Over the last two decades, how have Canadian views of organizations changed?

A) Employees have been increasing loyalty to their employers.

B) There has been growing confidence in political organizations.

C) There has been a decrease in confidence towards business and institutions.

D) There has been growing confidence in institutions.

E) There has been growing loyalty towards business.

Answer: C Diff: 2 Type: MC Page Ref: 142 Skill: Concept Objective: 4-4 73) Watching the cultural trends of how people view society, observers have noted that more and more Canadians have a sense of national pride. Marketers responded to the increased ________ of Canadians with special products and promotions.

A) loyalty B) patriotism C) distrust D) foreign intolerance E) myopia Answer: B Diff: 2 Type: MC Page Ref: 143 Skill: Concept Objective: 4-4 74) Which of the following is a potential downside to using patriotic themes in marketing programs?

A) Levels of patriotism fluctuate rapidly.

B) Patriotism has been on the decline in the past decade.

C) Such promotions can be viewed as exploitive.

D) Canadians are less confident in political organizations.

E) Few marketers currently use this technique.

Answer: C Diff: 2 Type: MC Page Ref: 143 Skill: Concept Objective: 4-4 75) Cultural forecasters have noted a declining Canadian interest in ________.

A) dominating and taming nature B) the fine arts C) work as a source of satisfaction and self-definition D) religious affiliation E) organized crime Answer: D Diff: 2 Type: MC Page Ref: 143 Skill: Concept Objective: 4-4 20 Copyright © 2017 Pearson Canada Inc.

76) LandPort Transportation and Omega Warehousing move and store the products your company sells. The two businesses are examples of ________.

A) resellers B) marketing services agencies C) marketing intermediaries D) physical distribution firms E) geographic segments Answer: D Diff: 1 Type: MC Page Ref: 121 Skill: Application Objective: 4-1 77) Currently, Diego Calabresa is employed by a firm that conducts marketing research and creates ads for other companies that help them target and promote their products to the right markets. Who is Diego's employer?

A) a financial intermediary B) a physical distribution firm C) a marketing service agency D) a reseller E) a green marketer Answer: C Diff: 1 Type: MC Page Ref: 121 Skill: Application Objective: 4-1 78) ING, an international insurance and financial services company, is the primary sponsor of the annual New York City Marathon, which is attended by over one million fans and watched by approximately 300 million viewers worldwide. The ING logo and name appear throughout the race course. ING most likely sponsors the event in order to appeal to which type of public?

A) financial B) local C) government D) general E) internal Answer: D Diff: 1 Type: MC Page Ref: 123 Skill: Application Objective: 4-1

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79) If baby boomers are predictors of where product and service demand will be, increased demands will most likely be evident in ________ in the coming years.

A) university enrollment B) beer and wine C) financial services D) the apparel industry E) the organic food industry Answer: C Diff: 2 Type: MC Page Ref: 126 Skill: Application Objective: 4-2 80) Noora DeLange is helping her company develop a marketing program for a new product line.

The program involves emphasizing experience over acquisition and uses a marketing pitch that is less overt than the company's previous programs. The marketing program is most likely designed to appeal to which one of the following demographic groups?

A) Gen Xers B) Nontraditional households C) "Micropolitan" populations D) Millennials E) Manufacturing workers Answer: A Diff: 3 Type: MC Page Ref: 127 Skill: Application Objective: 4-2 81) Which of the following best explains why Gen Xers who are parents tend to put family before career?

A) Gen Xers value experiences more than acquisitions.

B) Gen Xers were minimally affected by the recent economic downturn.

C) Gen Xers are more skeptical about marketing than members of other generations are.

D) Gen Xers are not as educated as members of other generations are.

E) Gen Xers do not face as many economic pressures as members of other generations do.

Answer: A Diff: 3 Type: MC Page Ref: 127 Skill: Application Objective: 4-2

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82) Wholesome Soups, a maker of organic soups, is starting a new marketing campaign emphasizing the ease of preparing and eating Wholesome Soups on the go. Print, television, and Internet ads feature college-aged students enjoying Wholesome Soups in between classes and during study breaks. Wholesome Soups' new marketing campaign is most likely aimed at which of the following?

A) Baby boomers B) Seniors C) Gen Xers D) Millennials E) the SOHO market Answer: D Diff: 1 Type: MC Page Ref: 126 Skill: Application Objective: 4-2 83) Which of the following demographic trends is likely the most responsible for the increasing number of people who telecommute?

A) the migration toward urban and suburban areas B) the move from rural to metropolitan areas C) the increasing number of nontraditional households D) the growing percentage of married couples who do not have children E) the declining number of manufacturing workers Answer: A Diff: 2 Type: MC Page Ref: 131 Skill: Application Objective: 4-2 84) With an expected increase in ethnic diversity, marketers are likely to place a greater emphasis on ________.

A) geographic segmentation B) differing advertising messages C) mass marketing D) "us and them" paradigms E) tiered markets Answer: B Diff: 2 Type: MC Page Ref: 132 Skill: Application Objective: 4-2

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85) A marketer of pesticides should be the least concerned about which of the following?

A) shortages of raw materials B) increased pollution C) increased government intervention D) persistence of cultural values E) chemical pollutants in the food supply Answer: D Diff: 3 Type: MC Page Ref: 135-136 Skill: Application Objective: 4-3 86) The green movement will likely spark the least interest in which of the following?

A) recycling programs B) environmentally sustainable strategies C) social responsibility D) Internet usage E) biodegradability Answer: D Diff: 3 Type: MC Page Ref: 136 Skill: Application Objective: 4-3 87) Norma Bernanke is a marketer at a pharmaceutical company that has just developed a new medication to treat asthma. Which of the following components of the political environment should Norma be most concerned with as her company begins to develop a marketing plan for the new product?

A) the department of Justice B) the department of Agriculture C) the Hazardous Products Act D) the Fair Packaging and Labeling Act E) the Food and Drug Act Answer: E Diff: 3 Type: MC Page Ref: 139 Skill: Application Objective: 4-4 88) Which of the following is an example of a core belief?

A) Marriage is important.

B) Canadians should display their patriotism.

C) The comforts of home are more important than entertainment outside of the home.

D) Extended warranties are never worth the money consumers pay for them.

E) Professionals should wear business clothes to work.

Answer: A Diff: 3 Type: MC Page Ref: 141 Skill: Application Objective: 4-4 24 Copyright © 2017 Pearson Canada Inc.

89) Assume that you are a manager at a firm that has hired lobbyists to influence legislation affecting your firm's industry to its advantage. Your firm takes a(n) ________ approach to the marketing environment.

A) reactive B) proactive C) adversarial D) passive E) team work Answer: B Diff: 1 Type: MC Page Ref: 144 Skill: Application Objective: 4-5 90) Which of the following forces would marketers most likely be able to influence?

A) geographic population shifts B) core cultural values C) income distribution D) increasing ethnic diversity E) media publics Answer: E Diff: 3 Type: MC Page Ref: 144 Skill: Application Objective: 4-5 91) When the marketing manager Suzie Kwan discusses factors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers, she is talking about the external marketing concept.

Answer: FALSE Diff: 2 Type: TF Page Ref: 119 Skill: Application Objective: 4-1 92) Marketers, more than any other group in the company, must be aware of the microenvironment and macroenvironment, tracking trends and seeking opportunities.

Answer: TRUE Diff: 2 Type: TF Page Ref: 120 Skill: Concept Objective: 4-1 93) The microenvironment consists of larger societal forces that affect a company, such as demographic, economic, political, and cultural forces.

Answer: FALSE Diff: 1 Type: TF Page Ref: 120 Skill: Concept Objective: 4-1

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94) The macroenvironment consists of the factors close to the company that affect its ability to service its customers, such as suppliers, customer markets, competitors, and publics.

Answer: FALSE Diff: 1 Type: TF Page Ref: 120 Skill: Concept Objective: 4-1 95) Omar Kahn works for a distribution channel firm that helps several electronics companies find customers or make sales to them. Omar works for a reseller.

Answer: TRUE Diff: 3 Type: TF Page Ref: 121 Skill: Application Objective: 4-1 96) Marketing research firms, advertising agencies, media firms, and marketing consulting firms are all referred to as marketing services agencies.

Answer: TRUE Diff: 1 Type: TF Page Ref: 121 Skill: Concept Objective: 4-1 97) Today's marketers should view their intermediaries as channels through which they sell their products rather than as full-fledged partners.

Answer: FALSE Diff: 2 Type: TF Page Ref: 121 Skill: Concept Objective: 4-1 98) No single competitive marketing strategy is suitable for every company.

Answer: TRUE Diff: 1 Type: TF Page Ref: 122 Skill: Concept Objective: 4-1 99) Consumer organizations such as environmental and minority groups that may question a company's marketing decisions are referred to as local publics.

Answer: FALSE Diff: 2 Type: TF Page Ref: 122-123 Skill: Concept Objective: 4-1 100) As an employee of Bonkers Enterprises, Brianna Chan markets wild and crazy games for teens to play at parties. Brianna's customer market is a business market.

Answer: FALSE Diff: 2 Type: TF Page Ref: 123 Skill: Application Objective: 4-1 26 Copyright © 2017 Pearson Canada Inc.

101) The demographic environment is of major interest to marketers because it involves people, and people make up markets.

Answer: TRUE Diff: 1 Type: TF Page Ref: 124 Skill: Concept Objective: 4-2 102) The single most important demographic trend in Canada that marketers should understand is the changing family structure.

Answer: FALSE Diff: 2 Type: TF Page Ref: 124 Skill: Concept Objective: 4-2 103) As baby boomers reach their peak earning and spending years, they represent lucrative markets.

Answer: TRUE Diff: 1 Type: TF Page Ref: 126 Skill: Concept Objective: 4-2 104) Gen X is the most digitally savvy generation in history.

Answer: FALSE Diff: 2 Type: TF Page Ref: 128 Skill: Concept Objective: 4-2 105) Millennials comprise the most commercially influential demographic group in Canadian history.

Answer: FALSE Diff: 1 Type: TF Page Ref: 128 Skill: Concept Objective: 4-2 106) Millennials represent a larger demographic segment than the baby boomers or Gen Xers.

Answer: TRUE Diff: 3 Type: TF Page Ref: 128 Skill: Concept Objective: 4-2 107) Traditional households are growing more rapidly than nontraditional households.

Answer: FALSE Diff: 2 Type: TF Page Ref: 130 Skill: Concept Objective: 4-2 27 Copyright © 2017 Pearson Canada Inc.

108) Recent shifts in where people live is influenced by where there are jobs Answer: TRUE Diff: 1 Type: TF Page Ref: 130 Skill: Concept Objective: 4-2 109) The Canadian workforce today is better educated and more white-collar than it was a generation ago.

Answer: TRUE Diff: 1 Type: TF Page Ref: 132 Skill: Concept Objective: 4-2 110) Because of the growing diversity in Canada, companies are increasingly targeting minority market segments.

Answer: TRUE Diff: 2 Type: TF Page Ref: 132 Skill: Concept Objective: 4-2 111) Diversity in Canada is increasing, and successful marketers are increasingly diversifying their marketing programs to appeal to different segments of the population.

Answer: TRUE Diff: 2 Type: TF Page Ref: 132 Skill: Concept Objective: 4-2 112) Women account for the majority of the Canadian workforce.

Answer: TRUE Diff: 2 Type: TF Page Ref: 130 Skill: Concept Objective: 4-2 113) The large majority of Canadians live in metropolitan and suburban geographies.

Answer: TRUE Diff: 2 Type: TF Page Ref: 131 Skill: Concept Objective: 4-2 114) If Statistics Canada's projections are correct, about one in three Canadians will belong to a visible minority by 2031.

Answer: TRUE Diff: 2 Type: TF Page Ref: 132 Skill: Concept Objective: 4-2

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115) Significant trends in the natural environment include shortages of raw materials, increased pollution, and decreased government intervention.

Answer: FALSE Diff: 2 Type: TF Page Ref: 135-136 Skill: Concept Objective: 4-3 116) Environmental concerns have been on the decline in the past decade probably because of more government legislation and the green movement.

Answer: FALSE Diff: 2 Type: TF Page Ref: 136 Skill: Concept Objective: 4-3 117) New technologies is beneficial to all industries.

Answer: FALSE Diff: 2 Type: TF Page Ref: 137 Skill: Application Objective: 4-3 118) Cause-related marketing is a slowing trend as companies have abused the practice, using it more to increase sales than to support worthwhile causes.

Answer: FALSE Diff: 2 Type: TF Page Ref: 140-141 Skill: Concept Objective: 4-4 119) Through advertising, marketers can quickly and easily change the core values of a population.

Answer: FALSE Diff: 1 Type: TF Page Ref: 141 Skill: Concept Objective: 4-4 120) When a company hires lobbyists to influence legislation affecting its industry, it is taking a reactive approach to the marketing environment.

Answer: FALSE Diff: 2 Type: TF Page Ref: 145 Skill: Concept Objective: 4-5 121) A company that experiences negative word of mouth on blogs or social networking sites should ignore rumors, as answering any complaints will only make them seem more legitimate.

Answer: FALSE Diff: 2 Type: TF Page Ref: 144 Skill: Concept Objective: 4-5 29 Copyright © 2017 Pearson Canada Inc.

122) Why should a company care about the macroenvironment?

Answer: The macroenvironment includes large societal forces that affect the microenvironment.

They include demographic, economic, natural, technological, political, and cultural forces. Such forces shape opportunities, create threats, and impact the relationships that an organization has with its customers. For example, technologies can impact what products and features are available, the processes used to make products (which also impacts price), how products are distributed (e.g., a high-speed ship could one day replace air shipments), and approaches for communicating to and with customers (e.g., social networks).

Diff: 2 Type: ES Page Ref: 120 Skill: Application Objective: 4-1 123) Who are the major players in a company's microenvironment? What roles do they play?

Answer: The microenvironment includes those who are close to a company and affect the company's ability to serve its customers. Within the company, marketing management takes other groups into account, such as top management, finance, research and development, purchasing, operations, and accounting. Suppliers form an important link in the company's overall customer value-delivery system. Marketing intermediaries help the firm to promote, sell, and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. One or several of the five types of markets—consumer, business, reseller, government, and international—may be part of the company's microenvironment, depending on the company's products. Competitors are also part of the microenvironment, as they can affect the company's ability to serve its customers. The last segment of the company's microenvironment is made of various publics, including financial, media, government, citizen-action, and local groups.

Diff: 2 Type: ES Page Ref: 120-123 Skill: Application Objective: 4-1 124) Differentiate between the basic marketing intermediaries.

Answer: Marketing intermediaries help the company to promote, sell, and distribute its goods and services to final buyers. Resellers are distribution channel firms that help the company find customers or make sales to them. Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Marketing service agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.

Diff: 3 Type: ES Page Ref: 121-22 Skill: Application Objective: 4-1

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125) In marketing, what is a public? Briefly describe the seven main types of publics faced by marketers and explain how marketing might communicate with these publics.

Answer: A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. We can identify seven types of publics. Financial publics influence the company's ability to obtain funds. Media publics carry news, features, and editorial opinions. Government publics develop public policy to guide commerce with sets of laws and regulations. Citizen-action publics include consumer, minority, and environmental groups. Local publics include neighborhood residents and community organizations. The general public has concerns about the company's products and actions. Internal publics include workers, managers, volunteers, and the board of directors. Marketing can treat these influential publics like consumer markets, creating marketing plans to build relationships and elicit a desired response.

Diff: 2 Type: ES Page Ref: 122-123 Skill: Application Objective: 4-1 126) How can marketers use information about the demographic environment?

Answer: Marketers can learn much about human populations in terms of size, density, age, location, gender, race, occupation, and other statistics. For example, knowledge about the changing age structure of the population can guide marketers to develop meaningful relationships with their customers. The baby boomer market of 9.8 million people holds 50% of Canada's financial assets. Marketers can learn the differences in the generations and in the changing Canadian family. The mobility and geographic shifts open new marketing opportunities for many companies. A better-educated and more white-collar population in Canada means a shift in emphasis on many goods and services. As diversity increases, marketers can learn about the characteristics of different segments of the population and design products and marketing programs designed for each segment.

Diff: 1 Type: ES Page Ref: 124-133 Skill: Application Objective: 4-2 127) Explain the impact of the baby boomers, Generation X, and Millennials on today's marketing strategies.

Answer: The baby boomers include 9.8 million Canadians born after WWII until the mid-1960s.

They control over 50% of the nation's disposable income. They are attracted to high-priced cars, health and fitness, and other luxuries. Generation Xers, the 7 million Canadians born between 1967 and 18976 carry a more cautious outlook and are less materialistic than baby boomers.

Millennials are children of the baby boomers, they number 10.4 million Canadians and were born between 1977 and 2000. They are highly computer literate and are more responsive to twoway brand conversations than to traditional marketing approaches. The demands of these population groups set marketing trends.

Diff: 2 Type: ES Page Ref: 124-127 Skill: Application Objective: 4-2

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128) What are the major trends in today's natural environment? How do these trends affect companies?

Answer: The natural environment is the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. The natural environment shows three major trends: shortages of certain raw materials, higher pollution levels, and more government intervention in natural resource management. Environmental concerns create marketing opportunities for alert companies. As concern about global warming and other environmental issues continues to grow, more and more consumers are demanding environmentally responsible products. Companies who heed these demands will benefit, as environmentally responsible actions are today linked with good business.

Diff: 2 Type: ES Page Ref: 135-136 Skill: Application Objective: 4-3 129) Why is the technological environment such a dramatic force in today's market?

Answer: The technological environment changes rapidly, as evidenced by all of the technologies that are widespread today—such as cell phones, laptops, digital cameras, etc.—that did not exist thirty years ago. Each new technology creates new products and market opportunities, and at the same time replaces an older technology. Because of this, marketers must keep a careful watch on the technological environment so that they can adjust to new technologies and take advantage of new opportunities.

Diff: 1 Type: ES Page Ref: 137-138 Skill: Application Objective: 4-3 130) Describe the three main reasons that business legislation is enacted.

Answer: Business legislation is enacted to protect companies from each other, to protect consumers from unfair business practices, and to protect the interests of society against unrestrained business behavior. Several laws in Canada are designed to prevent unfair competitive practices between businesses. Laws to protect consumers are designed to prevent deceptive advertising, packaging, and pricing, among other harmful practices. Finally, regulations to protect the interests of society require companies to take responsibility for the social costs of their products and/or production practices.

Diff: 2 Type: ES Page Ref: 138-139 Skill: Application Objective: 4-4

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131) What is cause-related marketing? Give two examples of the practice and explain why companies participate in cause-related marketing.

Answer: Companies link themselves to a worthwhile cause by connecting a purchase of the company's product or service with support for a cause or charitable organization. This has become a primary form of corporate donations, as the company can gain a more positive public image while exercising its social responsibility. Cause-related marketing benefits the chosen charitable organization or cause and may increase sales for the company, a win-win situation.

Examples of cause-related marketing include P&G Tide Loads of Hope program where P&G provides mobile laundromats and loads of clean laundry to families of disaster-stricken areas.

Warby Parker "sells eyewear with a purpose." For every pair of classes the company sells, it distributes a free pair for someone in need.

Diff: 2 Type: ES Page Ref: 140-141 Skill: Application Objective: 4-4 132) What is the cultural trend in how people view nature? How does this affect marketers?

Answer: Recently people have moved away from the view of mastering nature through technology and begun to think of nature as finite and susceptible to destruction by human activities. Many Canadians already consider themselves to be converts to the ideas of sustainable living, with an even greater number anticipating becoming "extremely green" in the next five years. The renewed love of nature has created a new market, called "lifestyles of health and sustainability" (LOHAS), of consumers who seek organic and natural products, fuel-efficient cars, and alternative medicines. Loblaw's supermarkets have increased their offerings of organic foods to respond (and proactively encourage) to this cultural trend.

Diff: 3 Type: ES Page Ref: 143 Skill: Application Objective: 4-4 133) How do baby boomers today differ from previous generations as they neared and reached their sixties?

Answer: The 50+ consumer segment now buys more than 55% of all consumer goods. They will continue to be a lucrative market for financial services, housing and remodeling, new cars, travel and entertainment, eating out, health and fitness, and more. The more active boomers have no intention of stopping their youthful lifestyles as they age.

Diff: 2 Type: ES Page Ref: 126-127 Skill: Application Objective: 4-2

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134) How might a successful marketing program for smart phones aimed at Millennials be different than one aimed at Gen Xers?

Answer: Millennials expect one-to-one communication with brands and easily share these experiences with friends and strangers using social media. The four pillars of their lifestyle are music, sports, pop culture and the "connected life." To attract Millennials, marketers may want products to allow for self-expression and personalization; marketers should focus on creating buzz through events and a presence on popular social networking sites rather than creating traditional marketing plans. Gen Xers are less materialistic, see family as more important than careers, and tend to research products before purchasing them. To capture this group, marketers may want to consider creating a smart phone that is practical and has apps that connect easily to researching products. Also, having family-connecting features is an attraction for this group.

Diff: 2 Type: ES Page Ref: 127-129 Skill: Application Objective: 4-2 135) What are two potential drawbacks of creating separate products and marketing programs for each generation?

Answer: A brand's image could be damaged if members of one generation respond negatively to a marketing campaign designed to appeal to members of another generation. Each generation spans decades of time, so members of one generation are actually at diverse life stages.

Marketers need to form more precise age-specific segments within each generational group.

Diff: 2 Type: ES Page Ref: 130 Skill: Application Objective: 4-2 136) Why might marketers want to target segments of the population based on lifestyles rather than age groups?

Answer: It may be more effective to segment the market according to lifestyle, lifestage, or values rather than by age alone. Too much might be assumed about people in the same age group, and grouping people by lifestyle may eliminate some of the inaccurate assumptions made regarding age. For example, baby boomers are showing that they actively engage in activities assumed to be the realm of younger Canadians: attending rock concerts or going on African Safaris.

Diff: 3 Type: ES Page Ref: 126,130 Skill: Application Objective: 4-2

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137) Give two characteristics of the Canadian family that depict its "nontraditional" nature.

Answer: The stereotypic Canadian family lives in the suburbs with their two growing children.

The 2011 census reveals interesting changes to this "traditional" view. About 42% of Canadians in their 20s live with their parents. Fewer households are having children. For the first time, there are more one-person households than coupled households with children. More adults of one or both sexes live together without being married; working women are making up a larger portion of the workforce; both husband and wife work in the majority of married-couple families; and the percentage of stay-at-home dads is rising.

Diff: 1 Type: ES Page Ref: 130 Skill: Application Objective: 4-2 138) Why has a growing portion of the Canadian population shifted to metropolitan areas?

Answer: Census Metropolitan Areas (CMA) include urban and its suburban populations. The shift to living in a CMA also caused a shift in where people worked. More people now telecommute; work at home or in a remote office, and conduct their business by telecommunications. This trend has created a boom in SOHO (small office/home office).

Diff: 3 Type: ES Page Ref: 131 Skill: Application Objective: 4-2 139) How might geographic shifts in population impact marketers?

Answer: Geographic shifts did not occur uniformly across Canada. Interprovincial migration is driven by employment opportunities. There are growing numbers of visible minorities in Canada's four largest cities. People in different regions buy differently. If tastes and preferences are taken with consumers as they disperse geographically, predicting specific consumption patterns in certain geographic areas may become difficult over time.

Diff: 2 Type: ES Page Ref: 130-131 Skill: Application Objective: 4-2 140) Briefly explain the following statement: "The distribution of income has created a tiered market."

Answer: In Canada, the rich are getting richer, the poor are getting poorer, and the earnings of the middle class are stagnating. This distribution of income has created a tiered market. Many companies focus on targeting the affluent, while others target consumers with more modest means. Another tiered strategy is tailoring marketing offers across a range of income groups.

Diff: 2 Type: ES Page Ref: 135 Skill: Application Objective: 4-2

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141) Why might it be beneficial for marketers to help develop solutions to problems facing the natural environment, such as increased pollution and shortages of raw material?

Answer: Marketers who help to develop solutions to these problems can gain the advantage of helping to shape policy that is beneficial to them, as increasingly strict environmental regulations can be expected. Environmentally responsible actions will help a company's public image; they will also help to create a more sustainable market.

Diff: 3 Type: ES Page Ref: 136 Skill: Application Objective: 4-3 142) What is meant by the "green movement"?

Answer: The green movement is a growing concern for the natural environment. It includes companies that go beyond government regulations in developing environmentally sustainable strategies, including recycling, biodegradability, pollution control, and energy efficiency.

Diff: 2 Type: ES Page Ref: 136 Skill: Application Objective: 4-3 143) One purpose of government regulation is to protect consumers from unfair business practices. List two areas in which this may occur.

Answer: Some firms, if left to their own devices, may produce shoddy products, mislead consumers in their advertising, or deceive consumers through packaging and pricing in order to increase profits. Major legislation affecting marketing that protects consumers are Motor Vehicle Safety Act that establishes mandatory safety standards for motor vehicles; Consumer Packaging and Labelling Act that ensures full information about a product is disclosed to the buyer; Section 36 of the Competition Act that forbids misleading advertising of prices.

Diff: 2 Type: ES Page Ref: 136 Skill: Application Objective: 4-4 144) How might a marketer act in a socially responsible way toward the general public?

Answer: Marketers may work to make products safer, interact responsibly with the natural environment, and support social organizations through cause-related marketing.

Diff: 2 Type: ES Page Ref: 140 Skill: Application Objective: 4-4 145) Explain the controversy surrounding cause-related marketing.

Answer: Cause-related marketing is aligning the company with a worthwhile cause. Companies using cause-related marketing may be perceived as trying to merely increase sales or improve their images if their connection to the cause is not accurately explained or understood or if they appear to be exploiting a cause in order to increase sales.

Diff: 2 Type: ES Page Ref: 141 Skill: Application Objective: 4-4

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146) What is the difference between a core belief and a secondary belief?

Answer: Core beliefs are passed on from parents to children and are reinforced by schools, businesses, religious institutions and government. A core belief is a stronger, overall belief; an example might be marriage is a good institution. Marketers cannot change core beliefs. A secondary belief is more open to change; an example might be people should get married early in life. Marketers can influence secondary beliefs. For example, family planning marketers could convince people to marry later.

Diff: 2 Type: ES Page Ref: 141 Skill: Application Objective: 4-4 147) Why is it important for marketers to understand people's views of themselves?

Answer: People select and use products and services as a means of self-expression and they buy products that match this view of themselves. Various segments have different self views.

Knowledge of these self-views will help marketers position their products to meet the needs of the various target segments.

Diff: 2 Type: ES Page Ref: 141 Skill: Application Objective: 4-4 148) What steps might a marketer take to shift from a reactive stance to the marketing environment to a more proactive stance?

Answer: To take a proactive stance, marketers need to take action to affect the different actors and forces in their marketing environment. These steps might include running advertorials or other campaigns to influence public opinion and hiring lobbyists to influence legislation.

Diff: 3 Type: ES Page Ref: 144 Skill: Application Objective: 4-5

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Tesla Motors is a California-based company that designs, manufactures, and markets highperformance electric cars. The company's first vehicle to hit the market was the Tesla Roadster, a sporty two-seater. Tesla's performance specifications are truly impressive. For example, the Roadster can accelerate from 0 to 100km/h in under 3.8 seconds. This type of acceleration is comparable to many high-performance Ferrari combustion engine models. The Tesla luxury sedan Model S and sport-utility vehicle Model X have also received accolades for artful design and performance. Not surprisingly, the electric car company has attracted many high-profile customers including Ben Affleck, Matt Damon, and Laurence Fishburne.

Tesla automobiles use lithium-ion battery cells and are the first electric vehicles to have a range greater than 320kms per charge. Many reports suggest that Tesla's energy efficiencies are superior to those of all other electric and hybrid cars. These efficiencies come with a cost, however. The base price of the Model S, Model X, and Roadster are about $60,000, $80,000, and $110,000, respectively.

149) Discuss the macroenvironmental forces that may affect Tesla's business in Canada.

Answer: Many macro forces may affect Tesla's business. In terms of economics, the cars are pricey, so when economic conditions are good, there should be a larger pool of customers willing to shell out larger sums of money on a car. Rising (or lowering) of gas prices may impact pocket books, which could drive consumers to look at electric cars. Concern for the natural environment, green house gasses, pollution, and potentially dwindling carbon-based energies may also encourage consumers look to alternatively powered cars. New technologies may make lithium-ion batteries obsolete very quickly, which could affect sales. Political factors such as subsidies for clean-energy cars may help to stimulate sales of electric vehicles. Demographics can also influence the types of cars that are in demand. For example, if larger family sizes become vogue again, Tesla might focus its energies on building vehicles to accommodate larger families.

Diff: 2 Type: ES Page Ref: 123-144 Skill: Application Objective: 4-2 150) How might a political regulation program like "cash for clunkers" (an economic incentive to purchase new, more fuel-efficient cars when trading in less fuel-efficient vehicles) impact Tesla's marketing program?

Answer: There are different ways of looking at this. The target audience for Tesla is probably not driving clunkers, in which case this will not impact Tesla's marketing program. If Tesla is able to take advantage of an economic incentive like this, it might communicate how a Tesla has never been more affordable. As well, the company may start to produce new, less expensive models that are affordable to market segments who are socially responsible Diff: 2 Type: ES Page Ref: 138-140 Skill: Application Objective: 4-4

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151) Gen Xers wanting an electric car would prefer to buy the Roadster. Discuss this statement.

Answer: This is not the case. Gen Xers are less materialistic than other groups. Although some Gen Xers might like to have a sports car, other Gen Xers have families and would prioritize a sport utility vehicle to drive their children around. Still others would prefer a smooth-riding luxury vehicle. This is a problem with stereotyping a demographic group.

Diff: 2 Type: ES Page Ref: 127-128 Skill: Application Objective: 4-2 152) Discuss the microenvironmental forces that may affect Tesla's business in Canada.

Answer: There are many influences in the microenvironment. The company itself must understand the wants and needs of its customers in order to create value. If customers want ultimate performance and efficiency in an electric car, every department must recognize this and contribute to this goal. For example, the designer of the car must design the car for performance and efficiency; the people working on the assembly line installing the tires must align the tires for efficiency and performance, and so on. Suppliers must also believe in Tesla's approach to make sure their component parts are contributing to performance and efficiency. Tesla cars require fuel stations rather than gas pumps. A Tesla will not provide a lot of value to consumers if the cars cannot be refueled at convenient locations. Competitors will also affect Tesla. If competing products perform horrendously (or catch on fire), this may affect the entire category.

Media, as an example of publics, can cover Tesla's story very favourably or unfavourably.

Diff: 3 Type: ES Page Ref: 120-123 Skill: Application Objective: 4-1

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 5 Managing Marketing Information to Gain Customer Insights 1) Good marketing programs begin with ________.

A) good customer information B) an abundance of information on international market activities C) lots of information D) company insights E) descriptive research Answer: A Diff: 1 Type: MC Page Ref: 157 Skill: Concept Objective: 5-1 2) To create value for customers and build meaningful relationships with them, marketers must ultimately ________.

A) perform thorough ethnographic research B) implement marketing intelligence C) gain a deep understanding of customers' needs and wants D) provide attractive promotions E) make consumers loyal Answer: C Diff: 1 Type: MC Page Ref: 157 Skill: Concept Objective: 5-1 3) Which of the following statements is true regarding information collected by marketers?

A) Managers lack information.

B) Most managers need more information.

C) Many managers need better information.

D) Most managers are burdened by data.

E) Managers have the right information and they have enough of it.

Answer: C Diff: 1 Type: MC Page Ref: 158 Skill: Concept Objective: 5-1

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4) ________ means having fresh understandings of customers and the marketplace derived from marketing information, which form the basis of customer value and relationships.

A) A marketing information system B) Customer insight C) An internal database D) Secondary data E) A focus group Answer: B Diff: 1 Type: MC Page Ref: 157 Skill: Concept Objective: 5-1 5) The real value of a company's marketing research and information system lies in the ________.

A) amount of data it generates B) variety of contact methods it uses C) efficiency with which it completes studies D) quality of customer insights it provides E) marketing information system it follows Answer: D Diff: 2 Type: MC Page Ref: 158 Skill: Concept Objective: 5-1 6) Besides "management," a marketing information system can also serve ________.

A) producers B) IT companies C) governments D) marketing services agencies E) competitors Answer: D Diff: 2 Type: MC Page Ref: 159 Skill: Concept Objective: 5-2 7) A good MIS balances the information users would ________ against what they really ________ and what is ________.

A) need; like; feasible B) like; can afford; needed C) like to have; need; feasible to offer D) need; can afford; useful E) use; have to use; available Answer: C Diff: 2 Type: MC Page Ref: 159 Skill: Concept Objective: 5-2 2 Copyright © 2017 Pearson Canada Inc.

8) The ________ must monitor the marketing environment to provide decision makers with information they should have to better understand customers.

A) organization B) head researcher C) marketing intelligence system D) marketing team E) online system Answer: C Diff: 1 Type: MC Page Ref: 159 Skill: Concept Objective: 5-2 9) Four common sources of internal data supplied to internal databases include the accounting department, operations, the sales force, and the ________.

A) owners B) stockholders C) marketing department D) competition E) Web Answer: C Diff: 2 Type: MC Page Ref: 160 Skill: Concept Objective: 5-2 10) Marketing information from which type of database usually can be accessed more quickly and cheaply than other information sources?

A) external B) LexisNexis C) DataStar D) internal E) ProQuest Answer: D Diff: 1 Type: MC Page Ref: 160 Skill: Concept Objective: 5-2 11) ________ is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.

A) Marketing data B) Competitive Marketing intelligence C) Sales management D) Customer intelligence E) Competitive intelligence Answer: B Diff: 1 Type: MC Page Ref: 161 Skill: Concept Objective: 5-2 3 Copyright © 2017 Pearson Canada Inc.

12) Which of the following statements regarding marketing intelligence is true?

A) Marketing intelligence is privately held information.

B) The advantage of using competitive intelligence is negligible.

C) All marketing intelligence is free.

D) Marketing intelligence is publicly available information.

E) Marketing intelligence gathering is more focused on gaining insights into consumer activities than competitors' activities.

Answer: D Diff: 2 Type: MC Page Ref: 161 Skill: Concept Objective: 5-2 13) Which of the following is considered a source of marketing intelligence?

A) rooting through competitor's garbage B) internal accounting records C) monitoring staff emails D) internal causal research E) suppliers' private annual reports Answer: A Diff: 2 Type: MC Page Ref: 162 Skill: Concept Objective: 5-2 14) Marketing intelligence can help ________ to gain insights into how customers talk about and connect with their brand.

A) salespeople B) competitors C) management D) marketers E) purchasing agents Answer: D Diff: 2 Type: MC Page Ref: 161 Skill: Concept Objective: 5-2 15) Many companies have even appointed ________, who are charged with sifting through online customer conversations and passing along key insights to marketing decision makers.

A) chief listening officers B) researchers C) marketing experts D) focus groups E) employees Answer: A Diff: 1 Type: MC Page Ref: 162 Skill: Concept Objective: 5-2 4 Copyright © 2017 Pearson Canada Inc.

16) Which of the following statements about competitive marketing intelligence is false?

A) Marketing intelligence is used to gain early warnings of competitor moves and strategies.

B) Marketing intelligence is used to stop competitors' new-product launches.

C) Marketing intelligence is used to gain awareness about new or changing markets.

D) Marketing intelligence is used to study potential competitive strengths and weaknesses.

E) Marketing intelligence can be collected from people inside the company.

Answer: B Diff: 2 Type: MC Page Ref: 161-162 Skill: Concept Objective: 5-2 17) Competitor intelligence can be collected ________.

A) only from people outside the company B) from suppliers, resellers, and customers C) from monitoring the company's own website D) only from internal sources E) only from official corporate documents Answer: B Diff: 2 Type: MC Page Ref: 162 Skill: Concept Objective: 5-3 18) ________ is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

A) The marketing information system B) Marketing research C) Exploratory research D) Observational research E) Causal research Answer: B Diff: 1 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3 19) Which of the following is false about marketing research?

A) Marketing research provides marketers insight into customers' motivations.

B) Marketing research helps marketers identify customer purchase behaviours and satisfaction.

C) Marketing research helps marketers assess product market potential.

D) Marketing research provides immediate revenue for the firm.

E) Marketing research enables marketers see the effectiveness of their promotion activities.

Answer: D Diff: 2 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3

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20) Your colleagues are confused about using the marketing research process, as they know that something is wrong but are not sure of the specific causes to investigate. They seem to be having problems with ________, which is often the hardest step to take.

A) developing the research plan B) determining a research approach C) defining the problem and research objectives D) selecting a research agency to help E) C and D Answer: C Diff: 2 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3 21) Which of the steps in the marketing research process includes the following: defining the problems and research objectives, implementing the research plan, and interpreting and reporting the findings?

A) developing the research budget B) choosing the research agency C) choosing the research method D) developing the research plan E) comparing and contrasting primary and secondary data Answer: D Diff: 2 Type: MC Page Ref: 164 Skill: Concept Objective: 5-3 22) Causal research is used to ________.

A) test hypotheses about cause-and-effect relationships B) gather preliminary information that will help define problems C) find information at the outset of the research process in an unstructured way D) describe marketing problems or situations E) quantify observations that produce insights unobtainable through other forms of research Answer: A Diff: 1 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3

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23) Of the following combinations, managers would be most likely to start with ________ research and later follow with ________ research.

A) exploratory; causal B) descriptive; causal C) descriptive; exploratory D) causal; descriptive E) causal; exploratory Answer: A Diff: 3 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3 24) The objective of ________ research is to gather preliminary information that will help define the problem and suggest hypotheses.

A) descriptive B) exploratory C) causal D) corrective E) descriptive and exploratory Answer: B Diff: 2 Type: MC Page Ref: 163 Skill: Concept Objective: 5-3 25) In the second step of the marketing research process, research objectives should be translated into specific ________.

A) marketing goals B) information needs C) dollar amounts D) research methods E) information sources Answer: B Diff: 2 Type: MC Page Ref: 4 Skill: Concept Objective: 5-3 26) Secondary data consists of information ________.

A) that already exists somewhere but is outdated B) that does not currently exist in an organized form C) that already exists somewhere but was collected for another purpose D) that is gathered by competitors E) that the researcher can only obtain through surveys and observation Answer: C Diff: 1 Type: MC Page Ref: 165 Skill: Concept Objective: 5-3 7 Copyright © 2017 Pearson Canada Inc.

27) Information collected from online databases on the Internet is an example of ________ data.

A) primary B) secondary C) observational D) experimental E) ethnographic Answer: B Diff: 2 Type: MC Page Ref: 165 Skill: Concept Objective: 5-3 28) Which form of data below can usually be obtained more quickly and at a lower cost than the others?

A) primary B) survey research C) secondary D) experimental research E) observational research Answer: C Diff: 2 Type: MC Page Ref: 166 Skill: Concept Objective: 5-3 29) It is most accurate to say that secondary data are ________.

A) collected mostly via surveys B) expensive to obtain C) not always usable D) never purchased from outside suppliers E) always necessary to support primary data Answer: C Diff: 2 Type: MC Page Ref: 166 Skill: Concept Objective: 5-3 30) Your assistant wants to use secondary data exclusively for the current marketing research project. Which of the following statements is false regarding secondary data?

A) It may not exist.

B) It may not be relevant.

C) It may not be impartial.

D) It is generally more expensive to obtain than primary data.

E) It may not be current.

Answer: D Diff: 2 Type: MC Page Ref: 166 Skill: Concept Objective: 5-3

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31) For secondary data to be useful to marketers, it must be relevant, current, unbiased, and ________.

A) complete B) accurate C) inexpensive D) collected before secondary data E) experimental Answer: B Diff: 2 Type: MC Page Ref: 166 Skill: Concept Objective: 5-3 32) Which method could a marketing researcher use to obtain information that people are unwilling or unable to provide?

A) observational research B) focus groups C) personal interviews D) Internet surveys E) questionnaires Answer: A Diff: 1 Type: MC Page Ref: 166 Skill: Concept Objective: 5-3 33) Ethnographic research ________.

A) comes from traditional focus groups B) is gathered in consumers in their natural habitat (where people live and work) C) provides secondary data D) is most popular in the service sector E) provides data to marketers when observation is impossible Answer: B Diff: 2 Type: MC Page Ref: 167 Skill: Concept Objective: 5-3 34) Which of the following is true of ethnographic research?

A) It is conducted within traditional focus groups.

B) It provides a window into customers' unconscious actions and unexpressed needs and feelings.

C) It provides researchers with secondary data.

D) It is most popular in the service sector.

E) It is a research option when observation is not possible.

Answer: B Diff: 3 Type: MC Page Ref: 167 Skill: Concept Objective: 5-3 9 Copyright © 2017 Pearson Canada Inc.

35) Survey research, though used to obtain many kinds of information in a variety of situations, is the approach best suited for gathering ________ information.

A) interpersonal B) causal C) attitudinal D) descriptive E) exploratory Answer: D Diff: 2 Type: MC Page Ref: 168 Skill: Concept Objective: 5-3 36) Fredia Dyck has just discovered the major advantage of survey research. She reports to her supervisor that the advantage is its ________.

A) flexibility B) interactive design C) ease to complete D) understandability E) simplicity Answer: A Diff: 2 Type: MC Page Ref: 168 Skill: Concept Objective: 5-3 37) A poor method for conducting survey research is ________.

A) the Web B) the mail C) the telephone D) observation E) person-to-person interactions Answer: D Diff: 1 Type: MC Page Ref: 168 Skill: Concept Objective: 5-3 38) Experimental research is best suited for gathering ________ information.

A) exploratory B) causal C) attitudinal D) interactive E) descriptive Answer: B Diff: 2 Type: MC Page Ref: 168 Skill: Concept Objective: 5-3

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39) ABC Company has decided to use mail questionnaires to collect data. Management recognizes this method has the following advantage.

A) flexibility B) speed of data collection C) control of interviewer effects D) response rate E) control of subject Answer: C Diff: 3 Type: MC Page Ref: 168-169 Skill: Concept Objective: 5-3 40) Which of the following is one of the best advantages of conducting research using telephone interviews?

A) control of sample B) flexibility C) speed of data collection D) response rate E) cost Answer: D Diff: 2 Type: MC Page Ref: 168-169 Skill: Concept Objective: 5-3 41) Which of the following contact methods generally has poor flexibility?

A) telephone interviewing B) personal interviewing C) mail questionnaires D) online surveys E) online panels Answer: C Diff: 2 Type: MC Page Ref: 168-169 Skill: Concept Objective: 5-3 42) Which contact method for marketing research is flexible, allows for explanation of difficult questions, and lends itself to showing products and advertisements?

A) personal interviewing B) online interviewing C) phone interviewing D) ethnographic research E) observational research Answer: A Diff: 1 Type: MC Page Ref: 168-169 Skill: Concept Objective: 5-3 11 Copyright © 2017 Pearson Canada Inc.

43) Focus group interviewing has become one of the major marketing research tools for getting insight into consumer thoughts and feelings. However, if the sample size is small, a researcher would be most concerned about which of the following?

A) finding a representative sample B) generalizing from the results C) administering the questions D) orchestrating cooperation among participants E) finding enough secondary data to support the findings Answer: B Diff: 2 Type: MC Page Ref: 169 Skill: Concept Objective: 5-3 44) Which of the following is a disadvantage of online focus groups?

A) Participants must be in a central location.

B) The Internet format can restrict respondents' expressiveness.

C) Results take longer to tabulate and analyze.

D) The cost of online focus groups is greater than that of most other qualitative research methods.

E) The format of focus groups can be varied.

Answer: B Diff: 2 Type: MC Page Ref: 171-172 Skill: Concept Objective: 5-3 45) Which of the following has the highest rating for speed of data collection and compilation?

A) open-ended questionnaires B) personal interviews C) mail surveys D) online surveys E) ethnographic research Answer: D Diff: 2 Type: MC Page Ref: 170 Skill: Concept Objective: 5-3 46) Marketing researchers usually draw conclusions about large groups of consumers by studying a small ________ of the total consumer population.

A) group B) sample C) population D) target group E) audience Answer: B Diff: 1 Type: MC Page Ref: 174 Skill: Concept Objective: 5-3 12 Copyright © 2017 Pearson Canada Inc.

47) You generally need to ask three questions when developing a sampling plan. Which of the questions below is one of these three?

A) Who should be left out of the sample (sampling exclusion)?

B) How should we contact the sample (sampling approach)?

C) Why should respondents be selected (sampling justification)?

D) How should participants be chosen (sampling procedure)?

E) none of the above Answer: D Diff: 3 Type: MC Page Ref: 175 Skill: Concept Objective: 5-3 48) What is a major drawback of probability sampling?

A) It can be time consuming and costly.

B) Sampling error cannot be measured.

C) The most difficult population from which to obtain information is chosen.

D) Everyone has an equal chance of selection.

E) Marketers must rely on the judgment of the researcher in respondent selection.

Answer: A Diff: 2 Type: MC Page Ref: 175 Skill: Concept Objective: 5-3 49) What are the two common types of research instruments used to collect primary data?

A) surveys and samples B) questionnaires and mechanical devices C) focus groups and online databases D) online panels and experiments E) personal interviews and online focus groups Answer: B Diff: 2 Type: MC Page Ref: 176 Skill: Concept Objective: 5-3 50) The most common research instrument used is the ________.

A) mechanical device B) live interviewer C) questionnaire D) telephone interviewer E) moderator Answer: C Diff: 1 Type: MC Page Ref: 176 Skill: Concept Objective: 5-3

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51) Which of the following statements about neuromarketing is false?

A) Neuromarketing measures brain activity to learn about consumer responses and feelings.

B) Well-known firms now hire neuromarketers.

C) Neuromarketing can be used to measure consumer involvement with a brand.

D) Responses provided by the use of neuromarketing are difficult to interpret.

E) Neuromarketing is regularly used as a stand-alone approach to consumer behaviour.

Answer: E Diff: 3 Type: MC Page Ref: 176-177 Skill: Concept Objective: 5-3 52) Which of the following is good advice about creating research questionnaires?

A) Use simple, direct, and unbiased language.

B) Questions should not be arranged in a particular order.

C) Ask difficult questions in the beginning to "weed out" uninterested respondents.

D) Ask personal questions in the middle of the instrument.

E) Avoid personal questions that may make some respondents uncomfortable.

Answer: A Diff: 2 Type: MC Page Ref: 176 Skill: Concept Objective: 5-3 53) After a research instrument is selected, the next step in the marketing research process is ________.

A) selecting a sampling method B) interpreting the findings C) implementing the research plan D) collecting secondary data E) selecting a research approach Answer: C Diff: 2 Type: MC Page Ref: 177 Skill: Concept Objective: 5-3 54) AMF Research Group must guard against problems during the implementation phase of marketing research for its clients. Which of the following should AMF Research Group avoid doing at the implementation phase?

A) interacting with respondents B) providing incorrect answers C) allowing unexpected research outcomes D) interpreting the findings E) reporting the findings Answer: A Diff: 3 Type: MC Page Ref: 177 Skill: Concept Objective: 5-3 14 Copyright © 2017 Pearson Canada Inc.

55) Typically, customer information is buried deep in separate databases, plans, and records of many different company functions and departments. To overcome such problems, which of the following should you try?

A) customer satisfaction measurement B) more sophisticated software C) customer relationship management D) a marketing information system E) decreased marketing intelligence Answer: C Diff: 2 Type: MC Page Ref: 178 Skill: Concept Objective: 5-4 56) Which of the following is true about customer relationship management (CRM)?

A) It relies on information produced through primary research.

B) Its aim is to maximize profit margins.

C) Its aim is to increase the efficiency of each customer touchpoint.

D) Its aim is to maximize customer loyalty.

E) Most companies who first implemented CRM have greatly benefited from the results.

Answer: D Diff: 2 Type: MC Page Ref: 178 Skill: Concept Objective: 5-4 57) Which of the following most accurately identifies the purpose of a data warehouse?

A) to prioritize information B) to integrate information a company already has into a central, accessible location C) to interpret data D) to analyze data E) to identify and discard old data Answer: B Diff: 2 Type: MC Page Ref: 178 Skill: Concept Objective: 5-4 58) In CRM, findings about customers discovered through ________ techniques often lead to marketing opportunities.

A) data warehousing B) data mining C) customer strategy D) customer loyalty management E) value network Answer: B Diff: 2 Type: MC Page Ref: 178 Skill: Concept Objective: 5-4 15 Copyright © 2017 Pearson Canada Inc.

59) A successful CRM program can be expected to help a company achieve which one of the following?

A) providing higher levels of customer service B) developing a strategy for investigating customer relations C) creating general offers for a wide customer segment D) understanding the competition better E) understanding how to build advertisements Answer: A Diff: 2 Type: MC Page Ref: 178 Skill: Concept Objective: 5-4 60) Marketing information is only valuable when it is used to ________.

A) simplify management's job B) identify a target market C) please shareholders D) increase efficiencies in the supply chain E) gain customer insights relevant to making better marketing decisions Answer: E Diff: 2 Type: MC Page Ref: 180 Skill: Concept Objective: 5-4 61) What source of marketing information provides those within the company ready access to research information, stored reports, shared work documents, contact information for employees and other stakeholders, and more?

A) an internal CRM system B) an extranet C) the Internet D) marketing research E) marketing intelligence Answer: A Diff: 2 Type: MC Page Ref: 181 Skill: Concept Objective: 5-4 62) Companies allowing key customers and value-network members to access accounts, products, and other data, are using ________.

A) a company CRM system B) an intranet C) direct marketing D) marketing intelligence E) online research Answer: A Diff: 2 Type: MC Page Ref: 181 Skill: Concept Objective: 5-4 16 Copyright © 2017 Pearson Canada Inc.

63) Small organizations can effectively obtain and use (with minimal effort and cost) the following types of data, except ________.

A) experimental data B) observational data C) secondary data D) online data E) ethnographic data Answer: E Diff: 2 Type: MC Page Ref: 182 Skill: Concept Objective: 5-5 64) You have been asked to locate secondary data for your small organization's research needs.

Which of the following is a common source for this type of research?

A) third party research companies B) the Canadian Small Business Administration C) the Canadian Census Bureau D) online surveys E) Statistics Canada Answer: E Diff: 1 Type: MC Page Ref: 182 Skill: Concept Objective: 5-5 65) The availability of which of the following is most problematic in international marketing research?

A) primary data B) research specialists C) secondary data D) intelligence limitations E) consumers willing to answer surveys Answer: C Diff: 2 Type: MC Page Ref: 182 Skill: Concept Objective: 5-5

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66) One challenge with using secondary data gathered by international researchers is that the data may be ________.

A) difficult to compare B) obtained from too many domestic research services C) expensive to collect D) lacking credibility E) collected improperly Answer: A Diff: 2 Type: MC Page Ref: 183 Skill: Concept Objective: 5-5 67) What do many researchers encounter when conducting market research in foreign countries?

A) Some countries have limited access to databases to create samples.

B) Many countries have mail services.

C) Some countries have poor roads.

D) Many cultures over value marketing research.

E) Some countries do not speak English.

Answer: A Diff: 1 Type: MC Page Ref: 183 Skill: Concept Objective: 5-5 68) Cultural differences, especially those involving language, can add to research costs in foreign markets and can increase the ________.

A) foreign trade B) risks of error C) response rate D) need for a larger sample E) reliance on primary data Answer: B Diff: 2 Type: MC Page Ref: 183 Skill: Concept Objective: 5-5 69) According to your text, what are two current major public policy and ethical issues in marketing research?

A) child abuse and identifying sampling methods B) intrusions on consumer privacy and misuse of research findings C) misuse of research findings and locating valuable secondary data D) selling of personal information to other firms and online secondary data E) ethnography and the misinterpretation of it Answer: B Diff: 2 Type: MC Page Ref: 184 Skill: Concept Objective: 5-5 18 Copyright © 2017 Pearson Canada Inc.

70) Choose the statement that is a typical consumer concern about intrusion on consumer privacy.

A) Researchers ask too many questions.

B) Marketers use their personal information to manipulate our buying.

C) Marketers build huge databases full of personal information about customers.

D) Marketers make too many products and services available, creating unnecessary consumer wants.

E) Protecting personal information is impossible.

Answer: C Diff: 1 Type: MC Page Ref: 184 Skill: Concept Objective: 5-5 71) Behavioural targeting, the practice of ________, is being used by more and more companies.

A) tracking customers' activities and rewarding customer loyalty B) managing customer relationships C) mining and analyzing data from data warehouses D) tracking consumers' online movements and using this information to target ads to them E) observing and interacting with consumers in their natural environments Answer: D Diff: 3 Type: MC Page Ref: 172 Skill: Concept Objective: 5-3 72) Consumers are most likely to willingly provide research information when researchers provide which of the following?

A) coupons B) social network membership C) value for the exchange D) prizes E) rebates Answer: C Diff: 2 Type: MC Page Ref: 185 Skill: Concept Objective: 5-5 73) The best approach for researchers to take to protect consumer privacy includes which of the following?

A) Ask for as much information as possible.

B) Use information to maximize profit.

C) Avoid sharing information without the customer's permission.

D) Sell the information only when it is financially worthwhile.

E) Fully explain to the respondents how the information will be collected.

Answer: C Diff: 1 Type: MC Page Ref: 185 Skill: Concept Objective: 5-5 19 Copyright © 2017 Pearson Canada Inc.

74) Each company must accept ________ to protect customers' best interests and their own.

A) chief customer loyalty manager B) chief behavioural analyst C) responsibility for policing the conduct of its own marketing research D) ethics manager E) data warehouse manager Answer: C Diff: 2 Type: MC Page Ref: 185 Skill: Concept Objective: 5-5 75) To address concerns about the misuse of research study findings, several highly regarded marketing associations have developed ________.

A) customer relationship management guidelines B) behaviour targeting "Do Not Track" lists C) chief privacy officer job descriptions D) codes of research ethics E) bans against using "cookies" Answer: D Diff: 2 Type: MC Page Ref: 185 Skill: Concept Objective: 5-5 76) Diana Dion is currently researching electronic data sources from within her company to make marketing decisions. Diana is making use of ________ databases.

A) external B) current C) historical D) internal E) foreign Answer: D Diff: 1 Type: MC Page Ref: 160 Skill: Application Objective: 5-2

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77) Your marketing department is attempting to improve strategic decision making, track competitors' actions, and provide early warning of opportunities and threats. To achieve this goal, which of the following would be the best for your department to use?

A) internal databases B) external databases C) marketing intelligence D) the Internet E) company reports only Answer: C Diff: 2 Type: MC Page Ref: 161 Skill: Application Objective: 5-2 78) Patti Love is making a presentation to the owners of her company. She is trying to convince them to conduct some current marketing research. Which of the following would be excluded from her argument to conduct marketing research?

A) assessing market potential and market share B) understanding customer satisfaction and purchase behaviour C) measuring the effectiveness of pricing and accounting D) measuring the effectiveness of distribution and promotion activities E) understanding customer motivation Answer: C Diff: 3 Type: MC Page Ref: 163 Skill: Application Objective: 5-3 79) You are about to test the hypothesis that sales of your product will increase at a very similar rate at either a $5 drop in unit price or a $7 drop in unit price. You are involved in what type of research?

A) exploratory B) descriptive C) causal D) focus group E) ethnographic Answer: C Diff: 2 Type: MC Page Ref: 163 Skill: Application Objective: 5-3

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80) What type of research would be best suited for identifying which demographic groups prefer diet soft drinks and why they have this preference?

A) observational research B) focus group research C) ethnographic research D) experimental research E) descriptive research Answer: E Diff: 2 Type: MC Page Ref: 163 Skill: Application Objective: 5-3 81) You want to observe how often consumers listen to music throughout their day and what different audio devices they use. You are also interested in how consumers store and access their own music collections. You should conduct ________ research.

A) causal B) experimental C) secondary D) survey E) exploratory Answer: E Diff: 2 Type: MC Page Ref: 163 Skill: Application Objective: 5-3 82) Nathan Eguakun owns a regional chain of drug stores. Before expanding nationwide, Nathan is conducting marketing research to determine the best options for opening new stores. He plans to start by collecting secondary data. Which of the following is a source of primary data that Nathan might use?

A) Yankelovich's Monitor B) commercial online databases C) online questionnaires D) web search engines E) local chambers of commerce Answer: C Diff: 2 Type: MC Page Ref: 170-171 Skill: Application Objective: 5-3

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83) Walmart sends a trained observer to watch and interact with customers as they shop in a Walmart store. This is an example of ________.

A) secondary research B) survey research C) ethnographic research D) experimental research E) descriptive research Answer: C Diff: 3 Type: MC Page Ref: 167 Skill: Application Objective: 5-3 84) Wendy's came out with a new hamburger and released it in two different cities with two different price points. Marketers at Wendy's then analyzed the different levels of purchase made at the two different price points, planning on using the information to set a nationwide price for the new offering. This is an example of ________.

A) observational research B) survey research C) ethnographic research D) experimental research E) descriptive research Answer: D Diff: 2 Type: MC Page Ref: 168 Skill: Application Objective: 5-3 85) Maryann Reimer is conducting research to determine consumers' personal grooming habits.

Because of the personal nature of the survey questions about this topic, Maryann wants to select the contact method that is most likely to encourage respondents to answer honestly. Which contact method should Maryann select?

A) mail questionnaires B) telephone interviews C) individual interviews D) focus group interviews E) online panels Answer: A Diff: 2 Type: MC Page Ref: 168 Skill: Application Objective: 5-3

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86) Tasoula Jeannopoulos has a limited budget for the market research she needs to conduct; however, the sample size for her research is quite large. Which of the following methods of contact would provide Tasoula with the most cost-effective way to reach a large sample of potential customers?

A) telephone surveys B) personal interviews C) Internet surveys D) mail surveys E) focus group interviews Answer: C Diff: 2 Type: MC Page Ref: 170-171 Skill: Application Objective: 5-3 87) You want to find out whether Canadians between 18 and 40 years of age tend to vote Liberal and whether Canadians between 41 and 70 tend to vote Conservative. You will most likely use a ________ to collect your data.

A) simple random sample B) mechanical device C) stratified random sample D) cluster sample E) convenience sample Answer: C Diff: 3 Type: MC Page Ref: 175 Skill: Application Objective: 5-3 88) You have decided to use only open-end questions on your survey. Which of the following questions would be found on your survey?

A) Do you like chocolate?

B) What is your gender?

C) Do you work full- or part-time?

D) What do you like about your school?

E) In what month do you plant your garden?

Answer: D Diff: 2 Type: MC Page Ref: 176 Skill: Application Objective: 5-3

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89) Loft Industries sells roof trusses to contractors and builders and would like to conduct research to determine how customers assess customer service. Which of the following research instruments would be best for this firm?

A) people meters B) checkout scanners C) questionnaires D) eye cameras E) MRI scans Answer: C Diff: 2 Type: MC Page Ref: 175 Skill: Application Objective: 5-3 90) Michelle Phaneuf is a customer service agent for a national car rental business. She has access to the company's intranet, which provides performance reports, shared work documents, contact information, and detailed information about customers. Which of the following is this access most likely to enable Michelle to do during interactions with customers?

A) analyze primary data B) use data mining techniques C) share information with value-network members D) reward customer loyalty with an upgrade or discount E) evaluate marketing intelligence Answer: D Diff: 2 Type: MC Page Ref: 181 Skill: Application Objective: 5-4 91) As a small business consultant, you recommend to your clients that they use no-cost methods of observation to gather market research. Which of the following are you most likely to recommend your clients do?

A) informally interview existing and potential customers and ask them what they think B) monitor competitors' media C) expansively evaluate how many and what kind of customers the competition has D) hire additional staff to observe extensively E) socialize with suppliers Answer: A Diff: 1 Type: MC Page Ref: 182 Skill: Application Objective: 5-5

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92) Juanita Petino operates a dress shop in a suburban mall. Her research budget is very small, so she uses low-cost or no-cost methods to gather research data. One method that works very well for her is changing the themes in her local newspaper and radio advertising and watching the result. Juanita is using ________ to gather data for marketing decisions.

A) informal surveys B) observation C) guess work D) logic-directed research E) secondary sources Answer: B Diff: 2 Type: MC Page Ref: 166,182 Skill: Application Objective: 5-5 93) Which of the following is irrelevant research for a small business manager deciding where to relocate within the city?

A) traffic-flow patterns in specific areas B) informal surveys of customers C) past sales data D) competitors' advertisements E) options for repackaging the company's products Answer: E Diff: 1 Type: MC Page Ref: 182 Skill: Application Objective: 5-5 94) Maria Hooper is conducting marketing research for a company that is investigating the possibility of entering multiple international markets. As Maria plans her research in 30 different countries, upon which of the following is she least likely to rely?

A) free secondary data B) translators C) primary data collected for the purpose of her research D) the same process as domestic researchers E) personal interviews Answer: A Diff: 2 Type: MC Page Ref: 182-183 Skill: Application Objective: 5-5

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95) Malaya Ramirez is organizing marketing research in Central American countries for a large Canadian corporation that is interested in expanding its market. The survey Malaya is using was written in English and then translated into Spanish for use by Spanish-speaking respondents.

Which of the following is it most important for Malaya to do before administering this questionnaire to a sample of the market?

A) make sure that the survey includes both open-end and closed-end questions B) decide whether to focus on primary or secondary data C) determine which type of research instrument to use D) have the questionnaire translated back into English to check for accuracy E) determine whether to focus on descriptive or causal objectives Answer: D Diff: 2 Type: MC Page Ref: 183 Skill: Application Objective: 5-5 96) The ability to reach respondents is a concern in some countries.

Answer: TRUE Diff: 2 Type: TF Page Ref: 183 Skill: Concept Objective: 5-5 97) Most marketers today believe they still lack a sufficient quantity of research data to make high-quality decisions.

Answer: FALSE Diff: 1 Type: TF Page Ref: 158 Skill: Concept Objective: 5-1 98) The real value of marketing research and information lies not in quantity but in the customer insights provided.

Answer: TRUE Diff: 1 Type: TF Page Ref: 158 Skill: Concept Objective: 5-1 99) Customer needs and buying motives are typically obvious to marketers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 158 Skill: Concept Objective: 5-1 100) An effective MIS assesses information needs, develops needed information, and distributes the information to help managers use it in decision making.

Answer: TRUE Diff: 2 Type: TF Page Ref: 159 Skill: Concept Objective: 5-2 27 Copyright © 2017 Pearson Canada Inc.

101) Too much marketing information can be as harmful as too little.

Answer: TRUE Diff: 1 Type: TF Page Ref: 159 Skill: Concept Objective: 5-2 102) When you collect information from your company's sales transactions, costs, and cash flows, as well as shipments and inventories, you are developing an internal database.

Answer: TRUE Diff: 2 Type: TF Page Ref: 160 Skill: Concept Objective: 5-2 103) You have just extracted sales and cost data used by the accounting department for preparing financial statements. Most likely, this information is complete and in useable form to build an internal marketing database.

Answer: FALSE Diff: 3 Type: TF Page Ref: 161 Skill: Concept Objective: 5-2 104) Data age quickly, so keeping the database current requires dedicated resources.

Answer: TRUE Diff: 1 Type: TF Page Ref: 161 Skill: Concept Objective: 5-2 105) Major suppliers and resellers are important sources of intelligence information for marketing decision making.

Answer: TRUE Diff: 2 Type: TF Page Ref: 162 Skill: Concept Objective: 5-2 106) You work in a bank and your manager asks you to open an account with a competing banking institution so that you can assess why consumers prefer the services of that bank over yours. This is an illegal practice.

Answer: FALSE Diff: 3 Type: TF Page Ref: 162 Skill: Application Objective: 5-2

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107) Marketing intelligence techniques range from observing consumers first-hand to quizzing the company's own employees, benchmarking competitors' products, researching on the Internet, and monitoring Internet buzz.

Answer: TRUE Diff: 2 Type: TF Page Ref: 162 Skill: Concept Objective: 5-2 108) Your firm faces determined marketing intelligence efforts by competitors. Managers are likely to instruct employees on how to take steps to protect information.

Answer: TRUE Diff: 1 Type: TF Page Ref: 162 Skill: Concept Objective: 5-2 109) Good marketing intelligence cannot help marketers gain insights into how consumers talk about and connect with their brands. These insights can only be gleaned through exploratory research.

Answer: FALSE Diff: 2 Type: TF Page Ref: 163 Skill: Application Objective: 5-3 110) Marketing research is the systematic design, collection, analysis, and reporting of data directly relevant to a specific marketing situation facing an organization.

Answer: TRUE Diff: 2 Type: TF Page Ref: 163 Skill: Concept Objective: 5-3 111) Once the research problems and objectives have been defined, researchers must first determine the exact information needed and then present that information to management.

Answer: FALSE Diff: 3 Type: TF Page Ref: 164 Skill: Concept Objective: 5-3 112) Marketing researchers can conduct their own searches of secondary data sources by using commercial online databases.

Answer: TRUE Diff: 1 Type: TF Page Ref: 165 Skill: Concept Objective: 5-3

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113) Because secondary data provide good starting points and often help to define problems and research objectives, most companies do not also need to collect primary data.

Answer: FALSE Diff: 2 Type: TF Page Ref: 166 Skill: Concept Objective: 5-3 114) Videoconferencing and Internet technology have changed how focus group interviews can be observed.

Answer: TRUE Diff: 1 Type: TF Page Ref: 169 Skill: Concept Objective: 5-3 115) Focus groups use no interviewer to bias the answers, may produce more honest answers, and can be used to collect large amounts of data at a low cost per respondent.

Answer: FALSE Diff: 2 Type: TF Page Ref: 169 Skill: Concept Objective: 5-3 116) A key advantage of conducting research using phone interviews is low cost.

Answer: FALSE Diff: 2 Type: TF Page Ref: 169 Skill: Concept Objective: 5-3 117) The most important issue facing online researchers is the lack of a broad cross section of consumers who have access to the Internet.

Answer: FALSE Diff: 2 Type: TF Page Ref: 170 Skill: Concept Objective: 5-3 118) Ideally, a sample should be representative so that the researcher can make accurate estimates of the thoughts and behaviours of the larger population.

Answer: TRUE Diff: 1 Type: TF Page Ref: 174 Skill: Concept Objective: 5-3 119) Sampling errors can be measured in nonprobability samples.

Answer: FALSE Diff: 3 Type: TF Page Ref: 175 Skill: Concept Objective: 5-3 30 Copyright © 2017 Pearson Canada Inc.

120) ABC Interior Designs wants to collect research data through mechanical instruments. The three typical methods are video cameras, checkout scanners, and Internet surveys.

Answer: FALSE Diff: 3 Type: TF Page Ref: 176 Skill: Concept Objective: 5-3 121) Questionnaires are the most common research instrument.

Answer: TRUE Diff: 1 Type: TF Page Ref: 175 Skill: Concept Objective: 5-3 122) Open-ended survey questions are particularly useful in exploratory research.

Answer: TRUE Diff: 2 Type: TF Page Ref: 175 Skill: Concept Objective: 5-3 123) Neuromarketing techniques provide easy-to-interpret data that allow researchers to analyze consumer involvement with products.

Answer: FALSE Diff: 2 Type: TF Page Ref: 176 Skill: Concept Objective: 5-3 124) Interpretation of market research data should be the responsibility of the researchers, not the marketing managers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 177 Skill: Concept Objective: 5-3 125) You have just identified the "touch points" of the 400 best customers in your database. At this point, you want to manage detailed information about each of them to maximize customer loyalty. You should use customer relationship management (CRM).

Answer: TRUE Diff: 2 Type: TF Page Ref: 178 Skill: Application Objective: 5-4

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126) Discuss the makeup and functions of a marketing information system (MIS).

Answer: A typical MIS consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

First, it interacts with information users to assess information needs. Next, it develops needed information from internal company databases, marketing intelligence activities, and marketing research. Finally, it helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships.

Diff: 2 Type: ES Page Ref: 159 Skill: Application Objective: 5-2 127) Marketers can obtain needed information from internal data, marketing intelligence, and marketing research. Explain some common sources for each of these.

Answer: Internal databases are built upon records of consumer and market information data sources within the company network. For example, the accounting department provides records of sales, costs, and cash flows; operations reports on production-related issues; sales and marketing provide data on resellers, competitors, buyer behaviour, and the industry; and marketing provides information on customer transactions, demographics, and buying behaviour.

Internal data are cheaper sources that are easy to access. Marketing intelligence is a collection and analysis of publicly available data about consumers, competitors, and developments in the industry. It can come from quizzing employees, studying competitors' ads and annual reports, analyzing competitors' products, monitoring Internet buzz, and researching the Internet. In addition to internal data and marketing intelligence, marketers often need formal studies of specific situations. To address this need, they conduct marketing research to collect, analyze, and report secondary and primary data to better form decisions.

Diff: 2 Type: ES Page Ref: 160-162 Skill: Application Objective: 5-2 128) Describe the basic marketing research process.

Answer: The marketing research process involves four steps: defining the problem and research objectives, developing the plan, implementing the plan, and interpreting and reporting the findings. Managers must know what is wrong in defining the problem. Research objectives may be reached through exploratory, descriptive, or causal research. Next, the information needed is identified and a plan for gathering and presenting is made. Then, secondary and primary data must be collected to compile and analyze. Finally, the important information must be presented to management for decision making.

Diff: 2 Type: ES Page Ref: 163 Skill: Application Objective: 5-3

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129) Briefly compare the three different types of research approaches for gathering primary data.

Answer: The three research approaches for gathering primary data are observations, surveys, and experiments. Observational research involves watching relevant people, actions, and situations, usually to glean customer insights that can't be obtained through direct questions and answers. Observations can reveal information that people are unwilling or unable to provide in surveys or experiments. Survey research is very flexible, as it can be used to obtain many different kinds of information in many different situations. Mail, telephone, and online surveys have relatively low costs in comparison to observational research. Surveys are also better suited than observations for identifying people's attitudes and feelings; surveys are best suited for gathering descriptive information. Experimental research is best suited for gathering causal information; this type of research is most appropriate for determining cause-and-effect relationships.

Diff: 2 Type: ES Page Ref: 166-177 Skill: Application Objective: 5-3 130) Provide the advantages/benefits of each of the contact methods.

Answer: Mail questionnaires can be used to collect large amounts of 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. Also, no interviewer is involved to bias the answers. Telephone interviewing is one of the best methods for gathering information quickly and provides great flexibility. Interviewers can explain difficult questions, skip questions, or probe on other questions. Rates of response tend to be higher than mail methods.

Personal and group interviews are flexible and allow interviewers to guide respondents and explore issues as they evolve. Visual aids can be used, products can be demonstrated, and reactions and behaviours can be observed. Computer-assisted interviewing aids in eliminating interviewer bias. Online methods allow the interviewee to be more honest, the costs are greatly reduced, the response rate is higher, and reports come back faster.

Diff: 3 Type: ES Page Ref: 166-177 Skill: Application Objective: 5-3 131) What would a researcher need to decide when designing a sample?

Answer: A sample is a segment of a population selected for marketing research to represent the population as a whole. Ideally the sample represents the population so that the researcher can make accurate estimates of the larger population based on results of the sample. First, a researcher must determine who is to be surveyed. Next, a researcher must determine the sample size by deciding how many people need to be surveyed. Third, the sampling procedure should be chosen to clarify how the respondents should be chosen.

Diff: 2 Type: ES Page Ref: 174-175 Skill: Application Objective: 5-3

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132) Compare and contrast closed-end questions and open-end questions for gathering data.

Answer: Closed-end questions, which include all possible answers, make it easier for respondents to choose among relevant answers. They are also easier for the researcher to interpret and tabulate. Open-end questions allow respondents to answer in their own words and as such do not limit their choices. Open-end questions are more difficult to interpret and tabulate, but they are particularly useful in exploratory research.

Diff: 2 Type: ES Page Ref: 175 -176 Skill: Application Objective: 5-3 133) How can a company overcome the problem of gathering internal data for research purposes when the data is usually scattered widely across the organization?

Answer: Many companies are using customer relationship management (CRM). CRM offers the benefits of managing detailed information about individual customers and carefully managing customer "touch points" in order to maximize customer loyalty. By using sophisticated software and analytical tools, CRM can integrate information about customers from all sources and analyze that data in depth. The results can be applied to build stronger customer relationships.

CRM integrates everything that a company's sales, service, and marketing teams know about individual customers to provide a 360-degree view of the customer relationship. CRM involves creating a data warehouse that can be mined for useful insights about customers.

Diff: 3 Type: ES Page Ref: 178 Skill: Application Objective: 5-4 134) Discuss several ways in which smaller organizations can use marketing research techniques at little or no expense.

Answer: Small organizations can use the same marketing research process used by larger firms, as well as many of the same methods, such as secondary data collection, observation, surveys, and experiments. There are many sources of free secondary data on the web, and small firms also have access to special help collecting data from chambers of commerce, government agencies, and other organizations. Managers of small organizations can use observation to collect data. For example, they can monitor competitors' advertisements, evaluate their own customer mix, and regularly visit their competition's places of business. Informal surveys with small convenience samples are another tool that smaller organizations can use. Finally, managers of smaller organizations can conduct simple experiments by altering one aspect of a marketing strategy and analyzing the results. As with larger firms, smaller organizations must conduct research systematically for the results to be valid and useful.

Diff: 2 Type: ES Page Ref: 181-182 Skill: Application Objective: 5-5

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135) Explain the common problems that international marketing researchers encounter.

Answer: International researchers deal with less homogeneous markets in and among countries.

The markets often vary greatly in their levels of economic development, their cultures and customers, and their buying patterns. Good secondary data are difficult to find in many foreign markets. More time and expense is involved in gathering primary data. In addition, choosing representative samples and finding methods of contacting participants can be a formidable task.

Cultural and language differences can present obstacles in interpreting the data and drawing realistic conclusions. Consumers' attitudes in other countries may hinder the process of collection.

Diff: 3 Type: ES Page Ref: 182-183 Skill: Application Objective: 5-5 136) Briefly explain the following statement: "Too much information can be as harmful as too little."

Answer: The real value of marketing information lies in how the information is used to gain customer insights. Managers must get the right information, in the right form, at the right time in order to understand the customer to reach their objective of creating customer value and stronger customer relationships. Too much information may prohibit marketers from clearly applying the data/information to their objectives, while excess information may lead marketers to lose sight of their objectives.

Diff: 2 Type: ES Page Ref: 158 Skill: Application Objective: 5-1 137) You have decided to run for a local political office. You want to hand-deliver campaign materials in person to the homes of voters. Explain how marketing intelligence plays a role in this scenario.

Answer: Marketing intelligence involves the systematic collection of publicly available information. You must have a system for accessing available information in order to determine where the voters live. Merely knocking on every door would be inefficient. You need a list of registered voters and their addresses from which you can plan your visits.

Diff: 3 Type: ES Page Ref: 161 Skill: Application Objective: 5-2 138) When do marketers need marketing research?

Answer: Marketing research becomes important when marketing intelligence cannot provide the detailed information needed for a specific situation.

Diff: 1 Type: ES Page Ref: 162 Skill: Application Objective: 5-3

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139) Explain why exploratory research, descriptive research, or causal research would be most useful for determining whether shoppers on the East Coast are more sensitive to a price increase for laundry soap than shoppers on the West Coast are.

Answer: Causal research would be most important because it investigates cause-and-effect relationships; causal research would allow the researcher to test a hypothesis about price sensitivity and compare the differences in the two geographic regions.

Diff: 3 Type: ES Page Ref: 163 Skill: Application Objective: 5-3 140) Why is it important for the statement of the problem and the research objectives to guide the entire research process?

Answer: The specific nature of the problem and the research objectives determine which type of research, contact methods, sampling plans, and instruments should be used. Without a focus of a specific problem and objectives, the marketing research process would not result in relevant data and could be unnecessarily expensive.

Diff: 2 Type: ES Page Ref: 163 Skill: Application Objective: 5-3 141) Sales have dropped at XYZ Corporation. Give two specific pieces of information the company's marketing researcher might need in order to reverse this situation.

Answer: First the researcher might wish to do exploratory research that will help define the problem. In this case, the researcher might want to explore changes in the competitive environment such as whether the number of competitors has increased and/or whether current competitors have changed their marketing strategies. The researcher might also want to explore economic factors.

Diff: 3 Type: ES Page Ref: 163 Skill: Application Objective: 5-3 142) Why is it important for a research plan to be presented as a written proposal?

Answer: A research plan typically involves many components such as objectives, information to be obtained, how results will be used, and costs. A written proposal decreases the likelihood of confusion over any one of these components. This is particularly important when several people are involved in a large or complex research project.

Diff: 2 Type: ES Page Ref: 164 Skill: Application Objective: 5-3

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143) You want to determine whether no-smoking policies have affected employee morale in Canada in the past two decades. Are any secondary data likely available? Why? Answer: Many companies have implemented no-smoking policies in the past 20 years. Thus, there are probably several studies conducted from which the researcher could extract information.

Diff: 3 Type: ES Page Ref: 165-166 Skill: Application Objective: 5-3 144) You want to determine whether no-smoking policies have affected morale among young female workers in companies that employ fewer than 50 workers in northern Ontario. Are any secondary data likely available? Why? Answer: Because the data sought are so specific, there will probably be very little data available, if any, that specifically answer the question.

Diff: 3 Type: ES Page Ref: 165-166 Skill: Application Objective: 5-3 145) Identify ways that a researcher should evaluate secondary data.

Answer: Secondary data is information that already exists, having been collected for another purpose. When using secondary data, the researcher should evaluate whether the data are relevant (fits the research project's needs), current (up to date enough to be relevant), accurate (reliably collected and reported), and impartial (objectively collected and reported).

Diff: 1 Type: ES Page Ref: 166 Skill: Application Objective: 5-3 146) Give an example of primary data that could effectively be collected via observation.

Answer: Observational research is gathering primary data by observing relevant people, actions, and situations. For example, a retailer might observe neighbourhood conditions as part of the research into choosing a new location.

Diff: 2 Type: ES Page Ref: 166 Skill: Application Objective: 5-3 147) You are trying to determine whether retired people drink more coffee at your restaurant during lunch than they do during dinner. Is observation research effective in this scenario?

Answer: On its own, observation research is ineffective in this situation. For one thing, it is difficult to determine, just by looking, whether people are retired.

Diff: 2 Type: ES Page Ref: 166 Skill: Application Objective: 5-3

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148) How might survey research be a better approach than observation research when attempting to assess customer satisfaction?

Answer: Survey research is gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behaviour. Survey research is more effective than observation in measuring customer satisfaction because observations of smiling customers or armloads of merchandise, for example, do not necessarily indicate customer satisfaction Carefully crafted questions should be used to seek knowledge about what satisfies customers.

Diff: 2 Type: ES Page Ref: 168 Skill: Application Objective: 5-3 149) A marketer of frozen dinners has decided to collect consumer feedback via a focus group interview. How might the marketer know for certain whether peas or green beans should be included with the turkey entrée?

Answer: A focus group interview is personal interviewing involving 6 to 10 people who gather with a trained interviewer to discuss products, services or companies. A focus group might be given a prepared meal with both vegetable options. Afterward, the marketer can obtain fresh feedback from the respondents or through observation. The marketer could assess respondents' reactions to focused questions as well as observe facial expressions while they eat provided meals.

Diff: 2 Type: ES Page Ref: 169 Skill: Application Objective: 5-3 150) A researcher is collecting data in an airport. What type of sample is most appropriate?

Answer: People in an airport are often in a hurry; not everyone will want to participate in providing data. Therefore, the researcher may be satisfied with collecting data from whoever is willing to provide it. In this case, a nonprobability, convenience sample is appropriate.

Diff: 1 Type: ES Page Ref: 175 Skill: Application Objective: 5-3 151) How would you design the sample to determine whether retired people drink more coffee at McDonald's during lunch than they do during dinner? Explain.

Answer: The sample plan should be representative of retired people. A simple random probability sample can be drawn from a list of retired names.

Diff: 2 Type: ES Page Ref: 174-175 Skill: Application Objective: 5-3 152) Give an example of a closed-end question.

Answer: Closed-end questions force respondents to answer from a limited number of options.

Examples include: What is your gender? Do you prefer McDonald's to Burger King? What year were you born?

Diff: 1 Type: ES Page Ref: 175 Skill: Application Objective: 5-3 38 Copyright © 2017 Pearson Canada Inc.

153) Explain why it's important for both the researcher and the marketing manager to interpret the findings of market research.

Answer: Both a marketing manager and a researcher bring important points of view to the task.

A marketing manager is an expert in the problem and the decisions that must be made, but also may be biased about the result. A researcher is an expert in statistics. Because findings can be interpreted in many ways, discussions between a researcher and marketing manager will lead to the most appropriate interpretation for the given situation.

Diff: 2 Type: ES Page Ref: 177 Skill: Application Objective: 5-3 154) Why is it difficult to obtain relevant and reliable secondary data when conducting international marketing research?

Answer: Unlike Canada, many countries have no or almost no research services. Also, most international research services operate in only a handful of countries. Even when secondary data is available, it must be obtained from different sources making the data difficult to combine or compare.

Diff: 2 Type: ES Page Ref: 182-183 Skill: Application Objective: 5-5 155) Why has consumer resentment toward marketing research been growing?

Answer: More individuals are wary of invasion of privacy and want to protect personal information. Many also resent the intrusion of marketing research and dislike surveys that are too long or too personal. They also fear that hey are being tracked, especially online, so that companies can manipulate their buying.

Diff: 2 Type: ES Page Ref: 184 Skill: Application Objective: 5-5

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Jason West, owner of A-1 Cleaning, began his enterprise in 2001. Jason's primary focus had been on office cleaning for large corporations. But in recent months Jason has seen a decline in demand for office cleaning. Surprisingly, the competitive environment appears relatively stable with no new competitors. However, Jason understands that office cleaning is a high-frequency service that is usually performed daily; therefore, competitors must be doing something to attract his customers. Building a competitive advantage seems to be the only option to offset competition. But as Jason pondered his dilemma, he realized that he needed to better understand how customers assess service quality and what they are looking for in a superior cleaning service before he could build his competitive advantage.

Jason developed a research plan. First, he gathered competitor information—primarily through pamphlets, but also from a few phone calls—to find out exactly what competitors offer in their cleaning packages. In addition, Jason obtained from the area Chamber of Commerce an updated list of local corporations to which he would send a short survey.

Though the list of corporations contained 141 local company names, Jason chose to survey 75 of them. To better understand customer service expectations in both small and large corporations, Jason divided his surveys into two categories. The survey questions were designed to extract specific data from respondents with regard to service quality expectations in correlation to service frequency and price.

Jason awaited the results. Though his primary focus had been on large corporations, he was flexible and would aim his efforts differently if needed.

156) What type(s) of marketing intelligence, if any, did Jason West use in this scenario?

Answer: Jason obtained competitive intelligence information through competitors' pamphlets and through a few phone calls made directly to the competitors to find out what competitors are offering.

Diff: 2 Type: ES Page Ref: 161 Skill: Application Objective: 5-2 157) How did Jason know he needed marketing research?

Answer: Jason knew that building a competitive advantage was the only option to offset competition. He realized that he needed to better understand how customers assess service quality and what they are looking for in a superior cleaning service before he could build his competitive advantage. Jason felt that he did not fully know what makes customers happy; therefore, he wanted to become better aware of what customers look for in a cleaning service and how those customers measure service quality. In addition, he wanted to find out whether he should continue to focus only on large corporations or, perhaps, change his focus to include smaller firms.

Diff: 3 Type: ES Page Ref: 163 Skill: Application Objective: 5-3

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158) In what way(s) did Jason's project require descriptive data?

Answer: Descriptive research describes things. The primary descriptive data being sought in Jason's project included the customers' attitudes toward service quality and their expectations from cleaning service providers.

Diff: 2 Type: ES Page Ref: 163 Skill: Application Objective: 5-3 159) In what way(s) did Jason's project require causal research?

Answer: Causal research test hypothesis about cause-and-effect relationships. To better understand customer service expectations in both small and large corporations, Jason divided his surveys into two categories. The survey questions were designed to extract specific data from respondents with regard to service quality expectations in correlation to service frequency and price. Jason used his survey to determine how price and service frequency related to service quality expectations.

Diff: 3 Type: ES Page Ref: 163 Skill: Application Objective: 5-3 160) What type(s) of secondary data did Jason collect?

Answer: The list of local companies provided by the area Chamber of Commerce constitutes a major source of secondary data in this scenario.

Diff: 1 Type: ES Page Ref: 165 Skill: Application Objective: 5-3 161) Could Jason have collected observational research effectively? Explain.

Answer: Collecting observational data within a business environment may have been difficult from the start, particularly since Jason was interested in attitudes and motives. Individuals' perceptions of service quality and customer satisfaction could be more effectively measured through survey or experimental research.

Diff: 2 Type: ES Page Ref: 166-167 Skill: Application Objective: 5-3 162) What types of contact methods did Jason utilize in this scenario?

Answer: He utilized the telephone to obtain competitor information early in the scenario. Then Jason used, we assume, mail to survey local companies in order to get the respondents' feelings about service quality.

Diff: 1 Type: ES Page Ref: 168-169 Skill: Application Objective: 5-3

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163) Why might Jason have purposefully avoided data collected via online research?

Answer: Jason wanted to control who was included in the sample; online data collection does not always guarantee that. Online surveys might work well in reaching hard-to-reach respondents; but, in this scenario, Jason knew exactly whom he had to contact and where he could contact them. Because Jason was concerned with a local market, he may have feared other samples on the internet would not be relevant.

Diff: 3 Type: ES Page Ref: 170-171 Skill: Application Objective: 5-3 164) Of the 141 companies on the list, Jason chose to survey only 75 of them. How might he have chosen this sample?

Answer: Though the case does not specify, Jason may have selected the 75 companies based on a simple random sample. He would randomly select the 75 names from the list of 141 local companies he obtained from the Chamber of Commerce.

Diff: 3 Type: ES Page Ref: 175 Skill: Application Objective: 5-3 165) How might Jason assure ethical conduct toward his respondents?

Answer: Jason might have included a disclosure statement on his survey, indicating that all information would be kept confidential, that the project was not a sales gimmick, that he was not building a database to be provided to any outside party, and that respondents could call him directly if any further questions arose. Furthermore, the survey would only include questions for information Jason needed.

Diff: 2 Type: ES Page Ref: 185 Skill: Application Objective: 5-5

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 6 Understanding Consumer and Business Buyer Behaviour 1) ________ is never simple, yet understanding it is essential to marketers.

A) Brand personality B) Consumption pioneering C) Early adoption D) Consumer buying behaviour E) Understanding the difference between primary and secondary data Answer: D Diff: 1 Type: MC Page Ref: 198 Skill: Concept Objective: 6-1 2) The consumer market is made up of which of the following?

A) individuals and households who buy goods or services for personal consumption B) suppliers who provide offerings to retailers C) businesses that purchase goods and services D) retailers who resell offerings to customers E) marketers who focus on satisfying consumer needs Answer: A Diff: 2 Type: MC Page Ref: 197 Skill: Concept Objective: 6-1 3) Answers to these questions lie deep in the consumer's mind and are not so easy to answer.

A) what B) when C) why D) how E) where Answer: C Diff: 2 Type: MC Page Ref: 198 Skill: Concept Objective: 6-1 4) Most companies research consumer buying decisions in great detail to understand ________.

A) consumer needs B) what, where, how, when, why consumers buy, as well as how much they typically pay C) consumer wants D) consumer characteristics E) consumer attitudes Answer: B Diff: 2 Type: MC Page Ref: 198 Skill: Concept Objective: 6-1 1 Copyright © 2017 Pearson Canada Inc.

5) Which of the following is an example of a major force affecting consumer behaviour?

A) cultural B) geographical C) philosophical D) channels E) physiological Answer: A Diff: 2 Type: MC Page Ref: 199 Skill: Concept Objective: 6-1 6) The study of consumer behaviour begins and ends with ________.

A) culture B) the individual C) beliefs D) lifestyles E) social classes Answer: B Diff: 2 Type: MC Page Ref: 198 Skill: Concept Objective: 6-1 7) ________ is(are) the most basic cause(s) of a person's wants and behaviour.

A) Culture B) Brand personality C) Cognitive dissonance D) Social factors E) Selective perception Answer: A Diff: 2 Type: MC Page Ref: 199 Skill: Concept Objective: 6-1 8) It is most accurate to say that marketers are always trying to spot ________ in order to discover new products that might be wanted.

A) lifestyles B) cultural shifts C) groups D) dissonance E) attitudes Answer: B Diff: 2 Type: MC Page Ref: 199 Skill: Concept Objective: 6-1

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9) Each culture contains smaller ________, or groups of people with shared value systems based on common life experiences and situations.

A) alternative evaluations B) cognitive dissonances C) subcultures D) social classes E) occupations Answer: C Diff: 1 Type: MC Page Ref: 199 Skill: Concept Objective: 6-1 10) Since Canada is regional, which of the following do marketers consider as a major Canadian subculture?

A) Hispanic Canadians B) Carib-African Canadians C) geographically grouped consumers D) Irish Canadians E) Inuit Answer: C Diff: 2 Type: MC Page Ref: 200 Skill: Concept Objective: 6-1 11) Increasingly this group of consumers are making their voices heard in the political arena and the marketplace.

A) Aboriginal Canadians B) African Canadians C) French Canadians D) mature Canadians E) youth Answer: A Diff: 3 Type: MC Page Ref: 200 Skill: Concept Objective: 6-2 12) According to Statistics Canada, by the year 2017 roughly ________ of the population will be a member of a visible minority.

A) 10% B) 20% C) 30% D) 40% E) 50% Answer: B Diff: 3 Type: MC Page Ref: 200 Skill: Concept Objective: 6-1 3 Copyright © 2017 Pearson Canada Inc.

13) People with a(n) ________ background are still the largest group among visible minorities in Canada.

A) Hispanic B) African C) Aboriginal D) Asian E) Northern European Answer: D Diff: 3 Type: MC Page Ref: 200 Skill: Concept Objective: 6-1 14) The third largest visible minority identified themselves as ________ in the 2006 Canada census.

A) Asian B) Hispanic C) Black D) Gen Xers E) East Indian Answer: C Diff: 3 Type: MC Page Ref: 201 Skill: Concept Objective: 6-1 15) Personicx life-stage segmentation is useful for ________.

A) creating targeted, personalized campaigns B) describing various age groups C) understanding various social classes D) identifying various social groups E) describing a person's economic situation Answer: A Diff: 2 Type: MC Page Ref: 207 Skill: Concept Objective: 6-1 16) ________ are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviours.

A) Social classes B) Cultures C) Reference groups D) Attitudes E) Lifestyles Answer: A Diff: 1 Type: MC Page Ref: 201 Skill: Concept Objective: 6-1 4 Copyright © 2017 Pearson Canada Inc.

17) What is one factor used to measure social class?

A) job satisfaction B) accent C) income D) number of children in the family E) postal code Answer: C Diff: 2 Type: MC Page Ref: 201 Skill: Concept Objective: 6-1 18) According to the authors, which of the following statements is true regarding social class in Canada?

A) Social class is more important in Canada than other countries such as the United States.

B) Lines between social classes in the United States are fixed and rigid.

C) Most Canadians see themselves as middle class.

D) Manners and etiquette determine social class.

E) People are relegated to a permanent class layer in Canada based on their birth right.

Answer: C Diff: 3 Type: MC Page Ref: 202 Skill: Concept Objective: 6-1 19) Family is one of the ________ factors that influence consumer behaviour.

A) cultural B) social C) personal D) psychological E) business Answer: B Diff: 2 Type: MC Page Ref: 202 Skill: Concept Objective: 6-1 20) ________ are groups to which an individual wishes to belong, as when a teenage hockey player hopes to play someday for the Canadian Olympic Hockey team.

A) Membership groups B) Aspirational groups C) Leading adopter groups D) Leisure groups E) Social class groups Answer: B Diff: 2 Type: MC Page Ref: 202 Skill: Concept Objective: 6-1

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21) ________ are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others.

A) Opinion leaders B) Habitual buyers C) Social networkers D) Stealth marketers E) Buzz marketers Answer: A Diff: 1 Type: MC Page Ref: 202 Skill: Concept Objective: 6-1 22) Opinion leaders are sometimes referred to as ________.

A) the influentials B) the upper class C) the middle class D) buzz marketers E) networkers Answer: A Diff: 2 Type: MC Page Ref: 202 Skill: Concept Objective: 6-1 23) Many companies, enlist everyday consumers who are enthusiastic about their brands to become ________ who share their passion for a company's products with large circles of friends and acquaintances in return for insider knowledge and other rewards.

A) early adopters B) brand ambassadors C) direct marketers D) direct sellers E) aspirational consumers Answer: B Diff: 2 Type: MC Page Ref: 203 Skill: Concept Objective: 6-1 24) Companies who use brand ambassadors are participating in ________.

A) opinion leading B) traditional marketing C) buzz marketing D) direct marketing E) values marketing Answer: C Diff: 2 Type: MC Page Ref: 203 Skill: Concept Objective: 6-1 6 Copyright © 2017 Pearson Canada Inc.

25) Facebook.com and YouTube are examples of ________.

A) buzz marketing B) opinion leaders C) social networks D) virtual worlds E) early adopters Answer: C Diff: 2 Type: MC Page Ref: 203 Skill: Concept Objective: 6-1 26) Why should marketers care about online social networks?

A) Social networks provide opportunities to overwrite influencers' opinions.

B) Social networks enable marketers to become part of consumer conversations.

C) Social networks enable marketers to promote one-way messages.

D) Social networks are an important fad.

E) Social networks can replace all other forms of communicating with customers.

Answer: B Diff: 2 Type: MC Page Ref: 203 Skill: Concept Objective: 6-1 27) Mountain Dew's "DEWmocracy" campaigns invited avid Mountain Dew customers to help name a new flavour, design new packaging, and select media communications for the brand.

Which of the following statements about a participation program like Mountain Dew's DEWmocracy program is likely false?

A) Participation helps drive conversations about the brand.

B) Participation provides excellent targeting for the brand.

C) Participation helps to create attention for the brand.

D) Participation is a starting point for pricing decisions.

E) Participation can be engaging for consumers.

Answer: D Diff: 2 Type: MC Page Ref: 202-204 Skill: Concept Objective: 6-1 28) ________ is the most important consumer buying organization in society; the roles and influences of different members have been researched extensively.

A) Family B) Social class C) Membership group D) Subculture E) Reference group Answer: A Diff: 2 Type: MC Page Ref: 204 Skill: Concept Objective: 6-1 7 Copyright © 2017 Pearson Canada Inc.

29) A ________ consists of the activities people are expected to perform according to the persons around them.

A) motive B) role C) lifestyle D) life-cycle E) tradition Answer: B Diff: 2 Type: MC Page Ref: 204 Skill: Concept Objective: 6-1 30) A buyer's decisions are influenced by ________ such as the buyer's age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.

A) personal characteristics B) reference groups C) perceptions D) attitudes E) psychographics Answer: A Diff: 2 Type: MC Page Ref: 206 Skill: Concept Objective: 6-1 31) People change the goods and services they buy over time because of the two changing factors of ________.

A) belief and attitude B) perception and personality C) age and life-cycle stage D) groups and learning E) family and tradition Answer: C Diff: 2 Type: MC Page Ref: 206 Skill: Concept Objective: 6-1 32) ________ is a person's pattern of living as expressed in his or her psychographics, including his or her activities, interests, and opinions.

A) Personality B) Culture C) Lifestyle D) Motive E) Social class Answer: C Diff: 2 Type: MC Page Ref: 208 Skill: Concept Objective: 6-1 8 Copyright © 2017 Pearson Canada Inc.

33) Which of the following influences the goods and services purchased by a consumer?

A) adoption process B) occupation C) dissonance-reducing buying behaviour D) city of birth E) education Answer: B Diff: 2 Type: MC Page Ref: 207 Skill: Concept Objective: 6-1 34) A customer's lifestyle can be measured using the AIO dimensions. What does AIO stand for?

A) Activities, Interests, Opinions B) Activities, Involvement, Organizations C) Accommodation, Investment, Orientation D) Acknowledgement, Interests, Options E) Adoptions, Interests, Occupations Answer: A Diff: 2 Type: MC Page Ref: 208 Skill: Concept Objective: 6-1 35) ________ refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment. It is usually described in traits such as selfconfidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness.

A) Alternative evaluations B) Belief C) Culture D) Personality E) Self-awareness Answer: D Diff: 2 Type: MC Page Ref: 208 Skill: Concept Objective: 6-1

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36) Researchers found that a number of well-known brands tended to be strongly associated with one particular trait, such as Jeep with "ruggedness." Which of the following terms would a marketer use to describe a specific mix of human traits that may be attributed to a particular brand?

A) brand perception B) product image C) brand personality D) new product E) brand equity Answer: C Diff: 1 Type: MC Page Ref: 208 Skill: Concept Objective: 6-1 37) Brand personality is a mix of human traits attributed to a brand. Which of the following is one of the five brand personality traits discussed in your text?

A) sincerity B) empathy C) confidence D) indecision E) emotion Answer: A Diff: 3 Type: MC Page Ref: 208 Skill: Concept Objective: 6-1 38) A person's buying choices are influenced by four major psychological factors. Which is one of these factors?

A) money B) manipulation C) motivation D) mockery E) misjudgment Answer: C Diff: 2 Type: MC Page Ref: 209 Skill: Concept Objective: 6-1

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39) A ________ is a need that is sufficiently pressing to direct a person to seek satisfaction.

A) stimulus B) motive C) culture D) perception E) tradition Answer: B Diff: 1 Type: MC Page Ref: 209 Skill: Concept Objective: 6-1 40) According to Freud's theories, people are ________ many of the psychological forces shaping their behaviour.

A) unconscious of B) unsure of C) aware of D) status-driven about E) socially conscious of Answer: A Diff: 2 Type: MC Page Ref: 209 Skill: Concept Objective: 6-1 41) The term ________ refers to qualitative research designed to probe consumers' hidden, subconscious motivations.

A) perception analysis B) neuromarketing research C) motivation research D) need recognition investigation E) depth research technique Answer: C Diff: 1 Type: MC Page Ref: 209 Skill: Concept Objective: 6-1 42) Maslow's theory is that ________ can be arranged in a hierarchy.

A) stimuli B) beliefs and attitudes C) perceptions D) human needs E) decisions Answer: D Diff: 2 Type: MC Page Ref: 210 Skill: Concept Objective: 6-1

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43) Which of the following is the highest part of Maslow's Hierarchy of Needs?

A) physiological needs B) safety needs C) stimulus needs D) self-actualization needs E) social needs Answer: D Diff: 2 Type: MC Page Ref: 210 Skill: Concept Objective: 6-1 44) What is the most pressing in Maslow's Hierarchy of Needs at any given time?

A) physiological needs B) social needs C) esteem needs D) self-actualization needs E) safety needs Answer: A Diff: 2 Type: MC Page Ref: 210 Skill: Concept Objective: 6-1 45) ________ is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

A) Personality B) Perception C) Selective grouping D) Learning E) Self-actualization Answer: B Diff: 2 Type: MC Page Ref: 210 Skill: Concept Objective: 6-1 46) People cannot focus on all of the stimuli that surround them each day. A person's tendency to screen out most of the information to which he or she is exposed is called ________.

A) selective retention B) selective distortion C) selective attitude D) selective attention E) selective perception Answer: D Diff: 2 Type: MC Page Ref: 210 Skill: Concept Objective: 6-1

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47) People tend to interpret new information in a way that will support what they already believe. This is called ________.

A) selective retention B) selective distortion C) selective attitude D) selective learning E) selective perception Answer: B Diff: 2 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 48) People forget much that they learn. They tend to retain information that supports their attitudes and beliefs. This is called ________.

A) selective retention B) selective distortion C) selective attitude D) selective attention E) perceptual vigilance Answer: A Diff: 2 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 49) Some consumers worry that they will be affected by marketing messages without even knowing it. They are concerned about ________ advertising.

A) alternative evaluation B) subliminal C) perceptual D) innovative E) comparative Answer: B Diff: 1 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 50) ________ describes changes in an individual's behaviour arising from experience.

A) Lifestyle B) Learning C) Perception D) Cognitive dissonance E) Aggressiveness Answer: B Diff: 1 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 13 Copyright © 2017 Pearson Canada Inc.

51) Among other factors, learning occurs through the interplay of which of the following two factors?

A) drives and stimuli B) stimuli and status C) status and dissonance behaviour D) cues and status E) reinforcement and dissonance behaviour Answer: A Diff: 3 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 52) ________ are minor stimuli that influence where, when, and how a person responds.

A) Cues B) Drives C) Messages D) Personalities E) Impulses Answer: A Diff: 3 Type: MC Page Ref: 211 Skill: Concept Objective: 6-1 53) Applying ________, marketers can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

A) subliminal advertising B) social classes C) learning theory D) need recognition E) cognitive dissonance Answer: C Diff: 3 Type: MC Page Ref: 211-212 Skill: Concept Objective: 6-1 54) A(n) ________ is a descriptive thought that a person has about something.

A) lifestyle B) motive C) belief D) attitude E) perception Answer: C Diff: 2 Type: MC Page Ref: 212 Skill: Concept Objective: 6-1

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55) A(n) ________ is a person's consistent evaluations, feelings, and tendencies toward an object or idea.

A) lifestyle B) motive C) belief D) attitude E) perception Answer: D Diff: 2 Type: MC Page Ref: 212 Skill: Concept Objective: 6-1 56) The buyer decision process consists of five stages. Which of the following is one of these stages?

A) need search B) risk assessment C) variety-seeking buying behaviour D) evaluation of alternatives E) postpurchase enjoyment Answer: D Diff: 3 Type: MC Page Ref: 213 Skill: Concept Objective: 6-2 57) The buying process starts with ________, in which the buyer recognizes a problem.

A) need recognition B) information search C) evaluation of alternatives D) purchase decision E) separation of needs and wants Answer: A Diff: 1 Type: MC Page Ref: 213 Skill: Concept Objective: 6-2 58) If the consumer's drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not, the consumer may store the need in memory or undertake a(n) ________.

A) brand personality B) alternative evaluation C) postpurchase behaviour D) information search E) product adoption Answer: D Diff: 3 Type: MC Page Ref: 213 Skill: Concept Objective: 6-2 15 Copyright © 2017 Pearson Canada Inc.

59) The information sources that are most effective at influencing a consumer's purchase decision are ________. These sources legitimize or evaluate products for the buyer.

A) commercial B) public C) experimental D) personal E) social Answer: D Diff: 3 Type: MC Page Ref: 213 Skill: Concept Objective: 6-2 60) Marketers describe the way the consumer processes information to arrive at brand choices as ________.

A) alternative evaluation B) information search C) purchase decision D) situational factors E) post-purchase dissonance Answer: A Diff: 1 Type: MC Page Ref: 214 Skill: Concept Objective: 6-2 61) Generally, the consumer's purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. Which of the following is one of these factors?

A) postpurchase behaviour B) attitude of others C) cognitive dissonance D) alternative evaluation E) new product adoption Answer: B Diff: 3 Type: MC Page Ref: 214 Skill: Concept Objective: 6-2

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62) After purchasing a product, the consumer will be satisfied or dissatisfied and will engage in ________.

A) need recognition B) alternative evaluation C) postpurchase behaviour D) product expectations E) information searches Answer: C Diff: 1 Type: MC Page Ref: 214 Skill: Concept Objective: 6-2 63) The relationship between the consumer's expectations and the product's ________ determines whether the buyer is satisfied or dissatisfied with a purchase.

A) perceived performance B) brand personality C) recognition D) consumer market E) service quality Answer: A Diff: 1 Type: MC Page Ref: 215 Skill: Concept Objective: 6-2 64) Many major purchases result in ________, or discomfort caused by postpurchase conflict.

A) need recognition B) cognitive dissonance C) purchase decisions D) legitimization E) dissatisfaction Answer: B Diff: 2 Type: MC Page Ref: 215 Skill: Concept Objective: 6-2 65) Consumers learn about new products for the first time and make the decision to buy them during the ________.

A) new product recognition B) adoption process C) evaluation process D) information search E) quality assessment Answer: B Diff: 2 Type: MC Page Ref: 215 Skill: Concept Objective: 6-3 17 Copyright © 2017 Pearson Canada Inc.

66) Relative advantage, compatibility, complexity, divisibility, and communicability are all examples of ________.

A) alternative evaluation B) dissonance-reducing buying behavior C) product characteristics that influence rate of adoption D) individual differences in innovativeness E) postpurchase behaviour Answer: C Diff: 3 Type: MC Page Ref: 217 Skill: Concept Objective: 6-3 67) Innovators are ________.

A) the first 3.5% of buyers to adopt a new idea B) venturesome C) deliberative D) traditional E) trusting Answer: B Diff: 2 Type: MC Page Ref: 216 Skill: Concept Objective: 6-3 68) As compared to consumer markets, business markets are ________.

A) approximately the same B) smaller C) huge D) somewhat larger E) less complex Answer: C Diff: 1 Type: MC Page Ref: 218 Skill: Concept Objective: 6-4 69) Which of the following is a way that business and consumer markets are the same?

A) satisfaction of needs through purchase decisions B) market structure and demand C) nature of the buying unit D) types of decisions E) decision process Answer: A Diff: 2 Type: MC Page Ref: 218 Skill: Concept Objective: 6-4

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70) Large business purchasers usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. These are all examples of how the business buying decision process is more ________ than the consumer buying decision process is.

A) formalized B) creative C) relationship-oriented D) independent E) concentrated Answer: A Diff: 2 Type: MC Page Ref: 219 Skill: Concept Objective: 6-4 71) Which business buying situation is the marketer's greatest opportunity and challenge?

A) modified rebuy B) straight rebuy C) new task D) multiple rebuys E) system rebuy Answer: C Diff: 2 Type: MC Page Ref: 221 Skill: Concept Objective: 6-4 72) Marketers call the decision-making unit of a buying organization the ________.

A) business buyer B) business-to-business market C) supplier-development centre D) buying system E) buying centre Answer: E Diff: 2 Type: MC Page Ref: 222 Skill: Concept Objective: 6-4 73) Which of the following statements about buying centres is true?

A) The buying centre is like a standing committee.

B) The buying centre roles are specified on the organizational chart.

C) The typical buying centre has five employees, one to assume each of the buying centre's roles.

D) An individual's role in the buying centre does not change.

E) The buying centre may involve informal participants who are not obvious to sellers.

Answer: E Diff: 3 Type: MC Page Ref: 222 Skill: Concept Objective: 6-4 19 Copyright © 2017 Pearson Canada Inc.

74) The first step of the business buying process is ________.

A) general need description B) supplier search C) proposal solicitation D) problem recognition E) order-routine specification Answer: D Diff: 1 Type: MC Page Ref: 224 Skill: Concept Objective: 6-5 75) During which stage of the business buying process is a buyer most likely to conduct value analysis, carefully studying components to determine if they can be redesigned, standardized, or made less expensive?

A) general need recognition B) product specification C) proposal solicitation D) order-routine specification E) performance review Answer: B Diff: 2 Type: MC Page Ref: 224 Skill: Concept Objective: 6-5 76) Reverse auctions, trading exchanges, and company buying sites are all ways that companies can participate in ________.

A) secure extranets B) product value analysis C) vendor-managed inventory systems D) systems selling E) e-procurement Answer: E Diff: 2 Type: MC Page Ref: 226 Skill: Concept Objective: 6-5 77) A problem with the rapidly expanding use of e-purchasing is that it ________.

A) can erode established customer-supplier relationships B) saves less time than expected C) generates more transactions to document D) generates less cost savings than predicted E) reduces the amount of time purchasing people can spend on strategic issues Answer: A Diff: 2 Type: MC Page Ref: 228 Skill: Concept Objective: 6-5 20 Copyright © 2017 Pearson Canada Inc.

78) Generation Xers, who were born between 1965 and 1976, share the childhood experiences of higher parental divorce rates, recession, and corporate downsizing. They tend to care about the environment and value experience over acquisition. Generation Xers make up a ________.

A) subculture B) social class C) social network D) life-cycle stage E) lifestyle Answer: A Diff: 1 Type: MC Page Ref: 199 Skill: Application Objective: 6-1 79) Rashmi Singh always knows about the trendiest fashions. She actively shares her knowledge with a wide group of friends and colleagues about where to shop for cutting-edge fashion at great deals, and her advice is often followed. Rashmi is an example of a(n) ________.

A) membership group B) innovator C) opinion leader D) buzz marketer E) experiential source Answer: C Diff: 2 Type: MC Page Ref: 202 Skill: Application Objective: 6-1 80) A shoe company uses ads featuring the members of a country music band with the hope that the band's fans will see them wearing the company's shoes and want to wear the same shoes. The shoe company is hoping that fans of the band view the band as a ________.

A) membership group B) reference group C) brand personality D) subculture E) lifestyle Answer: B Diff: 3 Type: MC Page Ref: 202 Skill: Application Objective: 6-1

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81) There is a trend in Canada toward rediscovering the flavour 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 local culinary traditions. This change in ________ is one of the reasons the number of farmers' markets in Canada has increased in recent years.

A) life-cycle stage B) subculture C) lifestyle D) personality E) life-cycle Answer: C Diff: 2 Type: MC Page Ref: 208 Skill: Application Objective: 6-1 82) A marketing research company asked members of a focus group to describe several motorcycle brands as people. of the researchers were trying to uncover the motorcycles' ________.

A) hierarchical need analysis B) brand personality C) status influence D) buzz marketing E) information search Answer: B Diff: 2 Type: MC Page Ref: 208 Skill: Application Objective: 6-1 83) Bob's job description had been changed. The rationale for the changes made no sense to Bob when they were explained. Bob continued to perform most of his job duties as usual. He has engaged in ________.

A) selective distortion B) selective attitude C) selective interpretation D) selective attention E) perceptual defense Answer: D Diff: 3 Type: MC Page Ref: 210 Skill: Application Objective: 6-1

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84) Stephanie and Jamal attended a sales seminar. Both left the seminar with differing opinions about what was important to implement in their jobs. Both used the information in different ways, according to what each already believed was important. They have engaged in ________.

A) selective distortion B) selective attitude C) selective retention D) selective attention E) perceptual defense Answer: A Diff: 2 Type: MC Page Ref: 211 Skill: Application Objective: 6-1 85) Juana looked at her September issue of Macleans magazine and did not see anything of interest. After her mother was diagnosed with bipolar disorder, she found the issue extremely interesting because it offered advice on how to help people who are suffering from this problem.

The September issue of the magazine became quite interesting to Juana due to ________.

A) subliminal messaging B) social factors C) selective attention D) the hierarchy of needs E) unconscious motivations Answer: C Diff: 2 Type: MC Page Ref: 210 Skill: Application Objective: 6-1 86) Donna wants to buy a new coat. During the ________ stage of her purchase process she asked her friends to recommend a store and/or a style of coat. She searched the newspaper for coat sales, and she visited nearby stores to see what is available in her price range.

A) product evaluation B) alternative evaluation C) need recognition D) information search E) purchase decision Answer: D Diff: 2 Type: MC Page Ref: 213 Skill: Application Objective: 6-2

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87) Blake is in the process of buying a new car. He is highly involved in the purchase and perceives significant differences among his three favourite models. Blake's next step is most likely to be ________.

A) postpurchase behaviour B) evaluation of alternatives C) opinion leadership D) cognitive dissonance E) purchase decision Answer: B Diff: 2 Type: MC Page Ref: 214 Skill: Application Objective: 6-2 88) Leona purchased two bottles of wine from vineyards in Australia. When asked her opinion of the wine, she said the burgundy wine tasted like alcoholic grape juice, but the Chablis had a crisp taste that she really enjoyed. These statements were made during the ________ stage of the purchase decision.

A) information search B) situational analysis C) alternative evaluation D) purchase decision E) postpurchase behaviour Answer: E Diff: 1 Type: MC Page Ref: 215 Skill: Application Objective: 6-2 89) Bill thought he had received the best deal on his new car. Shortly after the purchase, Bill started to notice certain disadvantages of his new car as he learned more about other cars available. Bill is experiencing ________.

A) postpurchase culture B) selective perception C) cognitive dissonance D) purchase decision E) information evaluation Answer: C Diff: 2 Type: MC Page Ref: 215 Skill: Application Objective: 6-2

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90) Cameron loves to know about and purchase the most up-to-date technological gadgets.

Among his friends, he is almost always the first to own the newest electronic product. Often the products that Cameron buys become adopted by large groups of consumers, but occasionally Cameron will purchase a product that is adopted by only a small portion of the population. To which of the following adopter groups does Cameron belong?

A) innovator B) early adopter C) early majority D) late majority E) laggards Answer: A Diff: 2 Type: MC Page Ref: 216 Skill: Application Objective: 6-3 91) Which of the following is a part of the consumer market?

A) Scott Sign Systems sells interior signs to an Alabama resort.

B) A municipal government buys chemicals for its city swimming pools.

C) Sue buys a gift for her mother.

D) A Canadian software company buys airplane tickets to send a group of salespeople to make a presentation to a heavy equipment manufacturer in Japan.

E) Airmark sells a vinyl printing press to a manufacturer of plastic bags.

Answer: C Diff: 1 Type: MC Page Ref: 218 Skill: Application Objective: 6-4 92) A well-known food retailer buys a lot of cranberry products in December due to seasonally high consumer demand. This is an example of ________ demand.

A) joint B) derived C) elastic D) fluctuating E) inelastic Answer: B Diff: 2 Type: MC Page Ref: 219 Skill: Application Objective: 6-4

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93) You regularly purchase cleaning supplies for your custodial staff, using the same vendor and ordering relatively consistent amounts of the same products with each purchase. This is an example of a ________ situation.

A) modified rebuy B) new task C) straight rebuy D) solution selling E) value analysis Answer: C Diff: 1 Type: MC Page Ref: 221 Skill: Application Objective: 6-4 94) You call in a department manager to assist in a purchase of industrial equipment. You are considering a change in product specifications, terms, and possibly suppliers. This is most likely a ________ situation.

A) modified rebuy B) new task C) straight rebuy D) solution selling E) value analysis Answer: A Diff: 2 Type: MC Page Ref: 221 Skill: Application Objective: 6-4 95) Worthington Farm raises chickens. For years, it has used wooden coops for hauling 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 needed to be replaced. Worthington was at which stage of the business buying process when he decided to replace his old coops?

A) problem recognition B) general need description C) product specification D) product value analysis E) performance review Answer: A Diff: 1 Type: MC Page Ref: 224 Skill: Application Objective: 6-5

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96) John Herr's company has standardized the size of its paper bags so that each bag can be used in five to seven different store departments. This approach to cost reduction likely took place in the ________ stage of the business buying process.

A) problem recognition B) general need description C) product specification D) supplier search E) proposal solicitation Answer: C Diff: 3 Type: MC Page Ref: 224 Skill: Application Objective: 6-5 97) Pace Hardware uses Learningnow.com to improve sales force effectiveness and facilitate sharing of expertise. It allows Pace retailers to link with other Pace retailers to ask for managerial and marketing advice. It also allows Pace retailers to ask their suppliers about product usage, deliveries, and warranties, and it allows suppliers to send new-product information directly to Pace retailers. In this scenario, Pace Hardware is using a(n) ________.

A) e-procurement B) intranet C) search engine D) trading exchange E) reverse auction Answer: A Diff: 2 Type: MC Page Ref: 225 Skill: Application Objective: 6-5 98) The starting point of understanding how consumers respond to various marketing efforts is called the marketing-stimulus model of buyer behaviour.

Answer: FALSE Diff: 2 Type: TF Page Ref: 198 Skill: Concept Objective: 6-1 99) Each social class contains groups of people with shared value systems based on common life experiences and situations.

Answer: FALSE Diff: 2 Type: TF Page Ref: 201 Skill: Concept Objective: 6-1

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100) Younger families have more disposable income than than more mature families. They are the ideal market for travel, restaurants and sport cars.

Answer: FALSE Diff: 1 Type: TF Page Ref: 206 Skill: Concept Objective: 6-1 101) Subcultures are a group of people whose members share similar values, interests, and behaviors.

Answer: TRUE Diff: 2 Type: TF Page Ref: 199 Skill: Concept Objective: 6-1 102) Online social networks represent an important form of buzz for marketers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 203-204 Skill: Concept Objective: 6-1 103) Children exert little influence on family buying decisions, particularly in areas such as entertainment and food.

Answer: FALSE Diff: 2 Type: TF Page Ref: 204 Skill: Concept Objective: 6-1 104) Personality is a person's pattern of living as expressed in his or her psychographics.

Answer: FALSE Diff: 1 Type: TF Page Ref: 208 Skill: Concept Objective: 6-1 105) A person's buying choices are influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.

Answer: TRUE Diff: 2 Type: TF Page Ref: 209 Skill: Concept Objective: 6-1 106) Maslow's theory is that human needs–including physiological, safety, social needs, esteem, and self-actualization needs–are arranged in a hierarchy and that an unsatisfied need motivates an individual to take action to satisfy it.

Answer: TRUE Diff: 2 Type: TF Page Ref: 210 Skill: Concept Objective: 6-1 28 Copyright © 2017 Pearson Canada Inc.

107) Alternative evaluation is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

Answer: FALSE Diff: 3 Type: TF Page Ref: 210 Skill: Concept Objective: 6-1 108) A belief is the specific mix of human traits that may be attributed to a particular brand.

Answer: FALSE Diff: 2 Type: TF Page Ref: 212 Skill: Concept Objective: 6-1 109) Consumers do not use a simple and single alternative evaluation process in all buying situations.

Answer: TRUE Diff: 2 Type: TF Page Ref: 214 Skill: Concept Objective: 6-2 110) After purchasing the product, the consumer will be satisfied or dissatisfied and will engage in postpurchase behaviour.

Answer: TRUE Diff: 1 Type: TF Page Ref: 214 Skill: Concept Objective: 6-2 111) Almost all major purchases result in cognitive dissonance, or discomfort caused by postpurchase conflict.

Answer: TRUE Diff: 1 Type: TF Page Ref: 215 Skill: Concept Objective: 6-2 112) When a consumer learns about a new product for the first time and makes a decision to try it, the consumer is engaged in the alternative evaluation process.

Answer: FALSE Diff: 2 Type: TF Page Ref: 215 Skill: Concept Objective: 6-3

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113) People differ greatly in their readiness to try new products. In each product area, there are "consumption pioneers." They are also called laggards.

Answer: FALSE Diff: 2 Type: TF Page Ref: 216 Skill: Concept Objective: 6-3 114) Early adopters are opinion leaders in their communities and adopt new ideas early but carefully.

Answer: TRUE Diff: 2 Type: TF Page Ref: 216 Skill: Concept Objective: 6-3 115) Members of the early mainstream are deliberate; although they rarely are leaders, they adopt new ideas before the average person.

Answer: TRUE Diff: 2 Type: TF Page Ref: 216 Skill: Concept Objective: 6-3 116) The lagging adopters are tradition bound; they adopt an innovation only when it has become something of a tradition itself.

Answer: TRUE Diff: 2 Type: TF Page Ref: 216 Skill: Concept Objective: 6-3 117) In general, innovators tend to be traditional and hesitant about trying new ideas if they incur some risk.

Answer: FALSE Diff: 2 Type: TF Page Ref: 216 Skill: Concept Objective: 6-3 118) Ed purchases new technological devices such as PDAs, DVRs, and MP3 players after many people he knows already own the devices. However, Ed is rarely among the last people he knows to purchase a new technology. Ed is part of the laggard adopter group.

Answer: FALSE Diff: 2 Type: TF Page Ref: 216 Skill: Application Objective: 6-3

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119) Two characteristics that are especially important in influencing an innovation's rate of adoption are relative advantage and compatibility.

Answer: TRUE Diff: 2 Type: TF Page Ref: 217 Skill: Concept Objective: 6-3 120) One set of business purchases is made for each set of consumer purchases.

Answer: FALSE Diff: 2 Type: TF Page Ref: 218 Skill: Concept Objective: 6-4 121) A business marketer normally deals with far fewer buyers than the consumer marketer does.

Answer: TRUE Diff: 1 Type: TF Page Ref: 218 Skill: Concept Objective: 6-4 122) Buyer and seller are more dependent upon each other in the business buying process than in the consumer buying process.

Answer: TRUE Diff: 2 Type: TF Page Ref: 219 Skill: Concept Objective: 6-4 123) Of the different types of buying situations, the modified rebuy presents the fewest decisions for a business buyer to make.

Answer: FALSE Diff: 2 Type: TF Page Ref: 221 Skill: Application Objective: 6-4 124) The buying centre is not a fixed or formally identified unit within an organization.

Answer: TRUE Diff: 2 Type: TF Page Ref: 222 Skill: Concept Objective: 6-4 125) Environmental, organizational, interpersonal, and individual factors all influence business buyer behaviour.

Answer: TRUE Diff: 1 Type: TF Page Ref: 223 Skill: Concept Objective: 6-5

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126) In the supplier selection stage of the business buying process, the buyer ranks the importance of reliability, price, and other desired characteristics in the product.

Answer: TRUE Diff: 2 Type: TF Page Ref: 225 Skill: Concept Objective: 6-5 127) The benefits of e-procurement include access to new suppliers, lower purchasing costs, and more time-efficient order processing and delivery.

Answer: TRUE Diff: 2 Type: TF Page Ref: 225 Skill: Concept Objective: 6-5 128) Cultural factors exert a broad and deep influence on consumer behaviour. The marketer needs to understand the role played by the buyer's culture, subculture, and social class. Compare the roles of culture, subculture, and social class.

Answer: Culture is the most basic cause of a person's wants and behaviour. Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions. Many subcultures make up important markets. Social classes are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Unlike nationality or ethnic subculture, social class is determined by a combination of many variables, such as occupation, income, education, and wealth. Social scientists have identified seven social classes within the Canadian culture, ranging from upper class to lower class.

Diff: 3 Type: ES Page Ref: 199-202 Skill: Application Objective: 6-1 129) Many subcultures make up important market segments. Examples of four such important subculture groups include those from Atlantic provinces, Quebec, Central Canada, the Prairies and British Columbia. Describe several characteristics that would interest marketers about each of these groups.

Answer: Atlantic Canada is largely defined by its proximity to and historical relationship with the sea. Equally, the isolation imposed by the mountain barrier, along with the abundance and grandeur of British Columbia's natural environment, shaped that region's outlook on nature.

Differing immigration patterns have also had a differential effect on different regions. Economic influences rise and fall with the market as each geographic region has quite distinct combinations of commodities and natural resources. Perceived disparities in political power have also increased regionalism, especially in Quebec, Newfoundland and Labrador, and Alberta.

Diff: 3 Type: ES Page Ref: 199 Skill: Application Objective: 6-1

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130) A consumer's behaviour is influenced by social factors, such as the consumer's small groups, friends, and family. Explain how these social factors influence consumption and why they are important to marketers.

Answer: Small groups to which a person belongs have a direct influence on what a person buys.

Reference groups serve as direct or indirect points of comparison or reference in forming a person's attitudes or behaviours. An aspirational group is one to which the individual wishes to belong. Reference groups expose a person to new behaviours and lifestyles, influence a person's attitudes and self-concept, and create pressures to conform that may affect the person's product and brand choices. Opinion leaders are also included in reference groups. The group closest to consumers is the family, the most important consumer buying organization in society. Personal recommendations tend to be more credible when they come from friend groups and family.

Diff: 3 Type: ES Page Ref: 202-203 Skill: Application Objective: 6-1 131) Why is it important for marketers to understand the changing roles and influence of family members? How are roles and social status related to product choice?

Answer: Marketers are interested in the changing roles and influence of each family member, particularly as male and female purchasing roles evolve and children wield more purchasing influence. Within groups, including families, the position of an individual is defined by role and status. A role consists of the activities people are expected to perform according to the persons around them, while status is the general esteem given to that role. People tend to choose products that fit with their roles and status.

Diff: 2 Type: ES Page Ref: 204 Skill: Application Objective: 6-1 132) Each person's distinct personality influences his or her buying behaviour. Personality is usually described in terms of traits. What are these traits, and how do they affect the way people purchase items? Give at least one example.

Answer: Personality is described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can be useful in analyzing behaviour for certain products. Consumers are likely to choose brands with personalities that match their own. For example, someone with a sophisticated personality might be attracted to a more sophisticated product, such as a BMW, while someone with a more rugged personality might be attracted to a more rugged product, such as a Jeep.

Diff: 1 Type: ES Page Ref: 208 Skill: Application Objective: 6-1

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133) Explain Maslow's needs hierarchy.

Answer: Maslow suggested that our unfulfilled needs motivate us and that our needs are arranged in a hierarchy. That hierarchy includes these needs: physiological, safety, social, selfesteem, and self-actualization. Maslow suggested that we fill the bottom-level, basic needs first before moving up the hierarchy. Until more important, basic needs such as safety are fulfilled, an individual has little interest in higher-level needs such as esteem and self-actualization.

Diff: 2 Type: ES Page Ref: 209-210 Skill: Application Objective: 6-1 134) Identify and describe the stages in the adoption process.

Answer: In the awareness stage, consumers become aware of the new product but lack information about it. Then, consumers seek information about the new product in the interest stage. In the evaluation stage, consumers consider whether trying the new product makes sense.

Consumers try the product on a limited basis in the trial stage. Finally, consumers decide to make full use of the product in the adoption stage.

Diff: 2 Type: ES Page Ref: 216 Skill: Application Objective: 6-3 135) Identify the product characteristics that influence the rate of adoption. Explain how each characteristic affects the rate of adoption.

Answer: The five most important product characteristics that influence the rate of a product's adoption are relative advantage, compatibility, complexity, divisibility, and communicability.

Relative advantage is the degree to which an innovation appears superior to existing products; the greater the perceived relative advantage, the sooner the product will be adopted.

Compatibility is the degree to which the innovation fits the values and experiences of potential consumers; high compatibility leads to quick adoption. Complexity is the degree to which the innovation is difficult to understand or use; the greater the complexity, the slower the adoption rate. Divisibility is the degree to which the innovation may be tried on a limited basis; the higher the divisibility, the slower the rate of adoption. Finally, communicability is the degree to which the results of using the innovation can be observed or described to others; high communicability lends itself to a higher rate of adoption.

Diff: 3 Type: ES Page Ref: 217 Skill: Application Objective: 6-3 136) Explain how business demand is derived demand.

Answer: The demand for business purchases is determined by the demand for consumer goods.

If consumer demand for an end product drops, business demand for all of the components used in that product will also drop. Similarly, when consumer demand for a product increases, business demand for all of the components of that product also increases.

Diff: 2 Type: ES Page Ref: 219 Skill: Application Objective: 6-4 137) Explain how the decision process in the business market and consumer market differ.

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Answer: Business buyers usually face more complex buying decisions than do consumer buyers, as business purchases more often involve large sums of money, complex technical and economic considerations, and interactions among many people at many levels of the buyer's organization.

Because the purchases are more complex, business buyers may take longer to make their decisions and are likely to use a more formalized buying process. In the business buying process, the buyer and seller are often much more dependent on each other.

Diff: 2 Type: ES Page Ref: 220 Skill: Application Objective: 6-4 138) What is the buying centre concept? Explain why this concept presents a major marketing challenge.

Answer: The buying centre is the decision-making unit of a buying organization. The buying centre is composed of all the individuals and units that play a role in the business purchase decision-making process, including the actual users of the product or service, those who make the buying decision, those who influence the buying decision, those who do the actual buying, and those who control buying information. The buying centre is not a fixed and formally identified unit within the buying organization. Instead, it is a set of buying roles assumed by different people for different purchases. Within the organization, the size and makeup of the buying centre varies for different products and buying situations. The variable nature of the buying centre makes it a major marketing challenge. The business marketer must learn who participates in each decision, each participant's relative influence, and what evaluation criteria each decision participant uses. Sometimes identifying the decision maker is difficult or even impossible, as no one single person may make the purchasing decision.

Diff: 3 Type: ES Page Ref: 222 Skill: Application Objective: 6-4 139) What roles do cultural factors play in consumer behaviour?

Answer: Culture is the set of values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Cultural factors exert broad and deep influences on consumer behaviour.

Diff: 1 Type: ES Page Ref: 199 Skill: Application Objective: 6-1 140) Give an example of a cultural shift that may impact the marketing of products or services.

Answer: Answers will vary. Currently, the shift toward greater concern about health and fitness has generated increased marketing of exercise equipment and gear as well as organic and gluten free foods.

Diff: 1 Type: ES Page Ref: 199 Skill: Application Objective: 6-1

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141) Why is targeting the Black population a viable market practice for a new marketer of products?

Answer: Self-identified Blacks are the third-largest visible minority in Canada. Many companies have developed special products, appeals and marketing programs for this large subculture.

Diff: 3 Type: ES Page Ref: 201 Skill: Application Objective: 6-1 142) Why might marketers be interested in social class?

Answer: Social class is relatively permanent and ordered division in a society whose members share similar values, interests and behaviours. People of different social classes show distinct product and brand preferences in areas including home furnishing, automobiles, and leisure.

Consumers in the same social classes tend to have similar buying behaviours.

Diff: 1 Type: ES Page Ref: 201 Skill: Application Objective: 6-1 143) In what way might a marketer rely on opinion leaders?

Answer: An opinion leader is a person within a reference group who because of special skills, knowledge, personality or other characteristics, exerts social influence on others. Opinion leaders can influence other larger groups of consumers to be attracted to a marketer's products. Buzz marketing enlists opinion leaders to serve as "brand ambassadors" who spread the word about a company's products.

Diff: 2 Type: ES Page Ref: 202-203 Skill: Application Objective: 6-1 144) How does marketing through online social networks differ from more traditional marketing?

Answer: Marketers hope to use social networks to interact with consumers and become a part of their everyday lives instead of relying on the one-way commercial messages of more traditional media. Social networks give consumers the opportunity to express their experiences with company's and their products thus creating a two-way communication system.

Diff: 2 Type: ES Page Ref: 203-204 Skill: Application Objective: 6-1

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145) Explain why typical husband-dominant or wife-dominant products of the 1970s may no longer be regarded as typical.

Answer: Buying roles changed with evolving consumer lifestyles. For example, in Canada and the United States, the wife traditionally has been considered the main purchasing agent for the family in the areas of food, household products, and clothing. However, with more women working outside the home and the willingness of husbands to engage in the family's purchasing, there have been changes in buying behaviours.

Diff: 2 Type: ES Page Ref: 204 Skill: Application Objective: 6-2 146) Explain the concept of brand personality.

Answer: The idea is that brands also have personalities. Consumers are likely to choose brands with personalities that match their own. A brand personality is the specific mix of human traits that may be attributed to a particular brand.

Diff: 1 Type: ES Page Ref: 208 Skill: Application Objective: 6-1 147) Explain why marketers must work especially hard to attract consumer attention.

Answer: Perception is the process by which people select, organize and interpret information to form meaning in the world. People can form different perceptions of the same stimulus depending on how they select information. It is impossible for people to pay attention to all the stimuli they are exposed to. They use selective attention to screen out most of what they are exposed to. A marketer cannot guarantee that a consumer will pay attention to or remember a specific ad; people use selective attention because it is impossible for them to pay attention to the thousands of marketing stimuli they experience each day. They usually select information of interest to them.

Diff: 2 Type: ES Page Ref: 210 Skill: Application Objective: 6-1 148) Explain why selective distortion is somewhat controllable by a marketer.

Answer: Selective distortion is when people perceive information in a way that will support what they currently believe. Marketers can create and then re enforce target market consumer beliefs.

Diff: 2 Type: ES Page Ref: 211 Skill: Application Objective: 6-1 149) In what ways does selective retention prevent consumers from remembering everything about an advertisement?

Answer: Selective retention means that consumers are likely to remember good points made about a brand they favour and forget good points made about competing brands.

Diff: 2 Type: ES Page Ref: 211 Skill: Application Objective: 6-1 37 Copyright © 2017 Pearson Canada Inc.

150) What determines whether the buyer is satisfied or dissatisfied with a purchase and what does this imply for sellers?

Answer: The answer lies in the relationship between the consumer's expectations and the product's perceived performance. If the product falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted. The larger the gap between expectations and performance, the greater the consumer's dissatisfaction. This suggests sellers should strive to meet or exceed consumer expectations and avoid setting unrealistic expectations.

Diff: 2 Type: ES Page Ref: 215 Skill: Application Objective: 6-2 151) Why should marketers set up systems that encourage customers to complain about a company's products?

Answer: Most customers never share their complaints with marketers, but rather tell others about their bad experience. Therefore a company should measure customer satisfaction and dissatisfaction regularly. In this way, companies can learn how to improve.

Diff: 2 Type: ES Page Ref: 215 Skill: Application Objective: 6-2 152) What are the differences between innovators and early adopters?

Answer: Innovators are venturesome and are more willing to take on risk. Early adopters are opinion leaders. They try new ideas early but are more careful.

Diff: 2 Type: ES Page Ref: 216 Skill: Application Objective: 6-3 153) How have relationships between customers and suppliers changed in recent years?

Answer: Customers and suppliers have had adversarial relationships in the past, but because they are dependent on each other, they have begun to act more as partners. Many buyers (B-2-B customer) now practice supplier development, systematically developing networks of supplierpartners to ensure an appropriate and dependable supply of products and materials.

Diff: 2 Type: ES Page Ref: 219-220 Skill: Application Objective: 6-4 154) Why is the new-task buying situation both a great opportunity and challenge for a marketer?

Answer: In the new-task buying situation, decision participants put forth substantial effort to collect information. As such, buyers are influenced by a supplier's message. These situations are likely to be competitive, as other suppliers also want to establish a relationship with the buyer.

Diff: 2 Type: ES Page Ref: 221 Skill: Application Objective: 6-4 38 Copyright © 2017 Pearson Canada Inc.

155) Snoopy tells you that business buyer decision making is solely based on economic factors.

What would you say to Snoopy?

Answer: This claim is not entirely accurate. Although some marketers assume that the major influences are economic and think buyers will favour the supplier who offers the lowest price or the best product or the most service, this is actually not entirely true. In fact, business buyers respond to both economic and personal factors. Far from being cold, calculating, and impersonal, business buyers are human and social. They react to both reason and emotion.

Diff: 2 Type: ES Page Ref: 222-223 Skill: Application Objective: 6-4 156) Why is it difficult to assess interpersonal factors that influence the business buying process?

Answer: Interpersonal factors–such as who is liked, who controls rewards and punishments, and who has special relationships with other important participants–are subtle and not obvious to the external observer.

Diff: 2 Type: ES Page Ref: 223 Skill: Application Objective: 6-4 157) How can marketers influence business buyers who are in the problem recognition stage?

Answer: Through advertising personal selling via a salesforce, business marketers can make buyers aware of and concerned about potential problems and then offer their products as solutions to the newly recognized problem.

Diff: 2 Type: ES Page Ref: 224 Skill: Application Objective: 6-5

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The Attic Trunk began in 1979 as an upscale dress shop in Forest Ridge's fashionable shopping district, catering to a wealthy, mature clientele. Many other specialty shops lined the main avenue over the next few years. But as Forest Ridge began to attract an affluent, younger, and more demographically diverse population, the once-popular shopping district was increasingly perceived as stodgy and snobby. By the late 1980s, many of these specialty shops suffered financially. Most shops attracted only tourists who enjoyed browsing through the displays of alligator belts and shoes, piles of scented soaps, and useless flowered parasols, often laughing at the ridiculously high prices. Owners of The Attic Trunk had noticed the shifts in population and buying behaviour of the typical shopper by the late 1980s. In fact, the owners had observed that the once-fashionable shopping district in Forest Ridge no longer attracted a "typical shopper."

The wealthy, mature clientele had been replaced with affluent families with children, and a mix of Asian and African Americans as well as Caucasians. Specialty items at The Attic Trunk gradually disappeared, replaced by brand-name apparel, colognes, and jewellery. Other owners followed suit in the early 1990s, bringing restaurants, an outdoor cafe, and a day spa to the main avenue in Forest Ridge.

158) Explain the cultural shift described in this scenario.

Answer: Cultural shifts occur when the set of basic value, perceptions, wants, and behaviours learned by a member of society from family and other important institutions changes. In the scenario, an affluent, younger and diverse population replaced the wealthy, mature population.

The once-popular shopping district was increasingly perceived as stodgy and snobby. Retail shops along Forest Ridge's fashionable shopping district changed their marketing strategies in order to appeal to the new population. Specialty items at The Attic Trunk gradually disappeared, replaced by brand-name apparel, colognes, and jewellery. Other owners followed suit in the early 1990s, bringing restaurants, an outdoor cafe, and a day spa to the main avenue in Forest Ridge.

Diff: 1 Type: ES Page Ref: 199 Skill: Application Objective: 6-1 159) Imagine that a female consumer is shopping at The Attic Trunk to look for a classy, branded shirt. Using this example, discuss each step of the buyer's decision process.

Answer: There are many different possibilities here. The consumer will follow a 5-step process of need recognition (something will trigger her belief that she requires a new shirt), information search (physically, online, asking for recommendations), evaluation of alternatives (comparisons of the attributes of the different shirts), purchase decision ("I will buy this one!") and postpurchase behaviours (evaluation of her decision to purchase the shirt that she bought).

Diff: 2 Type: ES Page Ref: 212-215 Skill: Application Objective: 6-2

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160) If this shop were to open an outlet in Canada and intended to cater to the typical Asian Canadian consumer, what locations would you advise? Why? Answer: Attic Trunk should locate its store in close proximity to the Asian Canadian consumers.

Over 70% of Asian Canadians live in Toronto or Vancouver. Locating in these cities would best serve this subculture.

Diff: 2 Type: ES Page Ref: 201 Skill: Application Objective: 6-1 161) Why might The Attic Trunk want to consider including the mature consumers as a stillviable target market?

Answer: The number of seniors is expected to increase significantly in the next two decades as baby boomers continue to age. Also, they are better off financially than younger segments.

Seniors are a strong market for designer items, leisure items, and fitness. Many of the revamped shops in Forest Ridge now provide the types of products and services attractive to seniors.

Diff: 3 Type: ES Page Ref: 206-207 Skill: Application Objective: 6-1 162) Many families with children are now attracted to the shopping district in Forest Ridge.

What characteristics about families as consumer groups might the owners of The Attic Trunk want to keep in mind?

Answer: Family members strongly influence the buying behaviour of other family members.

Husband-wife involvement varies widely by product category; therefore, the owners should not take specific behaviours or characteristics for granted. Further, children are a strong influence on family buying behaviour.

Diff: 3 Type: ES Page Ref: 204 Skill: Application Objective: 6-1 163) Might the owners of The Attic Trunk believe that people change what they buy over their lifetimes? Explain.

Answer: Yes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by stage in the family life cycle. Life-stage change results from demographics and life-changing events. Over time, the affluent, mature consumers fizzled out as a primary target market. However, the new wave of mature consumers in Forest Ridge, compared to the mature consumers of the 1980s, may continue to be attracted to the revamped shops along the main avenue.

Diff: 3 Type: ES Page Ref: 206 Skill: Application Objective: 6-1

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164) When comparing the lifestyles of all the consumer segments attracted to The Attic Trunk, what might each segment have in common with the other segments?

Answer: The wealthy, mature clientele had been replaced with affluent families with children, and a mix of Asian and African Americans as well as Caucasians. Specialty items at The Attic Trunk gradually disappeared, replaced by brand-name apparel, colognes, and jewellery. Other owners followed suit in the early 1990s, bringing restaurants, an outdoor cafe, and a day spa to the main avenue in Forest Ridge. Each segment may share similar psychographics: activities, interests, and opinions (AIOs). All segments seem to enjoy eating out, sitting in cafes, and pampering themselves at the spa. It appears that brand-name offerings were more attractive than specialty items.

Diff: 2 Type: ES Page Ref: 208 Skill: Application Objective: 6-1 165) In what way did the owners of The Attic Trunk have to change shoppers' perceptions from the 1980s to the 1990s?

Answer: Perception is the process by which people select, organize and interpret information.

Customers had to be convinced that The Attic Trunk had permanently shifted from being stodgy and snobby, offering overpriced specialty items, which were of little use to the consumer, to offering brand name upscale apparel and accessories. Consumers are more interested in gaining value from purchases than sheer volume.

Diff: 2 Type: ES Page Ref: 209 Skill: Application Objective: 6-2 166) Why might The Attic Trunk's current shoppers experience less postpurchase cognitive dissonance than the shoppers of the early 1980s?

Answer: Postpurchase cognitive dissonance involves compromising between the drawbacks of the chosen brand and losing the benefits if the brands not purchased. The Attic Trunk now offers what the typical customer wants. Because most of the product offerings are name brands, consumers likely know more about what they are getting before they purchase it. Consumers in the 1980s purchased products based on uniqueness; there were fewer, if any, branded items in the offering with which consumers could have built a relationship prior to the purchase or made a comparison to.

Diff: 3 Type: ES Page Ref: 215 Skill: Application Objective: 6-2 167) What are some assumptions that can be made about any dissatisfied customers at The Attic Trunk?

Answer: Dissatisfied customers find products fall short of their expectations. Bad word of mouth travels faster than positive comments. Dissatisfied customers do not often volunteer their complaints but spread the word to other potential customers. Therefore, the owners of this shop should set up a system to encourage customer comments and respond to them Diff: 2 Type: ES Page Ref: 215 Skill: Application Objective: 6-2 42 Copyright © 2017 Pearson Canada Inc.

168) How might the owners of The Attic Trunk use e-procurement to their advantage?

Answer: E- procurement is purchasing through electronic connections between buyers and sellers. The Attic Trunk now specializes in brand-name items, which are likely available through suppliers' Web sites. Using e-procurement would lower The Attic Trunk's purchase costs and speed order processing and delivery. Suppliers might also give information to The Attic Trunk about current trends and best sellers.

Diff: 2 Type: ES Page Ref: 225 Skill: Application Objective: 6-5

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 7 Segmentation, Targeting, and Positioning 1) Which of the following best describes market segmentation?

A) dividing the market into smaller, meaningful groups of customers B) a promise to a group of customers C) evaluating and identifying a meaningful group of customers to serve D) creating a unique offering to provide customer value E) identifying a clear and distinct place in the customer's brain that the brand or company should occupy Answer: A Diff: 1 Type: MC Page Ref: 239 Skill: Concept Objective: 7-1 2) Which of the following best describes market target?

A) dividing the market into smaller, meaningful groups of customers B) a promise to a group of customers C) evaluating and identifying a meaningful group of customers to serve D) creating a unique offering to provide customer value E) identifying a clear and distinct place in the customer's brain that the brand or company should occupy Answer: C Diff: 1 Type: MC Page Ref: 240 Skill: Concept Objective: 7-1 3) Which of the following best describes positioning?

A) dividing the market into smaller, meaningful groups of customers B) a promise to a group of customers C) evaluating and identifying a meaningful group of customers to serve D) creating a unique offering to provide customer value E) identifying a clear and distinct place in the customer's mind that the brand or company should occupy relative to the competition Answer: E Diff: 1 Type: MC Page Ref: 240 Skill: Concept Objective: 7-1

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4) Which of the following best describes differentiation?

A) dividing the market into smaller, meaningful groups of customers B) a promise to a group of customers C) evaluating and identifying a meaningful group of customers to serve D) creating a unique offering to provide customer value E) identifying a clear and distinct place in the customer's brain that the brand or company should occupy Answer: D Diff: 1 Type: MC Page Ref: 240 Skill: Concept Objective: 7-1 5) When a company identifies the parts of the market it can serve best and most profitably, it is practicing ________.

A) concentrated marketing B) mass marketing C) market targeting D) segmenting E) differentiation Answer: C Diff: 2 Type: MC Page Ref: 240 Skill: Concept Objective: 7-1 6) What are the four steps, in order, to designing a customer-driven marketing strategy?

A) market segmentation, differentiation, positioning, and targeting B) positioning, market segmentation, mass marketing, and targeting C) market segmentation, targeting, differentiation, and positioning D) market alignment, market segmentation, differentiation, and market positioning E) market recognition, market preference, market targeting, and market insistence Answer: C Diff: 2 Type: MC Page Ref: 239 Skill: Concept Objective: 7-1 7) Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached ________ and effectively with products and services that match their unique needs.

A) efficiently B) slowly C) intensely D) indirectly E) directly Answer: A Diff: 2 Type: MC Page Ref: 240 Skill: Concept Objective: 7-2 2 Copyright © 2017 Pearson Canada Inc.

8) There ________ to segment a market.

A) is one single best way B) is no single way C) is not a most effective way D) are limited ways E) are four ways Answer: B Diff: 2 Type: MC Page Ref: 240 Skill: Concept Objective: 7-2 9) Your firm's research reveals that consumers have different tastes in different cities. As a result, management has decided to localize its products and services to meet local market demands. This is an example of ________ segmentation.

A) geographic B) benefit C) end-use D) customer E) image Answer: A Diff: 1 Type: MC Page Ref: 240 Skill: Concept Objective: 7-2 10) Pendergraff Pet Supplies divides the pet market according to the owners' ethnicity, occupation, income, and family life cycle. What type of segmentation does Pendergraff use?

A) geographic B) behavioural C) lifestyle D) demographic E) psychographic Answer: D Diff: 1 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2

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11) Through talking to numerous competitors at a regional trade show, you learn that most of them use the most popular base for segmenting markets. What is it?

A) demographic B) lifestyle C) psychographic D) behavioural E) geographic Answer: A Diff: 2 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 12) Demographic variables are so frequently used in market segmentation because they ________.

A) create smaller segments B) create more easily reached segments C) do not involve stereotypes D) tend to be easier to identify and measure E) involve fewer attributes to consider Answer: D Diff: 2 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 13) When Burger King targets children, teens, adults, and seniors with different ads and media, it is practicing ________ segmentation.

A) geographic B) age and life cycle C) psychographic D) behavioural E) usage rate Answer: B Diff: 2 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 14) Marketers must be careful to guard against ________ when using age and life cycle segmentation.

A) underestimating B) stereotyping C) traditional marketing D) cultural bias E) gender bias Answer: B Diff: 3 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 4 Copyright © 2017 Pearson Canada Inc.

15) When Positive Image, Inc., caters to clothing, cosmetics, and toiletries markets, it is most likely primarily using which type of segmentation?

A) age and life cycle B) gender C) behaviour D) psychographic E) geographic Answer: B Diff: 2 Type: MC Page Ref: 242-243 Skill: Concept Objective: 7-2 16) Marketers of automobiles, financial services, and travel are most likely to use which of the following types of segmentation?

A) gender B) life cycle C) occasion D) usage rate E) benefits sought Answer: B Diff: 2 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 17) The division of buyers into groups based on their knowledge, attitudes, uses, or responses to a product is ________ segmentation.

A) behavioural B) psychographic C) age and life cycle D) demographic E) geographic Answer: A Diff: 2 Type: MC Page Ref: 245 Skill: Concept Objective: 7-2

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18) Which type of segmentation centers on the use of the word when, such as when consumers get the idea to buy, when they actually make their purchase, or when they use the purchased item?

A) demographic B) psychographic C) occasion D) impulse E) emergency Answer: C Diff: 2 Type: MC Page Ref: 245 Skill: Concept Objective: 7-2 19) Markets can be segmented into groups of nonusers, ex-users, potential users, first-time users, and regular users of a product. This method of segmentation is called ________.

A) user status B) usage rate C) benefit D) behaviour E) loyalty status Answer: A Diff: 1 Type: MC Page Ref: 247 Skill: Concept Objective: 7-2 20) Consumers can show their allegiance to brands, stores, or companies. Marketers can use this information to segment consumers by ________.

A) user status B) loyalty status C) store type D) brand preference E) usage rate Answer: B Diff: 1 Type: MC Page Ref: 248 Skill: Concept Objective: 7-2

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21) By studying its less loyal buyers, a company can detect which brands are most ________ with its own.

A) competitive B) used C) often overlooked D) similar E) complementary Answer: A Diff: 2 Type: MC Page Ref: 248 Skill: Concept Objective: 7-2 22) Many firms make an effort to identify smaller, better-defined target groups by using ________.

A) user rates B) loyalty segmentation C) multiple segmentation bases D) positioning E) mass marketing Answer: C Diff: 2 Type: MC Page Ref: 248 Skill: Concept Objective: 7-2 23) Consumer and business marketers use many of the same variables to segment markets.

Business marketers use which of the following?

A) operational behaviours B) purchasing plans C) situational factors D) product characteristics E) brand personalities Answer: C Diff: 2 Type: MC Page Ref: 250 Skill: Concept Objective: 7-2 24) As in consumer segmentation, many marketers believe that ________ and ________ segmentation provide the best basis for segmenting business markets.

A) geographic; demographic B) user status; user loyalty C) benefits; buying behaviour D) age and life-cycle; psychographic E) income; usage rate Answer: C Diff: 2 Type: MC Page Ref: 250 Skill: Concept Objective: 7-2 7 Copyright © 2017 Pearson Canada Inc.

25) International Drilling Company is a business-to-business company that segments its foreign markets by the income levels of a country's population. This firm segments on what basis?

A) political factors B) legal factors C) geographic factors D) economic factors E) cultural factors Answer: D Diff: 1 Type: MC Page Ref: 251 Skill: Concept Objective: 7-2 26) Wealth TV is a channel that segments its market based on the household income levels of television viewers. This firm segments on what basis?

A) geographic segmentation B) demographic segmentation C) psychographic segmentation D) behavioural segmentation E) situational factors Answer: B Diff: 1 Type: MC Page Ref: 242 Skill: Concept Objective: 7-2 27) If Wealth TV decides to segment its market based on the social class of television viewers, what segmentation approach is Wealth TV using?

A) geographic segmentation B) demographic segmentation C) psychographic segmentation D) behavioural segmentation E) situational factors Answer: C Diff: 2 Type: MC Page Ref: 244 Skill: Concept Objective: 7-2 28) In Canada, cranberry sauce sales spike right before Thanksgiving, Christmas, and other holidays. A segmentation that seems to describe this phenomenon is ________.

A) social class B) personality C) occasion D) readiness stage E) education Answer: C Diff: 2 Type: MC Page Ref: 245 Skill: Concept Objective: 7-2 8 Copyright © 2017 Pearson Canada Inc.

29) Lexus targets wealthy consumers with similar needs and buying behaviours, even though the consumers are located in different countries. This is an example of ________.

A) intermarket segmentation B) loyalty segmentation C) life-cycle segmentation D) targeting segmentation E) psychographic segmentation Answer: A Diff: 1 Type: MC Page Ref: 251 Skill: Concept Objective: 7-2 30) When the size, purchasing power, and profiles of a market segment can be determined, it possesses the requirement of being ________.

A) measurable B) accessible C) substantial D) actionable E) observable Answer: A Diff: 2 Type: MC Page Ref: 252 Skill: Concept Objective: 7-2 31) When a market segment is large or profitable enough to serve, it is termed ________.

A) measurable B) accessible C) substantial D) actionable E) differentiable Answer: C Diff: 2 Type: MC Page Ref: 252 Skill: Concept Objective: 7-2 32) When an effective program can be designed for attracting and serving a chosen segment, the segment is best described as ________.

A) accessible B) measurable C) reachable D) actionable E) differentiable Answer: D Diff: 2 Type: MC Page Ref: 252 Skill: Concept Objective: 7-2 9 Copyright © 2017 Pearson Canada Inc.

33) The market segments your company is targeting are conceptually distinguishable and respond differently to different marketing mix elements and programs. Therefore, these segments are ________.

A) accessible B) measurable C) reachable D) differentiable E) observable Answer: D Diff: 2 Type: MC Page Ref: 252 Skill: Concept Objective: 7-2 34) To evaluate the different market segments your company is serving, you would look at which of the following factors?

A) consumer size B) product growth C) segment structural attractiveness D) company culture E) company competitors Answer: C Diff: 3 Type: MC Page Ref: 252 Skill: Concept Objective: 7-3 35) Barney Hopkins has compiled a list of things that make segments more attractive. Which of the following items should be on the list?

A) profitability B) powerful suppliers to control prices C) many substitute products D) competition with superior resources E) financial resources Answer: A Diff: 2 Type: MC Page Ref: 252 Skill: Concept Objective: 7-3

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36) Which of the following is one of the reasons a segment would be less attractive to a company?

A) no competitors B) substitute products C) concentrated market D) does not match company's long run objectives E) power of suppliers Answer: D Diff: 2 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 37) Purrsonals.com calls itself "the cat lover's social network." Which targeting approach best describes the site's approach?

A) undifferentiated marketing B) differentiated marketing C) mass marketing D) niche marketing E) substitute marketing Answer: D Diff: 2 Type: MC Page Ref: 254 Skill: Concept Objective: 7-3 38) In general, a company should enter only segments in which it can ________ and ________.

A) offer lower prices; ship faster B) offer superior value; gain advantages over competitors C) offer superior value; ship faster D) gain advantages over competitors; offer new products E) identify behaviours; understand spending power Answer: B Diff: 2 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 39) The 55-year-old baby boomers share common needs in music and performers. When a music company decides to serve this group, the group is called a(n) ________.

A) market segment B) target market C) well-defined market D) differentiated market E) undifferentiated market Answer: B Diff: 1 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 11 Copyright © 2017 Pearson Canada Inc.

40) Mass marketers, such as Target and Venture Stores, often ignore market segment differences and target the whole market with one offer. What is their approach to segmenting?

A) undifferentiated marketing B) differentiated marketing C) target marketing D) concentrated marketing E) micromarketing Answer: A Diff: 1 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 41) When New Port Shipping uses segmented marketing, it targets several segments and designs separate offers for each one. This approach is called ________ marketing.

A) undifferentiated B) differentiated C) individual D) mass E) niche Answer: B Diff: 2 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 42) Typically, developing a strong position within several market segments creates more total sales than ________ marketing across all segments.

A) undifferentiated B) differentiated C) niche D) target E) individual Answer: A Diff: 2 Type: MC Page Ref: 253 Skill: Concept Objective: 7-3 43) ByWay Ventures chose a differentiated marketing strategy. The company had to weigh ________ against ________ when selecting this strategy.

A) extra research; costs B) sales analysis; sales C) increased sales; increased costs D) geographic segmentation; demographic segmentation E) attitudes; perceptions Answer: C Diff: 2 Type: MC Page Ref: 254 Skill: Concept Objective: 7-3 12 Copyright © 2017 Pearson Canada Inc.

44) Procter & Gamble sells six brands of laundry detergent in North America, each designed for one of six laundry type segments Procter & Gamble has identified. Together, these six brands take four times the market share of Procter & Gamble's nearest competitor. Which of the following is a disadvantage of Procter & Gamble's differentiated marketing strategy?

A) lost sales that would have been made with an undifferentiated marketing strategy across all segments B) lost customer loyalty due to lack of brand loyalty C) increased costs for separate marketing plans for each brand D) other suppliers controlling pricing E) lack of resources to succeed in an attractive segment Answer: C Diff: 2 Type: MC Page Ref: 254 Skill: Concept Objective: 7-3 45) Using concentrated marketing, the marketer goes after a ________ share of ________.

A) small; a small market B) small; a large market C) large; one or a few niches D) large; the mass market E) moderate; the local market Answer: C Diff: 2 Type: MC Page Ref: 254 Skill: Concept Objective: 7-3 46) It is most accurate to say that successful niche marketing relies on a firm's ________ and its ________.

A) marketing strategy; services B) individual relationships with customers; positioning C) superior products; value network partners D) greater knowledge of customers' needs; special reputation E) competitive advantage in comparison to mass-market companies; affordable pricing Answer: D Diff: 2 Type: MC Page Ref: 254 Skill: Concept Objective: 7-3

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47) Niche marketing offers smaller companies the opportunity to compete by focusing their limited resources on serving niches that may be ________ or ________ larger companies.

A) unimportant to; desired by B) unimportant to; overlooked by C) too large; undesirable to D) unknown by; desired by E) disappointed by; geographically far from Answer: B Diff: 2 Type: MC Page Ref: 255 Skill: Concept Objective: 7-3 48) Today, companies are ________ because they have the tools to interact on a one-to-one basis with masses of customers.

A) in malls in major cities B) in mail-order catalogs C) hyper-customizing D) near major competitors E) far from competitors Answer: C Diff: 1 Type: MC Page Ref: 257 Skill: Concept Objective: 7-3 49) Which of the segmenting strategies makes the most sense when a company introduces a new product?

A) concentrated B) mass C) differentiated D) individual marketing E) multiple-segment Answer: A Diff: 2 Type: MC Page Ref: 257 Skill: Concept Objective: 7-3

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50) As You Like It, Inc., customizes its offers to each individual consumer. This practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations is referred to as ________ marketing.

A) niche B) micro C) variable D) mass E) undifferentiated Answer: B Diff: 2 Type: MC Page Ref: 255 Skill: Concept Objective: 7-3 51) ________ marketing tailors brands and promotions to the needs and wants of specific cities, neighborhoods, and even stores.

A) Undifferentiated B) Differentiated C) Niche D) Local E) Variable Answer: D Diff: 1 Type: MC Page Ref: 255 Skill: Concept Objective: 7-3 52) Which of the following is an extreme form of market segmentation?

A) segmented strategy B) micromarketing C) differentiated marketing D) mass marketing E) undifferentiated marketing Answer: B Diff: 3 Type: MC Page Ref: 255 Skill: Concept Objective: 7-3 53) Which of the following is a drawback of local marketing?

A) It can drive up manufacturing agents.

B) It can drive up marketing costs by reducing economies of scale.

C) It can create logistics opportunities.

D) A brand's overall image will be enhanced through added variation.

E) Supporting technologies are not cost-effective.

Answer: B Diff: 3 Type: MC Page Ref: 256 Skill: Concept Objective: 7-3 15 Copyright © 2017 Pearson Canada Inc.

54) Under what circumstances would local marketing likely be the most effective?

A) when pronounced differences in psychographics are present B) when pronounced differences in lifestyles are present C) when pronounced regional and local differences in demographics and lifestyles are present D) when regional demographics and lifestyles are similar E) when pronounced similarities in psychographics are present Answer: C Diff: 2 Type: MC Page Ref: 256 Skill: Concept Objective: 7-3 55) When Walmart customizes its merchandise store by store to meet shopper needs, it is practicing ________.

A) niche marketing B) psychographic marketing C) local marketing D) social segmentation E) individual marketing Answer: C Diff: 2 Type: MC Page Ref: 255 Skill: Concept Objective: 7-3 56) When a company interacts one-on-one with large numbers of customers to create customerunique value by designing products and services tailor-made to individual needs, it is following ________.

A) concentrated marketing B) mass marketing C) mass customization D) undifferentiated marketing E) localization Answer: C Diff: 2 Type: MC Page Ref: 256 Skill: Concept Objective: 7-3 57) Mass customization has made relationships with customers ________.

A) irrelevant B) more important than ever C) less profitable D) easier E) self-conceptualized Answer: B Diff: 2 Type: MC Page Ref: 257 Skill: Concept Objective: 7-3 16 Copyright © 2017 Pearson Canada Inc.

58) When choosing a target marketing strategy, many factors need to be considered. Which of the following does your text mention as important?

A) company natural resources B) unlimited resources C) product life-cycle stage D) product cost E) your marketing strategies Answer: C Diff: 2 Type: MC Page Ref: 257 Skill: Concept Objective: 7-3 59) When competitors use differentiated or concentrated marketing, ________ marketing can be disastrous.

A) differentiated B) undifferentiated C) concentrated D) customized E) localized Answer: B Diff: 2 Type: MC Page Ref: 257 Skill: Concept Objective: 7-3 60) Target marketing sometimes generates controversy and concern. Issues usually involve the targeting of ________ consumers with ________ products.

A) elderly; expensive B) young; appealing C) vulnerable; marketing D) vulnerable or disadvantaged; controversial or potentially harmful E) mass market; deceptive Answer: D Diff: 2 Type: MC Page Ref: 258 Skill: Concept Objective: 7-3 61) It is considered socially irresponsible when the marketing of adult products spills over into the ________ segment.

A) elderly B) child C) animal D) minority E) senior Answer: B Diff: 1 Type: MC Page Ref: 258 Skill: Concept Objective: 7-3 17 Copyright © 2017 Pearson Canada Inc.

62) From cereal and toys to fast food and fashion marketers have generated much controversy in recent years by their attempts to target ________.

A) the elderly B) white-collar workers C) children D) multiple international markets E) suburban adults Answer: C Diff: 2 Type: MC Page Ref: 258 Skill: Concept Objective: 7-3 63) Most market targeting draws no criticism because it ________ customers.

A) benefits B) education C) disadvantages D) harm E) expenses Answer: A Diff: 2 Type: MC Page Ref: 258 Skill: Concept Objective: 7-3 64) In target marketing, the issue is not really who is targeted, but rather ________ and for ________.

A) why; what B) how; what C) why; how long D) where; how long E) how; where Answer: B Diff: 2 Type: MC Page Ref: 259 Skill: Concept Objective: 7-3 65) Which group determines a product's position relative to competing products?

A) manufacturers B) wholesalers C) retailers D) consumers E) suppliers Answer: D Diff: 2 Type: MC Page Ref: 259 Skill: Concept Objective: 7-4 18 Copyright © 2017 Pearson Canada Inc.

66) A product's position is based on important attributes as perceived by ________.

A) suppliers B) competitors C) market conditions D) consumers E) managers Answer: D Diff: 2 Type: MC Page Ref: 259 Skill: Concept Objective: 7-4 67) Which of the listed choices is a very important positioning task?

A) identifying a set of possible competitive advantages upon which to build a position B) surveying frequent uses of the product C) selecting a specific positioning statement D) effectively selling the cheapest position to the market E) selecting the right competition Answer: A Diff: 2 Type: MC Page Ref: 261 Skill: Concept Objective: 7-4 68) A company or store gains a(n) ________ by differentiating its products and delivering more value.

A) competitive advantage B) positioning advantage C) cost advantage D) efficiency advantage E) synergy Answer: A Diff: 1 Type: MC Page Ref: 262 Skill: Concept Objective: 7-4 69) A company or market offer can be differentiated along the lines of product, image, services, channels, or ________.

A) prices B) nonprice factors C) people D) customer service E) location Answer: C Diff: 2 Type: MC Page Ref: 262 Skill: Concept Objective: 7-4

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70) Which type of differentiation is used to gain competitive advantage through the way a firm designs its distribution coverage, expertise, and performance?

A) services differentiation B) channel differentiation C) people differentiation D) product differentiation E) price differentiation Answer: B Diff: 1 Type: MC Page Ref: 262 Skill: Concept Objective: 7-4 71) When firms use symbols, colors, or characters to convey their personalities, they are using ________ differentiation.

A) image B) people C) company D) reputation E) subliminal Answer: A Diff: 1 Type: MC Page Ref: 262 Skill: Concept Objective: 7-4 72) Ad man Rosser Reeves believes that firms should develop a USP for each brand and stick to it. What does USP stand for?

A) unique selling product B) unique services practice C) unique sales pitch D) unique selling proposition E) universally strategic practice Answer: D Diff: 2 Type: MC Page Ref: 263 Skill: Concept Objective: 7-4 73) Not every brand difference is worth establishing and promoting. A difference is worth promoting to the extent that it satisfies which of the following criteria?

A) competitive B) alternative C) divisible D) superior E) reactive Answer: D Diff: 3 Type: MC Page Ref: 263 Skill: Concept Objective: 7-4 20 Copyright © 2017 Pearson Canada Inc.

74) You have just created the "perfect" ad. It communicates the full mix of benefits upon which the brand is differentiated and positioned. This full positioning of the brand is called ________.

A) its value proposition B) target marketing C) capturing the consumers' attention D) value profiling E) differentiated marketing Answer: A Diff: 2 Type: MC Page Ref: 263-264 Skill: Concept Objective: 7-4 75) The answer to the customer's question, "Why should I buy your brand?" is found in the ________.

A) quality image B) customer services C) value proposition D) differentiation E) pricing and promotion structure Answer: C Diff: 2 Type: MC Page Ref: 264 Skill: Concept Objective: 7-4 76) What competitive positioning strategy can attack a more-for-more strategy by introducing a brand offering with comparable quality at a lower price?

A) more-for-the-same B) more-for-less C) same-for-less D) less-for-much-less E) all-or-nothing Answer: A Diff: 2 Type: MC Page Ref: 264 Skill: Concept Objective: 7-4

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77) Which positioning strategy offers consumers a "good deal" by offering equivalent-quality products or services at a lower price?

A) more-for-the-same B) more-for-less C) same-for-less D) less-for-much-less E) all-or-nothing Answer: C Diff: 2 Type: MC Page Ref: 264 Skill: Concept Objective: 7-4 78) "Less-for-much-less" positioning involves meeting consumers' ________.

A) quality performance requirements at a lower price B) lower quality requirements in exchange for a lower price C) lower quality requirements at the lowest possible price D) high quality requirements at a discounted rate E) high quality requirements at the lowest possible price Answer: B Diff: 1 Type: MC Page Ref: 264 Skill: Concept Objective: 7-4 79) Few people can afford the best in everything they buy. At times everyone needs a product with less quality or performance with a correspondingly lower price. In this case, a consumer would purchase a product positioned with a(n) ________ strategy.

A) more-for-the-same B) more-for-less C) same-for-less D) less-for-much-less E) all-or-nothing Answer: D Diff: 1 Type: MC Page Ref: 264 Skill: Concept Objective: 7-4 80) Which difficult-to-achieve positioning strategy attempts to deliver the winning value proposition?

A) more-for-the-same B) more-for-less C) same-for-less D) more-for-more E) less-for-much-less Answer: B Diff: 2 Type: MC Page Ref: 265 Skill: Concept Objective: 7-4 22 Copyright © 2017 Pearson Canada Inc.

81) Which type of statement first states the product's membership in a category and then shows its point-of-difference from other members of the category?

A) mission statement B) vision statement C) differentiation statement D) positioning statement E) statement of intent Answer: D Diff: 1 Type: MC Page Ref: 265 Skill: Concept Objective: 7-4 82) What is the following an example of? "To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go."

A) positioning statement B) service differentiation C) concentrated segmentation D) competitive advantage E) responsible target marketing Answer: A Diff: 2 Type: MC Page Ref: 266 Skill: Concept Objective: 7-4 83) Once it has chosen a position, a company must take strong steps to deliver and communicate that position to target consumers. Which of the following is necessarily needed for a company to support its positioning strategy?

A) The company's marketing mix efforts must support the positioning strategy.

B) Positioning the company calls for moving to more profitable locations.

C) Designing the marketing mix involves working out the strategic details of advertising.

D) The company's service personnel must be highly trained and provide superior service.

E) The company must outperform the competition first.

Answer: A Diff: 3 Type: MC Page Ref: 266 Skill: Concept Objective: 7-4

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84) When marketers at Procter & Gamble selected the Millennials, a demographic that includes college students, as an untapped group of potential customers for their Febreze line of products, they were executing which step in the process of designing a customer-driven marketing strategy?

A) market segmenting B) mass marketing C) differentiation D) targeting E) positioning Answer: D Diff: 1 Type: MC Page Ref: 240 Skill: Application Objective: 7-1 85) When Pacific Fisheries groups its customers as countries by regions such as Asia, Australia, or New Zealand, it is using which segmenting base?

A) economic B) political and legal C) geographic D) demographic Answer: C Diff: 1 Type: MC Page Ref: 240 Skill: Application Objective: 7-2 86) Which of the following statements illustrates why stereotypes should be avoided when using age and life cycle segmentation?

A) Old women love to shop; young women love it more!

B) Most 10-year-old boys are mischievous.

C) Some 70-year-olds require wheelchairs; others play tennis.

D) The majority of 20-year-olds have to work; the same holds true for 30- and 40-year-olds.

E) both C and D Answer: C Diff: 2 Type: MC Page Ref: 242 Skill: Application Objective: 7-2

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87) Segmenting voters as either Liberals, Conservatives, Green Party or NDP is an example of ________.

A) psychographic segmentation B) demographic segmentation C) occasion segmentation D) intermarket segmentation E) geographic segmentation Answer: A Diff: 3 Type: MC Page Ref: 244-245 Skill: Application Objective: 7-2 88) Bud Lite originally launched with the slogan "Tastes great and less filling!" This slogan suggests Bud Lite used which type of segmentation?

A) user status B) usage rate C) benefit D) behavioural E) psychographic Answer: C Diff: 2 Type: MC Page Ref: 247 Skill: Application Objective: 7-2 89) Your current assignment at York Foods is to find the major benefits people look for in product classes, the kinds of people who look for each benefit, and the major brands that deliver each benefit. What is this segmentation method called?

A) benefits sought B) user status C) age and life cycle D) psychographic E) demographic Answer: A Diff: 1 Type: MC Page Ref: 247 Skill: Application Objective: 7-2

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90) Shampoo marketers rate buyers as light, medium, or heavy product users. This is ________ segmentation.

A) user status B) usage rate C) benefits sought D) occasions E) psychographic Answer: B Diff: 1 Type: MC Page Ref: 248 Skill: Application Objective: 7-2 91) MTV targets the world's teenagers, who have similar needs and buying behaviour even though they are located in different countries. This is called ________ segmentation.

A) political and legal B) cross-cultural C) cultural D) intermarket E) individual Answer: D Diff: 2 Type: MC Page Ref: 251 Skill: Application Objective: 7-2 92) Pabst beer had a revival in Canada when it began targeting hipsters, a group of people who embrace edginess in their lives with independent thought, progressive thought, creativity, and witty banter. This targeting likely follows which segmentation approach?

A) social class B) lifestyle C) occupation D) attitude towards the product E) personality Answer: B Diff: 2 Type: MC Page Ref: 242 Skill: Application Objective: 7-2

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93) The markets you have chosen to serve in four western provinces can be effectively reached and served. You would tell the marketing manager that these segments are ________.

A) measurable B) accessible C) substantial D) actionable E) profitable Answer: B Diff: 1 Type: MC Page Ref: 252 Skill: Application Objective: 7-3 94) Jolene Enterprises mass-produces an all-purpose floor cleaner, mass-distributes it, and masspromotes it. This firm uses ________ marketing.

A) segmented B) undifferentiated C) traditional D) differentiated E) concentrated Answer: B Diff: 1 Type: MC Page Ref: 253 Skill: Application Objective: 7-3 95) A marketer focuses on several commonalities among all consumers. This marketer appears to be engaging in ________.

A) differentiated marketing B) undifferentiated marketing C) segmented marketing D) mass customization E) concentrated marketing Answer: B Diff: 2 Type: MC Page Ref: 253 Skill: Application Objective: 7-3 96) Sanguine Services practices a marketing strategy where its limited resources are used to go after a large share of two small niches. Sanguine practices which one of these strategies?

A) undifferentiated B) differentiated C) mass D) concentrated E) geographically dispersed Answer: D Diff: 2 Type: MC Page Ref: 254 Skill: Application Objective: 7-3 27 Copyright © 2017 Pearson Canada Inc.

97) Which of the following is the most logical reason for Procter & Gamble offering products that compete with one another on the same supermarket shelves?

A) Different people want a greater selection.

B) Different people want different mixes of benefits from the products they buy.

C) Procter & Gamble has little competition.

D) Retailers request it.

E) It creates healthy competition.

Answer: B Diff: 3 Type: MC Page Ref: 253 Skill: Application Objective: 7-3 98) Bob and Phyllis Cords own two retail stores, one in Nanaimo and one in Victoria. Though the cities are only 60 kilometers apart, the consumers at both stores are very different demographically. Bob and Phyllis alter the product offerings between both locations in an effort to cater to both demographic groups. This is an example of ________.

A) local marketing B) psychographic segmentation C) individual marketing D) demographic segmentation E) mass marketing Answer: A Diff: 3 Type: MC Page Ref: 255 Skill: Application Objective: 7-3 99) Jay Bee Promotions tailors its advertising and promotional services to the needs and preferences of individual customers. Which of the following applies to this type of marketing?

A) many-to-one B) mass customization C) markets-of-many D) concentrated E) mass modernization Answer: B Diff: 2 Type: MC Page Ref: 256 Skill: Application Objective: 7-3

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100) Jaygo Food Stores hires better employees than the competition by conducting lengthy searches and interviews. Management also trains employees much better than competitors. Jaygo has gained a strong competitive advantage through which type of differentiation?

A) image B) people C) services D) product E) channel Answer: B Diff: 2 Type: MC Page Ref: 262 Skill: Application Objective: 7-4 101) Ford Motor Company emphasizes "Quality first—Ford tough" in its truck products. The company has developed a differentiation strategy based on ________.

A) people B) image C) channels D) services E) positioning Answer: B Diff: 2 Type: MC Page Ref: 262 Skill: Application Objective: 7-4 102) Neiman Marcus claims superior quality, performance, and style. The owners provide the most upscale products and services and charge a higher price to cover the higher costs. What type of positioning does Neiman Marcus use?

A) more-for-the-same B) more-for-more C) repositioning D) the-same-for-less E) more-for-less Answer: B Diff: 1 Type: MC Page Ref: 264 Skill: Application Objective: 7-4

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103) When it first opened for business, Home Depot claimed to offer better products at lower prices. This hard-to-sustain value proposition is called ________.

A) more-for-the same B) more-for-less C) same-for-less D) more-for-more E) same-for-more Answer: B Diff: 2 Type: MC Page Ref: 265 Skill: Application Objective: 7-4 104) Superior Auto Sales, a chain of high-end used car dealerships, wants to sum up its company positioning and brand positioning in a formal way. Superior's management would use a ________.

A) mission statement B) vision statement C) competitive statement D) positioning statement E) company statement Answer: D Diff: 2 Type: MC Page Ref: 266 Skill: Application Objective: 7-4 105) Today, most companies have moved away from mass marketing and are being choosier about the customers with whom they wish to build relationships.

Answer: TRUE Diff: 2 Type: TF Page Ref: 239 Skill: Concept Objective: 7-1 106) Your company wants to move away from mass marketing and engage in customer-driven marketing. The four steps to take, in order, are market segmentation, marketing positioning, differentiation, and targeting.

Answer: FALSE Diff: 2 Type: TF Page Ref: 239 Skill: Concept Objective: 7-1 107) Bombay Gifts divides its markets into units of nations, regions, and cities. Bombay uses geographic segmentation.

Answer: TRUE Diff: 1 Type: TF Page Ref: 240 Skill: Application Objective: 7-2 30 Copyright © 2017 Pearson Canada Inc.

108) Demographic segmentation focuses on different marketing approaches for different time periods of people's lives and different family situations.

Answer: FALSE Diff: 2 Type: TF Page Ref: 242 Skill: Concept Objective: 7-2 109) Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines.

Answer: TRUE Diff: 1 Type: TF Page Ref: 242 Skill: Concept Objective: 7-2 110) Shopping For The Rich and Famous is a buying service that helps wealthy clients find the best buys in exclusive clothing, high-end cars, travel, and financial services. This firm would use household income segmentation.

Answer: TRUE Diff: 2 Type: TF Page Ref: 244 Skill: Application Objective: 7-2 111) Your assignment at work is to divide buyers into different groups based on social class, lifestyle, and personality characteristics. After a planning session with the marketing and sales staff, you issue a memo to upper management recommending psychographic segmentation. You are right on target.

Answer: TRUE Diff: 2 Type: TF Page Ref: 244-245 Skill: Concept Objective: 7-2 112) User status segmentation involves finding the major advantages or features people look for in the product class, the kinds of people who look for each advantage or feature, and the major brands that deliver each advantage or feature.

Answer: FALSE Diff: 2 Type: TF Page Ref: 247 Skill: Concept Objective: 7-2 113) LaGrange Florists segments markets into groups of nonusers, ex-users, potential users, firsttime users, and regular users of its flowers and services. This firm uses usage rate as the segmentation approach.

Answer: FALSE Diff: 2 Type: TF Page Ref: 247-248 Skill: Application Objective: 7-2

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114) Research about and planning for loyalty status as a segmentation approach is generally not useful or practical for most firms.

Answer: FALSE Diff: 2 Type: TF Page Ref: 248 Skill: Concept Objective: 7-2 115) For simplicity's sake, most marketers generally limit their segmentation analysis to one or a few variables.

Answer: FALSE Diff: 2 Type: TF Page Ref: 248 Skill: Concept Objective: 7-2 116) Clusters of marketable groups of customers with similar likes, dislikes, lifestyles, and purchase behaviors can be identified by multivariable segmentation systems that merge and analyze geographic, demographic, lifestyle, and behavioural data.

Answer: TRUE Diff: 2 Type: TF Page Ref: 248 Skill: Concept Objective: 7-2 117) Business and consumer marketers use the same set of variables to segment their markets.

Answer: FALSE Diff: 2 Type: TF Page Ref: 250 Skill: Concept Objective: 7-2 118) The majority of North America-based companies have developed the resources and the will to operate in multiple foreign countries.

Answer: FALSE Diff: 2 Type: TF Page Ref: 250 Skill: Concept Objective: 7-2 119) There are many exceptions to the geographic segmentation assumption that consumers in nations close to one another will have many common behaviours and traits.

Answer: TRUE Diff: 2 Type: TF Page Ref: 250 Skill: Concept Objective: 7-2

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120) Because there is such variation among the economies of countries around the world, it is not practical to segment international markets on the basis of economic factors.

Answer: FALSE Diff: 2 Type: TF Page Ref: 251 Skill: Concept Objective: 7-2 121) For market segments to be useful they must be measurable, accessible, substantial, differentiable, and actionable.

Answer: TRUE Diff: 2 Type: TF Page Ref: 252 Skill: Concept Objective: 7-2 122) In evaluating different market segments, a firm must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources.

Answer: TRUE Diff: 2 Type: TF Page Ref: 252 Skill: Concept Objective: 7-3 123) At a recent marketing seminar, the featured speaker stated that a target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. This is a correct definition.

Answer: TRUE Diff: 1 Type: TF Page Ref: 253 Skill: Concept Objective: 7-3 124) Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments.

Answer: TRUE Diff: 2 Type: TF Page Ref: 253 Skill: Concept Objective: 7-3 125) Because Cruise Ships International currently has limited financial and personnel resources, it should avoid concentrated or niche marketing until resources are again substantial.

Answer: FALSE Diff: 2 Type: TF Page Ref: 255 Skill: Application Objective: 7-3

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126) Niche marketing offers smaller companies an opportunity to compete by focusing their limited resources on serving niches that may be unimportant to or overlooked by larger companies.

Answer: TRUE Diff: 1 Type: TF Page Ref: 255 Skill: Concept Objective: 7-3 127) Though the use of mass marketing has been widespread in the past 100 years, for centuries consumers were served as individuals as businesses practiced individual marketing.

Answer: TRUE Diff: 1 Type: TF Page Ref: 256 Skill: Concept Objective: 7-3 128) Mass marketing is becoming the marketing principle for the twenty-first century.

Answer: FALSE Diff: 1 Type: TF Page Ref: 256 Skill: Concept Objective: 7-3 129) When a company chooses a target marketing strategy, its choices are influenced by factors related to company resources, the degree of product variability, and the product's life-cycle stage.

Answer: TRUE Diff: 2 Type: TF Page Ref: 257 Skill: Concept Objective: 7-3 130) Most marketing targeted at children, minorities, or other special segments provides benefits to targeted consumers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 258 Skill: Concept Objective: 7-3 131) A product's position is the way the product is defined by the retailers who sell it to target markets. It is how it is defined on important attributes—the place the product occupies in the retailers' minds relative to competing products.

Answer: FALSE Diff: 1 Type: TF Page Ref: 259 Skill: Concept Objective: 7-4

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132) Consumers position products in their minds in order to simplify the buying process.

Answer: TRUE Diff: 2 Type: TF Page Ref: 259 Skill: Concept Objective: 7-4 133) When Kia offers a new model of car with the same features as a comparable Toyota or Ford and provides a longer warranty, Kia is following a more-for-less strategy.

Answer: FALSE Diff: 2 Type: TF Page Ref: 264 Skill: Application Objective: 7-4 134) A brand's position is assessed relative to a competitor's positioning.

Answer: TRUE Diff: 2 Type: TF Page Ref: 259 Skill: Application Objective: 7-4 135) Apple says it makes its newest iPad has superior design and usability. Apple is referring to differentiation.

Answer: TRUE Diff: 2 Type: TF Page Ref: 261 Skill: Application Objective: 7-4 136) Explain the four major steps in designing a customer-driven marketing strategy.

Answer: The first step is market segmentation: dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviours, who might require separate products or marketing mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments. The second step is market targeting: evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. The third step is differentiation: actually differentiating the firm's market offering to create a superior customer value. Finally, the last step is market positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers.

Diff: 2 Type: ES Page Ref: 239 Skill: Application Objective: 7-1

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137) Explain the four major segmenting variables for consumer markets.

Answer: Geographic segmentation divides the market into different geographic units, such as nations, regions, states, countries, cities, or neighbourhoods. Many companies are localizing their products, advertising, promotion, and sales efforts or are seeking to cultivate as-yet untapped geographic territory. Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. These are the most popular factors because they are easy to measure, and consumer needs, wants, and usage rates often vary closely with demographic variables. Psychographic segmentation, on the other hand, divides buyers into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic makeup. Behavioural segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product.

Many marketers believe that behaviour variables are the best starting point for building market segments.

Diff: 2 Type: ES Page Ref: 240-248 Skill: Application Objective: 7-1 138) Describe how marketers use multiple-segmenting bases to their advantage.

Answer: Marketers rarely limit their segmenting analysis to only one or a few variables. Instead, they use multiple segmentation bases in an effort to identify smaller, better-defined target groups of consumers who share likes, dislikes, lifestyles, and purchase behaviours. Companies often begin by segmenting their markets using a single base, and then expand using other bases.

Diff: 2 Type: ES Page Ref: 248 Skill: Application Objective: 7-2 139) Why and how do businesses segment their markets?

Answer: By going after segments instead of the whole market, companies have a much better chance to deliver value to customers and to receive maximum rewards for close attention to customer needs. Like consumer groups, business buyers can be segmented using geographic, demographic, benefits sought, user status, usage rate, and loyalty status segmentations. Business buyers are also segmented by the variables of operating characteristics, purchasing approaches, situational factors, and personal characteristics.

Diff: 2 Type: ES Page Ref: 250 Skill: Application Objective: 7-2

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140) How might the marketing mix be different for a hotel targeting a business traveller versus family holiday travellers?

Answer: Business travellers and family travellers are different segments and require different marketing mixes. A business traveller would likely desire his/her room to have a desk, reliable wifi, and possibly an iron and ironing board. Family travellers would likely want larger rooms, multiple beds, and child-safe rooms. Business travellers will likely be more price insensitive than their family counterparts because the business traveller's employer would likely be paying for the room. Hotels targeting the business travellers will tend to be located closer to financial districts and businesses. Family-oriented travellers would tend to stay closer to places with familyoriented entertainment or shopping. Finally, promotions will likely be very different. Business communications may stress convenience, a good night's sleep, and focus on single-person travellers. Promotions geared to families may emphasize fun for the family and value.

Diff: 2 Type: ES Page Ref: 252 Skill: Application Objective: 7-3 141) "Because the Internet has no borders, it is useless for firms offering goods and services over the Internet to use geographical segmentation." Discuss this statement.

Answer: This is not a well-thought out statement. If anything, the Internet expands the number of locations that a firm can reach. Marketers can define and reach segments of like-minded consumers no matter where in the world they are. Therefore, the number of locally segmented groups a firm can reach increases. In addition, local segmentations may be required for products offered, languages, and delivery.

Diff: 2 Type: ES Page Ref: 251 Skill: Application Objective: 7-2 142) Why do international markets need to be segmented?

Answer: Few companies have either the resources or the will to operate in all, or even most, of the countries that dot the globe. Different countries, even those that are close together, can vary greatly in their economic, cultural, technological, and political makeup. International firms need to group their world markets into segments with distinctive buying needs and behaviours.

Diff: 2 Type: ES Page Ref: 250 Skill: Application Objective: 7-2

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143) Imagine that you are presenting a workshop on Requirements for Effective Segmentation.

Briefly describe the five traits of market segments that will help your audience understand your topic.

Answer: The size, purchasing power, and profiles of the segments must be measurable. The major problem may be that the segment will be hard to identify and measure. The market segments must be accessible; that is they can be effectively reached and served. The segment must be substantial or large/profitable enough to serve. It should be the largest possible homogeneous group worth pursuing with a tailored marketing program. To be differentiable, the segments need to be conceptually distinguishable and respond differently to different marketing mix elements and programs. Finally, the segment must be actionable, meaning that effective programs can be designed for attracting and serving consumers who make up the segment.

Diff: 3 Type: ES Page Ref: 252 Skill: Application Objective: 7-2 144) Explain how companies identify attractive market segments and choose a target marketing strategy.

Answer: To target the best market segments, the company first evaluates each segment's size and growth characteristics, structural attractiveness, and compatibility with company objectives and resources. It then chooses one of four marketing strategies—ranging from very broad to very narrow targeting. The seller can ignore segment differences and target broadly using undifferentiated marketing. This involves mass-producing, mass-distributing, and masspromoting about the same product in about the same way to all consumers. Or the seller can adopt differentiated marketing—developing different market offers for several segments.

Concentrated marketing involves focusing on only one or a few market segments. Finally, micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Micromarketing includes local marketing and individual marketing. Which targeting strategy is best depends on company resources, product variability, product life cycle stage, market variability, and competitive marketing strategies.

Diff: 3 Type: ES Page Ref: 252-257 Skill: Application Objective: 7-3 145) Compare and contrast four major segmenting strategies.

Answer: An undifferentiated marketing 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. 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 or niche marketing goes after a large share of one or a few segments or niches instead of going after a share of a large market. These niches may be overlooked, unimportant, or under worked. Niching offers smaller companies an opportunity to compete by focusing their limited resources more effectively. Using micromarketing, a company can tailor products and marketing programs to suit the tastes of specific individuals and locations. It includes local and individual marketing.

Diff: 2 Type: ES Page Ref: 253-257 Skill: Application Objective: 7-3 38 Copyright © 2017 Pearson Canada Inc.

146) In what ways might a marketer engage in socially responsible target marketing?

Answer: Socially responsible marketers work to avoid purposefully targeting vulnerable or disadvantaged consumers with controversial or potentially harmful products. In addition, marketers should reconsider the marketing of adult products that may spill over into the child segment—either intentionally or unintentionally; primary examples include beer, cigarettes, and fast food. The growth of the Internet has also presented potential problems—namely that makers of questionable products or deceptive advertisers may more readily victimize the most vulnerable audiences; marketers can avoid becoming involved in these harmful situations as they attempt to reach vast numbers of consumers with such precise, refined targeting strategies.

Diff: 1 Type: ES Page Ref: 258 Skill: Application Objective: 7-3 147) Explain the concept of positioning for competitive advantage.

Answer: A product's position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products.

Positioning involves implanting the brand's unique benefits and differentiation in customers' minds. To carry out effective positioning, a company must identify a set of possible competitive advantages upon which to build a position, choose the right competitive advantages, and select an overall positioning strategy. The company must then effectively communicate and deliver the chosen position to the market.

Diff: 3 Type: ES Page Ref: 259 Skill: Application Objective: 7-4 148) Why do marketers segment the market?

Answer: Marketers divide heterogeneous markets into smaller groups that can be reached more efficiently with products and services that match their unique tastes; firms focus on buyers they can serve best and most profitably.

Diff: 1 Type: ES Page Ref: 239 Skill: Application Objective: 7-1 149) When might be the best time for a marketer to use geographic segmentation?

Answer: Geographic segmentation may be especially profitable when consumers in different regions, states, counties, and so forth share distinct buying behaviours and product or service preferences.

Diff: 1 Type: ES Page Ref: 240 Skill: Application Objective: 7-2

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150) Why might demographic segmentation be the most common type of segmentation?

Answer: Demographic segmentation is often based on observable features, making demographic segmentation easier than other types. Another reason is that consumer needs, wants and usage rates often vary closely with demographic variables.

Diff: 2 Type: ES Page Ref: 242 Skill: Application Objective: 7-2 151) Why must marketers guard against stereotypes when using age and life cycle segmentation?

Answer: Not all consumers in the same age and life cycle categories share the same abilities and interests; some 40-year-olds may have more in common with typical 20-year-olds, for example, than with other 40-year-olds.

Diff: 3 Type: ES Page Ref: 242 Skill: Application Objective: 7-2 152) What characteristics would interest a marketer who focuses on psychographic segmentation?

Answer: Such characteristics include social class, lifestyle, and personality.

Diff: 1 Type: ES Page Ref: 244-245 Skill: Application Objective: 7-2 153) If Kool-Aid promotes a year-round campaign that "Kool-Aid isn't just a summertime drink," what type of segmentation is being used?

Answer: Occasion segmentation is being used in this scenario.

Diff: 3 Type: ES Page Ref: 245 Skill: Application Objective: 7-2 154) Half of a marketer's consumers buy a product because it is "in style"; the other half buy the product because of its superior functionality. What is this type of segmentation called?

Answer: This is benefit segmentation.

Diff: 3 Type: ES Page Ref: 247 Skill: Application Objective: 7-2 155) What is one way in which a marketer can attract non-loyal consumers?

Answer: Marketers can attract consumers who show no loyalty to any brand by putting their brand on sale or by altering price.

Diff: 2 Type: ES Page Ref: 248 Skill: Application Objective: 7-2

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156) How might a marketer benefit most from using PRIZM? Answer: The Nielsen Company's PRIZM classifies households based on many demographic, behavioral, and lifestyle factors. It then classifies and names these segments according to marketable groups of like-minded consumers. Marketers can more closely tailor their efforts to their target PRIZM segment.

Diff: 3 Type: ES Page Ref: 248 Skill: Application Objective: 7-2 157) List three variables that may be used to segment both consumer and business markets.

Answer: Variables that apply to both consumer and business markets include geographics, demographics, benefits sought, user status, usage rate, and loyalty status.

Diff: 3 Type: ES Page Ref: 250 Skill: Application Objective: 7-2 158) List variables that are applicable to segmenting business markets.

Answer: Operating characteristics, purchasing approaches, situational factors, and personal characteristics can all be used to segment business markets but not consumer markets.

Diff: 3 Type: ES Page Ref: 250 Skill: Application Objective: 7-2 159) What assumption about consumers is made by a marketer using intermarket segmentation?

Answer: Such marketers assume that segments of consumers have similar needs and buying behaviour even though they are located in different countries.

Diff: 3 Type: ES Page Ref: 251 Skill: Application Objective: 7-2 160) What factors may impact segment attractiveness?

Answer: The number of competitors, substitute products, power of buyers, and powerful suppliers may impact segment attractiveness.

Diff: 2 Type: ES Page Ref: 252-253 Skill: Application Objective: 7-3 161) What is one major assumption made by marketers who choose to use an undifferentiated marketing strategy?

Answer: Such marketers assume that all consumers share something in common, regardless of how different the consumers may be.

Diff: 2 Type: ES Page Ref: 253 Skill: Application Objective: 7-3

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162) XYZ Computers, Inc., a business with limited resources, is a market nicher. How might XYZ benefit from this?

Answer: XYZ Computers will have an opportunity to compete by focusing its limited resources on serving niches that may be unimportant to or overlooked by larger competitors.

Diff: 3 Type: ES Page Ref: 254 Skill: Application Objective: 7-3 163) BMW allows customers to design their own vehicle from a set of options at BMW's Web site. What is this called?

Answer: This is mass customization.

Diff: 2 Type: ES Page Ref: 256 Skill: Application Objective: 7-3 164) Explain how market variability impacts the choice of a target-marketing strategy.

Answer: If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing may be appropriate.

Diff: 3 Type: ES Page Ref: 257 Skill: Application Objective: 7-3 165) In which step of target marketing is the marketing mix created in detail?

Answer: Once a marketing positioning statement has been chosen, the company must deliver and communicate the desired position to customers. All the marketing mix efforts must support the positioning strategy.

Diff: 1 Type: ES Page Ref: 265 Skill: Application Objective: 7-4 166) Why might a marketer of laundry detergent be interested in viewing a perceptual positioning map?

Answer: Perceptual positioning 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 allows a marketer to view how consumers perceive their product with respect to others' products along those dimensions.

Diff: 3 Type: ES Page Ref: 259-260 Skill: Application Objective: 7-4

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167) In what ways might a marketer be able to gain competitive advantage through channel differentiation?

Answer: Firms that practice channel differentiation gain competitive advantage through the way they design their channel's coverage, expertise, and performance. Such factors as the level of customer service, speed of delivery, packaging, transportation type, and so on may play a role in channel differentiation.

Diff: 3 Type: ES Page Ref: 262 Skill: Application Objective: 7-4

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The Montreal Athletic Association (MAA) is an upscale club and fitness facility in downtown Montreal. The club offers comprehensive fitness services that include a state-of-the-art weight room, squash courts, handball court, boxing ring, Olympic-sized swimming pool, zumba dance classes, yoga rooms, spinning classes, and a gymnasium for volleyball, badminton, basketball, and floor hockey. Several of the classes and personal training services are headed by fitness celebrities and former Olympic athletes.

Beyond fitness, the MAA offers a world-class sports clinic that serves its members and many professional athletes. The clinic includes sports doctors, physiotherapists, and dietician services; and massage services and a restaurant are also part of the MAA offering. The restaurant, affectionately known by its members as "the Captain's Pub," has daily changes to its menu.

Members routinely gather at the restaurant for drinks, holiday parties, Mother's Day brunches, and special events such as whiskey tastings. The staff likes to surprise its MAA "family members" by handing out roses to mothers on Mother's Day and having recognized experts lead the wine tasting sessions. Some members have belonged to the MAA for over 70 years!

Not surprisingly, MAA is a favourite of celebrities when they shoot movies or perform concerts in Montreal. It is not uncommon for members to invite an A-lister movie star to join in a game of basketball or see a member have a game of squash with a rock-star. A few years ago, Reader's Digest voted MAA the best club in the country.

The MAA likes to pamper its members. Change rooms are equipped with luxury towels and full amenities (e.g., shaving cream, razors, lotions, and shampoos). Laundry services and a pro shop with dedicated pros offering lessons are additional services that members can purchase.

The MAA is not an inexpensive club. Each new member enters with an initiation fee of $250.

Base monthly memberships on a 1-year contract start at $99 for those under 30, $109 for those between 30-35, and $125 for those over 35. The longstanding members who capture the "the spirit of the Club" are awarded Gold Memberships, which give the gold members access to special club privileges.

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168) Discuss some of the different approaches that the MAA could use to segment the market.

Be specific.

Answer: Lots of different answers could apply here. Geographical segmentation applies. The club is based in downtown Montreal and therefore will target based on proximity to downtown/urban locations. Demographic breakdowns could be used as well. Income levels apply, as a higher disposable income is required for a $1500/year club membership. Age is a clear segmentation variable for the club as evidenced through its pricing structure. Occupation might apply as well. Professionals (business people, lawyers, etc.) and professional athletes seem to be relevant segments. Psychographically, several segmentations could apply. For example, social class is a segmentation approach that could be applied. The club segments based on upper classes. Lifestyle may play a role as well. People who integrate fitness in their lives would be another way to look at segmenting the market. Behavioural segmentation approaches may involve benefits sought, loyalty, and user status. Individuals looking for a "club" environment, an "intimate" environment, or being part of a prestige club could also form appropriate segments.

Within its existing membership base, the MAA clearly segments based on user rates and loyalty to the club via its Gold Membership.

Diff: 2 Type: ES Page Ref: 240-248 Skill: Application Objective: 7-2 169) You meet the General Manager of the MAA. He asks, "How should we assess the attractiveness of the different market segments?"

Answer: The segments should be large enough and have enough financial means to use the MAA services. The segments should also be readily identifiable so that the MAA can access them with a marketing mix. Relatedly, the segments should respond to the MAA marketing mix.

In short, the segments should be measureable, accessible, substantial, differentiable, and actionable.

Diff: 2 Type: ES Page Ref: 251 Skill: Application Objective: 7-2 170) How does the MAA differentiate its offering? How is this differentiation related to the position of the MAA? Answer: The MAA has several differentiating aspects. First, it offers a comprehensive fitness experience. Second, it provides a prestigious club feel for its members. Taken together, these differentiation aspects merge to form the positioning of the MAA in customers' minds The positioning strategy is "more for more."

Diff: 3 Type: ES Page Ref: 261- 265 Skill: Application Objective: 7-4

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 8 Developing and Managing Products and Services 1) A ________ is defined as anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

A) private brand B) service variability C) service D) product E) service encounter Answer: D Diff: 1 Type: MC Page Ref: 278 Skill: Concept Objective: 8-1 2) ________ are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

A) Line extensions B) Services C) Brands D) Consumer products E) Supplements Answer: B Diff: 1 Type: MC Page Ref: 278 Skill: Concept Objective: 8-1 3) Product is a key element in a company's ________, which may, at one extreme, consist of pure tangible goods or, at the other extreme, pure services.

A) market offering B) brand equity C) brand extension D) co-branding E) core customer value Answer: A Diff: 1 Type: MC Page Ref: 278 Skill: Concept Objective: 8-1

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4) To differentiate themselves, many companies go beyond offering products and services; they are also developing and delivering customer ________.

A) feedback B) experiences C) brands D) product lines E) events Answer: B Diff: 2 Type: MC Page Ref: 278 Skill: Concept Objective: 8-1 5) Product planners consider products and services on three levels. The most basic level is the ________, which addresses the question, "What is the buyer really buying?"

A) actual product B) augmented product C) core customer value D) co-branding E) exchange Answer: C Diff: 2 Type: MC Page Ref: 279 Skill: Concept Objective: 8-1 6) The third level of a product that product planners consider is a(n) ________ around the core benefit and actual product that offers additional consumer services and benefits.

A) augmented product B) brand equity C) brand extension D) industrial product E) image Answer: A Diff: 2 Type: MC Page Ref: 279-280 Skill: Concept Objective: 8-1 7) Product planners must design the actual product and also find ways to ________ it in order to create the bundle of benefits that will create the most customer value.

A) promote B) package C) brand D) augment E) present Answer: D Diff: 2 Type: MC Page Ref: 280 Skill: Concept Objective: 8-1 2 Copyright © 2017 Pearson Canada Inc.

8) Products and services fall into two broad classifications based on the types of consumers that use them. Which of the following is one of these broad classes?

A) industrial products B) specialty products C) supplies and services D) materials and parts E) convenience products Answer: A Diff: 2 Type: MC Page Ref: 280 Skill: Concept Objective: 8-1 9) ________ are products and services bought by final consumers for personal consumption.

These include convenience products, shopping products, specialty products, and unsought products.

A) Services B) Consumer products C) Line extensions D) Industrial products E) Straight extensions Answer: B Diff: 1 Type: MC Page Ref: 280 Skill: Concept Objective: 8-1 10) ________ are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. Consumers spend much time and effort in gathering information and making comparisons about these products.

A) Shopping products B) Convenience products C) Unsought products D) Industrial products E) Line extensions Answer: A Diff: 1 Type: MC Page Ref: 280 Skill: Concept Objective: 8-1

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11) ________ are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.

A) Shopping products B) Unsought products C) Specialty products D) Industrial products E) Line extensions Answer: C Diff: 1 Type: MC Page Ref: 280 Skill: Concept Objective: 8-1 12) ________ are consumer products that the consumer either does not know about or knows about but does not normally think about buying. These products require a lot of advertising, personal selling, and other marketing efforts.

A) Specialty products B) Line extensions C) Unsought products D) Shopping products E) Convenience products Answer: C Diff: 1 Type: MC Page Ref: 281 Skill: Concept Objective: 8-1 13) ________ are those products purchased for further processing or for use in conducting a business.

A) Unsought products B) Specialty products C) Shopping products D) Industrial products E) Accessories Answer: D Diff: 1 Type: MC Page Ref: 282 Skill: Concept Objective: 8-1 14) Most manufactured materials and parts are sold directly to ________ for further processing.

A) consumers B) industrial users C) government buyers D) co-branders E) wholesalers Answer: B Diff: 2 Type: MC Page Ref: 282 Skill: Concept Objective: 8-1 4 Copyright © 2017 Pearson Canada Inc.

15) ________ are industrial products that aid in the buyer's production or operations, including installations and accessory equipment.

A) Materials B) Parts C) Capital items D) Specialty items E) Supplies Answer: C Diff: 2 Type: MC Page Ref: 282 Skill: Concept Objective: 8-1 16) What are the two ways that a company can obtain new products?

A) line extension and brand management B) internal development and merger C) new-product development and acquisition D) service development and product extension E) market mix modification and research and development Answer: C Diff: 2 Type: MC Page Ref: 283 Skill: Concept Objective: 8-2 17) Product improvements and product modifications and new brands can all be classified as ________.

A) pioneer products B) new products C) product concepts D) product ideas E) test products Answer: B Diff: 1 Type: MC Page Ref: 283 Skill: Concept Objective: 8-2 18) The creation of a successful new product depends on a company's understanding of its ________ and its ability to deliver ________ to customers.

A) competitors, distributors, and employees; new styles B) customers, brands, products; product images C) customers, competitors, and markets; superior value D) product, marketing mix, and marketing strategy; functional features E) product life cycle, legal responsibilities, and social responsibilities; innovations Answer: C Diff: 2 Type: MC Page Ref: 285-286 Skill: Concept Objective: 8-2 5 Copyright © 2017 Pearson Canada Inc.

19) New product development starts with ________.

A) idea generation B) idea screening C) concept development D) concept testing E) test marketing Answer: A Diff: 1 Type: MC Page Ref: 286 Skill: Concept Objective: 8-2 20) What are two major sources of new-product ideas?

A) internal sources and external sources B) core-member sources and non-core-member sources C) government sources and non-government sources D) direct competitor sources and indirect competitor sources E) distributor sources and non-distributor sources Answer: A Diff: 2 Type: MC Page Ref: 286 Skill: Concept Objective: 8-2 21) Your company decides to use external sources for developing new product ideas. Which of the following would be consulted?

A) company executives and professionals B) company records and data C) intrapreneurial programs D) suppliers E) salespeople Answer: D Diff: 2 Type: MC Page Ref: 286 Skill: Concept Objective: 8-2 22) According to your text, which of the following is perhaps the most important external source of new-product ideas?

A) engineers B) customers C) competitors D) trade magazines, shows, and seminars E) distributors and suppliers Answer: B Diff: 2 Type: MC Page Ref: 286 Skill: Concept Objective: 8-2 6 Copyright © 2017 Pearson Canada Inc.

23) A new approach to idea generation invites broad communities of internal and external people into the new product innovation process. This approach is called ________.

A) crowdsourcing B) concept development C) competitive intelligence D) soliciting new users E) marketing research Answer: A Diff: 1 Type: MC Page Ref: 286 Skill: Concept Objective: 8-2 24) The purpose of idea generation is to create a ________ of ideas. The purpose of succeeding stages is to ________ that number.

A) small number; reduce B) small number; increase C) large number; increase D) large number; reduce E) limited number; sustain Answer: D Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 25) During the ________ stage of the new-product development process, helps spot good ideas and eliminate poor ones.

A) idea generation B) idea screening C) concept testing D) product development E) commercialization Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2

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26) GrayBerry Gifts has just brainstormed a large number of ideas for adding new products and services after visiting several buying fairs. The owners will begin the first idea-reducing stage, called ________, to arrive at a realistic number to adopt.

A) idea generation B) idea screening C) concept testing D) concept development E) business analysis Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 27) Which of the following is most likely to be included in an executive's write up of a newproduct idea to be presented to a new-product committee?

A) the proposed customer value proposition B) the product image C) the marketing strategy D) the business analysis E) the planned market rollout Answer: A Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 28) A detailed version of a new idea stated in meaningful customer terms is called a ________.

A) product idea B) product concept C) product image D) product proposal E) product movement Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 29) An attractive idea must be developed into a ________.

A) product idea B) product concept C) product image D) test market E) product strategy Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 8 Copyright © 2017 Pearson Canada Inc.

30) ________ calls for testing new-product concepts with groups of target consumers.

A) Concept development B) Concept testing C) Idea generation D) Idea screening E) Test marketing Answer: B Diff: 1 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 31) In the concept testing stage of new-product development, ________ form(s) of the product concept is presented to groups of target consumers.

A) physical B) conceptual C) final D) market-tested E) alternative Answer: E Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 32) With what groups do firms conduct concept testing for new products?

A) suppliers B) employees C) potential consumers D) manufacturers E) competitors Answer: C Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 33) A ________ is a detailed description, drawing, or prototype of that idea that can be shown to potential customers.

A) concept test B) product concept C) marketing strategy D) product development E) business analysis Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2

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34) After concept testing, a firm would engage in which stage in developing and marketing a new product?

A) idea screening B) marketing strategy development C) business analysis D) product development E) test marketing Answer: B Diff: 2 Type: MC Page Ref: 289-290 Skill: Concept Objective: 8-2 35) The marketing strategy statement describes the target market; the planned product positioning; and goals for sales, profits, and ________.

A) market share B) competition C) secondary market D) competition's anticipated reaction E) life-cycle duration Answer: A Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 36) Typically, the initial marketing strategy outlines the sales goals, market share goals, and ________ goals for the first year.

A) advertising B) promotion C) profit D) positioning E) target market Answer: C Diff: 3 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 37) According to the authors, the marketing strategy for a new product typically excludes ________.

A) identification of the target market B) positioning of the new product relative to competing products C) promotions and advertising expenditures D) information on dealing with defective products E) sales goals Answer: D Diff: 3 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 10 Copyright © 2017 Pearson Canada Inc.

38) A review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives is called a ________.

A) business feasibility plan B) market strategy development C) business analysis D) product acceptance E) proposal Answer: C Diff: 1 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 39) During which stage of new-product development will management most likely estimate minimum and maximum sales to assess the range of risk in launching a new product?

A) concept testing B) marketing strategy development C) business analysis D) product development E) test marketing Answer: C Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 40) Once managers of The Grecian Urn have decided on their product concept and marketing strategy, they can evaluate the business attractiveness of the proposal in the ________ stage of the new-product development process.

A) business feasibility B) feasibility study C) business analysis D) product acceptance E) concept testing Answer: C Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2

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41) New World Releases is conducting a business analysis to determine which of the many new songs available to management should be released. Sales must be estimated before costs can be estimated. Which of the following did your text recommend for forecasting sales?

A) considering the history of market opinions B) conducting surveys of competitors C) considering the sales history of similar products and conducting surveys of market opinions D) applying the PLC concept E) none of the above Answer: C Diff: 3 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 42) If the product or service passes the business analysis test, it moves into what stage?

A) concept development B) product development C) market testing D) strategy development E) product proposal Answer: B Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 43) In the ________ stage of new-product development, products undergo rigorous tests to make sure that they perform safely and effectively.

A) business analysis B) idea generation C) concept development and testing D) product development E) marketing mix Answer: D Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 44) Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes product tests, the next step is ________.

A) test marketing B) focus group surveys C) commercialization D) post-testing E) business analysis Answer: A Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 12 Copyright © 2017 Pearson Canada Inc.

45) The stage of new-product development where the product and marketing program are tested in realistic market settings is called ________.

A) idea generation B) concept testing C) product concept D) commercialization E) test marketing Answer: E Diff: 2 Type: MC Page Ref: 290 Skill: Concept Objective: 8-2 46) Under what circumstances might it be wise for a company to invest in a test market?

A) when a new product requires a major investment B) when the product is not working well C) when management is sure of the marketing program D) when the product risk is very low E) when the cost of new-product development is very low Answer: A Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-2 47) According to the authors, when does a company typically invest in test marketing?

A) before the full product introduction B) at idea generation time C) before the product concept D) after meeting with a stockholder E) after a logistics discussion with suppliers Answer: A Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-2 48) The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.

A) how to develop a market strategy B) which market to compete in C) whether to launch the new product D) how to compete in the market E) how long to compete in the market Answer: C Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-2

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49) Introducing a new product into the market is called ________.

A) test marketing B) new product development C) experimenting D) commercialization E) marketing development Answer: D Diff: 1 Type: MC Page Ref: 291 Skill: Concept Objective: 8-2 50) What is the final step in the new-product development process?

A) idea generation B) product concept C) concept testing D) prototype E) commercialization Answer: E Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-2 51) According to the authors, managers must accept the ________ of a product.

A) the research team B) the product life cycle C) the market segmentation D) the boss E) the idea generation Answer: B Diff: 3 Type: MC Page Ref: 291 Skill: Concept Objective: 8-3 52) What are the two main focuses of the product life cycle theory?

A) distributors and suppliers B) competitors and costs C) sales and profits D) profits and target markets E) target markets and competitors Answer: C Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-3

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53) What are the stages, in correct order, of the product life cycle?

A) Introduction, Maturity, Growth, and Decline B) Introduction, Growth, Decline, and Maturity C) Introduction, Growth, Maturity, and Decline D) Growth, Introduction, Maturity, and Decline E) Decline, Introduction, Growth, and Maturity Answer: C Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-3 54) ________ refers to inviting broad communities of people (such as customers, employees, independent scientists, and researchers) into the new-product innovation process.

A) Internal teams B) External teams C) Crowdsourcing D) Recruitment E) Market development Answer: C Diff: 1 Type: MC Page Ref: 287 Skill: Concept Objective: 8-2 55) ________ refers to the identification of good ideas (and the dropping of poor ones) as soon as possible.

A) Crowdsourcing B) Idea generation C) Concept testing D) Idea screening E) Concept development Answer: D Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 56) ________ refers to a detailed version of the new-product idea stated in meaningful consumer terms.

A) Product generation B) The product concept C) Product testing D) Product commercialization E) Product crowdsourcing Answer: B Diff: 2 Type: MC Page Ref: 289 Skill: Concept Objective: 8-2 15 Copyright © 2017 Pearson Canada Inc.

57) Which theory suggests that new products sometimes fail because they are unable to cross the gaps between the different market segments of innovators, early adopters, early majority, and late majority?

A) idea evaluation theory B) diffusion of innovations theory C) idea screening theory D) life cycle theory E) data processing theory Answer: B Diff: 2 Type: MC Page Ref: 284 Skill: Concept Objective: 8-2 58) According to the product life cycle theory, the sales of a typical product follow a(n) ________ curve.

A) U-shaped B) S-shaped C) L-shaped D) I-shaped E) O-shaped Answer: B Diff: 2 Type: MC Page Ref: 291 Skill: Concept Objective: 8-3 59) ________ is the product life cycle period when sales fall off and profits drop.

A) Introduction B) Growth C) Maturity D) Decline E) Development Answer: D Diff: 1 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 60) Increasing profits will most likely occur at which stage of the PLC? A) product development B) introduction C) growth D) maturity E) decline Answer: C Diff: 1 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 16 Copyright © 2017 Pearson Canada Inc.

61) In which stage of the typical consumer product life cycle do sales growth level off?

A) product development B) introduction C) maturity D) growth E) decline Answer: C Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 62) Some products that have entered the decline stage have been cycled back to the growth stage through ________.

A) repositioning B) concept testing C) business analysis D) innovation management E) customer-centered product development Answer: A Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 63) Which of the following is an accurate description of a style?

A) Styles appear in home, clothing, but seldom in art.

B) Once a style is invented, it will only last for a few months.

C) A style has a cycle showing several periods of renewed interest.

D) Styles tend to attract only a limited following.

E) Styles are complicated modes of expression.

Answer: C Diff: 2 Type: MC Page Ref: 296 Skill: Concept Objective: 8-3 64) The ________ is a model that proposes that a "chasm" exists between early adopters of a product and the early majority.

A) innovation life cycle B) technology adoption life cycle C) product life cycle D) diffusion cycle E) marketing life cycle Answer: B Diff: 3 Type: MC Page Ref: 284 Skill: Concept Objective: 8-2

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65) In which stage of the PLC will promotional expenditures be especially high in an attempt to create consumer awareness?

A) product development B) introduction C) growth D) maturity E) adoption Answer: B Diff: 1 Type: MC Page Ref: 291-292 Skill: Concept Objective: 8-3 66) In which stage of the PLC would promotional expenditures most likely increase as a company attempts to react to increasing competition?

A) product development B) introduction C) growth D) maturity E) decline Answer: C Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 67) A company wants to sustain this stage as long as possible.

A) growth B) decline C) maturity D) introduction E) commercialization Answer: A Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 68) Which stage in the PLC normally lasts longer and poses strong challenges to the marketing managers?

A) introduction B) growth C) maturity D) decline E) phase-in Answer: C Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 18 Copyright © 2017 Pearson Canada Inc.

69) Most products in the marketplace are in the ________ stage of the product life cycle.

A) development B) introduction C) growth D) maturity E) decline Answer: D Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 70) Which of the following would lead to continued sales in the maturity stage of the PLC? A) overcapacity of products in the market B) modifying the marketing mix C) strong management D) more promotion E) more spending Answer: B Diff: 3 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 71) When a product enters the maturity stage, the company should consider ________.

A) harvesting the product B) modifying the product, market, or marketing mix C) divesting the product D) maintaining the product E) dropping the product Answer: B Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 72) Which of the following best represents the options a company has when a product is declining?

A) maintain, reposition, harvest or drop the product B) harvest or drop the product C) maintain, harvest, or drop the product D) maintain or pioneer the product E) pioneer, harvest, or maintain the product Answer: A Diff: 2 Type: MC Page Ref: 294-295 Skill: Concept Objective: 8-3

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73) A manufacturer with a product in the decline stage of the product life cycle might decide to ________ if it has reason to hope that competitors will leave the industry.

A) harvest the product B) maintain the product without change C) drop the product D) search for replacements E) delay planning Answer: B Diff: 2 Type: MC Page Ref: 292 Skill: Concept Objective: 8-3 74) Developing a product involves defining the benefits that it will offer. These benefits are communicated and delivered by ________ such as quality, features, and style and design.

A) private brands B) product attributes C) consumer products D) product mixes E) marketing tools Answer: B Diff: 3 Type: MC Page Ref: 297 Skill: Concept Objective: 8-4 75) ________ is one of the marketer's major positioning tools because it has a direct impact on product or service performance; it is therefore closely linked to customer value and satisfaction.

A) Packaging B) Product quality C) Total quality management D) Specialty marketing E) Positioning Answer: B Diff: 2 Type: MC Page Ref: 297 Skill: Concept Objective: 8-4 76) In the narrowest sense, quality can be defined as ________.

A) positive post-purchase dissonance B) brand equity C) freedom from defects D) quality assurance E) customer-centered thinking Answer: C Diff: 2 Type: MC Page Ref: 297 Skill: Concept Objective: 8-4 20 Copyright © 2017 Pearson Canada Inc.

77) Which of the following internal professional membership organizations monitor product quality?

A) Society of Public Company B) Society of Quality Management C) Society of Consumer Assurance D) Society of Quality Assurance E) Society of Firm Management Answer: D Diff: 3 Type: MC Page Ref: 297 Skill: Concept Objective: 8-4 78) A company can create a competitive product by adding ________.

A) co-brandings B) product features C) product quality D) service variability E) conformance Answer: B Diff: 2 Type: MC Page Ref: 297 Skill: Concept Objective: 8-4 79) A sensational ________ may grab consumers' attention and produce pleasing aesthetics, but it does not necessarily improve a product's performance.

A) design B) style C) experience D) service-profit chain E) augmented product Answer: B Diff: 2 Type: MC Page Ref: 298 Skill: Concept Objective: 8-4 80) A product's ________ contributes to the customer's product-use experience.

A) style B) design C) package D) brand E) functionality Answer: B Diff: 2 Type: MC Page Ref: 298 Skill: Concept Objective: 8-4

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81) In recent years, marketers are concerned about packaging that minimizes environmental, social and economic impacts. They are developing ________ packaging.

A) branded B) sustainable C) bright D) strong E) long lasting Answer: B Diff: 2 Type: MC Page Ref: 299 Skill: Concept Objective: 8-4 82) At the very least, the ________ identifies the product or brand. It might also describe several things about the product and promote the brand.

A) line extension B) social marketing C) label D) specialty product E) package Answer: C Diff: 1 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 83) The ________ requires sellers to provide detailed nutritional information on all prepackaged food products.

A) Fair Packaging and Labeling Act of 1966 B) Consumer Packaging and Labelling Act. C) Labeling Act of 1970 D) Packaging Act of 1970 E) Federal Trade Commission Act of 1914 Answer: B Diff: 2 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 84) Many companies now use the Internet to provide product ________.

A) labeling information B) brand equity C) support services D) packaging advantages E) product mixes Answer: C Diff: 2 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 22 Copyright © 2017 Pearson Canada Inc.

85) A ________ is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same type of outlets, or fall within given price ranges.

A) product line B) line extension C) private brand D) convenience product E) product bandwidth Answer: A Diff: 1 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 86) The major product line decision involves ________.

A) line stretching B) moving the line upward or downward C) product line filling D) product line length E) product packaging Answer: D Diff: 3 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 87) Berkowitz Piano Company can expand its product line in one of two common ways. Which of the following is one of those ways?

A) internal marketing B) line filling C) product mixing D) social marketing E) line mixing Answer: B Diff: 2 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 88) An alternative to product line stretching is ________, adding more items within the present range of the line.

A) product mixing B) interactive marketing C) product line filling D) co-branding E) service marketing Answer: C Diff: 2 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 23 Copyright © 2017 Pearson Canada Inc.

89) When a company lengthens its product line beyond its current range, it is ________.

A) product line filling B) product line stretching C) product mixing D) increasing product depth E) building brand equity Answer: B Diff: 2 Type: MC Page Ref: 300 Skill: Concept Objective: 8-4 90) A ________ consists of all the product lines and items that a particular seller offers for sale.

A) product mix B) brand line C) consumer mix D) packaging mix E) line extension Answer: A Diff: 1 Type: MC Page Ref: 301 Skill: Concept Objective: 8-4 91) Which term best describes the following statement? "Campbell's products are highly uniform in that they perform similar functions for buyers and are available via the same distribution channels."

A) marketing length B) marketing height C) product mix consistency D) marketing strategic perimeter E) marketing mix depth Answer: C Diff: 2 Type: MC Page Ref: 301 Skill: Concept Objective: 8-4 92) Product mix ________ refers to the number of versions offered of each product in the line.

Crest toothpaste comes in 13 varieties, ranging from Crest Multicare to Crest Baking Soda formulations.

A) length B) depth C) height D) width E) perimeter Answer: B Diff: 2 Type: MC Page Ref: 301 Skill: Concept Objective: 8-4 24 Copyright © 2017 Pearson Canada Inc.

93) The ________ of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

A) depth B) length C) width D) consistency E) perimeter Answer: D Diff: 2 Type: MC Page Ref: 301 Skill: Concept Objective: 8-4 94) Service providers must consider four special service characteristics when designing marketing programs. They are ________.

A) service intangibility, service heterogeneity, service inseparability, service variability B) service inseparability, service heterogeneity, service intangibility, service variability C) service perishability, service heterogeneity, service inseparability, service variability D) service heterogeneity, service perishability, service inseparability, service intangibility E) service variability, service intangibility, service inseparability, service perishability Answer: E Diff: 3 Type: MC Page Ref: 303 Skill: Concept Objective: 8-5 95) ________ means that services cannot be seen, tasted, felt, heard, or smelled before they are bought.

A) Service inseparability B) Service variability C) Service intangibility D) Service perishability E) Service heterogeneity Answer: C Diff: 1 Type: MC Page Ref: 303 Skill: Concept Objective: 8-5 96) ________ means that services cannot be separated from their providers, whether the providers are people or machines.

A) Service intangibility B) Service inseparability C) Service variability D) Service perishability E) Service heterogeneity Answer: B Diff: 1 Type: MC Page Ref: 304 Skill: Concept Objective: 8-5 25 Copyright © 2017 Pearson Canada Inc.

97) Through ________, the service firm trains and motivates its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

A) service inseparability B) service intangibility C) service variability D) internal marketing E) external marketing Answer: D Diff: 2 Type: MC Page Ref: 305 Skill: Concept Objective: 8-5 98) Because service quality depends on the quality of buyer—seller interaction during the service encounter, service marketers use ________ to train employees in the art of interacting with customers to satisfy their needs.

A) internal marketing B) external marketing C) service-profit marketing D) service differentiation E) service productivity Answer: C Diff: 2 Type: MC Page Ref: 305 Skill: Concept Objective: 8-5 99) When the Twin Six Cafe provides gourmet menu options to its customers, as well as impeccable service—which even allows customers to hand-select their own cuts of meat— ________ is/are evident.

A) only an actual product B) only an augmented product C) only a core benefit D) both a core benefit and an actual product E) a core benefit, an actual product, and an augmented product Answer: E Diff: 3 Type: MC Page Ref: 279-280 Skill: Application Objective: 8-1

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100) A hickory rocking chair, handmade by an French woodcarver in northern Quebec from locally grown wood, is an example of a(n) ________.

A) convenience product B) shopping product C) specialty product D) service E) augmented product Answer: C Diff: 2 Type: MC Page Ref: 280 Skill: Application Objective: 8-1 101) You have an upset stomach. Your spouse rushes to the corner convenience store for a bottle of Pepto-Bismol. This product is a(n) ________ product.

A) unsought B) convenience C) augmented D) shopping E) specialty Answer: B Diff: 2 Type: MC Page Ref: 280 Skill: Application Objective: 8-1 102) Mabel Lu is planning to buy a new washing machine. She notices that they come in numerous price ranges. She wants to make sure she gets the most for her money. This product is a(n) ________ product.

A) augmented B) specialty C) convenience D) shopping E) unsought Answer: D Diff: 2 Type: MC Page Ref: 280 Skill: Application Objective: 8-1 103) Paper, pencils, lubricants, paint, nails, and brooms are examples of ________.

A) supplies B) capital items C) raw materials D) specialty products E) installations Answer: A Diff: 1 Type: MC Page Ref: 282 Skill: Application Objective: 8-1 27 Copyright © 2017 Pearson Canada Inc.

104) Which of the following is at the core for product designers to consider as they develop a product?

A) which product features can be added to create higher-level models B) how the product appears C) what the product's technical specifications are D) how customers will use and benefit from the product E) how the product is packaged to attract spontaneous purchases Answer: D Diff: 3 Type: MC Page Ref: 279 Skill: Application Objective: 8-1 105) Helene Curtis began to market shampoo for normal hair. In an attempt to increase profits and use excess market capacity, Helene Curtis then marketed shampoo for oily hair and colourtreated hair. This is an example of ________.

A) line filling B) social marketing C) a shopping product D) an unsought product E) people marketing Answer: A Diff: 3 Type: MC Page Ref: 300 Skill: Application Objective: 8-4 106) Which of the following is/are examples of product mix depth?

A) hamburger and cheeseburger B) hamburger and ice cream C) Coke and hamburger D) hamburger and desert E) hamburger and french fries Answer: A Diff: 3 Type: MC Page Ref: 301 Skill: Application Objective: 8-4

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107) The impossibility of a barber storing haircuts for later sale is an example of which of the following?

A) service intangibility B) service inseparability C) service variability D) service perishability E) provider-customer interaction Answer: D Diff: 2 Type: MC Page Ref: 304 Skill: Application Objective: 8-5 108) A service is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Answer: FALSE Diff: 1 Type: TF Page Ref: 278 Skill: Concept Objective: 8-1 109) Sony offers consumers more than just camcorders; it provides consumers with a complete solution to their picture-taking problems. This offering is called an augmented product.

Answer: TRUE Diff: 3 Type: TF Page Ref: 279-280 Skill: Application Objective: 8-1 110) Unsought products are products that the customer buys frequently, immediately, and with a minimum of comparison and buying effort.

Answer: FALSE Diff: 1 Type: TF Page Ref: 281 Skill: Concept Objective: 8-1 111) Shopping products are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.

Answer: TRUE Diff: 2 Type: TF Page Ref: 280 Skill: Concept Objective: 8-1 112) Style is a larger concept than design.

Answer: FALSE Diff: 2 Type: TF Page Ref: 298 Skill: Concept Objective: 8-4

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113) Because so many purchase decisions are made in stores, a product's packaging may be a seller's last and best chance to influence consumers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 299 Skill: Concept Objective: 8-4 114) Product support services identify the product or brand, describe several things about the product, and promote the product through attractive graphics.

Answer: FALSE Diff: 2 Type: TF Page Ref: 300 Skill: Concept Objective: 8-4 115) A company's market offering usually includes some support services.

Answer: TRUE Diff: 2 Type: TF Page Ref: 300 Skill: Concept Objective: 8-4 116) Quaker produces a variety of cereals. This variety is called its product line.

Answer: TRUE Diff: 2 Type: TF Page Ref: 300 Skill: Application Objective: 8-4 117) Cannibalization and customer confusion about product differentiation are two potential results if line filling is overdone.

Answer: TRUE Diff: 3 Type: TF Page Ref: 300 Skill: Concept Objective: 8-4 118) A company can stretch its product either upward or downward, but not both directions.

Answer: FALSE Diff: 2 Type: TF Page Ref: 301 Skill: Concept Objective: 8-4 119) A company might stretch its product line upward to add prestige to its current products.

Answer: TRUE Diff: 2 Type: TF Page Ref: 300 Skill: Concept Objective: 8-4

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120) A company's product mix has four important dimensions: width, length, depth, and consistency.

Answer: TRUE Diff: 1 Type: TF Page Ref: 301 Skill: Concept Objective: 8-4 121) An example of service variability is that within a given Marriott hotel, one registration-desk employee may be cheerful and efficient, whereas another may be unpleasant and slow.

Answer: TRUE Diff: 3 Type: TF Page Ref: 304 Skill: Application Objective: 8-5 122) Service inseparability means that the quality of services depends on when, where, and how it is provided.

Answer: FALSE Diff: 3 Type: TF Page Ref: 304 Skill: Concept Objective: 8-5 123) In a service business, the customer and front-line service employee interact to create the service.

Answer: TRUE Diff: 2 Type: TF Page Ref: 305 Skill: Concept Objective: 8-5 124) Successful service companies focus their attention on both their customers and their employees.

Answer: TRUE Diff: 2 Type: TF Page Ref: 305 Skill: Concept Objective: 8-5 125) The service-profit chain is the set of all product lines and items that a particular seller offers for sale.

Answer: FALSE Diff: 2 Type: TF Page Ref: 305 Skill: Concept Objective: 8-5 126) One aspect of managing service differentiation is the company's service delivery.

Answer: TRUE Diff: 2 Type: TF Page Ref: 306 Skill: Concept Objective: 8-5 31 Copyright © 2017 Pearson Canada Inc.

127) Customer retention is perhaps the best measure of quality—a service firm's ability to hang on to its customers depends on how consistently it delivers value to them.

Answer: TRUE Diff: 2 Type: TF Page Ref: 306 Skill: Concept Objective: 8-5 128) Service productivity can be managed by increasing the quantity of service and giving up some quality.

Answer: TRUE Diff: 2 Type: TF Page Ref: 307 Skill: Concept Objective: 8-5 129) A firm can obtain new products in two ways: acquisition or new-product development.

Answer: TRUE Diff: 2 Type: TF Page Ref: 283 Skill: Concept Objective: 8-2 130) A very high number of new products fail each year.

Answer: TRUE Diff: 2 Type: TF Page Ref: 283 Skill: Concept Objective: 8-2 131) New product development begins with a systematic search for new product ideas through idea generation.

Answer: TRUE Diff: 1 Type: TF Page Ref: 286 Skill: Concept Objective: 8-2 132) Winnipeg Beach Parties finds that the tastes and preferences of its customers change more rapidly than in the past. The manager should constantly look for external ideas from customers, suppliers, the competition, and the sales force.

Answer: TRUE Diff: 2 Type: TF Page Ref: 286 Skill: Application Objective: 8-2

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133) Companies rarely solicit ideas from customers during the idea generation stage of product development.

Answer: FALSE Diff: 1 Type: TF Page Ref: 286-287 Skill: Concept Objective: 8-2 134) Blair Housewares wants to add new lines of products to its 46-store chain. Managers are correct in believing that the purpose of idea generation is to create a few ideas, and the purpose of succeeding stages is to increase that number.

Answer: FALSE Diff: 2 Type: TF Page Ref: 286 Skill: Application Objective: 8-2 135) A product idea is an idea for a possible product a company can offer the market, while a product concept is a detailed version of the idea stated in meaningful consumer terms.

Answer: TRUE Diff: 2 Type: TF Page Ref: 289 Skill: Concept Objective: 8-2 136) Concept testing works best with people who are familiar with the new idea and the new product's purpose. This generally includes top management, the sales force, and research and development.

Answer: FALSE Diff: 2 Type: TF Page Ref: 289 Skill: Concept Objective: 8-2 137) GreenTree Lawn and Garden Products is engaged in marketing strategy development.

Management should first create a statement outlining the product's planned price, distribution, and marketing budget for the first year.

Answer: FALSE Diff: 3 Type: TF Page Ref: 290 Skill: Application Objective: 8-2 138) GreenTree Lawn and Garden Products is engaged in a review of the sales, costs, and profit projections for some new products to find out whether they satisfy the company's objectives.

This activity is called business product development.

Answer: FALSE Diff: 2 Type: TF Page Ref: 290 Skill: Application Objective: 8-2

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139) The business analysis stage represents the first large jump in financial investment in the new-product development process.

Answer: FALSE Diff: 2 Type: TF Page Ref: 290 Skill: Concept Objective: 8-2 140) To test the product concept of a new idea, the R&D department of a firm can develop a prototype that will excite consumers and can be produced quickly at budgeted costs.

Answer: TRUE Diff: 2 Type: TF Page Ref: 289 Skill: Concept Objective: 8-2 141) The stage at which new product and marketing programs are introduced into realistic market settings is called concept testing.

Answer: FALSE Diff: 1 Type: TF Page Ref: 290 Skill: Concept Objective: 8-2 142) Lack of product differentiation is a common reason that new products fail.

Answer: TRUE Diff: 2 Type: TF Page Ref: 284 Skill: Concept Objective: 8-2 143) Diffusion of innovations theory refers to a theory that divides members of a social group into segments according to how likely they are to adopt new ideas.

Answer: TRUE Diff: 1 Type: TF Page Ref: 284 Skill: Concept Objective: 8-2 144) The maturity stage of the PLC is characterized by a slowdown in sales growth.

Answer: TRUE Diff: 1 Type: TF Page Ref: 292 Skill: Concept Objective: 8-3 145) During the introduction stage, a company that acts as a market pioneer should execute a launch strategy that is part of a marketing plan for the product's entire life cycle.

Answer: TRUE Diff: 2 Type: TF Page Ref: 291 Skill: Concept Objective: 8-3 34 Copyright © 2017 Pearson Canada Inc.

146) Profits rise during the growth stage of the PLC because promotion costs are spread over a large volume and unit manufacturing costs fall.

Answer: TRUE Diff: 1 Type: TF Page Ref: 292 Skill: Concept Objective: 8-3 147) Although products that remain in the maturity stage of the PLC seem unchanged, the most successful ones actually evolve to meet changing consumer needs.

Answer: TRUE Diff: 2 Type: TF Page Ref: 292 Skill: Concept Objective: 8-3 148) When sales of a product falter during the PLC, a company can take several approaches. The more common ones are to modify the marketing mix, modify the product, or modify the market.

Answer: TRUE Diff: 2 Type: TF Page Ref: 292 Skill: Concept Objective: 8-3 149) Sales for the time-tried household cleansers made by Brite and New, Inc., have been declining for some time. If these products are typical, sales are declining because of technological advances, shifts in consumer tastes, and lack of raw materials from foreign suppliers.

Answer: FALSE Diff: 3 Type: TF Page Ref: 292 Skill: Application Objective: 8-3 150) Companies need to pay attention to their aging products. Management should regularly review sales, market shares, costs, and profit trends, and then decide whether to maintain, harvest, or drop these declining products.

Answer: TRUE Diff: 2 Type: TF Page Ref: 292, 295 Skill: Concept Objective: 8-3 151) When a company decides to maintain a product in the decline stage, it will reduce costs and hope that sales hold up to increase the profits in the short run.

Answer: FALSE Diff: 2 Type: TF Page Ref: 292 Skill: Concept Objective: 8-3

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152) Products and services fall into two broad classes based on the types of consumers that use them. Name these two broad classes and describe how they are different from each other.

Answer: The two broad classes are consumer products and industrial products. Consumer products and services—those bought by final consumers—are usually classified according to consumer shopping habits. Consumer products include convenience products, shopping products, specialty products, and unsought products. Industrial products are distinguished from consumer products by the purpose for which they were purchased. Industrial products are those that are purchased for further processing or for use in conducting a business. These products include materials and parts, capital items, and supplies and services.

Diff: 2 Type: ES Page Ref: 278-282 Skill: Application Objective: 8-1 153) Name and describe four decisions that companies make regarding their individual products and services.

Answer: Decisions to be made in the development and marketing of individual products and services include 1) product attributes, 2), packaging, 3) labeling, and 4) product support services.

Product attribute decisions involve product quality, features, and style and design. Packaging involves designing and producing a product's container; packaging provides many key benefits, such as protection, economy, convenience, and promotion. Labeling identifies the product and may describe and promote the product and brand. Companies must also make a decision about product support services, which are usually a minor or major part of a market offering.

Diff: 2 Type: ES Page Ref: 297-300 Skill: Application Objective: 8-4 154) Describe the role of packaging.

Answer: Packaging involves designing and producing the container or wrapper for a product.

Packaging contains and protects the product, but it also is used to attract customer attention, to describe the product, and to make the sale. Innovative packaging may give a company an edge over competitors.

Diff: 1 Type: ES Page Ref: 298-300 Skill: Application Objective: 8-4 155) Explain sustainable packaging.

Answer: Sustainable packaging meets the requirements of the product while minimizing the environmental, economic, and social impacts of the product and its packaging. Consumers are increasingly aware of which products are environmentally responsible and sustainable.

Sustainable packaging optimizes the use of recyclable materials and is manufactured using clean production technology.

Diff: 2 Type: ES Page Ref: 299 Skill: Application Objective: 8-4

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156) Compare product mix width, length, consistency, and depth.

Answer: Product mix width refers to the number of different product lines the company carries; product length refers to the total number of products carried in a company's product lines.

Consistency refers to how closely related the various product lines are in end use. Product depth refers to the number of versions offered of each product in the line.

Diff: 2 Type: ES Page Ref: 301 Skill: Application Objective: 8-4 157) 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.

Diff: 3 Type: ES Page Ref: 303-304 Skill: Application Objective: 8-5 158) Good service companies focus attention on both customers and employees. Describe what the service-profit chain and internal marketing are, and how they differ from each other.

Answer: The service-profit chain links service firm profits with employee and customer satisfaction. The links in the service-profit chain are as follows: internal service quality leads to satisfied and productive employees, who create greater service value, which leads to satisfied and loyal customers, who create healthy service profits and growth. Internal marketing by a service firm refers to training and effectively motivating its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction. The serviceprofit chain deals with employees and customers. Internal marketing deals with training employees; it is at the beginning of the service-profit chain.

Diff: 3 Type: ES Page Ref: 305 Skill: Application Objective: 8-5 159) How can service providers use a differentiated offer, delivery, and image to avoid competing solely on price?

Answer: A service offer can include innovative features that differentiate the company's offers from competitors. Service delivery can be differentiated by hiring and training more reliable customer-contact people, developing a superior physical environment in which the service is delivered, and designing a superior delivery process. Services can also be differentiated through symbols and branding, creating an image that sets a company's services apart from competitors.

Diff: 2 Type: ES Page Ref: 306 Skill: Application Objective: 8-5

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160) What does the term product include?

Answer: Products are anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. Products include physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities.

Diff: 1 Type: ES Page Ref: 278 Skill: Application Objective: 8-1 161) Give an example of the most basic level of product, the core customer value.

Answer: The core customer value answers the question "What is the buyer really buying?" It should define the core problem-solving benefits or services customers seek. Examples are numerous. A salon owner, providing similar services of a day spa, may focus on "pampering yourself in total relaxation."

Diff: 2 Type: ES Page Ref: 279 Skill: Application Objective: 8-1 162) Give examples of the second level of product, the actual product.

Answer: The actual product is the physical device with all its features and associated brand name and packaging. In this situation, the salon owner may market hair- and nail-care products and services, full- and partial-body massages, workout equipment and training, social activities, and so forth.

Diff: 1 Type: ES Page Ref: 279 Skill: Application Objective: 8-1 163) Give an example of an augmented product.

Answer: An augmented are the additional services and benefits that go with the actual product.

Examples will vary. In the situation the salon owner, may include the customer option of having most of the services performed in the privacy and solitude of his or her home.

Diff: 2 Type: ES Page Ref: 279-280 Skill: Application Objective: 8-1 164) Give three examples of convenience products.

Answer: Examples may include soft drinks, milk, and candy.

Diff: 1 Type: ES Page Ref: 280 Skill: Application Objective: 8-1 165) Give three examples of shopping products.

Answer: Examples could include washing machines, lawn mowers, and furniture.

Diff: 1 Type: ES Page Ref: 280 Skill: Application Objective: 8-1

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166) Give three examples of specialty products.

Answer: Examples could include a Rolex watch, a Jaguar sports car, and an around-the-world cruise.

Diff: 1 Type: ES Page Ref: 280 Skill: Application Objective: 8-1 167) What do industrial supplies and consumer convenience products have in common? How do they differ?

Answer: Industrial supplies are purchased for further use in conducting a business, while convenience products are purchased by final consumers for personal consumption; both types of products are usually purchased with a minimum of effort or comparison.

Diff: 3 Type: ES Page Ref: 281-282 Skill: Application Objective: 8-1 168) How might a flower shop engage in line stretching?

Answer: A flower shop may offer single-stem, fresh-cut flowers that are sold individually, small arrangements, bouquets, or large ceremonial sprays. With line stretching, the flower shop will offer a wide array of products outside the current offerings, geared toward all types of flower buyers.

Diff: 3 Type: ES Page Ref: 300 Skill: Application Objective: 8-4 169) Give an example of product mix depth in the soft drink industry.

Answer: Examples could include Coke, Diet Coke, Caffeine-free Coke, and Cherry Coke.

Diff: 1 Type: ES Page Ref: 301 Skill: Application Objective: 8-4 170) Why might a company pursue a strategy of less product mix consistency?

Answer: Product mix consistency is how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. If a company had less related product offerings, it could seek to satisfy different customers and their needs. A company might want to increase its business by building a reputation in several product fields.

Diff: 3 Type: ES Page Ref: 301 Skill: Application Objective: 8-4 171) Consider a massage. What service characteristics definitely define the massage as a service?

Answer: Intangibility, variability, inseparability, and perishability all define the massage as a service.

Diff: 1 Type: ES Page Ref: 303-304 Skill: Application Objective: 8-5 39 Copyright © 2017 Pearson Canada Inc.

172) As a service provider, why might you perceive the buyer-seller relationship 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. It is critical that service sellers establish sound relationships from the beginning. A service firm can differentiate itself by consistently delivering higher quality than its competitors.

Diff: 3 Type: ES Page Ref: 306 Skill: Application Objective: 8-5 173) 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 measuring the intangibles of service quality.

Diff: 3 Type: ES Page Ref: 306 Skill: Application Objective: 8-5 174) You have just flown first-class from Winnipeg to Calgary. Last month you flew economyclass from Ottawa to Vancouver. When assessing the quality of service you received on both flights, you admit that you preferred the economy-class flight. List three possible factors that may have led to that variability.

Answer: Answers will vary. Customer retention is the best measure of service quality. It depends on how consistently a company delivers value to its customers. Service variability is dependent on who provides the service as well as when, where, and how it is provided. The firstclass flight may have been bumpy due to windy weather or the plane, for whatever reason, may have left Winnipeg late. The flight attendants in the first-class section may not have been as attentive as you expected. The higher price of first-class may not have provided the higher customer value you expected.

Diff: 3 Type: ES Page Ref: 306 Skill: Application Objective: 8-5 175) How might competitors be a good external idea source?

Answer: Marketers can pay particular attention to competitors' ads to get clues about their new products. Marketers can also buy competing products, take them apart to see how they work, analyze their sales, and decide whether they should bring out a new product of their own.

Diff: 2 Type: ES Page Ref: 286 Skill: Application Objective: 8-2

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176) You have recently sent a proposal for a fictional novel to an editor at a major publishing firm. The editor, alone, will carry out the idea screening. Why might you feel this process is unfair?

Answer: The success of your proposal, or at least the likelihood that your novel will be published, is at the mercy of that one individual. A screening committee might give the proposal a more accurate and fair assessment.

Diff: 3 Type: ES Page Ref: 289 Skill: Application Objective: 8-2 177) In a brief statement, what is the purpose of concept testing?

Answer: A concept test tells a firm what groups of target customers think of a new product idea.

Diff: 2 Type: ES Page Ref: 289 Skill: Application Objective: 8-2 178) What is the advantage of using a concrete and physical presentation of the product concept in the concept testing stage of new-product development?

Answer: A physical presentation of the concept instead of a symbolic presentation, such as words or pictures, generally elicits more reliable feedback from consumers during the concept test.

Diff: 2 Type: ES Page Ref: 289 Skill: Application Objective: 8-2 179) The potential sales, costs and profits are being determined for a new-product idea at Art for Kids. In what stage of the new-product development process does this occur?

Answer: It occurs in the business analysis stage of the new product development process.

Diff: 2 Type: ES Page Ref: 290 Skill: Application Objective: 8-2 180) According to the authors, what is the next step in the new-product development process after a product has passed concept and product tests?

Answer: Testing the market Diff: 2 Type: ES Page Ref: 291 Skill: Application Objective: 8-2

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181) What does test marketing tell the company? Why would a company want to perform test marketing?

Answer: It tells the company how well received the new product will be with its new-product marketing programs (segmentation, targeting, positioning, promotion, pricing, distribution, and product features). The test marketing will help the company make adjustments to its marketing programs before a full roll-out is implemented. In doing so, the test marketing reduces risk for the company.

Diff: 3 Type: ES Page Ref: 290-291 Skill: Application Objective: 8-2 182) Give two examples of fads that passed through the PLC quickly.

Answer: Fads are new products that are extremely popular for a very short time. Pet rocks and Rubik's Cubes are examples; examples are numerous.

Diff: 2 Type: ES Page Ref: 296 Skill: Application Objective: 8-3 183) Why might ad expenditures be high for products in the introductory stage of the PLC? Answer: Consumers have very little awareness about such products; promotional spending can enhance customer awareness.

Diff: 2 Type: ES Page Ref: 295 Skill: Application Objective: 8-3 184) Why might ad expenditures remain high in the growth stage of the PLC? Answer: Though sales are increasing for such products, competition becomes fierce as competitors attempt to enter the market; therefore, ad expenditures remain high in an effort to offset competitive threats.

Diff: 2 Type: ES Page Ref: 295 Skill: Application Objective: 8-3 185) Marketers can prolong the lives of many products in the maturity or decline stages of the PLC, sometimes even moving these products back into the growth stage. How can this happen?

Answer: Marketers can change any element of the marketing mix, change the number of uses or the number of users, or even change the frequency of product use. They can also reintroduce a declining product.

Diff: 2 Type: ES Page Ref: 292 Skill: Application Objective: 8-3

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Herb Marks built his enterprise on the faithful patronage of four specialty shops and a large contract from Elmore Distributors. But after two years, the maker of novelty pens and pencils had to rethink his strategy when his two-year contract with Elmore ended.

Herb built a company reputation on the manufacturing and distribution of a variety of wooden writing utensils with customized engravings. Specialty shops loved to display the products in their fancy, lighted showcases, but such specialty shops alone were not profitable. Herb Marks established a brand name, known merely as Marks, and decided to expand on it.

Herb extended his writing utensil lines to include quills, felt-tip pens, and multiple-cartridge pens that write in different colors. He even added a line of various grades of personalized stationery and business cards. Perhaps Herb's biggest added touch, however, was the addition of two salespeople who would work to explain the diverse array of products offered by Marks, as well as nurture existing accounts.

"We make an excellent product," Herb Marks stated, "and we honour a good guarantee on everything we sell. But let's face it—we face hundreds of competitors! We need Marks representatives out there to help prospects understand what they should demand in something as simple as a writing tool."

The Marks brand is now fast-becoming synonymous with top-notch customer service. Part of the purchase package brought personal visits from the Marks representative, before the purchase and long after.

186) Explain Herb's market offering.

Answer: Herb's wide array of specialty writing utensils is the key element in the offering; however, the Marks brand is also built upon the customer relationships established early on and nurtured in the long run, providing customers with brand experiences.

Diff: 1 Type: ES Page Ref: 278 Skill: Application Objective: 8-1 187) Describe Herb's core product.

Answer: The core customer value can be described as an easier, more comfortable, or more stylish transfer of a thought onto paper.

Diff: 2 Type: ES Page Ref: 279 Skill: Application Objective: 8-1 188) Explain Herb's augmented product in this scenario.

Answer: The augmented product is the determined effort by Marks representatives to build lasting relationships with customers.

Diff: 3 Type: ES Page Ref: 279 Skill: Application Objective: 8-1

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189) What type of consumer products does Marks manufacture? Explain.

Answer: The Marks brand is associated with specialty products; these products are probably higher priced and need to be perceived as different and superior from competitors' offerings.

Diff: 2 Type: ES Page Ref: 280-281 Skill: Application Objective: 8-1 190) Does organization marketing occur in this scenario? Explain.

Answer: Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of customers and the general public toward an organization. Herb Marks does attempt to carry out activities to "sell" the organization itself. The Marks products should speak for themselves; the representatives' customer visits may serve as powerful imagebuilding mechanisms over and beyond the quality of the products.

Diff: 3 Type: ES Page Ref: 279 Skill: Application Objective: 8-1 191) Is line filling evident in this scenario? Explain.

Answer: Yes. Line filing is adding more items within the present range of the product line.

Examples of line filling include the new felt-tip pens, multiple-cartridge pens, and quills added to the existing line of pens and pencils.

Diff: 2 Type: ES Page Ref: 300 Skill: Application Objective: 8-4 192) Are examples of product mix depth evident in this scenario? Explain.

Answer: Yes. Product mix depth is the number of versions offered of each product in the line.

There are apparently numerous versions of the same product types in this scenario; Herb Marks can vary the materials, style, and engravings used for each product.

Diff: 2 Type: ES Page Ref: 301 Skill: Application Objective: 8-4

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 9 Brand Strategy and Management 1) Which of the following best describes what a brand is?

A) a physical product B) a specialty product C) an SBU D) a corporate identity E) a concept Answer: E Diff: 3 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1 2) A key element in a company's relationship with consumers, a ________ has personality, so it involves our emotions as consumers.

A) product line B) product experience C) brand D) service E) product attribute Answer: C Diff: 1 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1 3) According to the definition of a brand presented in your text, all of the following would be an example of a brand except ________.

A) the name Coca-Cola B) the golden arches of McDonald's restaurants C) Tony the Tiger of Frosted Flakes cereal D) the sparkles in Moet et Chandon champagne E) the name and font of IBM Answer: D Diff: 2 Type: MC Page Ref: -323 Skill: Concept Objective: 9-1

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4) Which of the following is one of the main four consumer perception dimensions used by ad agency Young & Rubicam to measure brand strength?

A) brand differentiation B) brand depth C) brand valuation D) brand equity E) brand personality Answer: A Diff: 3 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2 5) Young & Rubicam measures brand strength along all of the following dimensions except ________.

A) differentiation B) relevance C) knowledge D) equity E) esteem Answer: D Diff: 2 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2 6) The fundamental asset underlying brand equity is ________–the value of the customer relationships that the brand creates.

A) the customer mix B) customer equity C) line equity D) service variability E) the service encounter Answer: B Diff: 3 Type: MC Page Ref: 329 Skill: Concept Objective: 9-2 7) Which of the following is a way by which marketers can position their brands in target customers' minds?

A) interactive marketing B) internal marketing C) product attributes D) strong beliefs and values E) added service Answer: C Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 2 Copyright © 2017 Pearson Canada Inc.

8) Positioning a new chocolate bar brand as "the chocolate bar with the most cocoa powder" is positioning based on ________.

A) product attributes B) product benefits C) product values and ideals D) user imagery E) brand equity Answer: A Diff: 1 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 9) Positioning a new chocolate bar brand as "the chocolate bar with the fewest calories" is positioning based on ________.

A) product attributes B) product benefits C) product values and ideals D) user imagery E) brand equity Answer: B Diff: 1 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 10) Positioning a new chocolate bar brand as "the chocolate that forges bonds of friendship" is positioning based on ________.

A) product attributes B) product benefits C) beliefs and values D) user imagery E) brand equity Answer: C Diff: 1 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3

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11) According to brand positioning theory, which of the following positions would likely resonate best with customers?

A) the chocolate bar with the most cocoa powder B) the chocolate bar with the fewest calories C) the chocolate that forges bonds of friendship D) the chocolate bar that can break into 5 pieces E) the thinnest chocolate bar Answer: C Diff: 3 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 12) The strongest brands go beyond attributes or benefit positioning; they are positioned on ________.

A) desirable benefit B) good packaging C) service inseparability D) strong beliefs and values E) customer image Answer: D Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 13) Which of the following is the least desirable quality for a brand name?

A) It should suggest something about the product's benefits and qualities.

B) It should be easy to pronounce, recognize, and remember.

C) The name should be a long word to get attention.

D) The name should translate easily into foreign languages.

E) It should be distinctive.

Answer: C Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 14) Which of the following is an option for a manufacturer's brand sponsorship for a product?

A) subliminal brand B) multibrand C) public brand D) licensed brand E) solo-branding Answer: D Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3

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15) In the competition between ________ and ________ brands, retailers have the advantages of controlling what products will be stocked, where products will be stocked, what prices will be charged, and which products will be featured in print promotions.

A) national; manufacturer's B) store; private C) national; private D) store; licensed E) private; distributor Answer: C Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 16) An increasing number of retailers and wholesalers have created their own ________, also called store brands.

A) unsought products B) private brands C) specialty products D) service variability E) shopping products Answer: B Diff: 1 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 17) For a fee, some companies ________ names or symbols previously created by other manufacturers, names of well-known celebrities, and/or characters from popular movies and books, any of which can provide an instant and proven brand name.

A) service B) license C) market D) package E) brand Answer: B Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3

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18) ________ occurs when two established brand names of different companies are used on the same product.

A) A brand extension B) Brand equity C) Co-branding D) Internal marketing E) Cannibalization Answer: C Diff: 1 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 19) In most ________ situations, one company licenses another company's well-known brand to use in combination with its own.

A) brand extension B) brand equity C) co-branding D) internal marketing E) line extension Answer: C Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 20) Which of the following is an advantage offered by co-branding?

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) A company can expand its existing brand into a category it otherwise might have difficulty entering alone.

D) Advertising, sales, promotion, and marketing must be carefully coordinated.

E) Brand equity is stabilized.

Answer: C Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 21) Hershey's Kisses and Breyers Ice Cream each lending their names to create a new 2L ice cream product is an example of ________.

A) brand advocacy B) co-branding C) megabranding D) brand equity E) a brand touchpoint Answer: B Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 6 Copyright © 2017 Pearson Canada Inc.

22) In 2013, pop band One Direction allowed photos and band-related images to be placed on various footwear and apparel created by the Leomil Group in exchange for a royalty. This is an example of ________.

A) licensing B) ingredient branding C) brand extension D) megabranding E) a brand touchpoint Answer: A Diff: 3 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 23) A consumer just bought a new smartphone game called "Hippy Monster" from his favourite app retailer. Which of the following is unrelated to his direct experience with the brand?

A) a friend telling him about Hippy Monster B) downloading the game C) buying the game from the app store D) the creation of the programming team to create Hippy Monster E) playing the game Answer: D Diff: 1 Type: MC Page Ref: 336 Skill: Concept Objective: 9-4 24) A company has four choices when it comes to developing brands. Which is definitely one of those choices?

A) line inversion B) brand extension C) multibrands D) width and depth perception E) international brands Answer: B Diff: 3 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3

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25) ________ occurs when a company introduces additional items in a given product category under the same brand name, such as new flavours, forms, colours, ingredients, or package sizes.

A) A line extension B) A product mix C) Interactive marketing D) Service variability E) Service intangibility Answer: A Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 26) A ________ involves the use of a successful brand name to launch new or modified products in a new category.

A) line extension B) product line C) brand extension D) private brand E) brand symbol Answer: C Diff: 1 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3 27) Which of the following is a potential drawback of multibranding?

A) Consumers may become confused about the image of the main brand.

B) An overextended brand name might lose its specific meaning for consumers.

C) Different product features can appeal to consumers with different buying motives.

D) The company's resources may be spread over too many brands.

E) The company can occupy more retail shelf space.

Answer: D Diff: 3 Type: MC Page Ref: 335 Skill: Concept Objective: 9-3 28) While advertising campaigns can help to create name recognition, brand knowledge, and maybe even some brand preference, brands are not maintained by advertising but by ________.

A) marketing experience B) line extensions C) brand experience D) product mix E) word-of-mouth elements Answer: C Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-4 8 Copyright © 2017 Pearson Canada Inc.

29) Jerry recently bought a Sony Bravia HD television. He first heard about the TV through an advertisement and later talked to a friend who has one and recommended it. These are examples of ________.

A) solicitations B) line extensions C) touchpoints D) product mix E) word-of-mouth elements Answer: C Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-3 30) Companies will often partner with filmmakers, musicians and artists to create brand context.

This is an example of ________.

A) branded entertainment B) line extensions C) brand widening behaviours D) product mix E) brand meaning Answer: A Diff: 2 Type: MC Page Ref: 340 Skill: Concept Objective: 9-5 31) Brand managers are responsible for, and manage, a brand. An example of a questions brand managers continually ask is ________.

A) Is our brand profitable?

B) Should we sign up celebrities like Neil Young or Nelly Furtado as our spokespeople?

C) What is our competitive advantage?

D) How can we increase sales?

E) Does our brand excel at delivering benefits that customers truly value?

Answer: E Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-3 32) In order to be recognizable brand images and logos need to be ________.

A) brightly coloured B) large C) consistent and exact D) detailed E) simple Answer: C Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-3 9 Copyright © 2017 Pearson Canada Inc.

33) A ________ is a name, term, sign, symbol or design that identifies the maker or seller of a product or service.

A) brand B) line extension C) touchpoint D) label E) package Answer: A Diff: 2 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1 34) Consumers view a brand as an important part of a product and branding can add ________.

A) costs B) value C) layers D) depth E) elements Answer: B Diff: 2 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1 35) Branding helps consumers in many ways. Which of the following is definitely one way?

A) Brand names help customers to see which products cost more.

B) Brand names help customers look cooler than their friends.

C) Brand names help customers to be trendy.

D) Brand names help customers identify products that might benefit them.

E) Brand names help customers find better sales.

Answer: D Diff: 2 Type: MC Page Ref: 323 Skill: Concept Objective: 9-1 36) Branding helps sellers. The following is definitely an example of this help.

A) Brand names provide legal protection for unique product features.

B) Brand names provide guarantees that consumers will spend their money.

C) Brand names are easy to sell.

D) Brand names work for everyone.

E) Brand names provide advertising.

Answer: A Diff: 2 Type: MC Page Ref: 323 Skill: Concept Objective: 9-1

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37) Trademarks are useful because customers ________ them.

A) expect B) pay for C) trust D) mistrust E) define Answer: C Diff: 2 Type: MC Page Ref: 323 Skill: Concept Objective: 9-1 38) The words "Coca-Cola," the unique shape of the bottle and the wave shaped symbol are all examples of a ________.

A) trademark B) marketing mix C) touchpoint D) product E) brand Answer: A Diff: 2 Type: MC Page Ref: 323 Skill: Concept Objective: 9-1 39) Thanks to the rise in popularity of social media customers are beginning to tell stories about their favourite brands. This is an example of ________.

A) selling out B) brand advocacy C) solicitation D) mixed messaging E) computerization Answer: B Diff: 2 Type: MC Page Ref: 341 Skill: Concept Objective: 9-5 40) Brand advocacy begins with ________.

A) payment B) an idea C) a touchpoint D) trust E) a computer Answer: D Diff: 2 Type: MC Page Ref: 341 Skill: Concept Objective: 9-1

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41) It is the ________ job to create and communicate stories about their brand.

A) management's B) salesperson's C) brand manager's D) owner's E) spokesperson's Answer: C Diff: 2 Type: MC Page Ref: 337 Skill: Concept Objective: 9-5 42) ________ is universally one of the most effective ways to create brand advocates.

A) Having contests B) Writing blogs C) Creating advertisements D) Paying people E) Understanding and solving problems Answer: E Diff: 2 Type: MC Page Ref: 341 Skill: Concept Objective: 9-5 43) The skillful use of marketing can turn a person's name into a powerhouse brand. This is an example of ________.

A) solicitation B) public relations C) people as brands D) product mix E) marketing principles Answer: C Diff: 2 Type: MC Page Ref: 325-326 Skill: Concept Objective: 9-1 44) Rather than simply posing with a product, many professional athletes today have become ________.

A) rich B) powerful C) conceited D) their own brands E) overbranded Answer: D Diff: 2 Type: MC Page Ref: 325-326 Skill: Concept Objective: 9-1

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45) Besides a logo, name and icon brands also have ________.

A) personality, status and value.

B) legal implications, and trust accounts C) profit D) public relations E) exclusive power over customers Answer: A Diff: 2 Type: MC Page Ref: 326 Skill: Concept Objective: 9-2 46) Brand managers often describe their brands using the same kinds of adjectives typically used for people. Words like: traditional, youthful, sophisticated, reliable. These managers are trying to build brand ________.

A) profit B) extensions C) personality D) evaluations E) word-of-mouth Answer: C Diff: 2 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2 47) Brands occupy a level of social regard with respect to one another. We consider a RollsRoyce or Bentley car differently than a Chevrolet or Hyundai. This is an example of brand ________.

A) status B) price C) touchpoints D) value E) equity Answer: A Diff: 2 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2

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48) Coca-Cola, IBM and Microsoft are all examples of ________ while Thompson Reuter, TD and RBC are all examples of ________.

A) global brands, Canadian brands B) multinationals, nationals C) computer companies, banks D) well known brands, unknown brands E) large caps, small caps Answer: A Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-2 49) One of the main branding strategy decisions made by the marketing manager is ________.

A) brand name selection B) brand placement C) brand product D) brand people E) brand price Answer: A Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-3 50) When choosing a brand name, the process begins with ________.

A) an analysis of the competition B) a careful review of the product and its benefits C) touchpoints of consumers D) identifying absolute advantage E) budget size Answer: B Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-3 51) The brand must stand out in ways that ________.

A) are quirky B) are imaginary C) are international D) have real meaning E) make good jingles Answer: D Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-3

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52) A great ________ absolutely requires a strong, memorable name.

A) company B) product C) brand D) promotion E) service Answer: C Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 53) Once chosen the brand name should be ________.

A) sold B) protected C) shared D) exploited E) saved Answer: B Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 54) Sometimes a company will take a brand name from ________.

A) the competition B) the past C) the future D) the present E) corporate intel Answer: B Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 55) A brand can be better positioned by associating its name with a ________.

A) legal contract B) desirable benefit C) monopoly D) customer E) partner Answer: B Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3

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56) Some companies like Godiva, Starbucks, Apple, and Victoria's Secret rely less on a product's tangible attributes and more on creating ________.

A) advertisements B) promotions C) public relations campaigns D) touch points E) surprise, passion, and excitement.

Answer: E Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 57) A(n) ________ is created and owned by the manufacturer of a product or service.

A) advertising strategy B) private brand C) sales force D) national brand E) customer appreciation campaign Answer: D Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 58) A(n) ________ is created for and owned by a reseller of a product or service.

A) advertising strategy B) private brand C) sales force D) national brand E) customer appreciation campaign Answer: B Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 59) Store brands account for ________ of Canadian grocery store and drugstore revenues.

A) 25% B) 75% C) 5% D) 10% E) 60% Answer: A Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3

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60) National brands are so-called because they are ________.

A) well known throughout the country or even internationally B) named after famous Canadian people C) gimmicks manufactured in Canada D) satisfy the needs of Canadians E) advertised only in Canada Answer: A Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 61) Due to worsening economic times customers are becoming more cost conscious and increasingly are abandoning ________ in favour of ________.

A) private brands, national brands B) national brands, no names C) private brands, exclusive names D) national brands, private brands E) no names, national brands Answer: D Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 62) Retailers often price their store brands ________ comparable national brands.

A) higher than B) lower than C) the same as D) unrelated to the price of E) much higher Answer: B Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 63) A modest manufacturing company in Regina has recently paid the Tommy Hilfiger and Quicksilver companies for the right to use their brand names in everything from belts to blouses, and shirts to socks. These are examples of ________.

A) branding B) trademarking C) copying D) knock offs E) licensing Answer: E Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 17 Copyright © 2017 Pearson Canada Inc.

64) A number of top selling retail toys are products that are based on television shows and movies. These are examples of ________.

A) licensing B) product extensions C) word of mouth sales D) exploitations E) top down production Answer: A Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3 65) In recent years name and character licensing has ________.

A) declined slightly B) declined quickly C) increased quickly D) increased slightly E) stayed about the same Answer: C Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 66) Costco recently teamed up with mattress maker Stearns & Foster to market a line of Kirkland Signature mattress sets by Stearns & Foster. This is a good example of ________.

A) branding B) trademarking C) advertising D) product mixing E) co-branding Answer: E Diff: 2 Type: MC Page Ref: 3313 Skill: Concept Objective: 9-3 67) Co-branding has many limitations. Which of the following is definitely one of them?

A) customer complaints B) brands must be complementary C) competition envy D) partner distraction E) ease of use limitations Answer: B Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3

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68) One advantage of co-branding is ________.

A) more defined target market B) decreased competition C) longer product life D) more memorable E) greater brand equity Answer: E Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-4 69) One risk of having too many line extensions is that ________.

A) sales might come at the expense of other items in the line.

B) the competition can use your good ideas C) customers buy more than they really need D) intermediaries increase the throughput costs E) Internet sales may decrease Answer: A Diff: 2 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3 70) Recently Campbell's soup has developed a wide range of ethnic and religiously focussed soup varieties. This type of modification is known as ________.

A) product mixing B) line extensions C) brand extensions D) promotional dilemmas E) customer stratification Answer: C Diff: 2 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3 71) At Jeep you can now buy 7 different models; the Commander, Grand Cherokee, Compass, Patriot, Liberty, Wrangler, and Wrangler Unlimited. A risk of this over extension is that a brand ________.

A) loses market share B) increases variable costs per unit C) complicates consumer touchpoints D) dominates an industry E) confuse the image of the brand Answer: E Diff: 2 Type: MC Page Ref: 335 Skill: Concept Objective: 9-3 19 Copyright © 2017 Pearson Canada Inc.

72) Procter & Gamble recently used the Mr. Clean character on its new line of auto cleaning kits.

P&G did this to increase recognition and speed consumer acceptance. This success story is a good example of ________.

A) promotion B) customer service C) research and development D) brand extension E) sales savvy Answer: D Diff: 2 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3 73) One of the many benefits to multibranding is that ________.

A) each brand has a small market share B) it focuses market penetration C) it increases per unit profitability D) it simplifies promotion E) consumers choose one of your many brands Answer: E Diff: 2 Type: MC Page Ref: 335 Skill: Concept Objective: 9-3 74) Recently General Motors was on the brink of bankruptcy. One of the solutions was to deal with their problem of multibranding. What did GM do to reduce costs and increase profitability?

A) They cut many modest or failing brands to focus on their stronger brands.

B) They offered employee discounts to everyone.

C) They lobbied along with Chrysler for huge government bailout payments.

D) They sold stock to generate revenue.

E) They sold more cars and trucks.

Answer: A Diff: 2 Type: MC Page Ref: 335 Skill: Concept Objective: 9-4 75) A company might introduce a new brand because ________.

A) their sales force recommends it B) their old brand is waning in popularity C) they developed a new product D) the competition is increasing E) they believe more brands is better Answer: C Diff: 2 Type: MC Page Ref: 333—334 Skill: Concept Objective: 9-3 20 Copyright © 2017 Pearson Canada Inc.

76) An important task of the brand manager is the management of ________.

A) money B) people C) brand names D) communications about the brand E) story seeding Answer: D Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-3 77) BMW was the first company to create branded entertainment in the form of a series of short films. In each film the star was ________.

A) a male B) a female C) from Hollywood D) a BMW car E) a car owner Answer: D Diff: 2 Type: MC Page Ref: 340 Skill: Concept Objective: 9-5 78) When a company uses film makers, artists or musicians to help sell their brands it is called ________.

A) a sell out B) cool C) effective D) costly E) branded entertainment Answer: E Diff: 2 Type: MC Page Ref: 340 Skill: Concept Objective: 9-5 79) Brands must be maintained by ________.as well as by advertising.

A) the overall brand experience B) managers C) sales staff D) executive E) intermediaries Answer: A Diff: 2 Type: MC Page Ref: 336 Skill: Concept Objective: 9-3

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80) According to the text, consumer preference isn't based on taste alone. Consumers attach ________ to brands and develop ________ that go beyond a product's physical attributes.

A) value; choices B) meaning; relationships C) benefits; alliances D) labels; lists E) names; icons Answer: B Diff: 2 Type: MC Page Ref: 324 Skill: Concept Objective: 9-1 81) Brands are powerful. They have status and value. Interestingly brands are really nothing but ________.

A) ideas B) agreements C) labels D) promises E) contracts Answer: A Diff: 2 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1 82) Michelle is describing her vision of the company brand to her vice president. The same brand is described by an employee to a friend. The descriptions and definitions are completely different. This is because ________.

A) one of them is wrong B) both are wrong C) brands can't be described D) no two people perceive a brand in exactly the same way. A brand is not real.

E) executives are cut off from the front line staff Answer: D Diff: 2 Type: MC Page Ref: 322 Skill: Concept Objective: 9-1

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83) A couple designed their wedding around the Black & Decker's DeWalt brand. This is an extreme example of ________.

A) brand servicing B) line extensions C) brand advocacy D) people trying to get a wedding sponsor E) the reality that DeWalt makes darned good power tools.

Answer: C Diff: 2 Type: MC Page Ref: 341 Skill: Concept Objective: 9-5 84) To create brand advocates some brand managers try to make ________ part of the brand story.

A) people B) profit C) advertisements D) product development E) customers and employees Answer: E Diff: 2 Type: MC Page Ref: 341 Skill: Concept Objective: 9-5 85) In order for customers to choose his brand, Spencer must get his public to see that his brand is ________.

A) simple B) distinctive C) illusive D) engaging E) expansive Answer: B Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-2 86) According to the text, the top two Canadian brands are TD and RBC. Their dollar amounts measure ________.

A) the value of the brand B) the value of the company C) the profitability of the brand D) the stock value of the company E) the memorable ratings of the company Answer: A Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-2 23 Copyright © 2017 Pearson Canada Inc.

87) The Chevrolet Prism and Toyota Corolla are the same car, made on the same assembly line by the same people, using the same parts, and have the same warranty. Yet, the baseline model of the Toyota Corolla sells for $250 more than its counterpart. We can conclude that Toyota Corolla has ________.

A) lower brand equity B) higher brand equity C) better distribution networks D) a better advertising agency E) better strategic alliances Answer: B Diff: 3 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2 88) Sophia is the newly hired brand manager for a new company in southern Ontario. She knows that before consumers respond to a brand they must first ________.

A) know about and understand the benefits.

B) be given coupons C) hire a successful olympian to help carry the message D) buy full page advertisements in the National Post and Globe and Mail.

E) talk to salespeople Answer: A Diff: 2 Type: MC Page Ref: 329 Skill: Concept Objective: 9-2 89) The ________ is the sum total of all the attributes of a brand, and the emotions it inspires in the minds of consumers.

A) brand equity B) brand valuation C) brand touchpoints D) brand image E) brand personality Answer: E Diff: 2 Type: MC Page Ref: 327 Skill: Concept Objective: 9-2

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90) Before choosing a brand name to use in a foreign country it is a good idea to check ________.

A) if it is translatable B) trademarks C) American patents D) differences in time zones E) local labour codes Answer: B Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 91) To compete with the national brands Loblaws created a private brand called President's Choice. The President's Choice brand bas become so popular that Loblaws now licenses it to retailers in 15 countries where Loblaws has no stores of its own. In effect the private brand has grown into ________.

A) a megabrand B) a gold mine C) a national brand D) a phenomenon E) a fluke Answer: C Diff: 2 Type: MC Page Ref: 330 Skill: Concept Objective: 9-3 92) One disadvantage of store brands is that they are ________.

A) harder to establish B) well known throughout the country C) more expensive than national brands D) easy to promote E) cheaper to stock than national brands Answer: A Diff: 2 Type: MC Page Ref: 332 Skill: Concept Objective: 9-3

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93) A company has four main choices when it comes to brand development. Which of the following best describes these choices?

A) brand names, brand extensions, multibrands, or new brands B) line extensions, brand names, multibrands, or new brands C) line extensions, brand extensions, brand names, or new brands D) line extensions, brand extensions, multibrands, or brand names E) line extensions, brand extensions, multibrands, or new brands Answer: E Diff: 2 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 94) Before a company blindly decides to incorporate a brand extension, they need to seriously consider which of the following?

A) new customers likes and dislikes B) how well the brand's association fits the new product C) past customers preferences D) nostalgia E) word-of-mouth promotions on YouTube and Twitter Answer: B Diff: 3 Type: MC Page Ref: 335 Skill: Concept Objective: 9-3 95) Cheerios launching Walnut Cheerios cereal is an example of ________.

A) line extension B) brand extension C) cobranding D) licensing E) the product lifecycle Answer: A Diff: 3 Type: MC Page Ref: 333 Skill: Concept Objective: 9-3 96) Virgin entering the theme park market by creating Virgin Rollercoaster World is an example of a ________.

A) line extension B) brand extension C) cobranding D) licensing E) product life cycle Answer: B Diff: 2 Type: MC Page Ref: 334 Skill: Concept Objective: 9-3 26 Copyright © 2017 Pearson Canada Inc.

97) Dove marketers can go beyond the brand's cleansing cream properties and talk about the resulting benefit of softer skin. This is known as product attributes in brand positioning.

Answer: FALSE Diff: 3 Type: TF Page Ref: 330 Skill: Application Objective: 9-3 98) Attributes are the least desirable level for brand positioning because competitors can easily copy attributes and customers are more interested in what attributes will do for them than in the attributes themselves.

Answer: TRUE Diff: 2 Type: TF Page Ref: 330 Skill: Concept Objective: 9-3 99) A brand name should translate easily into foreign languages.

Answer: TRUE Diff: 1 Type: TF Page Ref: 330 Skill: Concept Objective: 9-3 100) Retailers and wholesalers who have created their own brands—such as Walmart's Great Value beverages and food products–are participating in co-branding.

Answer: FALSE Diff: 3 Type: TF Page Ref: 333 Skill: Application Objective: 9-3 101) Co-branding is a form of product sponsorship that consists of activities, benefits, or satisfactions offered for sale.

Answer: FALSE Diff: 2 Type: TF Page Ref: 333 Skill: Concept Objective: 9-3 102) When a company introduces a new brand name in the same product category, it is called line extension.

Answer: FALSE Diff: 2 Type: TF Page Ref: 333 Skill: Concept Objective: 9-3

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103) Customers come to know a brand through a wide range of contacts and touch points, including word of mouth, personal interactions with company employees, telephone interactions, social media, and company websites.

Answer: TRUE Diff: 1 Type: TF Page Ref: 336 Skill: Concept Objective: 9-4 104) A brand represents consumers' perceptions and feelings about a product and its performance.

Answer: TRUE Diff: 2 Type: TF Page Ref: 322 Skill: Concept Objective: 9-1 105) Retailers and wholesalers have created their own national brands, also called store brands.

Answer: FALSE Diff: 2 Type: TF Page Ref: 331 Skill: Concept Objective: 9-3 106) To be successful, brand managers continually ask "Is our brand consistently providing the benefits our customers value and expect?"

Answer: TRUE Diff: 2 Type: TF Page Ref: 336 Skill: Concept Objective: 9-3 107) Companies will often partner with film makers, musicians and artists to create brand context. This is an example of branded entertainment.

Answer: TRUE Diff: 2 Type: TF Page Ref: 340 Skill: Concept Objective: 9-5 108) Brands are powerful. They have status and value. Interestingly though brands are really nothing but product attributes.

Answer: FALSE Diff: 2 Type: TF Page Ref: 322 Skill: Concept Objective: 9-1

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109) A line extension involves the use of a successful brand name to launch new or modified products in a new category.

Answer: FALSE Diff: 2 Type: TF Page Ref: 334 Skill: Concept Objective: 9-3 110) National brands are so-called because they are well known and well established in Canada, or even internationally.

Answer: TRUE Diff: 2 Type: TF Page Ref: 333-334 Skill: Concept Objective: 9-3 111) A brand can be better positioned by associating its name with a desirable benefit.

Answer: TRUE Diff: 2 Type: TF Page Ref: 330 Skill: Concept Objective: 9-3 112) Registered trademarks are names and symbols. They cannot include characters.

Answer: FALSE Diff: 2 Type: TF Page Ref: 323 Skill: Application Objective: 9-1 113) A couple designed their wedding around Black & Decker's DeWalt brand. This is an extreme example of brand advocacy.

Answer: TRUE Diff: 2 Type: TF Page Ref: 341 Skill: Application Objective: 9-5 114) Brand equity is the sum total of all the attributes of a brand, and the emotions it inspires in the minds of consumers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 327 Skill: Concept Objective: 9-2

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115) A manufacturer has four brand sponsorship options. Describe what they are.

Answer: A manufacturer can launch its own brand (manufacturer's brand or national brand). It can sell to resellers who give the product a private brand (or store brand). It can market licensed brands, using names or symbols created by other manufacturers, names of celebrities, or characters from popular movies or television. Finally, a manufacturer can join forces with another company to co-brand a product.

Diff: 2 Type: ES Page Ref: 330-333 Skill: Application Objective: 9-3 116) A company has four choices when it comes to developing brands. Describe what they are.

Answer: The company can introduce line extensions, brand extensions, multibrands, or entirely new brands. A line extension involves extending a current brand name to new forms, colors, sizes, flavors, etc. in one of the company's existing product categories. In contrast, a brand extension extends a current brand name to a new or modified product in a new product category.

Multibranding involves introducing several brands within the same category. Finally, a company may decide that a new brand name is needed, particularly if the power of an existing brand name is declining or the company is entering a new product category.

Diff: 2 Type: ES Page Ref: 333-335 Skill: Application Objective: 9-3 117) "The definition of a brand is far from simple." Explain what the text authors mean by this statement.

Answer: No two people, let alone two marketers, agree on what makes up a brand. It may identify one item, a family of items, or all items from that seller. A brand is a name, icon, design, or a combination of these, that identifies the maker of the marketer of a product. Brands are powerful. They have status and value. Brands have personalities and they involve the emotions of customers. But for all that brands are not real. They are simply ideas.

Diff: 2 Type: ES Page Ref: 322-323 Skill: Application Objective: 9-1 118) Branding helps buyers in many ways. Explain why branding has become so important in the marketplace by describing these benefits to buyers.

Answer: Brand names help customers identify products that might benefit them. Brands also say something about product quality and consistency–buyers who always buy the same brand know that they will get the same features, benefits, and quality each time they buy.

Diff: 2 Type: ES Page Ref: 320-321 Skill: Application Objective: 9-1

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119) Branding helps sellers in many ways. Explain why branding has become so important in the marketplace by describing these benefits to sellers.

Answer: Branding helps sellers. The brand name becomes the basis on which a whole story can be built about a product's special qualities. The seller's brand name and trademark provide legal protection for unique product features that might otherwise be copied by competitors. Branding helps the seller to segment the market.

Diff: 2 Type: ES Page Ref: 323 Skill: Application Objective: 9-1 120) Brands are more than just names and symbols, they are relationships. Explain.

Answer: Brands are really the key element in a company's relationship with customers. Brands represent consumers' perceptions and feelings about a product and its performance—everything that a product or service means to customers. In the final analysis, brands exist in the heads of consumers. Products are created in factories but brands are created in the customer's mind.

Diff: 2 Type: ES Page Ref: 324 Skill: Application Objective: 9-1 121) Brand advocacy is critical to the job of the brand marketer. To create brand advocates professional experts suggest five main elements beginning with "Advocacy begins with trust."

What are the other four suggestions?

Answer: 1) Advocacy begins with trust—word of mouth affects customers' perceptions.

2) Advocacy starts close to home—brands need to create advocates.

3) Make customers and employees part of the story—people should be at the heart of the story.

4) Deliver an experience that gets them talking—loyalty is not enough. Brands need advocates.

5) Outperform where customers care the most—understanding and solving problems is key.

Diff: 2 Type: ES Page Ref: 341 Skill: Application Objective: 9-5 122) Brands are more than logos and names. They also have personality, status and value.

Explain what is meant by each of these three elements.

Answer: 1) Personality—the total sum of all the attributes of a brand, and the emotions it inspires in the minds of consumers.

2) Status—Brands occupy a level of social regard with respect to one another. Within just about every product category there are high status and low status brands. Status is not the same thing as value or popularity.

3) Brand Equity—It is the dollar amount attributed to the value of the brand. Because customers see a brand as adding benefit, this added value comes at a cost. The premium that customers are willing to pay for a brand over its nearest non-branded competitor is a measure of the value of the brand.

Diff: 2 Type: ES Page Ref: 327 Skill: Application Objective: 9-2 31 Copyright © 2017 Pearson Canada Inc.

123) Branding strategy covers all the high-level decisions that govern the management of the brand, and guide the public and market perceptions about the brand. Name and explain the three branding strategy decisions.

Answer: 1) Brand name selection—picking a good name starts with careful review of the product and its benefits. It should say something about the products it will brand. It should be memorable and easy to pronounce. It should be distinctive and extendable. It should be pronounceable in many languages and trademarkable in key markets.

2) Brand positioning—brands need to be positioned in the minds of consumers. Brand managers can position based on attributes, desirable benefits, or strong beliefs and values.

3) Brand sponsorship—some products are not branded at all. If they are, the brands may be national or private (store). Licensing can also brand a new product as is co-branding which involves partnering with another firm.

Diff: 2 Type: ES Page Ref: 329-333 Skill: Application Objective: 9-3 124) Explain which is better: national or private brands?

Answer: Retailers have many advantages in the so-called battle of the brands. They control the products they stock, where they go on the shelf, what prices to charge, and featured brands.

Retailers often price their store brand lower than the comparable national brand, appealing to the budget conscious buyer. Store brands can be hard to establish and costly to stock and promote.

Nonetheless, they yield higher profits for the store. Also, store brands give retailers exclusive products that cannot be purchased from competitors.

Diff: 2 Type: ES Page Ref: 332 Skill: Application Objective: 9-3 125) What can a brand manager do to create brand advocates?

Answer: Brand managers can encourage feedback and storytelling from those customers who love the brand as well as from employees and others who are willing to voluntarily promote their favourite brands.

Diff: 2 Type: ES Page Ref: 341 Skill: Concept Objective: 9-5 126) What must a brand manager do to maintain a brand?

Answer: Brand managers need to continually audit their brands' strengths and weaknesses and make decisions about which brands need more support, which need to be dropped, and which need to be repositioned.

Diff: 2 Type: ES Page Ref: 336 Skill: Concept Objective: 9-3

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127) Brand managers try to build a brand personality. How do they do this?

Answer: The brand personality is the sum total of all the attributes of a brand, and the emotions it inspires in the consumers' minds. Brand managers describe their brands by using the same kind of adjectives used to describe people.

Diff: 2 Type: ES Page Ref: 327 Skill: Concept Objective: 9-2 128) What is meant by brand relationships?

Answer: Brands are more than names and symbols. They are a key element in the company's relationship with consumers. A key factor in consumers' relationships with brands is what they believe about them. Brands represent consumers' perceptions and feelings about a product and its performance.

Diff: 2 Type: ES Page Ref: 324 Skill: Concept Objective: 9-1 129) What is customer equity?

Answer: The bottom line of brand equity is customer equity. Customer equity is the value of customer relationships that the brand creates. A powerful brand really represents a profitable set of loyal customers. The proper focus of marketing is building customer equity.

Diff: 2 Type: ES Page Ref: 329 Skill: Concept Objective: 9-2 130) Advocacy starts close to home. Explain.

Answer: A brand must first build a strong base of brand supporters. If you gain the passionate support of customers and employees, advocates will willingly volunteer their enthusiasm for the brand.

Diff: 2 Type: ES Page Ref: 341 Skill: Concept Objective: 9-5 131) What is licensing a famous person?

Answer: Licensing is the buying and selling the rights to use, in this case, a famous person's name or image. An example is an NHL team jersey with the name of a hockey player on it.

Diff: 2 Type: ES Page Ref: 333 Skill: Concept Objective: 9-3

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132) What are the qualities of a good brand name?

Answer: Good brand names should say something about the type of products it is associated with; they should be easy to pronounce, recognize and remember; they should be distinctive; they should not be tied to one product in the brand; they should be pronounceable in many languages; and they should be capable of trademarking and registering.

Diff: 2 Type: ES Page Ref: 330 Skill: Concept Objective: 9-3 133) How can a brand name be positioned?

Answer: Brands can be positioned on the basis of product attributes, However, consumers are more interested in the benefits associated with the brands. The strongest brands go beyond attribute or benefit positioning. They are positioned on strong beliefs and values, and as such engage the customer on a deep emotional level.

Diff: 2 Type: ES Page Ref: 330 Skill: Concept Objective: 9-3 134) Brand communications is an important part of the ongoing management of a brand. What does this entail?

Answer: Brand communications focuses on communicating brand positioning, or image, rather than on product features. In addition to advertising, brand messages are communicated through brand experiences, touchpoints, brand icons and characters, brand ambassadors, brand stories, branded content, and branded entertainment, Because of social media, consumers can also be part of brand advocacy Diff: 2 Type: ES Page Ref: 336 Skill: Concept Objective: 9-4

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Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered just whether a company-wide global focus would be more profitable after all.

Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Though seeing first-hand the benefits Wellman found with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting.

With the assistance of a domestic export department, the Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered.

Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks.

"Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there."

135) How might Selman & Saks eventually benefit from engaging in licensing?

Answer: Licensing would benefit Selman & Saks by allowing a French firm to produce the razors and trimmers in exchange for a royalty; the French company might have identified necessary product or package changes necessary to remain attractive to the French market.

Diff: 2 Type: ES Page Ref: 332 Skill: Application Objective: 9-3 136) How might Selman & Saks use brand positioning?

Answer: Selman & Saks could focus on the product attributes but this assumes that French customers want to use their razors as often as their Canadian counterparts. Selman & Saks could position the brand by associating its name with desirable benefits. To do this effectively Selman & Saks needs to research what French customers define as "benefits" when it comes to shaving.

Finally, the brand could be positioned on strong beliefs and values. Again, research is required to discover what beliefs and values are important to the French culture.

Diff: 2 Type: ES Page Ref: 330 Skill: Application Objective: 9-3

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 10 Pricing: Understanding and Capturing Customer Value 1) ________ is the amount of money charged for a product or service.

A) Experience curve B) Demand curve C) Price D) Wage E) Salary Answer: C Diff: 1 Type: MC Page Ref: 354 Skill: Concept Objective: 10-1 2) Price is the only element in the marketing mix that produces ________.

A) revenue B) variable costs C) expenses D) fixed costs E) stability Answer: A Diff: 1 Type: MC Page Ref: 354 Skill: Concept Objective: 10-1 3) Consumer perceptions of the product's value set the ________ for prices.

A) demand curve B) floor C) ceiling D) variable cost E) image Answer: C Diff: 2 Type: MC Page Ref: 354 Skill: Concept Objective: 10-1 4) Product costs set a(n) ________ to a product's price.

A) demand curve B) experience curve C) floor D) ceiling E) break-even cost Answer: C Diff: 2 Type: MC Page Ref: 354 Skill: Concept Objective: 10-1 1 Copyright © 2017 Pearson Canada Inc.

5) ________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing.

A) Customer value-based pricing B) Target return pricing C) Variable costs D) Price elasticity E) Product image Answer: A Diff: 2 Type: MC Page Ref: 355 Skill: Concept Objective: 10-1 6) In ________, price is considered along with the other marketing mix variables before the marketing program is set.

A) target return pricing B) value-based pricing C) variable costs D) price elasticity E) cost-based pricing Answer: B Diff: 2 Type: MC Page Ref: 355 Skill: Concept Objective: 10-1 7) Value-based pricing is the reverse process of ________ pricing.

A) variable cost B) cost-plus C) cost-based D) good-value E) value-added Answer: C Diff: 2 Type: MC Page Ref: 355 Skill: Concept Objective: 10-1 8) With ________ pricing, price is set to match consumers' perceptions of product value.

A) variable cost B) cost-plus C) cost-based D) value-based E) everyday low Answer: D Diff: 2 Type: MC Page Ref: 355 Skill: Concept Objective: 10-1

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9) Measuring ________ can be difficult. A company might conduct surveys or experiments to test this in the different products they offer.

A) target returns B) fixed costs C) perceived value D) break-even pricing E) variable costs Answer: C Diff: 2 Type: MC Page Ref: 356 Skill: Concept Objective: 10-1 10) Underpriced products sell very well, but they produce less revenue than they would have if price were raised to the ________ level.

A) perceived value B) value-based C) variable D) demand curve E) price-floor Answer: A Diff: 2 Type: MC Page Ref: 356 Skill: Concept Objective: 10-1 11) ________ involves charging a constant low price with few or no temporary price discounts.

A) High-low pricing B) Target return pricing C) Cost-plus pricing D) Everyday low pricing (EDLP) E) Penetration pricing Answer: D Diff: 2 Type: MC Page Ref: 356-357 Skill: Concept Objective: 10-1 12) When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.

A) pricing power B) value-added pricing strategies C) fixed costs D) price elasticity E) image pricing Answer: B Diff: 2 Type: MC Page Ref: 8 Skill: Concept Objective: 10-1 3 Copyright © 2017 Pearson Canada Inc.

13) ________ pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for the company's efforts and risks.

A) Value-based B) Fixed cost C) Cost-based D) Variable E) Skimming Answer: C Diff: 1 Type: MC Page Ref: 358-359 Skill: Concept Objective: 10-1 14) Fixed costs ________ as the number of units produced increases.

A) decrease B) increase C) divide in half D) remain the same E) increase at a diminishing rate Answer: D Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 15) Costs that do not vary with production or sales level are referred to as ________ costs.

A) fixed B) variable C) target D) total E) unit Answer: A Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 16) Costs that vary directly with the level of production are referred to as ________ costs.

A) fixed B) variable C) target D) total E) unit Answer: B Diff: 1 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1

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17) Rent, electricity, and executive salaries are examples of ________ costs.

A) fixed B) variable C) total D) accumulated E) marketing Answer: A Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 18) ________ are the sum of the ________ and ________ for any given level of production.

A) Fixed costs; variable; total costs B) Fixed costs; total; variable costs C) Variable costs; fixed; total costs D) Total costs; fixed; variable costs E) Break-even costs; fixed; total costs Answer: D Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 19) The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard mark-up to the cost of the product. This approach to pricing is called ________ pricing.

A) value-based B) fixed cost C) cost-plus D) variable E) skimming Answer: C Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 20) The simplest pricing method is ________.

A) value-based pricing B) going-rate and sealed-bid pricing C) cost-plus pricing D) break-even analysis E) target return pricing Answer: C Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1

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21) Which of the following presents the strongest reason that markup pricing is generally illogical?

A) Sellers earn a fair return on their investment.

B) By tying the price to cost, sellers simplify pricing.

C) When all firms in the industry use this pricing method, prices tend to be similar.

D) This method ignores demand.

E) With a standard markup, consumers know when they are being overcharged.

Answer: D Diff: 3 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 22) Which of the following is a cost-based approach to pricing?

A) value-based pricing B) going-rate pricing C) break-even pricing D) good-value pricing E) EDLP Answer: C Diff: 2 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 23) Break-even pricing, or a variation called ________, is when the firm tries to determine the price at which it will break even or make the return it is seeking.

A) competition-based pricing B) target return pricing C) fixed cost D) value-based pricing E) customer-based pricing Answer: B Diff: 1 Type: MC Page Ref: 359 Skill: Concept Objective: 10-1 24) Which of the following statements about a break-even chart is true?

A) It is used to determine how the customer-perceived value changes with value-added pricing.

B) It is a tool used to calculate fixed costs.

C) It shows the level of earnings a company has during an accounting period.

D) It is a tool marketers use to examine the relationship between supply and demand.

E) It uses variable costs, the unit price, and fixed costs.

Answer: E Diff: 3 Type: MC Page Ref: 359-360 Skill: Concept Objective: 10-1

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25) Which of the following is an external factor that affects pricing decisions?

A) the salaries of production management B) competition C) the salaries of finance management D) overall pricing objectives E) the company's overall marketing strategy Answer: B Diff: 2 Type: MC Page Ref: 360 Skill: Concept Objective: 10-2 26) ________ that influence pricing decisions include the nature of the market and demand.

A) Internal factors B) Elasticity factors C) External factors D) Target factors E) Domestic factors Answer: C Diff: 2 Type: MC Page Ref: 361 Skill: Concept Objective: 10-2 27) Of the following, which is a poor reason for a company to set prices low?

A) to prevent competition from entering the market B) to stabilize the market C) to create excitement for a product D) to prepare for an easy exit from a market E) to match a competitor Answer: D Diff: 2 Type: MC Page Ref: 362 Skill: Concept Objective: 10-2 28) With target costing, marketers will first ________ and then ________.

A) build the marketing mix; identify the target market B) identify the target market; build the marketing mix C) design the product; determine its cost D) use skimming pricing; use penetrating pricing E) determine a selling price; target costs to ensure that the price is met Answer: E Diff: 2 Type: MC Page Ref: 362 Skill: Concept Objective: 10-2

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29) Price setting is usually determined by ________ in small companies.

A) top management B) marketing departments C) sales departments D) divisional managers E) cross-functional teams Answer: A Diff: 2 Type: MC Page Ref: 364 Skill: Concept Objective: 10-2 30) Price setting is usually determined by ________ in large companies.

A) top management B) divisional managers C) finance managers D) purchasing departments E) suppliers Answer: B Diff: 2 Type: MC Page Ref: 364 Skill: Concept Objective: 10-2 31) Under ________, the market consists of many buyers and sellers trading in a uniform commodity such as wheat, copper, or financial securities.

A) pure competition B) monopolistic competition C) oligopolistic competition D) a pure monopoly E) anti-trust agreements Answer: A Diff: 2 Type: MC Page Ref: 365 Skill: Concept Objective: 10-2 32) Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.

A) pure competition B) monopolistic competition C) oligopolistic competition D) a pure monopoly E) socialism Answer: B Diff: 2 Type: MC Page Ref: 365 Skill: Concept Objective: 10-2

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33) Under ________, the market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies.

A) pure competition B) monopolistic competition C) oligopolistic competition D) a pure monopoly E) capitalism Answer: C Diff: 2 Type: MC Page Ref: 365 Skill: Concept Objective: 10-2 34) The relationship between the price charged and the resulting demand level can be shown as the ________.

A) demand curve B) variable cost C) target cost D) break-even chart E) experience curve Answer: A Diff: 1 Type: MC Page Ref: 366 Skill: Concept Objective: 10-2 35) ________ describes how responsive demand will be to a change in price.

A) Price elasticity B) Break-even pricing C) The break-even chart D) Target costing E) Supply Answer: A Diff: 1 Type: MC Page Ref: 366 Skill: Concept Objective: 10-2 36) If demand hardly changes with a small change in price, we say the demand is ________.

A) variable B) inelastic C) value-based D) at break-even pricing E) market penetrating Answer: B Diff: 2 Type: MC Page Ref: 366 Skill: Concept Objective: 10-2

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37) If demand changes greatly with a small change in price, we say the demand is ________.

A) inelastic B) variable C) elastic D) value-based E) fixed Answer: C Diff: 2 Type: MC Page Ref: 366 Skill: Concept Objective: 10-2 38) Which of the following economic factors does not have a strong impact on a firm's pricing strategy?

A) an economic boom B) the reseller's reaction to price changes C) an economic recession D) inflation E) interest rates Answer: B Diff: 2 Type: MC Page Ref: 367 Skill: Concept Objective: 10-2 39) A company should set prices that will allow ________ to receive a fair profit.

A) resellers B) producers C) consumers D) the elderly E) competitors Answer: A Diff: 2 Type: MC Page Ref: 367 Skill: Concept Objective: 10-2 40) When companies set prices, the government and social concerns are two ________ affecting pricing decisions.

A) external factors B) internal factors C) economic conditions D) demand curves E) temporary influences Answer: A Diff: 1 Type: MC Page Ref: 367 Skill: Concept Objective: 10-2

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41) A company sets not a single price, but rather a ________ that covers different items in its line that change over time as products move through their life cycles.

A) pricing by-product B) pricing structure C) pricing loop D) pricing cycle E) pricing bundle Answer: B Diff: 1 Type: MC Page Ref: 367-368 Skill: Concept Objective: 10-3 42) Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________.

A) market-level pricing B) market-competitive pricing C) market-skimming pricing D) market-price lining E) market-price filling Answer: C Diff: 1 Type: MC Page Ref: 368 Skill: Concept Objective: 10-3 43) Which of the following would likely be ineffective in supporting a market-skimming policy for a new product?

A) The product's quality and image must support its higher price.

B) Enough buyers must want the products at that price.

C) Competitors are not able to undercut the high price.

D) Competitors can enter the market easily.

E) The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.

Answer: D Diff: 2 Type: MC Page Ref: 368 Skill: Concept Objective: 10-3

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44) A firm is using ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future.

A) price skimming B) trial pricing C) value pricing D) market-penetration pricing E) prestige pricing Answer: A Diff: 2 Type: MC Page Ref: 368 Skill: Concept Objective: 10-3 45) ________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share.

A) Market-skimming B) Market-penetration C) Below-market D) Value-based E) Leader Answer: B Diff: 1 Type: MC Page Ref: 368 Skill: Concept Objective: 10-3 46) Which of the following conditions would most likely to support market-penetration pricing?

A) The market must be highly price sensitive.

B) Production and distribution costs rise as sales volume increases.

C) The product's quality and image must support the price.

D) The low price does not affect the competition.

E) A low price does not affect market growth.

Answer: A Diff: 2 Type: MC Page Ref: 369 Skill: Concept Objective: 10-3 47) A challenge for management in product line pricing is to decide on the price steps between the ________.

A) various products in a line B) product mixes C) product groupings D) product lines E) various target markets Answer: A Diff: 2 Type: MC Page Ref: 369 Skill: Concept Objective: 10-4 12 Copyright © 2017 Pearson Canada Inc.

48) When using price steps, the seller must establish perceived ________ that support the price differences among the products in the line.

A) non-price competition B) value differences C) quantity levels D) images E) strategies Answer: B Diff: 2 Type: MC Page Ref: 369 Skill: Concept Objective: 10-4 49) Companies involved in deciding which items to include in the price of the main product and which to offer as options are engaged in ________ pricing.

A) product bundle B) optional-product C) captive-product D) by-product E) skimming Answer: B Diff: 2 Type: MC Page Ref: 370 Skill: Concept Objective: 10-4 50) It is most typical for producers who use captive-product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product.

A) low; low markups B) high; low markups C) low; high markups D) high; high markups E) moderately; moderate markups Answer: C Diff: 2 Type: MC Page Ref: 370 Skill: Concept Objective: 10-4 51) Hotline Long Distance Service uses captive-product pricing for its phone call charges.

Because this is a service, the price is broken into a fixed rate plus a per-call ________.

A) fixed rate usage B) variable usage rate C) standard usage rate D) market usage rate E) fixed fee Answer: B Diff: 2 Type: MC Page Ref: 370 Skill: Concept Objective: 10-4 13 Copyright © 2017 Pearson Canada Inc.

52) When amusement parks and movie theaters charge admission plus fees for food and other attractions, they are following a(n) ________ pricing strategy.

A) by-product B) optional-product C) captive-product D) skimming E) penetration Answer: C Diff: 2 Type: MC Page Ref: 370 Skill: Concept Objective: 10-4 53) With product bundle pricing, sellers can combine several products and offer the bundle ________.

A) as a working unit B) at a reduced price C) as a complete self-service package D) as a reward to loyal customers E) as segmented pricing Answer: B Diff: 1 Type: MC Page Ref: 371 Skill: Concept Objective: 10-4 54) A quantity discount is a price reduction to buyers who purchase ________.

A) frequently B) large volumes C) close outs D) inferior merchandise E) superior merchandise Answer: B Diff: 1 Type: MC Page Ref: 371 Skill: Concept Objective: 10-5 55) Which of the following is not a price adjustment strategy?

A) segmented pricing B) customer value-based pricing C) promotional pricing D) discount and allowance pricing E) dynamic pricing Answer: B Diff: 1 Type: MC Page Ref: 372 Skill: Concept Objective: 10-5 14 Copyright © 2017 Pearson Canada Inc.

56) When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a(n) ________.

A) trade discount B) functional discount C) allowance D) promotional allowance E) trade credit Answer: D Diff: 2 Type: MC Page Ref: 372 Skill: Concept Objective: 10-5 57) By definition, this type of pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

A) segmented pricing B) variable pricing C) flexible pricing D) cost-plus pricing E) reference pricing Answer: A Diff: 1 Type: MC Page Ref: 372 Skill: Concept Objective: 10-5 58) The New Age Gallery has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________.

A) time-based pricing B) location pricing C) customer-segment pricing D) revenue management pricing E) generational pricing Answer: C Diff: 2 Type: MC Page Ref: 372 Skill: Concept Objective: 10-5 59) When a firm varies its price by the season, month, day, or even hour, it is using ________ pricing.

A) revenue management B) penetration C) skimming D) time-based E) value-added Answer: D Diff: 2 Type: MC Page Ref: 372 Skill: Concept Objective: 10-5 15 Copyright © 2017 Pearson Canada Inc.

60) Consumers usually perceive higher-priced products as ________.

A) not within reach of most people B) having a higher quality C) having high profit margins D) popular brands E) being in the introductory stage of the product life cycle Answer: B Diff: 2 Type: MC Page Ref: 373 Skill: Concept Objective: 10-5 61) Consumers use price less to judge the quality of a product when they ________.

A) lack information B) lack skills to use the product C) have experience with the product D) are shopping for a specialty item E) cannot physically examine the product Answer: C Diff: 2 Type: MC Page Ref: 373 Skill: Concept Objective: 10-5 62) ________ prices are the prices that buyers carry in their mind and refers to when looking at a given product.

A) Psychological B) Reference C) Promotional D) Geographical E) Dynamic Answer: B Diff: 1 Type: MC Page Ref: 373 Skill: Concept Objective: 10-5 63) What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

A) segmented pricing B) psychological pricing C) referent pricing D) promotional pricing E) dynamic pricing Answer: D Diff: 1 Type: MC Page Ref: 373 Skill: Concept Objective: 10-5 16 Copyright © 2017 Pearson Canada Inc.

64) When a manufacturer offers a ________, customers buy products from manufacturers' dealers within a specified time period and the manufacturer sends the customer a check.

A) cash rebate B) special event price C) dealer reduction D) promotional pricing reward E) discount allowance Answer: A Diff: 2 Type: MC Page Ref: 374 Skill: Concept Objective: 10-5 65) Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory to its destination?

A) basing-point pricing B) freight-absorption pricing C) FOB-origin pricing D) dynamic pricing E) zone pricing Answer: C Diff: 2 Type: MC Page Ref: 374 Skill: Concept Objective: 10-5 66) Which of the following is the opposite of FOB-origin pricing?

A) basing-point pricing B) absorption pricing C) uniform-delivered pricing D) freight-absorption pricing E) zone pricing Answer: C Diff: 3 Type: MC Page Ref: 374 Skill: Concept Objective: 10-5 67) The Internet offers ________, where the price can easily be adjusted to meet changes in demand.

A) captive pricing B) dynamic pricing C) basing-point pricing D) price bundling E) cost-plus pricing Answer: B Diff: 2 Type: MC Page Ref: 375 Skill: Concept Objective: 10-5 17 Copyright © 2017 Pearson Canada Inc.

68) Price escalation in international markets is most likely to result from the higher costs of selling in another country and differences in market conditions or ________.

A) cultural preferences B) selling strategies C) regional tastes D) customer perceptions E) language barriers Answer: B Diff: 2 Type: MC Page Ref: 376 Skill: Concept Objective: 10-5 69) Which of the following is a poor reason for a company to initiate a price cut?

A) to boost sales B) to obtain prestige C) to dominate the market D) to relieve excess capacity E) to influence falling demand Answer: B Diff: 2 Type: MC Page Ref: 376 Skill: Concept Objective: 10-6 70) Which of the following is a reason for a company to raise its prices?

A) to balance out cost increases B) to win a larger share of the market C) to use excess capacity D) to boost sales volume E) to balance out decreasing costs Answer: A Diff: 2 Type: MC Page Ref: 376 Skill: Concept Objective: 10-6 71) In a monopolistic competitive market, a company might decide to ________ if only one competitor raises its prices.

A) reduce its production costs B) reduce its marketing costs C) maintain its current price and profit margin D) increase its marketing budget to raise the perceived value of its product E) increase its production costs to improve the quality of the product Answer: C Diff: 3 Type: MC Page Ref: 377 Skill: Concept Objective: 10-6

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72) Which of the following is likely to be the least effective action that a company can take to combat a competitor's price cut on a product?

A) reduce price B) raise perceived value C) improve quality and increase price D) bundle products together E) launch a low-price "fighting brand" Answer: D Diff: 2 Type: MC Page Ref: 378 Skill: Concept Objective: 10-6 73) The Competition Act is the federal law that was enacted to curb the formation of ________.

A) unfair competition B) oligopolies C) competitive markets D) international markets E) limited partnerships Answer: A Diff: 2 Type: MC Page Ref: 379 Skill: Concept Objective: 10-7 74) 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) with the intention of putting competitors out of business E) consistently throughout a region Answer: B Diff: 2 Type: MC Page Ref: 379 Skill: Concept Objective: 10-7 75) Price discrimination is legal under which of the following conditions?

A) when a manufacturer and reseller have agreed upon a specified retail price for a product B) when a manufacturer sells to retailers in different markets C) if a seller can prove its costs per unit are different when selling to different retailers D) if a seller advertises prices that are not actually available to consumers E) if a seller has not communicated with competitors before announcing prices Answer: C Diff: 3 Type: MC Page Ref: 379 Skill: Concept Objective: 10-7

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76) Xbox 360 decides to add a free subscription to XBOX magazine with every game bought in an effort to differentiate its offering from PS3 games. This is an example of ________.

A) good-value pricing B) add-on pricing C) product-support pricing D) value-added pricing E) cost-based pricing Answer: D Diff: 2 Type: MC Page Ref: 358 Skill: Application Objective: 10-1 77) General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment.

This approach is called ________.

A) value-based pricing B) going-rate pricing C) cost-plus pricing D) low-price image E) target return pricing Answer: E Diff: 2 Type: MC Page Ref: 359 Skill: Application Objective: 10-1 78) A company faces fixed costs of $100,000 and variable costs of $8.00/unit. They plan to directly sell their product to the market for $12.00. How many units must they produce and sell to break even?

A) 20,000 B) 25,000 C) 40,000 D) 50,000 E) not enough information to calculate Answer: B Diff: 3 Type: MC Page Ref: 359 Skill: Application Objective: 10-1

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79) Swatch surveyed the market and identified an unserved segment of watch buyers. Using these results, they created a watch at a price 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-based pricing E) penetration pricing Answer: C Diff: 2 Type: MC Page Ref: 362 Skill: Concept Objective: 10-2 80) In Lima, Peru, 20 stores specializing in selling the same quality and brand of wheat products are located on one street. An individual seller cannot charge more than the going price without the risk of losing business to the other stores. This is an example of what type of market?

A) pure competition B) monopolistic competition C) oligopolistic competition D) pure monopoly E) socialist Answer: A Diff: 2 Type: MC Page Ref: 365 Skill: Application Objective: 10-2 81) With an understanding of price elasticity, sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________.

A) drop the price B) raise the price C) leave the price where it is D) discontinue the item E) bundle the product with another product Answer: B Diff: 2 Type: MC Page Ref: 366 Skill: Application Objective: 10-2

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82) If Canon Camera Company follows a high-price, high-margin strategy, what will competitors most likely do?

A) They will go out of business.

B) They will want to compete by undercutting Canon's price.

C) They will advertise less.

D) They will unbundle their products.

E) They will use market-skimming pricing.

Answer: B Diff: 3 Type: MC Page Ref: 368 Skill: Application Objective: 10-3 83) When Pepsi came out with Pepsi Blue and priced it at half price to attract buyers, Pepsi was using ________.

A) marketing-skimming pricing B) market-penetration pricing C) new-product pricing D) discount pricing E) promotional allowances Answer: B Diff: 2 Type: MC Page Ref: 368 Skill: Application Objective: 10-3 84) 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) market-skimming B) market-penetration C) zone D) discount E) captive-product Answer: B Diff: 2 Type: MC Page Ref: 368 Skill: Application Objective: 10-3 85) Market-skimming pricing would likely be most effective in selling ________.

A) any convenience item B) an electronic device for which research and development must be recouped C) shampoo and bath soap D) anything easily copied by competitors E) most items at EDLP retailers such as Walmart Answer: B Diff: 3 Type: MC Page Ref: 368 Skill: Application Objective: 10-3 22 Copyright © 2017 Pearson Canada Inc.

86) When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________.

A) product line pricing B) market-skimming pricing C) market-penetration pricing D) break-even pricing E) target return pricing Answer: A Diff: 2 Type: MC Page Ref: 369 Skill: Application Objective: 10-4 87) The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________.

A) allowance pricing B) captive-product pricing C) penetration pricing D) segmented pricing E) promotional pricing Answer: B Diff: 2 Type: MC Page Ref: 370 Skill: Application Objective: 10-4 88) Mach 3 razor blades must be used in the Mach 3 razor. Which type of pricing is most likely used?

A) product line pricing B) optional-product pricing C) captive-product pricing D) by-product pricing E) allowance pricing Answer: C Diff: 2 Type: MC Page Ref: 370 Skill: Application Objective: 10-4

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89) To offset the pricing of its main product, the Toronto Zoo has partnered with a waste management company to turn animal waste into methane gas to be used to produce power. This is an example of ________.

A) product line pricing B) optional-product pricing C) captive-product pricing D) by-product pricing E) allowance pricing Answer: D Diff: 2 Type: MC Page Ref: 370 Skill: Application Objective: 10-4 90) When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount.

A) functional B) seasonal C) annual D) allowance E) credit Answer: B Diff: 2 Type: MC Page Ref: 371 Skill: Application Objective: 10-5 91) A manufacturer offers 3/10, net 30, terms to a wholesaler for a recent purchase. Under these terms, the wholesaler may deduct ________ percent if the bill is paid within ________ days.

A) 10; 30 B) 10; 3 C) 3; 30 D) 3; 10 E) 7; 10 Answer: D Diff: 2 Type: MC Page Ref: 371 Skill: Application Objective: 10-5

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92) Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called?

A) functional discount B) captive-product discount C) seasonal discount D) trade-in allowance E) by-product allowance Answer: D Diff: 2 Type: MC Page Ref: 371 Skill: Application Objective: 10-5 93) The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same. What is this form of pricing called?

A) location-based B) skimming C) product-form D) time-based E) penetration Answer: A Diff: 2 Type: MC Page Ref: 372 Skill: Application Objective: 10-5 94) If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________.

A) psychological pricing B) promotional pricing C) reference pricing D) zone pricing E) uniform-delivered pricing Answer: D Diff: 3 Type: MC Page Ref: 374 Skill: Application Objective: 10-5

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95) Big Mike's Health Food Store sells nutritional energy-producing foods. The price of the products sold varies according to individual customer accounts and situations. For example, long-time customers receive discounts. This strategy is an example of ________.

A) promotional pricing B) cost-plus pricing C) dynamic pricing D) value pricing E) penetration pricing Answer: C Diff: 2 Type: MC Page Ref: 375 Skill: Application Objective: 10-5 96) 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) market skimming B) price-fixing C) predatory pricing D) deceptive pricing E) price confusion Answer: C Diff: 2 Type: MC Page Ref: 379 Skill: Application Objective: 10-7 97) Prices have a direct impact on a company's bottom line.

Answer: TRUE Diff: 1 Type: TF Page Ref: 354 Skill: Concept Objective: 10-1 98) Product costs set a floor to a product's price; consumer perceptions of the product's value set the ceiling.

Answer: TRUE Diff: 2 Type: TF Page Ref: 354 Skill: Concept Objective: 10-1 99) Demand and consumer value perceptions set the floor for prices.

Answer: FALSE Diff: 2 Type: TF Page Ref: 354 Skill: Concept Objective: 10-1

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100) Value-based pricing is being used when costs vary directly with the level of product.

Answer: FALSE Diff: 2 Type: TF Page Ref: 355 Skill: Concept Objective: 10-1 101) Value-based pricing is the reverse of cost-based pricing.

Answer: TRUE Diff: 2 Type: TF Page Ref: 355 Skill: Concept Objective: 10-1 102) EDLP is very similar to high-low pricing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 358 Skill: Concept Objective: 10-1 103) High-low pricing involves setting a product's initial price high and lowering it in six months.

Answer: FALSE Diff: 2 Type: TF Page Ref: 358 Skill: Concept Objective: 10-1 104) Overhead cost is another term for variable cost.

Answer: FALSE Diff: 2 Type: TF Page Ref: 359 Skill: Concept Objective: 10-1 105) Cost-based pricing relies on consumer perception of value to drive pricing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 358-359 Skill: Concept Objective: 10-1 106) The simplest pricing method is break-even pricing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 359 Skill: Concept Objective: 10-1

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107) A break-even chart shows the total cost and total revenue expected at various sales volume levels.

Answer: TRUE Diff: 2 Type: TF Page Ref: 359 Skill: Concept Objective: 10-1 108) Environmental elements that affect pricing decisions are categorized as external factors.

Answer: TRUE Diff: 2 Type: TF Page Ref: 361 Skill: Concept Objective: 10-2 109) Target costing reverses the usual process of first designing a product.

Answer: TRUE Diff: 2 Type: TF Page Ref: 362 Skill: Concept Objective: 10-2 110) In industrial markets, salespeople may be able to negotiate price with customers.

Answer: TRUE Diff: 3 Type: TF Page Ref: 364 Skill: Concept Objective: 10-2 111) In a pure monopoly, the market consists of one seller.

Answer: TRUE Diff: 2 Type: TF Page Ref: 365 Skill: Concept Objective: 10-2 112) The demand curve indicates the higher the price, the higher the demand.

Answer: FALSE Diff: 1 Type: TF Page Ref: 366 Skill: Concept Objective: 10-2 113) If demand changes greatly with a small change in product price, the demand is inelastic.

Answer: FALSE Diff: 2 Type: TF Page Ref: 366 Skill: Concept Objective: 10-2

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114) Market-skimming pricing is practiced by companies that set a low initial price in order to get their "foot in the door" quickly and deeply, attract a large number of buyers quickly, and win a large market share.

Answer: FALSE Diff: 1 Type: TF Page Ref: 368 Skill: Concept Objective: 10-3 115) Market-skimming is a more popular strategy for pricing new products, while marketpenetration is a more popular strategy for pricing products that are more advanced in the product life cycle.

Answer: FALSE Diff: 3 Type: TF Page Ref: 368 Skill: Concept Objective: 10-3 116) Pricing a product mix is often difficult because various products have related demand and costs, and they face different degrees of competition.

Answer: TRUE Diff: 2 Type: TF Page Ref: 369 Skill: Concept Objective: 10-4 117) Melt-In-Your-Mouth Candy Stores prices its candy displays at ten different price levels, ranging from $2.00 per pound to $4.95 per pound. This is an illustration of price steps.

Answer: TRUE Diff: 2 Type: TF Page Ref: 369 Skill: Application Objective: 10-4 118) When Johnny On the Spot, a house mover, sells boxes and pads that must be used in moving a household's furniture, the company is practicing by-product pricing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 372 Skill: Application Objective: 10-4 119) Some industries commonly use two-part pricing, where the price is broken down into a fixed fee and a fixed usage rate.

Answer: FALSE Diff: 2 Type: TF Page Ref: 370 Skill: Concept Objective: 10-4

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120) When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Answer: TRUE Diff: 2 Type: TF Page Ref: 370 Skill: Application Objective: 10-4 121) When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Answer: FALSE Diff: 1 Type: TF Page Ref: 371 Skill: Concept Objective: 10-4 122) The major price-adjustment strategies include discount and allowance pricing, segmented pricing, psychological pricing, promotional pricing, geographical pricing, dynamic pricing, and international pricing.

Answer: TRUE Diff: 2 Type: TF Page Ref: 371 Skill: Concept Objective: 10-5 123) When consumers cannot judge the quality of a product because they lack information or skill, they are likely to perceive a higher-priced product as having higher quality.

Answer: TRUE Diff: 2 Type: TF Page Ref: 373 Skill: Application Objective: 10-5 124) Used too frequently, promotional pricing can have the negative effect of decreasing the brand's value in the eyes of customers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 374 Skill: Concept Objective: 10-5 125) A company considering a price change should be concerned about consumers' reactions but not competitors' reactions.

Answer: FALSE Diff: 2 Type: TF Page Ref: 377 Skill: Concept Objective: 10-6

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126) Canadian companies are free to charge whatever prices they wish.

Answer: FALSE Diff: 2 Type: TF Page Ref: 379 Skill: Concept Objective: 10-7 127) The practice of a manufacturer requiring a dealer to charge a set retail price for its product, also known as retail price maintenance, is illegal.

Answer: TRUE Diff: 2 Type: TF Page Ref: 380 Skill: Concept Objective: 10-7 128) Functional discounts (offering a larger discount to wholesalers than to retailers) are legal Canada.

Answer: FALSE Diff: 2 Type: TF Page Ref: 380 Skill: Concept Objective: 10-7 129) Compare pure competition with monopolistic competition conditions.

Answer: Under pure competition, the market consists of many buyers and sellers trading in a uniform commodity. No single buyer or seller has much effect on the going market price. Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. A range of prices occurs because sellers can differentiate their offers to buyers. The central difference is the ability to differentiate offers under monopolistic competition.

Diff: 3 Type: ES Page Ref: 365 Skill: Application Objective: 10-2 130) Compare oligopolistic competition with pure monopoly conditions.

Answer: Under oligopolistic competition, the market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies. Each seller is responsive to competitor pricing strategies. Under a pure monopoly, the market consists of one seller. Pricing is handled differently in each case. The seller may be a government monopoly, a private nonregulated monopoly, or a private regulated monopoly.

Diff: 2 Type: ES Page Ref: 365-366 Skill: Application Objective: 10-2

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131) Describe what a demand curve is and explain how it helps businesses.

Answer: Most companies use the demand curve to estimate consumer demand at different prices The type of market makes a difference. In a monopoly, the demand curve shows the total market demand resulting from different prices. If the company faces competition, its demand at different prices will depend on whether competitors' prices stay constant or change with the company's own prices. In normal cases, demand and price are inversely related.

Diff: 2 Type: ES Page Ref: 366 Skill: Application Objective: 10-2 132) When setting prices, the company must consider its external environment. Describe four aspects of the external 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 company should encourage and support resellers and help them to sell the product effectively. The government, in the form of local, state, and federal laws, is another important influence on pricing decisions. Social concerns impact pricing, especially when a company's short-term sales, market share, and profit goals may have to be tempered by broader societal considerations.

Diff: 3 Type: ES Page Ref: 367 Skill: Application Objective: 10-2 133) Companies bringing out a new product can choose between two broad strategies: marketskimming pricing and market-penetration pricing. Distinguish between the two.

Answer: Market skimming is used to skim revenues layer by layer from the market by entering the market 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. The costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Competitors should not be able to enter the market easily and undercut the high price. Market penetration is used to penetrate the market quickly and deeply to attract a large number of buyers quickly and win a large market share by setting a low price initially. The market must be highly price sensitive so that a low price produces more market growth. Production and distribution costs must fall as sales volume increases. Also, the low price must help keep out competition and be maintained over time.

Diff: 2 Type: ES Page Ref: 368-369 Skill: Application Objective: 10-3 134) Explain product line pricing.

Answer: In product line pricing, management must decide on the price steps to set between the various products in a line. The price steps should take into account cost differences between the products in a line, customer evaluations of their different features, and competitors' prices. The seller's task is to establish perceived quality differences that support the price differences between various price points.

Diff: 2 Type: ES Page Ref: 369 Skill: Application Objective: 10-4 32 Copyright © 2017 Pearson Canada Inc.

135) Which pricing mix strategy should be used in relation to saleable scrap materials, and how does this strategy function?

Answer: When using by-product pricing, a manufacturer will seek a market for scraps or byproducts and should accept any price that covers more than the cost of disposing of or storing and delivering the by-products. By-product pricing allows the seller to reduce the main product's price to make it more competitive.

Diff: 2 Type: ES Page Ref: 370 Skill: Application Objective: 10-4 136) Explain the factors involved in setting international pricing.

Answer: In some cases, a company can set a uniform worldwide price. However, most companies adjust their prices to reflect local market conditions and cost considerations. A firm must consider economic conditions, competitive situations, laws and regulations, and development of the wholesale and retail system. Consumer perceptions and preferences also may vary from country to country, calling for different prices. The company may have different marketing objectives in various world markets. Costs play an important role in setting international prices. Management must prepare for price escalation that may result from the differences in selling strategies or market conditions. The additional costs of product modifications, shipping and insurance, import tariffs and taxes, exchange-rate fluctuations, and physical distributions must all be factored into the "price."

Diff: 3 Type: ES Page Ref: 375-376 Skill: Application Objective: 10-5 137) Identify and explain several situations in which price cuts or price increases might be necessary.

Answer: Price cuts may be necessary when there is excess capacity. Another time to cut prices is when market share is falling in the face of strong price competition. A company may also cut prices in a drive to dominate the market through lower costs. A major factor in price increases is cost inflation. Rising costs squeeze profit margins and lead companies to pass cost increases along to customers.

Diff: 3 Type: ES Page Ref: 376 Skill: Application Objective: 10-6

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138) Compare the practices of price-fixing and predatory pricing, explaining why each is prohibited by law.

Answer: Many federal, provincial/territorial, and local laws govern the rules of fair play in pricing. Two major areas of concern are price-fixing and predatory pricing. Companies that engage in price-fixing collude to set a common price for their comparable products; price-fixing undermines the core element of price competition in our free-market economy. On the other hand, predatory pricing takes price competition too far. Predatory pricing occurs when a company sells a product below cost with the intention of punishing a competitor or by putting a competitor out of business.

Diff: 3 Type: ES Page Ref: 379 Skill: Application Objective: 10-7 139) Why is price considered to be one of the most flexible elements of the marketing mix?

Answer: Price is the sum of all the values that customers give up to gain the benefits of having or using a product or service. Price remains one of the most important elements determining a company's market share and profitability. It is the only marketing mix element that produces revenue where the others represent costs. Unlike product features and channel commitments, prices can be changed quickly. A small percentage improvement in price can produce a large percentage in profitability.

Diff: 2 Type: ES Page Ref: 354 Skill: Application Objective: 10-1 140) Explain the concept of a price ceiling.

Answer: A price ceiling is the highest price charged at which there is still some consumer demand. Priced above this, customers will perceive the price as greater than the product's value and will not make the purchase. It is the opposite extreme of price flooring (based on product costs).

Diff: 2 Type: ES Page Ref: 354 Skill: Application Objective: 10-1 141) Explain the concept of a price floor.

Answer: A price floor is the lowest price charged at which the company still earns some profits.

It is the opposite extreme of price ceiling (based on customer value perception).

Diff: 2 Type: ES Page Ref: 354 Skill: Application Objective: 10-1 142) A marketer's fixed costs are $400,000, the variable cost is $16, and the company expects the product to sell for $24. What is the break-even volume in units?

Answer: The break-even volume in units is 50,000 units. This is calculated as follows: fixed costs divided by (price - variable costs) = $400,000 / ($24 - $16) = $400,000/8 = $50,000.

Diff: 3 Type: ES Page Ref: 359 Skill: Application Objective: 10-1 34 Copyright © 2017 Pearson Canada Inc.

143) Patti is starting a small chocolate chip cookie company. What might be some variable costs in her company?

Answer: Variable costs vary with the level of production. These costs tend to be the same for each unit produced. Examples are ingredients (sugar, flour, chocolate chips), packaging for the cookies, and labour.

Diff: 2 Type: ES Page Ref: 359 Skill: Application Objective: 10-1 144) Patti is starting a small chocolate chip cookie company. What might be some fixed costs in her company?

Answer: Fixed costs are costs that do not vary with production or sales level. Management salaries, electricity, utilities, and ovens are examples.

Diff: 2 Type: ES Page Ref: 359 Skill: Application Objective: 10-1 145) Explain oligopolistic competition.

Answer: In an oligopoly, a market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies. Each seller is responsive to competitors' pricing strategies.

Diff: 2 Type: ES Page Ref: 365 Skill: Application Objective: 10-2 146) If demand is elastic, will sellers consider lowering their prices? Explain.

Answer: If demand is elastic, demand changes greatly with price changes. Sellers will consider lowering their prices because consumers will respond to the change in price and buy more.

Therefore, the lower price will produce more revenue.

Diff: 2 Type: ES Page Ref: 366 Skill: Application Objective: 10-2 147) For what types of products might marketers use market-skimming pricing?

Answer: Price skimming is setting the price high for a new product. Such pricing works when the product's quality and image support the higher price; for example, companies selling hightech electronics may use market-skimming pricing.

Diff: 2 Type: ES Page Ref: 368 Skill: Application Objective: 10-3

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148) For what types of products might marketers use market-penetration pricing?

Answer: Market penetration pricing is setting the price low for new products. Marketers use such pricing when attempting to attract a large number of buyers quickly and win a large market share; such pricing may be common when competition for products is high.

Diff: 2 Type: ES Page Ref: 368 Skill: Application Objective: 10-3 149) Why is product line pricing used?

Answer: Product line pricing is used to establish price ranges—or price steps—within product lines. The price steps should take into consideration cost differences between the products in the line as well as customer perceived value of the different products in the line.

Diff: 2 Type: ES Page Ref: 369 Skill: Application Objective: 10-4 150) Give two examples of products for which marketers may use optional-product pricing.

Answer: Optional-product pricing is the pricing of options or accessories along with a main product. Such products may include refrigerators with optional icemakers and cars with options such as stereos, GPS, and cruise control.

Diff: 2 Type: ES Page Ref: 370 Skill: Application Objective: 10-4 151) Give two examples of products for which captive-product pricing may be used.

Answer: Captive-product pricing is used when pricing products that must be used with a main product. For example, selling refreshments at a higher rate inside a theatre. Another example is the high price of ink cartridges for home printers.

Diff: 3 Type: ES Page Ref: 370 Skill: Application Objective: 10-4 152) Give two examples of by-product pricing.

Answer: By-product pricing is setting a price for by-products to enable pricing the main product competitively. Examples could include selling scrap metal after producing metal stampings or selling donut holes after producing donuts.

Diff: 3 Type: ES Page Ref: 370 Skill: Application Objective: 10-4 153) How do consumers benefit from product bundle pricing?

Answer: Several products are sold together at a lower rate than buying each product in the bundle separately. Vacation packages that include air and hotel or value meals in the fast-food industry are examples.

Diff: 2 Type: ES Page Ref: 371 Skill: Application Objective: 10-4 36 Copyright © 2017 Pearson Canada Inc.

154) Give an example of a cash discount.

Answer: A cash discount is a price reduction if the buyer pays their bill promptly. With a 2/10, net 30 arrangement, for example, the customer can deduct 2 percent if the bill is paid within 10 days, even though the bill is due in 30 days.

Diff: 2 Type: ES Page Ref: 371 Skill: Application Objective: 10-5 155) List four types of segmented pricing.

Answer: Segmented pricing is selling a product or service at two or more prices where the difference in price is not related to difference in costs. Customer-segment pricing, product-form pricing, location-based pricing, and time-based pricing are all examples.

Diff: 2 Type: ES Page Ref: 372 Skill: Application Objective: 10-5 156) Explain the psychology behind a price of $9.99 instead of $10.00.

Answer: Consumers typically see the $9.99 product in the $9 range instead of the $10 range; the price difference appears to be more significant than it is.

Diff: 2 Type: ES Page Ref: 373 Skill: Application Objective: 10-5 157) L.L. Bean sells its catalog items FOB-origin pricing. Who pays the freight charges?

Answer: FOB means free on board at the origin. The customer pays for the freight during transportation from the origin to the customer. Freight prices vary according to delivery destination.

Diff: 2 Type: ES Page Ref: 374 Skill: Application Objective: 10-5 158) Explain how web retailers can initiate dynamic pricing.

Answer: Dynamic pricing allows sellers to adjust their prices according to customer demands and situations. The internet has made this easy to do. Such retailers can change prices according to changes in demand or costs, changing prices for certain items on a day-by-day basis.

Diff: 2 Type: ES Page Ref: 375 Skill: Application Objective: 10-5 159) Explain two different ways a consumer might view a price cut.

Answer: A consumer might believe that he or she is getting a good deal on a quality product, or a consumer might believe that the quality of the product has been reduced.

Diff: 2 Type: ES Page Ref: 377 Skill: Application Objective: 10-6 37 Copyright © 2017 Pearson Canada Inc.

160) Why is it difficult to enforce laws against predatory pricing?

Answer: Predatory pricing is a matter of intent—a seller must be cutting prices below cost with the intention of punishing a competitor; selling below cost for other reasons is legal. Intent is difficult to prove.

Diff: 3 Type: ES Page Ref: 379 Skill: Application Objective: 10-7 Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains.

Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.

161) Quills started out with a market-penetration pricing strategy. What assumptions could be made about the market(s) Quills was serving?

Answer: Price would have been set low in an effort to attract large numbers of consumers in this highly competitive environment; Quills would have expected to sell a large amount of product to make the marketing effort worthwhile.

Diff: 2 Type: ES Page Ref: 368-369 Skill: Application Objective: 10-3 162) Why might Charles Powell have avoided using market-skimming pricing at Quills?

Answer: The quality and the image of the products would not have likely supported the high price in the beginning. Also, if we assume the market is highly competitive, market skimming is not a good pricing strategy.

Diff: 2 Type: ES Page Ref: 368 Skill: Application Objective: 10-3 163) How might product line pricing be initiated at Quills?

Answer: Quills could arrange its writing tools, for example, within three price steps, which would allow buyers to select products based on their perceptions of low, medium, and high quality writing tools.

Diff: 2 Type: ES Page Ref: 369 Skill: Application Objective: 10-4 164) How could optional product pricing be used by Quills?

Answer: With specific pens being sold, Quills could offer a pen refill pack with different types of ink at an additional price.

Diff: 2 Type: ES Page Ref: 370 Skill: Application Objective: 10-4

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165) How could product bundle pricing work for Quills?

Answer: Certain styles of stationery and matching envelopes could come packaged with a writing tool. Or, certain pens could come packaged in a set with matching pencils. The price of the bundle would be less than the total price if purchasing each item separately.

Diff: 2 Type: ES Page Ref: 371 Skill: Application Objective: 10-4 166) Would quantity discounts be possible for Quills to offer? Why? Answer: Absolutely! One of the firm's strategies is to sell in large volumes to gain market share, which would happen more quickly with quantity discounts.

Diff: 2 Type: ES Page Ref: 371 Skill: Application Objective: 10-5 167) Explain how product-form pricing may be a pricing option at Quills.

Answer: Quills may charge more for a pen packaged with a matching pencil in a gift box than what it charges for the pen when it is sold in bulk.

Diff: 3 Type: ES Page Ref: 372 Skill: Application Objective: 10-5 168) Explain how a reference price could partially build Quills' image in the market.

Answer: If Quills offered the market a long-lasting, economically priced pen at $.39, for example, consumers would come to ask for "the 39-cent pen," much the same as happened with Wrigley's 25-cent pack of chewing gum. If this $.39 pen was the reference, the price of other pens would be compared to this reference product in the minds of the customers.

Diff: 3 Type: ES Page Ref: 373 Skill: Application Objective: 10-5 169) If Quills decided to introduce its products internationally, what factors may cause a change in price?

Answer: Economic conditions, competitive situations, laws and regulations, the foreign retailing and wholesaling system, and consumer perceptions of the products' quality in various countries may affect price.

Diff: 2 Type: ES Page Ref: 375 Skill: Application Objective: 10-5 170) How can Quills avoid retail price maintenance?

Answer: Quills can propose a suggested retail price for its products instead of requiring a set retail price. According to the Competition Act, retail price maintenance is prohibited in Canada.

Diff: 2 Type: ES Page Ref: 380 Skill: Application Objective: 10-7 39 Copyright © 2017 Pearson Canada Inc.

Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 11 Marketing Channels 1) Which of the following would be considered an upstream partner in a company's supply chain?

A) a firm that resells a finished product and shares the net sales with the producer B) a firm that provides technical expertise in the production of a product C) a firm that markets a product to consumers through social media D) a firm that buys products at wholesale cost from the company E) a firm that exclusively markets a product to other businesses Answer: B Diff: 2 Type: MC Page Ref: 391 Skill: Concept Objective: 11-1 2) Which of the following is true of downstream channels in a company's supply chain?

A) They provide their expertise in product design.

B) They manufacture the products of the company.

C) They supply raw materials and components to the company.

D) They contribute financially to the company during production.

E) They form an intermediary link between the company and its customers.

Answer: E Diff: 2 Type: MC Page Ref: 391-392 Skill: Concept Objective: 11-1 3) A ________ is made up of a company, its suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system.

A) manufacturing chain B) distribution centre C) marketing intermediary D) value delivery network E) disintermediation system Answer: D Diff: 2 Type: MC Page Ref: 392 Skill: Concept Objective: 11-1

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4) ________ are sets of interdependent organizations that help make the product or service of a company available for use by consumers or business users.

A) Research and development channels B) Upstream channels C) Marketing channels D) Raw materials suppliers E) Backward integration chains Answer: C Diff: 2 Type: MC Page Ref: 392 Skill: Concept Objective: 11-1 5) Producers use marketing intermediaries because they ________.

A) create greater efficiency in making goods available to target markets B) supply inexpensive raw materials for manufacturing products C) provide technical expertise for faster production D) monitor day-to-day activities during production E) form a part of the company's direct channel Answer: A Diff: 2 Type: MC Page Ref: 393 Skill: Concept Objective: 11-1 6) From the economic system's point of view, the role of marketing intermediaries is to ________.

A) facilitate the production of products without direct customer feedback B) help a company develop a direct channel selling system C) buy small quantities of products from producers and break them down into narrow assortments for customers D) increase the amount of work that must be done by producers and consumers E) transform the assortments of products made by producers into the assortments wanted by consumers Answer: E Diff: 2 Type: MC Page Ref: 393 Skill: Concept Objective: 11-1 7) Which of the following is true of a direct marketing channel?

A) It increases the number of channel transactions.

B) It enables retailers to reach many customers.

C) It does not use any intermediaries.

D) It gives limited distribution control to producers.

E) It creates a complex distribution channel.

Answer: C Diff: 2 Type: MC Page Ref: 398 Skill: Concept Objective: 11-3 2 Copyright © 2017 Pearson Canada Inc.

8) Which of the following creates the shortest distribution channel between a producer and a customer?

A) retail marketing B) indirect marketing C) share marketing D) direct marketing E) wholesale marketing Answer: D Diff: 2 Type: MC Page Ref: 398 Skill: Concept Objective: 11-3 9) In which of the following situations is a producer guaranteed full control over product sales?

A) a corporate marketing channel B) a direct marketing channel C) a contractual distribution channel D) a horizontal marketing system E) an administered marketing system Answer: B Diff: 2 Type: MC Page Ref: 398 Skill: Concept Objective: 11-3 10) A firm that uses direct marketing would most likely sell its products through ________.

A) one marketing intermediary B) big box retailers C) large wholesalers D) multiple intermediaries E) the company Web site Answer: E Diff: 2 Type: MC Page Ref: 398 Skill: Concept Objective: 11-3 11) Which of the following is a marketing intermediary?

A) customers B) producers C) manufacturers D) retailers E) advertisers Answer: D Diff: 2 Type: MC Page Ref: 395 Skill: Concept Objective: 11-2

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12) Kevin Pinker is a freelance electrical engineer who writes computer algorithms for companies such as SoftStar and BlueHill. SoftStar and BlueHill use these algorithms to make specific programs based on online market research. These programs are then sold to the online retailer, Abundon, which then sells them to individual consumers and businesses. Which of the following is a marketing intermediary in this chain?

A) SoftStar B) BlueHill C) the consumer D) Abundon E) Kevin Pinker Answer: D Diff: 3 Type: MC Page Ref: 399 Skill: Concept Objective: 11-3 13) Mintel Agro provides raw materials in the form of agricultural products to Kiltmark Food Company. Kiltmark produces flour-based edible products, which it distributes to a wholesale company called Yellowstar Trading. Yellowstar Trading then sells Kiltmark products to the discount retailer, Stroos. Stroos sells the products to consumers. Which of the following is considered a marketing intermediary in these transactions?

A) only Kiltmark B) only Stroos C) only Yellowstar Trading D) both Yellowstar Trading and Stroos E) both Stroos and Mintel Agro Answer: D Diff: 3 Type: MC Page Ref: 399 Skill: Concept Objective: 11-3 14) Which of the following is an example of a horizontal conflict in a distribution channel?

A) a Nike shoe dealer complaining that the shoes provided to the dealer are defective B) a Ford car dealer complaining that another Ford dealer is underpricing the same models C) a FedEx agent complaining that a DHL agent is cutting off his business D) a Walmart executive complaining to a Pepsi executive for not replenishing stocks on time E) a Gucci executive complaining to Gucci's suppliers of delays in shipping consignments Answer: B Diff: 2 Type: MC Page Ref: 403 Skill: Concept Objective: 11-3

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15) Vertical conflicts in distribution channels are conflicts that occur between ________.

A) same levels in the same channel B) different levels of the same channel C) same levels of different channels D) different levels of different channels E) retailers and customers Answer: B Diff: 2 Type: MC Page Ref: 403 Skill: Concept Objective: 11-3 16) Orion Steel is the chief provider of metals to Accline Cars, which manufactures two models of vehicles—cars and large buses. Accline dealers sell the firm's cars to individual citizens, but buses are sold directly to government entities. In such a distribution channel, which of the following would be considered a vertical conflict?

A) a conflict between Orion Steel and Accline Cars B) a conflict between Orion Steel and Accline dealers C) a conflict between two Accline car dealers D) a conflict between Accline dealers and government entities E) a conflict between Accline Cars and its dealers Answer: E Diff: 2 Type: MC Page Ref: 403 Skill: Concept Objective: 11-3 17) Jupiter Steel is the chief provider of metals to Greystone Motors. Greystone Motors has two models of cars—one for commercial and ordinary consumers and another for professional car racing teams. Greystone Motors has designated dealers to sell its commercial cars to consumers, while racing cars are sold directly to the racing teams. In such a distribution channel, which of the following would be considered a horizontal conflict?

A) a conflict between Jupiter Steel and Greystone Motors B) a conflict between Jupiter Steel and Greystone dealers C) a conflict between two Greystone Motors car dealerships D) a conflict between a Greystone Motors car dealership and a racing team E) a conflict between Greystone Motors and its car dealerships Answer: C Diff: 2 Type: MC Page Ref: 403 Skill: Concept Objective: 11-3

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18) Which of the following is true of a conventional distribution channel?

A) It has each channel member acting as a separate business unit trying to maximize its own profits.

B) It consists of producers selling their products directly to customers without the use of intermediaries.

C) It has one channel member owning the other channel members.

D) It is a distribution channel where a producer is owner of all the other channel members.

E) It has all members of the channel working together as a single organization.

Answer: A Diff: 2 Type: MC Page Ref: 399 Skill: Concept Objective: 11-3 19) In a ________, producers, wholesalers, and retailers act as a unified system. In such a structure, one channel member owns the others, has contracts with them, or has so much power that they all cooperate.

A) direct marketing system B) horizontal distribution channel C) lateral marketing system D) conventional distribution channel E) vertical marketing system Answer: E Diff: 2 Type: MC Page Ref: 399 Skill: Concept Objective: 11-3 20) Which of the following is true of a vertical marketing system?

A) It is formed when two or more companies at one level join together to follow a new marketing opportunity.

B) It is formed when a single firm sets up two or more marketing channels to reach one or more customer segments.

C) It does not give overall power to any one member in the channel.

D) It has each channel member acting as a separate business unit trying to maximize its own profits.

E) It has one channel member owning all the other channel members or has contracts with all other channel members.

Answer: E Diff: 2 Type: MC Page Ref: 399 Skill: Concept Objective: 11-3

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21) A(n) ________ marketing system combines successive stages of production and distribution under single ownership, where channel leadership is established through common ownership.

A) contractual vertical B) corporate vertical C) administered vertical D) horizontal E) direct Answer: B Diff: 2 Type: MC Page Ref: 400 Skill: Concept Objective: 11-3 22) A(n) ________ marketing system is a marketing system in which independent firms at different levels of production and distribution join together through binding agreements.

A) corporate vertical B) horizontal C) contractual vertical D) administered vertical E) direct Answer: C Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3 23) Which type of channel arrangement does a franchise organization most likely follow?

A) administered vertical marketing system B) horizontal marketing system C) contractual vertical marketing system D) corporate vertical marketing system E) direct marketing system Answer: C Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3

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24) Rage, a leading motor vehicle manufacturer, introduces a new superbike model. It invites proposals from independent dealers who are willing to set up exclusive showrooms that only sell Rage's superbikes. Chosen dealers will sell and service the superbikes, and Rage will oversee national advertising. This is most likely an example of a(n) ________.

A) administered vertical marketing system B) horizontal manufacturing marketing system C) manufacturer-sponsored retailer franchise system D) manufacturer-sponsored wholesaler franchise system E) direct marketing system Answer: C Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3 25) Pastaliano is a restaurant based in Illinois that exclusively sells Italian food. Pastaliano sells the rights to its recipes to a British firm, Clover Trading, which then opens an outlet in London under the Pastaliano brand name. Which kind of channel arrangement does Pastaliano most likely have with Clover Trading?

A) a horizontal marketing system B) a direct marketing system C) an administered vertical marketing system D) a contractual vertical marketing system E) a corporate vertical marketing system Answer: D Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3 26) In a(n) ________ marketing system, leadership over production and distribution is assumed through the size and power of one or a few dominant channel members.

A) direct B) contractual vertical C) horizontal D) corporate vertical E) administered vertical Answer: E Diff: 2 Type: MC Page Ref: 400 Skill: Concept Objective: 11-3

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27) Sonic Shack, an audio equipment retailer, signs an agreement with PineWire, a renowned electronics company, to sell PineWire products. The deal requires Sonic Shack to provide PineWire products with superior displays, shelf space, and promotion compared to competing products. Sonic agrees to these terms as PineWire products command a huge share in the market.

Which of the following types of channel arrangements do PineWire and Sonic Shack most likely have?

A) administered vertical marketing system B) corporate vertical marketing system C) indirect marketing system D) wholesaler franchise system E) horizontal marketing system Answer: A Diff: 2 Type: MC Page Ref: 400 Skill: Concept Objective: 11-3 28) A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity is referred to as a(n) ________.

A) corporate vertical marketing system B) contractual vertical marketing system C) direct marketing system D) horizontal marketing system E) administered vertical marketing system Answer: D Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3 29) TruMart, a leading retail chain, decides to open a restaurant inside its stores, so the firm partners with MeatMe, a popular burger chain. MeatMe opens a restaurant inside TruMart. The MeatMe chain of restaurants also has a deal with Westman Cola to serve only Westman soft drinks at its outlets. This arrangement will benefit all three companies. What kind of channel arrangement is being followed in this case?

A) administered vertical marketing system B) horizontal marketing system C) direct marketing system D) contractual vertical marketing system E) corporate vertical marketing system Answer: B Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3

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30) GreatWords is a book retailer. Due to the increasing demand for audiobooks, the firm decides to sell audiobooks in its stores. GreatWords signs a deal with Carpem, a leading producer of educational audiobooks. According to the deal, GreatWords will sell only Carpem's audio titles in its stores, while Carpem will not sell its books through other retailer stores.

GreatWords profits from Carpem's popularity while Carpem, in return, enjoys better sales. This is most likely an example of a(n) ________ marketing system.

A) direct B) administered vertical C) corporate vertical D) contractual vertical E) horizontal Answer: E Diff: 2 Type: MC Page Ref: 401 Skill: Concept Objective: 11-3 31) Faber Motors manufactures three lines of cars: high-end security cars for government agencies, commercial cars for consumers and individuals, and professional racing cars. The highend security cars are sold directly to government buyers by the company. The consumer cars are sold through dedicated dealers who only sell Faber's lines at their outlets. For its professional racing cars, Faber collaborates with Radium Tires, an innovative and renowned tire manufacturer. Faber provides the engine and body, while Radium provides the tires and its expertise on the racing industry. Which term best describes Faber's channel arrangements?

A) direct distribution system B) horizontal marketing system C) corporate vertical franchise system D) multichannel distribution system E) administered vertical marketing system Answer: D Diff: 2 Type: MC Page Ref: 402 Skill: Concept Objective: 11-3 32) Clara's, a cosmetics manufacturer, sells many of its products through retail outlets. However, the firm sells a few expensive, popular products only through direct selling methods. What kind of channel arrangement does Clara's follow for all of its products together?

A) horizontal marketing system B) multichannel distribution system C) administered vertical marketing system D) contractual vertical marketing system E) corporate vertical marketing system Answer: B Diff: 2 Type: MC Page Ref: 402 Skill: Concept Objective: 11-3

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33) For over ten years, Erudite, a publishing and educational company that produces college textbooks, has been selling its books online through studysmart.com, a popular online retailer that sells textbooks published by different companies. Recently, Erudite stopped selling its books through studysmart.com and set up its own website for selling its books. This change in channel organization is called ________.

A) disintermediation B) intensive distribution C) brokering D) franchising E) selective distribution Answer: A Diff: 2 Type: MC Page Ref: 404-405 Skill: Concept Objective: 11-3 34) ________ distribution is a product distribution strategy that involves stocking a product in as many outlets as possible.

A) Selective B) Exclusive C) Intensive D) Exponential E) Comprehensive Answer: C Diff: 2 Type: MC Page Ref: 407 Skill: Concept Objective: 11-4 35) Which of the following is true of an intensive distribution strategy?

A) It gives sole rights to select dealers in a given area.

B) It strives to make products available where and when consumers want them.

C) Compared with other distribution strategies, it uses the least number of intermediaries to sell products.

D) Compared with other distribution strategies, it provides the best support for dealers of luxury products.

E) It discards traditional intermediaries and uses direct marketing to reach customers.

Answer: B Diff: 2 Type: MC Page Ref: 407 Skill: Concept Objective: 11-4

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36) ________ distribution gives a limited number of dealers the sole rights to distribute a company's products in their territories.

A) Inclusive B) Horizontal C) Intensive D) Exclusive E) Vertical Answer: D Diff: 2 Type: MC Page Ref: 409 Skill: Concept Objective: 11-4 37) Selective distribution is a strategy in which ________.

A) more than one but fewer than all willing intermediaries are used by a seller B) products are stocked in as many outlets as possible by a seller C) products are not sold through intermediaries but directly to customers from producers D) all willing intermediaries are given rights to sell a product E) common household goods are preferred over luxury products by intermediaries Answer: A Diff: 2 Type: MC Page Ref: 408 Skill: Concept Objective: 11-4 38) ________ distribution gives producers good market coverage with more control and less cost than does intensive distribution.

A) Vertical B) Selective C) Horizontal D) Comprehensive E) Inclusive Answer: B Diff: 2 Type: MC Page Ref: 408 Skill: Concept Objective: 11-4 39) When a seller requires that only certain dealers carry its products, its strategy is known as ________.

A) horizontal restraint of trade B) intensive distribution C) vertical distribution D) disintermediation E) exclusive distribution Answer: E Diff: 2 Type: MC Page Ref: 409 Skill: Concept Objective: 11-4 12 Copyright © 2017 Pearson Canada Inc.

40) Which of the following is an advantage of exclusive dealing between a seller and a dealer?

A) The seller gains more shelf power compared to competitors' products.

B) The seller can avoid using any intermediary and sell the product directly to customers.

C) Customers get more loyal and dependable outlets.

D) The dealer obtains a steady source of supply and more support from the seller.

E) The dealer can freely choose what products to sell without any interference from the seller.

Answer: D Diff: 2 Type: MC Page Ref: 409 Skill: Concept Objective: 11-4 41) Which of the following is true of an exclusive dealing arrangement between a producer and a dealer?

A) It prohibits the producer from selling outside the dealer's territory.

B) It prevents the producer from using any other dealer to sell its products regardless of geographical area.

C) It gives the producer's products more shelf power compared to a competitor's products being sold by the dealer.

D) It can be considered illegal if it increases competition substantially.

E) It does not allow other producers to sell to that dealer.

Answer: E Diff: 2 Type: MC Page Ref: 409 Skill: Concept Objective: 11-4 42) The Memphis Rock chain of restaurants has a deal with WestEnd Cola, according to which it will serve only WestEnd sodas at its restaurants. What strategy has most likely been adopted by WestEnd Cola?

A) horizontal price fixing B) disintermediation C) exclusive distribution D) selective distribution E) horizontal integration Answer: C Diff: 2 Type: MC Page Ref: 403 Skill: Concept Objective: 11-4

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43) Bateman Gray Motors sells the cars it produces using dedicated dealers who only sell Bateman Gray's products at their outlets. What kind of marketing strategy has Bateman Gray adopted with its car dealers?

A) direct marketing B) exclusive distribution C) disintermediation D) horizontal integration E) vertical integration Answer: B Diff: 2 Type: MC Page Ref: 409 Skill: Concept Objective: 11-4 44) In supply chain management, moving products and materials from suppliers to the factory is known as ________ logistics.

A) outbound B) reverse C) inbound D) downstream E) inventory Answer: C Diff: 2 Type: MC Page Ref: 413 Skill: Concept Objective: 11-6 45) Outbound logistics refers to moving ________.

A) unwanted, excess products from resellers to producers B) raw materials from suppliers to the factory C) excess materials from the factory to suppliers D) products from the factory to resellers E) broken, damaged products from customers to producers Answer: D Diff: 2 Type: MC Page Ref: 413 Skill: Concept Objective: 11-6 46) Reverse logistics refers to moving ________.

A) unwanted, excess products from resellers to producers B) raw materials from suppliers to the factory C) excess materials from the factory to suppliers D) finished products from the factory to customers E) finished products from producers to resellers Answer: A Diff: 2 Type: MC Page Ref: 413 Skill: Concept Objective: 11-6 14 Copyright © 2017 Pearson Canada Inc.

47) In a logistics system, minimizing distribution costs most likely involves ________.

A) flexible assortments B) large shipping lots C) rapid delivery D) large inventories E) liberal return policies Answer: B Diff: 3 Type: MC Page Ref: 413 Skill: Concept Objective: 11-6 48) A ________ is highly automated and designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

A) distribution centre B) storage warehouse C) cold storage unit D) controlled-atmosphere unit E) storage silo Answer: A Diff: 2 Type: MC Page Ref: 417 Skill: Concept Objective: 11-6 49) Which of the following is a difference between warehouses and distribution centres?

A) warehouses are used to store agricultural products, while distribution centres are used to store nonagricultural products.

B) warehouses store goods for moderate to long periods, while distribution centres are used to move goods rather than just store them.

C) warehouses are always owned by a producer, while distribution centres are rented.

D) warehouses are more likely to use newer, computer-controlled systems, while distribution centres generally use outdated materials-handling methods.

E) warehouses are exclusively used by government agencies, while distribution centres are exclusively used by private businesses.

Answer: B Diff: 2 Type: MC Page Ref: 417 Skill: Concept Objective: 11-6

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50) In a just-in-time logistics system, ________.

A) retailers carry small inventories of merchandise to last for only a few days B) retailers store products for long periods to avoid an interruption in supply C) producers supply products to resellers before customers place their orders D) producers that are geographically far from their retailers use an express-delivery system E) retailers incur high inventory-carrying and inventory-handling costs Answer: A Diff: 2 Type: MC Page Ref: 413 Skill: Concept Objective: 11-6 51) Which of the following is true of RFID or radio frequency ID tags?

A) RFID eliminates the need for intermediaries and facilitates a direct marketing system.

B) RFID can de-automate the entire supply chain.

C) The use of RFID makes it difficult to know where a product is located physically within the supply chain.

D) Retailers and suppliers using RFID have higher risks of shoplifting and robbery.

E) "Smart shelves" can tell when it is time to reorder and can place orders automatically.

Answer: E Diff: 2 Type: MC Page Ref: 418 Skill: Concept Objective: 11-6 52) Which of the following is a cost-effective mode for shipping large amounts of bulk products —coal, sand, minerals, and forest products—over long distances?

A) air carriers B) water carriers C) pipelines D) trucks E) railroads Answer: E Diff: 2 Type: MC Page Ref: 419 Skill: Concept Objective: 11-6 53) Which of the following is most efficient for short hauls of high-value merchandise and is highly flexible in its routing and time schedules?

A) water carriers B) pipeline C) trucks D) air carriers E) railroads Answer: C Diff: 2 Type: MC Page Ref: 418 Skill: Concept Objective: 11-6 16 Copyright © 2017 Pearson Canada Inc.

54) Which mode of transportation is best for carrying perishable goods to distant markets?

A) railroads B) water carriers C) trucks D) air carriers E) pipelines Answer: D Diff: 2 Type: MC Page Ref: 419 Skill: Concept Objective: 11-6 55) ________ involves combining two or more systems of transportation to move products.

A) Vertical transportation B) Disintermediation C) Just-in-time management D) Vertical integration E) Multimodal transportation Answer: E Diff: 2 Type: MC Page Ref: 419 Skill: Concept Objective: 11-6 56) The use of both rail and trucks for transporting goods is called ________.

A) trainshipping B) fishybacking C) piggybacking D) airtrucking E) autoracking Answer: C Diff: 2 Type: MC Page Ref: 419 Skill: Concept Objective: 11-6 57) Under ________, a customer shares real-time data on sales and current inventory levels with a supplier, and the supplier then takes full responsibility for managing inventories and deliveries.

A) periodic inventory systems B) vendor-managed inventory systems C) selective-trading inventory systems D) manual inventory replenishment systems E) customer-managed inventory systems Answer: B Diff: 2 Type: MC Page Ref: 418 Skill: Concept Objective: 11-6

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58) ________ includes all activities involved in selling goods and services to those buying for resale or business use.

A) Wholesaling B) Retailing C) Franchising D) Discounting E) Disintermediation Answer: A Diff: 1 Type: MC Page Ref: 395 Skill: Concept Objective: 11-2 59) ________ buy mostly from producers and sell to retailers and industrial consumers.

A) Independents B) Factory outlets C) Wholesalers D) Discount stores E) Megaretailers Answer: C Diff: 2 Type: MC Page Ref: 396 Skill: Concept Objective: 11-2 60) ________ are the largest group of wholesalers. The group can be divided into the two broad types of full-service and limited-service.

A) Brokers B) Manufacturer sellers C) Agents D) Merchant wholesalers E) Specialty wholesalers Answer: D Diff: 2 Type: MC Page Ref: 396 Skill: Concept Objective: 11-2 61) ________ and ________ do not take title to goods, and they perform only a few channel functions.

A) Full-service wholesalers; limited-service wholesalers B) Brokers; agents C) Branches; office D) Power centres; independent wholesalers E) Independent wholesalers; off-price retailers Answer: B Diff: 2 Type: MC Page Ref: 396 Skill: Concept Objective: 11-2 18 Copyright © 2017 Pearson Canada Inc.

62) A(n) ________ brings buyers and sellers together and assists in negotiations.

A) agent B) broker C) retailer D) wholesaler E) retail convergence Answer: B Diff: 2 Type: MC Page Ref: 396 Skill: Concept Objective: 11-2 63) ________ represent a buyer or seller on a more permanent basis.

A) Brokers B) Franchises C) Agents D) Retailers E) Intermediaries Answer: C Diff: 2 Type: MC Page Ref: 396 Skill: Concept Objective: 11-2 64) Producing a product or service and making it available to buyers requires building relationships not just with customers, but also with key suppliers and resellers in the company's supply chain.

Answer: TRUE Diff: 1 Type: TF Page Ref: 392 Skill: Concept Objective: 11-1 65) In creating customer value, it is more important for a company to build relationships with downstream channel partners than with upstream supplier partners.

Answer: FALSE Diff: 2 Type: TF Page Ref: 391 Skill: Application Objective: 11-1 66) With the success of the Internet, few producers sell through intermediaries today.

Answer: FALSE Diff: 1 Type: TF Page Ref: 392 Skill: Concept Objective: 11-1

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67) A major role played by intermediaries is to buy large quantities of products from many producers and break them down into the smaller quantities and broader assortments wanted by consumers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 393 Skill: Concept Objective: 11-1 68) Members of the marketing channel may help a company complete transactions by performing key functions such as promotion and negotiation.

Answer: TRUE Diff: 2 Type: TF Page Ref: 394 Skill: Concept Objective: 11-1 69) The producer and the final consumer are part of every type of marketing channel.

Answer: TRUE Diff: 2 Type: TF Page Ref: 392 Skill: Concept Objective: 11-1 70) In a direct marketing channel, which has no intermediary levels, the company sells directly to consumers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 398 Skill: Concept Objective: 11-3 71) When Sherwin Williams Paint Company has single ownership of integrated, successive stages of production and distribution, it has created a corporate VMS. Answer: TRUE Diff: 2 Type: TF Page Ref: 399-400 Skill: Application Objective: 11-3 72) The three main types of franchises are manufacturer-sponsored retailers, manufacturersponsored wholesalers, and service-firm-sponsored retailers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 401 Skill: Concept Objective: 11-3

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73) When the NewWay Dry Cleaners and The Easy Laundromat in your hometown join forces to follow a new marketing opportunity, they are forming a horizontal marketing system.

Answer: TRUE Diff: 2 Type: TF Page Ref: 401-402 Skill: Application Objective: 11-3 74) 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 is now using a multichannel distribution system.

Answer: TRUE Diff: 2 Type: TF Page Ref: 402 Skill: Application Objective: 11-3 75) Disintermediation is a threat to incumbent retailers in North America.

Answer: TRUE Diff: 1 Type: TF Page Ref: 404-405 Skill: Concept Objective: 11-3 76) Disintermediation has occurred when an online marketer takes business away from traditional brick-and-mortar retailers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 404-405 Skill: Concept Objective: 11-3 77) Selective distribution seeks only one outlet in a given market area.

Answer: FALSE Diff: 2 Type: TF Page Ref: 408 Skill: Concept Objective: 11-4 78) The producer and intermediaries need to agree on the terms and responsibilities of each member, including price policies, conditions of sale, territorial rights, and specific services to be performed by each party.

Answer: TRUE Diff: 2 Type: TF Page Ref: 411 Skill: Concept Objective: 11-5

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79) Under the strategy of exclusive distribution, a seller allows only certain retail outlets to carry its products.

Answer: TRUE Diff: 2 Type: TF Page Ref: 409 Skill: Concept Objective: 11-4 80) The key to managing inventory is to balance the costs and benefits of carrying larger inventories with the costs and benefits of holding less.

Answer: TRUE Diff: 2 Type: TF Page Ref: 418 Skill: Concept Objective: 11-6 81) Today, fewer companies outsource their logistics to third-party logistics providers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 413 Skill: Concept Objective: 11-6 82) Wholesaling includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

Answer: FALSE Diff: 1 Type: TF Page Ref: 395 Skill: Concept Objective: 11-2 83) Introducing intermediaries into a distribution chain increases the number of direct channel transactions between a manufacturer and its customers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 392 Skill: Concept Objective: 11-1 84) From a producer's point of view, a greater number of levels in a supply chain means less control and greater channel complexity.

Answer: TRUE Diff: 2 Type: TF Page Ref: 398 Skill: Concept Objective: 11-3 85) A channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Answer: TRUE Diff: 1 Type: TF Page Ref: 398 Skill: Concept Objective: 11-3 22 Copyright © 2017 Pearson Canada Inc.

86) A company that has no intermediary levels sells its products directly to its customers.

Answer: TRUE Diff: 1 Type: TF Page Ref: 398 Skill: Concept Objective: 11-3 87) A vertical marketing system is one in which the producer is always the dominant member of the channel.

Answer: FALSE Diff: 1 Type: TF Page Ref: 399 Skill: Concept Objective: 11-3 88) In a vertical marketing system, producers do not use intermediaries to sell their products.

Answer: FALSE Diff: 2 Type: TF Page Ref: 399 Skill: Concept Objective: 11-3 89) The franchise organization is an example of a corporate vertical marketing system.

Answer: FALSE Diff: 1 Type: TF Page Ref: 401 Skill: Concept Objective: 11-3 90) In an administered VMS, the producer assumes the leadership position in a distribution channel by default.

Answer: FALSE Diff: 1 Type: TF Page Ref: 400-401 Skill: Concept Objective: 11-3 91) A horizontal marketing system can develop between a company and its competitor.

Answer: TRUE Diff: 1 Type: TF Page Ref: 401-402 Skill: Concept Objective: 11-3 92) A multichannel marketing system is one in which a producer sells to multiple markets using the same distribution channel.

Answer: FALSE Diff: 1 Type: TF Page Ref: 402 Skill: Concept Objective: 11-3

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93) Marketing channel design calls for analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

Answer: TRUE Diff: 2 Type: TF Page Ref: 409-410 Skill: Concept Objective: 11-5 94) Companies selling perishable products generally prefer direct marketing, which minimizes delays.

Answer: TRUE Diff: 2 Type: TF Page Ref: 399 Skill: Concept Objective: 11-3 95) Intensive distribution occurs when only one intermediary is used by a producer to sell all its products.

Answer: FALSE Diff: 1 Type: TF Page Ref: 407 Skill: Concept Objective: 11-4 96) Customer-centered logistics starts with the marketplace and works backward to the factory.

Answer: TRUE Diff: 2 Type: TF Page Ref: 413 Skill: Concept Objective: 11-6 97) Supply chain management involves managing both upstream and downstream value-added flows of materials.

Answer: TRUE Diff: 1 Type: TF Page Ref: 413 Skill: Concept Objective: 11-6 98) According to the text, the goal of any logistics system should be to maximize sales, not profits.

Answer: FALSE Diff: 1 Type: TF Page Ref: 417 Skill: Concept Objective: 11-6 99) Inbound logistics involves managing the flow of products from an intermediary to a customer.

Answer: FALSE Diff: 2 Type: TF Page Ref: 413 Skill: Concept Objective: 11-6 24 Copyright © 2017 Pearson Canada Inc.

100) With a vendor-managed inventory system, the supplier takes full responsibility for managing inventories and deliveries.

Answer: TRUE Diff: 1 Type: TF Page Ref: 418 Skill: Concept Objective: 11-6 101) Explain why "value delivery network" is a more relevant expression to use than the terms supply chain and demand chain.

Answer: Supply chain takes a make-and-sell view of the business, using materials and other inputs as the starting point for market planning instead of the needs of target customers. Demand chain takes a sense-and-respond view, starting with the needs of target customers and planning a chain of resources and activities with the goal of creating customer value. However, a demand chain is a step-by-step, linear view of purchase-production-consumption activities. This does not allow for the flexibility made possible by the Internet and other technologies. Value delivery network is more appropriate because it is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.

Diff: 2 Type: ES Page Ref: 392 Skill: Application Objective: 11-1 102) How do channel members add value to a marketing system?

Answer: Intermediaries reduce the amount of work that must be done by both producers and consumers. They transform the assortment of products made by producers into the assortment wanted by consumers. They buy large quantities from many producers and break them down into the smaller quantities and broader assortments wanted by consumers. Intermediaries help to match supply and demand. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them.

Diff: 2 Type: ES Page Ref: 393 Skill: Application Objective: 11-1 103) Describe four of the eight key functions that members of the marketing channel perform.

Answer: Some help to complete transactions by gathering and distributing information, developing and spreading promotions, contacting prospective buyers, matching and shaping the offer to the buyer's needs, and negotiating price and other terms. Other members help to fulfill the completed transactions through physical distribution, financing, and risk taking.

Diff: 2 Type: ES Page Ref: 394-395 Skill: Application Objective: 11-1

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104) Compare and contrast a conventional distribution channel 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, even at the expense of the system as a whole. No channel member has much control over the other members, and no formal means exists for assigning roles and resolving channel conflict. 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 either one member owns the others, one has contracts with the others, or one wields more power than the others.

Diff: 3 Type: ES Page Ref: 399-400 Skill: Application Objective: 11-3 105) Why are multichannel distribution systems gaining popularity today?

Answer: Multichannel distribution systems exist when a single firm sets up two or more marketing channels to reach one or more customer segments. Such a system offers advantages to firms facing large and complex markets. It allows the firms to expand sales and market coverage.

It allows firms to tailor their products and services to the specific needs of diverse customer segments. Larger bottom-line profits may occur.

Diff: 2 Type: ES Page Ref: 402 Skill: Application Objective: 11-3 106) How have changes in technology and the growth of online marketing affected the design of marketing channels?

Answer: Changes in technology and the growth of online marketing have increased disintermediation, which is the cutting out of marketing channel intermediaries by product or service producers, or the displacement of traditional intermediaries with radically new types. In many industries, traditional intermediaries are dropping by the wayside. For example, many airlines now sell directly to final buyers, cutting retailers and sales agents from their marketing channels. Online marketers take business from traditional brick-and-mortar retailers.

Diff: 2 Type: ES Page Ref: 404-405 Skill: Application Objective: 11-3 107) Distinguish between the three distribution strategies.

Answer: Producers of convenience products and common raw materials typically seek intensive distribution as a strategy to stock their products in as many outlets as possible. The goods are available where and when consumers want them, such as chewing gum. 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 or a few dealers in an area. Examples are expensive cars and prestige clothing.

Diff: 2 Type: ES Page Ref: 407-409 Skill: Application Objective: 11-4 26 Copyright © 2017 Pearson Canada Inc.

108) Why are more and more companies turning to third-party logistics providers (3PLs)?

Answer: A third-party logistics provider is an independent company that performs any or all of the functions required to get a producer's product to market, helping clients to tighten up sluggish, overstuffed supply chains, slash inventories, and get products to customers more quickly and reliably. Companies use third-party logistics providers because getting the product to market is the main focus of 3PLs, so they can often do it more efficiently and at a lower cost.

Second, outsourcing logistics frees a company to focus more intensely on its core business.

Finally, integrated logistics companies understand increasingly complex logistics environments.

For example, third-party logistics partners can be especially helpful to companies attempting to expand their global market coverage.

Diff: 3 Type: ES Page Ref: 413-414 Skill: Application Objective: 11-6 109) What is a contractual vertical marketing system? Give an example of a type of business that works as 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 more economies or sales impact than each could achieve alone. Channel members coordinate their activities and manage conflict through contractual agreements. The franchise organization is the most common type of contractual relationship. In this system, a channel member called a franchiser links several stages in the production-distribution process. Almost every kind of business has been franchised—from motels and fast-food restaurants to dental centres and dating services, from wedding consultants and handyman services to fitness centres and funeral homes. For example, Anytime Fitness, "The club for busy people," grew quickly through franchising. Only a decade or so after its founding, Anytime Fitness now operates more than 2,100 clubs with 2 million members in all 50 states and 15 countries.

Diff: 2 Type: ES Page Ref: 401 Skill: Application Objective: 11-3 110) Differentiate between the three types of franchises and provide examples of each type.

Answer: There are three types of franchises. The first type is the manufacturer-sponsored retailer franchise system—for example, Ford and its network of independent franchised dealers.

The second type is the manufacturer-sponsored wholesaler franchise system—Coca-Cola licenses bottlers (wholesalers) in various world markets that buy Coca-Cola syrup concentrate and then bottle and sell the finished product to retailers locally. The third type is the servicefirm-sponsored retailer franchise system—for example, Burger King and its nearly 12, 300 franchisee-operated restaurants around the world.

Diff: 2 Type: ES Page Ref: 401 Skill: Application Objective: 11-3

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111) How does a company determine its channel objectives? What factors influence the channel objectives of a company?

Answer: Companies should state their marketing channel objectives in terms of targeted levels of customer service. Usually, a company can identify several segments wanting different levels of service. The company should decide which segments to serve and the best channels to use in each case. In each segment, the company wants to minimize the total channel cost of meeting customer service requirements. The company's channel objectives are also influenced by the nature of the company, its products, its marketing intermediaries, its competitors, and the environment. For example, companies selling perishable products may require more direct marketing to avoid delays and too much handling. In some cases, a company may want to compete in or near the same outlets that carry competitors' products. In other cases, companies may avoid the channels used by competitors. Finally, environmental factors such as economic conditions and legal constraints may affect channel objectives and design. For example, in a depressed economy, producers will want to distribute their goods in the most economical way, using shorter channels and dropping unneeded services that add to the final price of the goods.

Diff: 3 Type: ES Page Ref: 410-413 Skill: Application Objective: 11-6 112) How do channel members add value?

Answer: Typically, intermediaries have greater efficiency than producers in making goods available to target markets; through their contacts, experience, specialization, and scale of operation, intermediaries usually offer the firm more than it can achieve on its own.

Diff: 2 Type: ES Page Ref: 392 Skill: Application Objective: 11-1 113) What is the role of marketing intermediaries?

Answer: The role of marketing intermediaries is to transform the assortments of products made by producers into the assortments wanted by consumers.

Diff: 2 Type: ES Page Ref: 393 Skill: Application Objective: 11-1 114) Give an example of channel conflict.

Answer: This type of conflict occurs among firms at the same level of the channel; an example would be two Chevrolet dealers in the St. Louis area complaining that each is being undercut by the other.

Diff: 2 Type: ES Page Ref: 403 Skill: Application Objective: 11-3

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115) 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 more economies or sales impact than each could achieve alone.

Diff: 2 Type: ES Page Ref: 401 Skill: Application Objective: 11-3 116) How can a firm benefit from participating in a horizontal marketing system?

Answer: Two or more companies at one level join together to follow a new marketing opportunity; by working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone.

Diff: 2 Type: ES Page Ref: 401-402 Skill: Application Objective: 11-3 117) Give two examples of multichannel distribution systems.

Answer: Students' answers will vary. Examples may include Sear's catalog distribution option and the retail store locations, as well as Avon's door-to-door distribution and over-the-counter distribution options.

Diff: 2 Type: ES Page Ref: 402 Skill: Application Objective: 11-2 118) What types of products are intensively distributed?

Answer: These products must be available where and when consumers want them; examples include chewing gum, soft drinks, toothpaste, and candy.

Diff: 2 Type: ES Page Ref: 407 Skill: Application Objective: 11-4 119) What types of products are exclusively distributed?

Answer: Exclusive distribution is often used for luxury brands such as expensive automobiles and designer clothing.

Diff: 2 Type: ES Page Ref: 409 Skill: Application Objective: 11-4 120) What types of products are selectively distributed?

Answer: With this type of distribution, more than one, but fewer than all, of the intermediaries who are willing to carry a company's products are used. Products include appliances, furniture, and some name-brand clothing.

Diff: 2 Type: ES Page Ref: 407 Skill: Application Objective: 11-4

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121) What is the difference between a storage warehouse and a distribution warehouse?

Answer: Storage warehouses store goods for moderate to long periods; distribution warehouses are designed to move goods rather than just store them.

Diff: 2 Type: ES Page Ref: 417 Skill: Application Objective: 11-6 122) How can a company benefit from a just-in-time logistics system?

Answer: With such systems, producers and retailers carry only small inventories of parts or merchandise, often only enough for a few days of operations. This creates substantial savings in inventory-carrying and handling costs.

Diff: 2 Type: ES Page Ref: 413 Skill: Application Objective: 11-4 Mary Jay, an American designer of luxury leather goods, had experienced growth by selling her goods in her own retail stores. As internet usage increased, Mary Jay did what many of her competitors did: she created a virtual online store on her company website. When the Canadian and US dollars were on par, many Canadian shoppers would purchase online through the US website since there were no retailers in Canada carrying Mary Jay goods. Eventually, Mary Jay opened her own retail stores in Canada after considering the risks and advantages of going global. She also created opportunities with major department stores to carry her goods under specific conditions.

123) How many channel levels did Mary Jay have?

Answer: Mary Jay had a direct marketing channel, her website, where no intermediaries were involved. She also had her own retail stores which is a form of corporate vertical marketing system. The distribution of her goods in major department stores is an indirect marketing channel where retailers are intermediaries. She is using a vertical marketing system since she controls the distribution of her products in these retail stores.

Diff: 2 Type: ES Page Ref: 398-400 Skill: Application Objective: 11-3 124) Describe possible conflicts that can arise.

Answer: Horizontal conflict can arise between a retailer selling Mary Jay goods and the corporate Mary Jay retailer, especially if they are both located in the same shopping mall. For instance, the corporate store may not have sales but the department store might. This is one reason why Mary Jay must be careful in developing a contract with the department store reselling her goods. It might stipulate that sales cannot appear on the goods at all, or only under very strict conditions.

Diff: 2 Type: ES Page Ref: 401-402 Skill: Application Objective: 11-3

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125) What is the most logical way to store and distribute product from the main warehouse in the US to the Canadian customer?

Answer: Depending on how many corporate stores and Canadian customers there are, it might be more cost effective and time effective to have a warehouse strategically located in Canada.

Goods can be transported across Canada to the various corporate retail stores from this warehouse, avoiding cross-border delays. There is no concern regarding department stores carrying the goods. Once the retailer purchase Mary Jay products, they are responsible for the storage and distribution from their own warehouses.

Diff: 3 Type: ES Page Ref: 418 Skill: Application Objective: 11-6

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Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 12 Retailing and Wholesaling 1) ________ refers to the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

A) Sole sourcing B) Retailing C) Manufacturing D) Procurement E) Warehousing Answer: B Diff: 2 Type: MC Page Ref: 433 Skill: Concept Objective: 12-1 2) Which of the following conditions increases the chances of a retailer opting to be categorized as a self-service retailer?

A) when consumers need warranty information about shopping goods B) when customers are willing to conduct their own locate-compare-select process C) when the store offers luxury products at highly affordable prices D) when customers are looking for a narrow product line with a deep assortment E) when the store has been converted into a designer shop from a department store Answer: B Diff: 2 Type: MC Page Ref: 434 Skill: Concept Objective: 12-1 3) Stores that provide moderate sales assistance because they carry shopping goods about which customers need a moderate level of information are called ________ retailers.

A) self-service B) full-service C) off-price D) limited-service E) convenience Answer: D Diff: 2 Type: MC Page Ref: 434 Skill: Concept Objective: 12-1

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4) Which types of stores are characterized by specialty goods for which customers need assistance and higher operating costs that are passed along to customers as higher prices?

A) self-service stores B) convenience stores C) full-service stores D) discount stores E) off-price stores Answer: C Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 5) Flax is a chain of stores that carries several product lines including clothing, home furnishings, and household appliances. Each line is operated as a separate department, and employees are available to assist and advise customers in every phase of the shopping process.

Flax is most likely a ________.

A) self-service retailer B) category killer C) full-service retailer D) supermarket E) pop-up store Answer: C Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 6) Customers at Carat, a premium jewellery store, are encouraged to make an appointment before a visit so that a customer service representative is assigned to them. These representatives help every customer make a purchase that meets his or her needs and budget after considering numerous options. The different styles and special features of the jewellery are explained to each customer to aid the purchase decision. In this case, Carat is an example of a(n) ________.

A) self-service retailer B) off-price retailer C) full-service retailer D) supermarket E) convenience store Answer: C Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1

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7) Which type of retailer typically carries deep product assortments of narrow product lines?

A) self-service retailers B) specialty stores C) warehouse clubs D) discount stores E) factory outlets Answer: B Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 8) GameStop, a video game retailer, offers a deep assortment of video games and video game consoles. GameStop is best described as a(n) ________.

A) department store B) supermarket C) specialty store D) discount store E) off-price retailer Answer: C Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 9) Specialty stores are characterized by ________.

A) the sale of convenience and staple items B) narrow product lines with deep assortments C) a wide range of products and categories D) low prices on a wide range of goods E) routinely purchased food products and services Answer: B Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 10) Department stores are most likely characterized by ________.

A) narrow product lines B) specialty goods and services C) predatory pricing strategies D) deep assortments of luxury brands E) wide varieties of product lines Answer: E Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1

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11) Jones & Company, a major retail chain across the United States, offers a wide range of consumer goods such as clothing, furniture, home appliances, cosmetics, jewellery, and food.

Jones & Company is best described as a ________.

A) supermarket B) department store C) specialty store D) pop-up store E) category killer Answer: B Diff: 2 Type: MC Page Ref: 435 Skill: Concept Objective: 12-1 12) A convenience store ________.

A) markets to segments comprised mostly of white-collar workers B) stocks narrow product lines that have wide, deep assortments C) carries a limited line of high-turnover goods for consumer self-service D) involves high operation costs due to full-service customer assistance E) is a multi-channel food and discount retailer that targets niche markets Answer: C Diff: 2 Type: MC Page Ref: 434 Skill: Concept Objective: 12-1 13) Which type of store is much larger than a regular supermarket and offers a large assortment of routinely purchased food products, nonfood items, and services?

A) discount stores B) specialty stores C) factory outlets D) superstores E) off-price outlets Answer: D Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 14) Which term refers to a giant specialty store with a very deep assortment of a particular product line?

A) category killer B) convenience store C) factory outlet D) department store E) independent store Answer: A Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 4 Copyright © 2017 Pearson Canada Inc.

15) Pawz is a larger retailer that specializes in pet products and services such as pet food, accessories, grooming, toys, and medical treatment. Pawz also has animals available for adoption at all of its many stores located across the nation. Pawz is most likely an example of a ________.

A) convenience store B) pop-up store C) category killer D) lifestyle centre E) supermarket Answer: C Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 16) Which of the following statements is true of retailing?

A) All retail stores are full-service retail stores.

B) A department store has a narrow product line with a deep assortment.

C) The largest type of retail outlet is a supermarket.

D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed.

E) A feature common to all types of retail stores is the use of the everyday low pricing strategy.

Answer: D Diff: 2 Type: MC Page Ref: 433 Skill: Concept Objective: 12-1 17) ________ refer to retailers that sell standard merchandise at lower prices by accepting lower margins and selling higher volume.

A) Convenience stores B) Discount stores C) Full-service retailers D) Designer shops E) Specialty stores Answer: B Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1

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18) ________ have filled the ultralow-price, high-volume gap by buying at less-than-regular wholesale prices and charging consumers less than retail.

A) Off-price retailers B) Specialty stores C) Convenience stores D) Designer shops E) Full-service retailers Answer: A Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 19) Which of the following is a type of off-price retailer?

A) specialty store B) full-service retailer C) discount store D) warehouse club E) supermarket Answer: D Diff: 2 Type: MC Page Ref: 436-437 Skill: Concept Objective: 12-1 20) Allstocks.com is an online retailer that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices. Allstocks then charges customers less than retail. Allstocks is an example of a(n) ________.

A) specialty retailer B) independent off-price retailer C) departmental retailer D) full-service retailer E) category killer Answer: B Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 21) An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods is called a ________.

A) category killer B) factory outlet C) specialty store D) superstore E) warehouse club Answer: B Diff: 2 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 6 Copyright © 2017 Pearson Canada Inc.

22) Dina loves branded apparel and accessories but cannot afford to buy them too often.

Fortunately, Dina lives close to an off-price retail store that is owned and operated by a famous brand. The company utilizes this store to sell its surplus, discontinued, or irregular goods at significantly lower costs. The retail store is best referred to as a ________.

A) category killer B) factory outlet C) specialty store D) superstore E) power centre Answer: B Diff: 3 Type: MC Page Ref: 436 Skill: Concept Objective: 12-1 23) ________ are off-price retailers that operate in huge facilities offering few frills but ultra-low prices and surprise deals on selected branded merchandise.

A) Warehouse clubs B) Department stores C) Convenience stores D) Specialty stores E) Superstores Answer: A Diff: 2 Type: MC Page Ref: 436-437 Skill: Concept Objective: 12-1 24) ________ refer to two or more outlets that are commonly owned and controlled.

A) Corporate chains B) Factory stores C) Specialty stores D) Designer shops E) Warehouse clubs Answer: A Diff: 2 Type: MC Page Ref: 437 Skill: Concept Objective: 12-1

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25) Which term refers to a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising?

A) factory outlet mall B) retailer cooperative C) corporate chain D) warehouse club E) voluntary chain Answer: E Diff: 2 Type: MC Page Ref: 437 Skill: Concept Objective: 12-1 26) Which contractual system is distinguished by the fact that it is normally based on some unique product or service?

A) voluntary chain B) retailer cooperative C) franchise D) corporate chain E) warehouse club Answer: C Diff: 2 Type: MC Page Ref: 437 Skill: Concept Objective: 12-1 27) McPherson's, an ice cream retailer, recently entered into an agreement that allows independent businesspeople at select stores and locations across the country to sell its famous ice creams and milk shakes for a monetary consideration. Which type of contractual retail association is described in the above example?

A) corporate chain B) voluntary chain C) franchise organization D) independent retailer E) retailer cooperative Answer: C Diff: 2 Type: MC Page Ref: 437 Skill: Concept Objective: 12-1

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28) Rhonda recently entered into a contractual agreement with StellarCutz, a national chain of affordable, walk-in hair salons. Under the agreement, Rhonda uses the StellarCutz trade name and receives support from StellarCutz in terms of business methods and processes. Rhonda paid a start-up fee to StellarCutz and will pay annual licensing fees for the use of the StellarCutz brand. Which of the following best describes Rhonda's business?

A) franchise B) factory outlet C) superstore D) acquisition E) joint agreement Answer: A Diff: 2 Type: MC Page Ref: 437 Skill: Concept Objective: 12-1 29) What is most likely the first major marketing decision that a retailer must take?

A) positioning B) targeting C) segmentation D) differentiation E) promoting Answer: C Diff: 2 Type: MC Page Ref: 438-439 Skill: Concept Objective: 12-2 30) Venture Zone, a hiking and climbing equipment retailer, has a rock climbing wall inside the store so that consumers can test products prior to purchase. Venture Zone most likely differentiates itself from its competitors through ________.

A) everyday low pricing B) predatory pricing C) self-service retailing D) experiential retailing E) franchising Answer: D Diff: 2 Type: MC Page Ref: 442 Skill: Concept Objective: 12-2

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31) The Toby's chain of first-class department stores carries a wide range of product lines, including clothing, jewellery, kitchenware, and home furnishings. Toby's typically charge higher prices on an everyday basis and then holds frequent sales and price promotions to increase store traffic. Toby's most likely uses ________.

A) self-service retailing B) experiential retailing C) high-low pricing D) everyday low pricing E) franchise retailing Answer: C Diff: 2 Type: MC Page Ref: 442 Skill: Concept Objective: 12-2 32) Barry's is a chain of retail stores that stocks a large variety of goods and practices high-low pricing. This means that Barry's is likely to ________.

A) have low volume and low markups B) charge low prices constantly C) offer numerous sales or discounts D) compete on the basis of price rather than product or service quality E) use predatory pricing to eliminate competition Answer: C Diff: 2 Type: MC Page Ref: 442 Skill: Concept Objective: 12-2 33) A ________ refers to a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

A) pop-up store B) shopping centre C) warehouse D) category killer E) convenience store Answer: B Diff: 2 Type: MC Page Ref: 443 Skill: Concept Objective: 12-2

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34) Which of the following statements is true of shopping centres?

A) Most shopping centres function at the regional level rather than at the neighborhood level.

B) Shopping centres typically contain only those stores that target a niche market segment of high income groups.

C) Shopping centres are groups of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

D) Shopping centres usually contain exclusive brands and specialty stores rather than convenience stores or department stores.

E) Shopping centres are huge superstores that offer a deep assortment of a particular product line.

Answer: C Diff: 2 Type: MC Page Ref: 443 Skill: Concept Objective: 12-2 35) A ________ contains between 15 and 50 retail stores, including a department or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.

A) community shopping centre B) warehouse club C) superstore D) neighborhood shopping centre E) regional shopping mall Answer: A Diff: 2 Type: MC Page Ref: 443 Skill: Concept Objective: 12-2 36) Power centres are characterized by the ________.

A) lack of an anchor store B) sale of exclusive brands only C) provision of individual entrances to each store D) provision for nonretail activities, such as playgrounds E) absence of any pricing strategies for differentiation Answer: C Diff: 2 Type: MC Page Ref: 443 Skill: Concept Objective: 12-2

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37) A ________ is a small open-air mall with upscale stores, convenient locations, and nonretail activities such as a playground, dining establishments, and a movie theater.

A) regional shopping centre B) lifestyle centre C) community shopping centre D) power centre E) warehouse club Answer: B Diff: 2 Type: MC Page Ref: 443 Skill: Concept Objective: 12-2 38) Carleese, a leading fashion brand, sets up small temporary boutiques across numerous locations during its year-end sale, promoting its outdated products at half the price. These temporary boutiques are referred to as ________.

A) power centres B) franchises C) shopping centres D) pop-up stores E) category killers Answer: D Diff: 2 Type: MC Page Ref: 450 Skill: Concept Objective: 12-3 39) Retail convergence most likely leads to ________.

A) reduced differentiation B) reduced competition C) increased sales D) increased profit margins E) reduced advertising costs Answer: A Diff: 2 Type: MC Page Ref: 450 Skill: Concept Objective: 12-3 40) Which of the following is most likely the greatest factor in the increasingly short life cycle of new retail forms?

A) changes in technology B) economic swings C) import and export regulations D) stagnating retail convergence E) global expansion of major retailers Answer: A Diff: 2 Type: MC Page Ref: 450 Skill: Concept Objective: 12-3 12 Copyright © 2017 Pearson Canada Inc.

41) All of the following are trends in Canadian retail except ________.

A) experiential retailing B) enhanced use of in-store technology C) increased gift card usage D) social media and mobile E) rapid growth of malls Answer: E Diff: 2 Type: MC Page Ref: 444-451 Skill: Concept Objective: 12-3 42) Which of the following is not a good practice in social media for retailing?

A) monitor the conversations B) identify a pool of influencers who can spread the right message C) incentivize influencers to spread the right message D) create a social media account and then ignore it E) develop a relationship with the influencers Answer: D Diff: 2 Type: MC Page Ref: 449 Skill: Concept Objective: 12-3 43) Retailers use digital technologies to ________.

A) provide a more personalized shopping experience B) keep certain consumers out of the store C) charge higher prices D) avoid customer feedback and complaints E) eliminate transportation costs Answer: A Diff: 2 Type: MC Page Ref: 445 Skill: Concept Objective: 12-3 44) In Canada, online retail growth rates are ________.

A) decreasing rapidly B) decreasing modestly C) increasing modestly D) increasing at a double-digit rate every year E) not changing Answer: D Diff: 2 Type: MC Page Ref: 447 Skill: Concept Objective: 12-3

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45) Most retailers believe that ________.

A) the Internet is a fad B) social media is unreliable C) online retail offers an additional channel to increase reach and sales D) online retail is an additional channel to provide information but not sales E) the cost of doing business on the Internet is not justified by sales Answer: C Diff: 2 Type: MC Page Ref: 447 Skill: Concept Objective: 12-3 46) Checking out products in traditional stores and purchasing them online is referred to as ________.

A) warehousing B) wholesaling C) retailing D) franchising E) showrooming Answer: E Diff: 2 Type: MC Page Ref: 447 Skill: Concept Objective: 12-4 47) ________ includes all the activities involved in selling goods and services to those buying them for resale or business use.

A) Wholesaling B) Sole sourcing C) Franchising D) Crowdsourcing E) Showrooming Answer: A Diff: 2 Type: MC Page Ref: 452 Skill: Concept Objective: 12-4 48) Which wholesaler channel function is demonstrated when a wholesaler's sales force helps a manufacturer reach many small customers at a low cost?

A) bulk breaking B) selling and promoting C) buying and assortment building D) warehousing E) risk bearing Answer: B Diff: 2 Type: MC Page Ref: 453 Skill: Concept Objective: 12-4 14 Copyright © 2017 Pearson Canada Inc.

49) Which wholesaler channel function helps reduce the inventory holding costs and risks of suppliers and customers?

A) showrooming B) assortment building C) warehousing D) financing E) transporting Answer: C Diff: 2 Type: MC Page Ref: 453 Skill: Concept Objective: 12-4 50) Which of the following channel functions of wholesalers is demonstrated when a buyer receives quicker delivery because wholesalers are located closer than are producers?

A) buying and assortment building B) financing C) transportation D) risk bearing E) warehousing Answer: C Diff: 2 Type: MC Page Ref: 453 Skill: Concept Objective: 12-4 51) Wayne Wholesaling fulfills many channel functions for its customers. The company mainly focuses on helping retailers to train their salespeople, improve store layouts, and set up inventory control systems. Based on this description, which channel function is provided by Wayne Wholesaling?

A) buying and assortment building B) selling and promoting C) risk bearing services D) market information services E) management services and advice Answer: E Diff: 2 Type: MC Page Ref: 453 Skill: Concept Objective: 12-4

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52) ________ are the largest group of wholesalers and can be divided into two broad types of wholesalers: full-service and limited-service.

A) Brokers B) Retailers C) Agent wholesalers D) Merchant wholesalers E) Manufacturers' agents Answer: D Diff: 2 Type: MC Page Ref: 454 Skill: Concept Objective: 12-5 53) C & G Retail, a chain of local supermarkets, procures all its goods directly from the producers' factories. This type of wholesaling is usually done in ________.

A) corporate broker branches B) manufacturers' offices C) value-retail centres D) warehouse clubs E) factory outlet malls Answer: B Diff: 2 Type: MC Page Ref: 454 Skill: Concept Objective: 12-5 54) Hamilton Wholesaling, an electronics wholesaling firm, provides many services to customers including buying, storing, and transporting expensive and delicate electronics equipment.

Hamilton takes title of ownership to all goods that the firm handles. Hamilton is most likely a(n) ________.

A) wholesaling broker B) merchant wholesaler C) agent wholesaler D) manufacturer's agent E) manufacturer's representative Answer: B Diff: 2 Type: MC Page Ref: 454 Skill: Concept Objective: 12-5

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55) Wholesalers most likely discourage less-profitable customers by ________.

A) increasing product promotions B) carrying exclusive product lines C) overseeing inventory control systems D) adding service charges to small purchase orders E) requiring smaller orders to lower transportation costs Answer: D Diff: 2 Type: MC Page Ref: 453 Skill: Concept Objective: 12-5 56) According to the text, today's large and progressive wholesalers have successfully reacted to rising costs by ________.

A) relocating to low-rent, low-tax areas B) investing in information technology systems C) eliminating the need for brokers and agents D) increasing customer service responsibilities E) reducing promotional and personal selling activities Answer: B Diff: 2 Type: MC Page Ref: 456 Skill: Concept Objective: 12-5 57) Which of the following is true about trends in wholesaling?

A) New laws prevent wholesalers from having their own retailing operations.

B) Value-added customer relationships have been replaced by control systems.

C) Merchant wholesalers are decreasing in number and relevance.

D) The demand for lower prices and higher quality has increased.

E) Bulk breaking is increasingly popular and necessary.

Answer: D Diff: 2 Type: MC Page Ref: 456 Skill: Concept Objective: 12-5

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58) JP Wholesalers is one of the largest wholesalers of wooden furnishings in the country.

Recently, the company opened a chain of stores called JP Designer Homes that has become popular due to the good reputation the company has as a wholesaler. The company has now started acquiring smaller retail chains and consolidating its position in the market. Which of the following trends is reflected in this scenario?

A) the shift toward self-service retailing B) the decline of superstores and megastores C) the decline of the voluntary chain distribution method D) the rise of franchise organizations and joint partnerships E) the blurring of distinctions between retailers and wholesalers Answer: E Diff: 2 Type: MC Page Ref: 456 Skill: Concept Objective: 12-5 59) At Neiman Marcus, a first-class department store, customers shop for specialty products and have come to expect assistance in every phase of the shopping process. Neiman Marcus is a ________.

A) self-service retailer B) limited-service retailer C) full-service retailer D) specialty store E) power centre Answer: C Diff: 2 Type: MC Page Ref: 434 Skill: Application Objective: 12-1 60) 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) category killer E) off-price retailer Answer: C Diff: 2 Type: MC Page Ref: 435 Skill: Application Objective: 12-1

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61) 7-Eleven, Stop-N-Go, and Macs, small stores that traditionally have had a primary market of young, blue-collar men, are examples of ________.

A) specialty stores B) department stores C) convenience stores D) supermarkets E) category killers Answer: C Diff: 2 Type: MC Page Ref: 434 Skill: Application Objective: 12-1 62) Overstock.com, a web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________.

A) discount store B) independent off-price retailer C) factory outlet D) wholesale club E) category killer Answer: B Diff: 2 Type: MC Page Ref: 436 Skill: Application Objective: 12-1 63) A growing number of outlet malls now feature upscale brands such as Coach, Polo Ralph Lauren, Dolce & Gabbana, and Giorgio Armani. Which of the following are most likely to protest about this trend to the manufacturers of these brands?

A) membership warehouses B) agents C) brokers D) department stores E) factory outlets Answer: D Diff: 2 Type: MC Page Ref: 435 Skill: Application Objective: 12-1

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64) McDonald's, Subway, and Pizza Hut are all examples of a ________.

A) voluntary chain B) retailer cooperative C) franchise D) full-service retailer E) power centre Answer: C Diff: 2 Type: MC Page Ref: 437 Skill: Application Objective: 12-1 65) Retailers are businesses whose sales come primarily from retailing.

Answer: TRUE Diff: 2 Type: TF Page Ref: 433 Skill: Concept Objective: 12-1 66) PennyLane Retailers believe in a do-it-yourself approach, and their stores are designed for consumers who are willing to perform their own locate-compare-select process. PennyLane is an example of a full-service retailer.

Answer: FALSE Diff: 2 Type: TF Page Ref: 434-435 Skill: Concept Objective: 12-1 67) Department stores carry narrow product lines with deep assortments within those lines.

Answer: FALSE Diff: 2 Type: TF Page Ref: 435 Skill: Concept Objective: 12-1 68) Venns is a chain of department stores that has become more focused in recent years and now stocks only exclusive labels of designer home accessories. Venns has transformed itself into a chain of pop-up stores.

Answer: FALSE Diff: 2 Type: TF Page Ref: 450 Skill: Concept Objective: 12-4 69) Convenience stores are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services.

Answer: FALSE Diff: 2 Type: TF Page Ref: 434 Skill: Concept Objective: 12-1

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70) Category killers are superstores that carry a deep assortment of a particular product line.

Answer: TRUE Diff: 2 Type: TF Page Ref: 436 Skill: Concept Objective: 12-1 71) Off-price retailers can be found in all areas, from food, clothing, and electronics to no-frills banking and discount brokerages.

Answer: TRUE Diff: 2 Type: TF Page Ref: 436 Skill: Concept Objective: 12-1 72) Independent off-price retailers purchase merchandise at rates that are substantially higher than regular wholesale rates.

Answer: FALSE Diff: 2 Type: TF Page Ref: 436 Skill: Concept Objective: 12-1 73) Factory outlet malls combine manufacturers' outlets with off-price retail stores and department store clearance outlets.

Answer: FALSE Diff: 2 Type: TF Page Ref: 436 Skill: Concept Objective: 12-1 74) Voluntary chains are normally based on one unique product or a specific trade name.

Answer: FALSE Diff: 2 Type: TF Page Ref: 437 Skill: Concept Objective: 12-1 75) In a retailer cooperative, independent retailers band together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts.

Answer: TRUE Diff: 2 Type: TF Page Ref: 437 Skill: Concept Objective: 12-1 76) Retailers cannot make consistent decisions about product assortment and pricing until they define and profile their markets.

Answer: TRUE Diff: 2 Type: TF Page Ref: 438 Skill: Concept Objective: 12-2 21 Copyright © 2017 Pearson Canada Inc.

77) The retailer's product assortment should be distinguishable and also match target shoppers' expectations.

Answer: TRUE Diff: 2 Type: TF Page Ref: 441 Skill: Concept Objective: 12-2 78) Pricing decisions of specialty stores are typically based on low markups on a high volume of products.

Answer: FALSE Diff: 2 Type: TF Page Ref: 442 Skill: Concept Objective: 12-2 79) Casey's is a large supermarket that practices everyday low pricing. Therefore, consumers should expect few discounts or sales if shopping at Casey's regularly.

Answer: TRUE Diff: 2 Type: TF Page Ref: 442 Skill: Concept Objective: 12-2 80) A majority of shoppers who buy products at traditional stores first check them out online.

Answer: FALSE Diff: 2 Type: TF Page Ref: 447 Skill: Concept Objective: 12-3 81) Wholesalers add value to the supply chain.

Answer: TRUE Diff: 2 Type: TF Page Ref: 453 Skill: Concept Objective: 12-4 82) Merchant wholesalers are independently owned businesses.

Answer: TRUE Diff: 2 Type: TF Page Ref: 454 Skill: Concept Objective: 12-5 83) Manufacturers' agents represent two or more manufacturers of complementary lines.

Answer: TRUE Diff: 2 Type: TF Page Ref: 454 Skill: Concept Objective: 12-5

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84) The Great Recession put heavy pressure on wholesalers to increase their operation costs and limit warehouse automation systems.

Answer: FALSE Diff: 2 Type: TF Page Ref: 456 Skill: Concept Objective: 12-5 85) In an automated warehouse, orders are fed directly from the retailer's information system into the wholesaler's, and the items are picked up by mechanical devices and taken to a shipping platform where they are assembled.

Answer: TRUE Diff: 2 Type: TF Page Ref: 456 Skill: Concept Objective: 12-5 86) The suppliers who are not adding value based on cost and quality are more in demand than their competitors.

Answer: FALSE Diff: 2 Type: TF Page Ref: 456 Skill: Concept Objective: 12-5 87) What is the difference between a limited-service and a full-service retailer?

Answer: Limited-service retailers carry more shopping goods about which customers need information; their increased operating costs result in higher prices. Full-service retailers provide salespeople who assist customers in every phase of the shopping process; these retailers usually carry more specialty goods for which customers like to be "waited on."

Diff: 2 Type: ES Page Ref: 434 Skill: Concept Objective: 12-1 88) What types of products do specialty stores carry? Give an example of a specialty store.

Answer: Specialty stores carry narrow product lines with deep assortments within those lines.

Examples could include sporting goods stores, crafts stores, sewing stores, etc.

Diff: 2 Type: ES Page Ref: 435 Skill: Concept Objective: 12-1 89) What types of products may be sold through category killers?

Answer: Category killers are prevalent in a wide range of categories, including books, baby gear, toys, electronics, home improvement products, linens and towels, party goods, sporting goods, and pet supplies.

Diff: 2 Type: ES Page Ref: 436 Skill: Concept Objective: 12-1

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90) How can discount stores sell merchandise at lower prices?

Answer: Discount stores sell merchandise at lower prices by accepting lower margins and selling higher volumes.

Diff: 2 Type: ES Page Ref: 436 Skill: Concept Objective: 12-1 91) What might be a major concern for a high-end designer whose merchandise is sold through factory outlets?

Answer: Though factory outlets have moved upscale, some high-end designers might be concerned that their brand would be diminished through association with irregular or discontinued products.

Diff: 2 Type: ES Page Ref: 436 Skill: Concept Objective: 12-1 92) How are retailers classified based on the amount of service they provide to customers?

Provide examples of each service level to illustrate your response.

Answer: Different types of customers and products require different amounts of service. To meet these varying service needs, retailers may offer one of three service levels: self-service, limited service, and full service. Self-service retailers serve customers who are willing to perform their own locate-compare-select process to save time or money. Self-service is the basis of all discount operations and is typically used by retailers selling convenience goods (such as supermarkets) and nationally branded, fast-moving shopping goods (such as Target or Kohl's).

Limited-service retailers, such as Sears or JCPenney, provide more sales assistance because they carry more shopping goods about which customers need information. Their increased operating costs result in higher prices. Full-service retailers, such as high-end specialty stores (for example, Tiffany or Williams-Sonoma) and first-class department stores (such as Nordstrom or Neiman Marcus) assist customers in every phase of the shopping process. Full-service stores usually carry more specialty goods for which customers need or want assistance or advice. They provide more services, which results in much higher operating costs. These higher costs are passed along to customers as higher prices.

Diff: 2 Type: ES Page Ref: 434-436 Skill: Concept Objective: 12-1

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93) Compare and contrast specialty stores and convenience stores.

Answer: Specialty stores carry narrow product lines with deep assortments within those lines.

The increasing use of market segmentation, market targeting, and product specialization has resulted in a greater need for stores that focus on specific products and segments. Convenience stores are small stores that carry a limited line of high-turnover convenience goods. Many convenience store chains have tried to expand beyond their primary market of young, blue-collar men by redesigning their stores to attract female shoppers. They are shedding the image of a "truck stop" where men go to buy gas, beer, cigarettes, or shriveled hotdogs on a roller grill and are instead offering freshly prepared foods and cleaner, safer, more-upscale environments.

Diff: 2 Type: ES Page Ref: 434-435 Skill: Concept Objective: 12-1 94) Describe superstores, category killers, and service retailers.

Answer: Superstores are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Walmart, Target, Meijer, and other discount retailers offer supercentres, very large combination food and discount stores.

Recent years have also seen the rapid growth of superstores that are actually giant specialty stores, the so-called category killers (e.g., Best Buy, Home Depot, and PetSmart). They feature stores the size of airplane hangars that carry a very deep assortment of a particular line. Category killers are found in a wide range of categories, including electronics, home-improvement products, books, baby gear, toys, linens and towels, party goods, sporting goods, and even pet supplies. Finally, for many retailers, the product line is actually a service. Service retailers include hotels and motels, banks, airlines, restaurants, colleges, hospitals, movie theaters, tennis clubs, bowling alleys, repair services, hair salons, and dry cleaners.

Diff: 2 Type: ES Page Ref: 436 Skill: Concept Objective: 12-1 95) Describe the differences between discount stores and off-price retailers.

Answer: A discount store sells standard merchandise at low prices by accepting lower margins and selling a higher volume. The early discount stores cut expenses by offering few services and operating in warehouse-like facilities in low-rent, heavily traveled districts. Today's discounters have improved their store environments and increased their services, while at the same time keeping prices low through lean, efficient operations. Off-price retailers can be found in all areas, from food, clothing, and electronics to no-frills banking and discount brokerages. Offprice retailers buy at less-than-regular wholesale prices and charge consumers less than retail.

Diff: 2 Type: ES Page Ref: 436 Skill: Concept Objective: 12-1

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96) Crunch and Munch is the country's favorite fast-food vendor of fried chicken. Over the years, the company has diversified into providing a larger variety of snacks like hot dogs, burritos, and burgers, but consumers still consider it the best seller of fried chicken. Many parties have approached Crunch and Munch with offers to buy the company, but Crunch and Munch continues to operate through its stores and franchise outlets. What is franchising? Why would franchising be a good contractual system for Crunch and Munch?

Answer: A franchise is a contractual association between a manufacturer, wholesaler, or service organization and an independent businessperson who buys the right to own and operate one or more units within the franchise system. The main difference between franchise organizations and other contractual systems (voluntary chains and retail cooperatives) is that franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, goodwill, or patent that the franchisor has developed. Franchising has been prominent in fast-food restaurants, motels, health and fitness centres, auto sales and service dealerships, and real estate agencies. Since Crunch and Munch enjoys the position of being a favorite among consumers, franchising is a good tool to capitalize its reputation without losing its identity.

Diff: 2 Type: ES Page Ref: 437-538 Skill: Concept Objective: 12-1 97) What is the difference between corporate chains, voluntary chains, and retailer cooperatives?

How are such retail organizations different from franchise organizations?

Answer: Corporate chains are two or more outlets that are commonly owned and controlled.

They have many advantages over independents. Their size allows them to buy in large quantities at lower prices and gain promotional economies. They can hire specialists to deal with areas such as pricing, promotion, merchandising, inventory control, and sales forecasting. A voluntary chain is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. The other type of contractual association is the retailer cooperative—a group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts. The main difference between franchise organizations and other contractual systems is that franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, goodwill, or patent that the franchisor has developed.

Diff: 2 Type: ES Page Ref: 437 Skill: Concept Objective: 12-1

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98) Posco, a limited-service retail chain with 130 stores across the country, is seeking to improve its standing in the market. Since its operations are widespread, altering the store atmosphere significantly is not feasible because of the costs involved. Similarly, upgrading the stores to fullservice retail chains would require a large investment of time, effort, and employee training.

Assuming that many of Posco Retail's private-label brands are bringing in large revenues, what strategy could Posco Retail use to differentiate itself while matching target shoppers' expectations?

Answer: (Students' answers may vary. The answer given below is indicative.)

Posco Retail should use its product assortment to differentiate its stores while matching target shoppers' expectations. One strategy is to offer merchandise that no other competitor carries, such as store brands or national brands on which it holds exclusive rights. Posco Retail has private-label brands that are doing well in the market and the company should capitalize on them. While the services mix and store atmosphere can also help set one retailer apart from another, these measures are not feasible in the current situation for Posco Retail.

Diff: 2 Type: ES Page Ref: 438-443 Skill: Concept Objective: 12-2 99) Describe the promotion tools used by retailers.

Answer: Retailers use any or all of the five promotion tools—advertising, personal selling, sales promotion, public relations (PR), and direct marketing—to reach consumers. They advertise in newspapers and magazines and on radio, television, and the Internet. Advertising may be supported by newspaper inserts and catalogs. Store salespeople greet customers, meet their needs, and build relationships. Sales promotions may include in-store demonstrations, displays, sales, and loyalty programs. PR activities, such as new-store openings, special events, newsletters and blogs, store magazines, and public service activities, are also available to retailers. Most retailers also interact digitally with customers via Web sites and digital catalogs, online ads and video, social media, mobile ads and apps, blogs, and email. Almost every retailer, large or small, maintains a full social media presence.

Diff: 2 Type: ES Page Ref: 443 Skill: Concept Objective: 12-2 100) Three types of shopping centres are regional shopping centres, community shopping centres, and neighborhood shopping centres or strip malls. Describe how they differ from each other.

Answer: Regional shopping centres are the largest and most dramatic shopping centres. They contain from 50 to more than 100 stores. They are like covered mini-downtowns and attract customers from a wide area. Smaller than regional shopping centres, community shopping centres contain between 15 and 50 stores. They normally contain a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.

Smaller still are neighborhood shopping centres or strip malls, which generally contain 5 to 15 stores. They are close and convenient for consumers, usually containing a supermarket, a discount store, and several service stores.

Diff: 2 Type: ES Page Ref: 443 Skill: Concept Objective: 12-2 27 Copyright © 2017 Pearson Canada Inc.

101) Differentiate between power centres and lifestyle centres.

Answer: Power centres are huge unenclosed shopping centres consisting of a long strip of retail stores, including large, freestanding anchors such as Walmart, Home Depot, Costco, Best Buy, Michaels, PetSmart, and OfficeMax. Each store has its own entrance with parking directly in front for shoppers who wish to visit only one store. In contrast, lifestyle centres are smaller, open-air malls with upscale stores, convenient locations, and nonretail activities, such as a playground, skating rink, hotel, dining establishments, and a movie theater. In fact, the original power centre and lifestyle centre concepts are now morphing into hybrid lifestyle-power centres that combine the convenience and community feel of a neighborhood centre with the brute force of a power centre. In all, today's centres are more places to hang out than just places to shop.

Diff: 2 Type: ES Page Ref: 443 Skill: Concept Objective: 12-2 102) Amex Retail, the largest and oldest retail chain in America, was recently recognized as one of the most influential companies in the U.S. The company aims to capitalize on this opportunity by implementing major marketing activities to capture the attention of consumers, politicians, and environmentalists. The company was one of the first to do away with plastic bags, and the public relations division is contemplating the adoption of additional green retailing practices.

Would this move reflect sound business tactics? What other measures can Amex Retail take in this direction?

Answer: (Students' answers may vary. The answer given below is indicative.)

Today's retailers are increasingly adopting environmentally sustainable practices. They are greening up their stores and operations, promoting more environmentally responsible products, launching programs to help customers be more responsible, and working with channel partners to reduce their environmental impact. At the most basic level, most large retailers are making their stores more environmentally friendly through sustainable building design, construction, and operations. Retailers are also greening up their product assortments. Many retailers have also launched programs that help consumers make more environmentally responsible decisions.

Finally, many large retailers are joining forces with suppliers and distributors to create more sustainable products, packaging, and distribution systems. Green retailing yields both top- and bottom-line benefits. Sustainable practices lift a retailer's top line by attracting consumers looking to support environmentally friendly sellers and products. They also help the bottom line by reducing costs. Keeping all these benefits and measures in mind, the decision of Amex Retail to go green would make tremendous positive impact.

Diff: 2 Type: ES Page Ref: 444-452 Skill: Concept Objective: 12-3

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103) Explain how wholesalers add value for a producer.

Answer: Wholesalers add value by performing one or more of the following channel functions: Selling and promoting: Wholesalers' sales forces help manufacturers reach many small customers at a low cost. The wholesaler has more contacts and is often more trusted by the buyer than the distant manufacturer.

Buying and assortment building: Wholesalers can select items and build assortments needed by their customers, thereby saving much work.

Bulk breaking: Wholesalers save their customers money by buying in carload lots and breaking bulk (breaking large lots into small quantities).

Warehousing: Wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers.

Transportation: Wholesalers can provide quicker delivery to buyers because they are closer to buyers than are producers.

Financing: Wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time.

Risk bearing: Wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence.

Market information: Wholesalers give information to suppliers and customers about competitors, new products, and price developments.

Management services and advice: Wholesalers often help retailers train their salesclerks, improve store layouts and displays, and set up accounting and inventory control systems.

Diff: 2 Type: ES Page Ref: 452-453 Skill: Concept Objective: 12-4 104) Describe the three different types of wholesalers.

Answer: Wholesalers fall into three major groups: merchant wholesalers, brokers and agents, and manufacturers' and retailers' branches and offices. Merchant wholesalers are the largest single group of wholesalers, accounting for roughly 50 percent of all wholesaling. Merchant wholesalers include two broad types: full-service wholesalers and limited-service wholesalers.

Full-service wholesalers provide a full set of services, whereas the various limited-service wholesalers offer fewer services to their suppliers and customers. The different types of limitedservice wholesalers perform varied specialized functions in the distribution channel.

Brokers and agents differ from merchant wholesalers in two ways: They do not take title to goods, and they perform only a few functions. Like merchant wholesalers, they generally specialize by product line or customer type. A broker brings buyers and sellers together and assists in negotiation. Agents represent buyers or sellers on a more permanent basis.

Manufacturers' agents (also called manufacturers' representatives) are the most common type of agent wholesaler. The third major type of wholesaling is that done in manufacturers' and retailers' branches and offices by sellers or buyers themselves rather than through independent wholesalers.

Diff: 2 Type: ES Page Ref: 453-454 Skill: Concept Objective: 12-4

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105) Explain how wholesalers have been able to use technology to cut costs.

Answer: Today's large and progressive wholesalers have reacted to rising costs by investing in automated warehouses and IT systems. Orders are fed from the retailer's information system directly into the wholesaler's, and the items are picked up by mechanical devices and automatically taken to a shipping platform where they are assembled. Most large wholesalers use technology to carry out accounting, billing, inventory control, and forecasting. Modern wholesalers are adapting their services to the needs of target customers and finding cost-reducing methods of doing business. They are also conducting more business transactions online.

Diff: 2 Type: ES Page Ref: 456 Skill: Concept Objective: 12-5 In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population—the Amish.

Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same.

Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.

"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods."

106) Why might Indiana Wood be classified as a full-service retailer?

Answer: Indiana Wood offers specialty goods made to fit customers' requests. Customers are waited on as their customized products are produced on the spot, right in front of them.

Diff: 2 Type: ES Page Ref: 434-435 Skill: Concept Objective: 12-1 107) Why do specialty stores flourish in Shipshewana?

Answer: Customers are attracted to the lifestyle of the Amish people; customers like to take a part of the unique Amish culture and tradition home with them as they buy any number of specialty goods.

Diff: 2 Type: ES Page Ref: 435 Skill: Concept Objective: 12-1 30 Copyright © 2017 Pearson Canada Inc.

Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 13 Communicating Customer Value: Advertising and Public Relations 1) 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) the promotion mix D) competitive marketing E) target marketing Answer: C Diff: 1 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1 2) The use of short-term incentives to encourage the purchase or sale of a product or service is called ________.

A) direct marketing B) sales promotion C) personal selling D) public relations E) publicity Answer: B Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1 3) Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor is called ________.

A) sales promotion B) direct marketing C) advertising D) personal selling E) public relations Answer: C Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1

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4) Which of the five major promotion tools includes building up a positive corporate image and handling unfavorable stories and events?

A) sales promotion B) personal selling C) direct marketing D) public relations E) search engine optimization Answer: D Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1 5) Which of the following are major categories in the promotion mix?

A) advertising, sales promotion B) sales promotion, positioning C) positioning, public relations D) positioning, advertising E) advertising, indirect marketing Answer: A Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1 6) The promotion mix is the company's primary communication activity; the marketing mix must be coordinated for the greatest communication impact. Which of the following are included in the entire marketing mix?

A) product, competitor B) competitor, price C) price, intermediaries D) intermediaries, place E) promotion, price Answer: E Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-1 7) Today's consumers do not need to rely on marketer-supplied information about products and services because they can use ________ to seek out a wealth of information.

A) public relations B) direct marketing C) the Internet and other technologies D) mass market media E) informative advertising Answer: C Diff: 1 Type: MC Page Ref: 469 Skill: Concept Objective: 13-2 2 Copyright © 2017 Pearson Canada Inc.

8) Which of the following is a factor in the changes occurring in today's marketing communications?

A) Mass markets have consolidated, and marketers are shifting towards mass marketing.

B) Improvements in communication technologies are changing how companies and customers communicate with each other.

C) Companies sometimes invest millions of dollars in the mass media.

D) Mass media no longer capture the majority of promotional budgets.

E) Consumers tend to make rash decision based on impulse.

Answer: B Diff: 3 Type: MC Page Ref: 469-470 Skill: Concept Objective: 13-2 9) Which of the following is an example of a media that an advertiser might use to reach larger customer segments?

A) cable television channels B) email C) blogs D) network television E) online social networks Answer: D Diff: 2 Type: MC Page Ref: 469 Skill: Concept Objective: 13-2 10) Companies are using less ________ and more ________ as a result of an explosion of more focused media that better match today's targeting strategies.

A) marketing; media B) media; sales C) narrowcasting; broadcasting D) mass media; targeted media E) advertising; word-of-mouth Answer: D Diff: 2 Type: MC Page Ref: 469 Skill: Concept Objective: 13-2

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11) Companies are challenged with the changing face of today's marketing communications.

Change in which of the following is one of the factors?

A) media B) competitors C) micromarkets D) consumers E) advertising Answer: D Diff: 2 Type: MC Page Ref: 468 Skill: Concept Objective: 13-2 12) Some argue that factors like high costs will cause the old mass-media communications model to be abandoned in favour of ________.

A) public relations B) direct marketing C) push and pull strategies D) new technologies E) buzz marketing Answer: D Diff: 2 Type: MC Page Ref: 469 Skill: Concept Objective: 13-2 13) Which of the following does not explain why marketers are moving to digital media?

A) Mass media costs are rising.

B) Audiences are shrinking.

C) Ad clutter is increasing.

D) Viewers are gaining message control.

E) TV leads as an advertising media in global spending.

Answer: E Diff: 2 Type: MC Page Ref: 469 Skill: Concept Objective: 13-2 14) Which of the following best explains why companies often fail to integrate their various communications to consumers?

A) Historically, consumers have been able to distinguish between message sources.

B) Public relations is usually given priority over advertising.

C) Communications often come from different parts of the company.

D) Personal selling and sales promotion are in direct conflict.

E) Companies have failed to understand the concept of brand contact.

Answer: C Diff: 2 Type: MC Page Ref: 472 Skill: Concept Objective: 13-2 4 Copyright © 2017 Pearson Canada Inc.

15) More companies are adopting the concept of ________, which carefully coordinates the company's many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

A) integrated marketing communications B) integrated personal selling C) integrated competitive methods D) nonpersonal communication channels E) buzz marketing Answer: A Diff: 1 Type: MC Page Ref: 473 Skill: Concept Objective: 13-2 16) Advertising, sales promotion, personal selling, public relations, and direct marketing are all ________.

A) communications channels that should be integrated under the concept of integrated marketing communications B) communications channels focused more on narrowcasting than broadcasting C) promotional tools used for push strategies but not pull strategies D) promotional tools used for pull strategies but not push strategies E) promotional tools adapted for use in mass marketing Answer: A Diff: 2 Type: MC Page Ref: 473 Skill: Concept Objective: 13-2 17) Integrated marketing communications require a company's mass-market advertisements, website, email, and personal selling communications to all have ________.

A) equal portions of the advertising budget B) independent communications directors C) separate marketing objectives D) the same target audience E) the same clear and compelling message Answer: E Diff: 2 Type: MC Page Ref: 473 Skill: Concept Objective: 13-2

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18) To produce better communications consistency, a unified company image, and greater sales impact, some companies employ a(n) ________.

A) advertising agency B) marketing communications director C) public relations specialist D) personal sales force E) media buyer Answer: B Diff: 2 Type: MC Page Ref: 474 Skill: Concept Objective: 13-2 19) Advertising has many advantages. What is one of them?

A) It is impersonal.

B) It can be very costly.

C) It reaches many people across geographic locations.

D) It carries on one-way communication with the audience.

E) It does not make audiences feel the need to respond.

Answer: C Diff: 2 Type: MC Page Ref: 474 Skill: Concept Objective: 13-2 20) ________ is the company's most expensive promotion tool.

A) Advertising B) Personal selling C) Mass media D) Public relations E) Publicity Answer: B Diff: 2 Type: MC Page Ref: 475 Skill: Concept Objective: 13-2 21) Which promotional tool is most effective in building up buyers' preferences, convictions, and, most importantly, actions?

A) mass-market advertising B) segmented advertising C) sales promotion D) public relations E) personal selling Answer: E Diff: 2 Type: MC Page Ref: 475 Skill: Concept Objective: 13-2

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22) Sales promotion features a wide assortment of tools. Which is one set of these tools?

A) contests, catalogues B) catalogues, premiums C) catalogs, coupons D) coupons, contests E) dealer warranties, coupons Answer: D Diff: 2 Type: MC Page Ref: 475 Skill: Concept Objective: 13-2 23) Which of the following statements does not describe direct marketing?

A) Direct marketing is interactive.

B) Direct marketing is customized to the target audience and immediate.

C) Messages are directed at the mass public audience in direct marketing.

D) Direct marketing allows a dialogue between the marketing team and the consumer.

E) Building one-to-one customer relationships is a key benefit of direct marketing.

Answer: C Diff: 1 Type: MC Page Ref: 475-486 Skill: Concept Objective: 13-2 24) "Buy it now" is the message of ________.

A) personal selling B) advertising C) a nonpersonal communication channel D) sales promotion E) publicity Answer: D Diff: 2 Type: MC Page Ref: 475 Skill: Concept Objective: 13-2 25) Which promotional tool is described as less public, immediate, customized, and interactive?

A) segmented advertising B) sales promotions C) public relations D) brand contacts E) direct marketing Answer: E Diff: 2 Type: MC Page Ref: 476 Skill: Concept Objective: 13-2

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26) Which promotional mix strategy directs marketing efforts toward final consumers?

A) push B) blitz C) pull D) buzz E) pulse Answer: C Diff: 1 Type: MC Page Ref: 476 Skill: Concept Objective: 13-2 27) Which promotional mix strategy directs marketing efforts toward market channel members?

A) push B) blitz C) pull D) buzz E) pulse Answer: A Diff: 1 Type: MC Page Ref: 476 Skill: Concept Objective: 13-2 28) Business-to-consumer companies are more likely to emphasize a ________ promotion strategy, while business-to-business companies are more likely to emphasize a ________ promotion strategy.

A) pull; push B) push; pull C) pulse; pull D) continuity; pulse E) pulse; continuity Answer: A Diff: 2 Type: MC Page Ref: 477 Skill: Concept Objective: 13-2 29) Which of the following are important decisions during the process of developing an advertising program?

A) setting advertising objectives, setting the advertising budget B) setting the advertising budget, selecting a target market C) selecting a target market, developing advertising strategy D) selecting a target market, evaluating campaigns E) evaluating advertising campaigns, starting over Answer: A Diff: 2 Type: MC Page Ref: 477 Skill: Concept Objective: 13-3 8 Copyright © 2017 Pearson Canada Inc.

30) Advertising ________ define the task that advertising must do with a specific target audience during a specific period of time.

A) objectives B) budgets C) strategies D) campaigns E) evaluations Answer: A Diff: 1 Type: MC Page Ref: 478 Skill: Concept Objective: 13-3 31) Advertising ________ can be classified by primary purpose—whether the aim is to inform, persuade, or remind.

A) objectives B) budgets C) evaluations D) campaigns E) logos Answer: A Diff: 2 Type: MC Page Ref: 478 Skill: Concept Objective: 13-3 32) ________ is used heavily when introducing a new product category. The objective is to build primary demand.

A) Persuasive advertising B) Informative advertising C) Comparative advertising D) Patronage advertising E) Institutional advertising Answer: B Diff: 2 Type: MC Page Ref: 478 Skill: Concept Objective: 13-3 33) ________ becomes more important as competition increases. The company's objective is to build selective demand.

A) Persuasive advertising B) Informative advertising C) POP promotion advertising D) Patronage advertising E) Reminder-oriented advertising Answer: A Diff: 2 Type: MC Page Ref: 478 Skill: Concept Objective: 13-3 9 Copyright © 2017 Pearson Canada Inc.

34) Persuasive advertising becomes comparative advertising, also known as ________, when a company directly or indirectly compares its brand with one or more other brands.

A) informative advertising B) reminder advertising C) attack advertising D) POP promotion advertising E) institutional advertising Answer: C Diff: 2 Type: MC Page Ref: 478 Skill: Concept Objective: 13-3 35) A product in the maturity stage will often require ________ advertising.

A) informative B) comparative C) persuasive D) reminder E) cooperative Answer: D Diff: 2 Type: MC Page Ref: 479 Skill: Concept Objective: 13-3 36) After determining its advertising objectives, the company's next step in developing an advertising program is to ________.

A) set its advertising budget B) evaluate ad campaigns C) develop an ad strategy D) make message decisions E) make media decisions Answer: A Diff: 3 Type: MC Page Ref: 479 Skill: Concept Objective: 13-3

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37) Using the ________ method for setting an advertising budget, the company starts with total revenues, deducts operating expenses and capital outlays, and then devotes some portion of the remaining funds to advertising.

A) percentage-of-sales B) affordable C) competitive-parity D) objective-and-task E) moving-average Answer: B Diff: 2 Type: MC Page Ref: 479 Skill: Concept Objective: 13-3 38) A company decides on its promotion budget by using four common methods to set the total budget for advertising. What are two of these methods?

A) the affordable method, the integrated method B) the percentage-of-sales method, the integrated method C) the integrated method, objective-task method D) the integrated method, the competitive-parity method E) the objective-and-task method, affordable method Answer: E Diff: 2 Type: MC Page Ref: 479 Skill: Concept Objective: 13-2 39) 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) affordable C) competitive-parity D) objective-and-task E) regression Answer: A Diff: 2 Type: MC Page Ref: 480 Skill: Concept Objective: 13-3

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40) Which method of setting an advertising budget is based on analyzing competitors' spending?

A) affordable method B) percentage-of-sales method C) competitive-parity method D) objective-and-task method E) integrated method Answer: C Diff: 1 Type: MC Page Ref: 480 Skill: Concept Objective: 13-3 41) The most logical budget-setting method is the ________ method because it is based on spending necessary to accomplish specific promotion goals.

A) percentage-of-sales B) affordable C) competitive-parity D) objective-and-task E) exponential smoothing Answer: D Diff: 2 Type: MC Page Ref: 480 Skill: Concept Objective: 13-3 42) Today, which of the following is often a more important element of developing an advertising strategy than the creative elements of the campaign?

A) selecting the right advertising media B) using sophisticated statistical models C) setting advertising objectives D) evaluating advertising campaigns E) setting the advertising budget Answer: A Diff: 2 Type: MC Page Ref: 481 Skill: Concept Objective: 13-3 43) Soaring media costs, focused target marketing strategies, and the growing array of new media have increased the importance of ________.

A) the affordable method of setting a promotion budget B) the competitive-parity method of setting a promotion budget C) using humor to capture audience attention and interest D) implementing branded entertainment E) media planning Answer: E Diff: 2 Type: MC Page Ref: 481 Skill: Concept Objective: 13-3 12 Copyright © 2017 Pearson Canada Inc.

44) To succeed, an advertisement must ________.

A) have a significant budget B) be placed during prime time C) be high frequency D) interrupt or disrupt E) gain attention and be engaging Answer: E Diff: 2 Type: MC Page Ref: 482 Skill: Concept Objective: 13-3 45) Digital technology present which of the following problems for marketers?

A) Consumers are watching less television.

B) Consumers have difficulty attending to specific advertising messages due to advertising clutter.

C) Audiences are less interested in media consumption.

D) Consumers have more choices about what to watch or not watch.

E) Television advertising is becoming more expensive.

Answer: D Diff: 2 Type: MC Page Ref: 482 Skill: Concept Objective: 13-3 46) A term that has come to represent the merging of advertising and entertainment in an effort to create new avenues for reaching consumers with more engaging messages is ________.

A) Madison & Vine B) Hollywood & Vine C) Hollywood & Madison D) Saks Fifth Avenue E) Hollywood and Wall Street Answer: A Diff: 2 Type: MC Page Ref: 482-483 Skill: Concept Objective: 13-3 47) The goal of advertising as entertainment is for ________ to become a part of the entertainment rather than interrupting it.

A) branded entertainment B) advertainment C) audience engagement D) brands E) testimonial endorsement Answer: D Diff: 2 Type: MC Page Ref: 483 Skill: Concept Objective: 13-3 13 Copyright © 2017 Pearson Canada Inc.

48) Product placement in television programs and movies is an example of ________.

A) branded entertainment B) advertainment C) lifestyle execution D) mood execution E) consumer generated content Answer: A Diff: 2 Type: MC Page Ref: 483 Skill: Concept Objective: 13-3 49) ________ is the first step in creating effective advertising messages—deciding what general message will be communicated to consumers.

A) Eliminating advertising clutter B) Message strategy C) Media opportunity D) Rewarding consumers E) Selecting the medium Answer: B Diff: 2 Type: MC Page Ref: 484 Skill: Concept Objective: 13-3 50) Developing an effective message strategy begins with identifying ________ that can be used as advertising appeals.

A) consumer trends B) competitors' weaknesses C) competitors' strengths D) customer benefits E) consumer emotions Answer: D Diff: 2 Type: MC Page Ref: 484 Skill: Concept Objective: 13-3 51) ________ tend to be plain, straightforward outlines of benefits and positioning points that the advertiser wants to stress.

A) Execution styles B) Message strategy statements C) Creative concept strategies D) Advertising appeals E) Branded entertainment plans Answer: B Diff: 2 Type: MC Page Ref: 484 Skill: Concept Objective: 13-3 14 Copyright © 2017 Pearson Canada Inc.

52) After creating message strategy statements, the advertiser must develop a(n) ________ that will bring the message strategy to life in a distinctive and memorable way.

A) creative concept B) customer strategy C) customer benefit D) execution style E) media vehicle Answer: A Diff: 2 Type: MC Page Ref: 484 Skill: Concept Objective: 13-3 53) Which of the following are the three characteristics an advertising appeal should have?

A) engaging, informative, and stylish B) trendy, compelling, and appealing C) meaningful, believable, and distinctive D) unique, emotional, and entertaining E) humorous, memorable, and interesting Answer: C Diff: 3 Type: MC Page Ref: 484 Skill: Concept Objective: 13-3 54) ________ is the message execution style that depicts one or more typical people using the product in a normal setting.

A) Lifestyle B) Fantasy C) Slice of life D) Personality symbol E) Testimonial evidence Answer: C Diff: 2 Type: MC Page Ref: 485 Skill: Concept Objective: 13-3 55) Ads that are built around dream themes use which type of execution style?

A) mood or image B) musical C) fantasy D) slice of life E) scientific evidence Answer: C Diff: 1 Type: MC Page Ref: 485 Skill: Concept Objective: 13-3

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56) The Geico gecko and Tony the Tiger are examples of ________ used in successful advertising campaigns.

A) slice of life appeals B) creative endorsements C) testimonials D) celebrity spokespeople E) personality symbols Answer: E Diff: 2 Type: MC Page Ref: 485 Skill: Concept Objective: 13-3 57) What is the first element that a reader typically notices in a print ad?

A) copy B) illustration C) headline D) logo E) color Answer: B Diff: 2 Type: MC Page Ref: 486 Skill: Concept Objective: 13-3 58) An amateur video showing the result of mixing Diet Coke with Mentos candies is an example of which growing trend in advertising?

A) YouTube webisodes B) YouTube consumer-generated messages C) multiple mini-campaigns D) consumer-driven promotions E) competitive consumer messages Answer: B Diff: 2 Type: MC Page Ref: 486-487 Skill: Concept Objective: 13-3 59) Which of the following are some of the major steps in selecting advertising media?

A) deciding on reach, frequency, and impact, choosing among major media types B) choosing among major media types, selecting target markets C) selecting specific media vehicles, deciding on format elements D) deciding on format elements, selecting target markets E) deciding on format elements, deciding on timing Answer: A Diff: 2 Type: MC Page Ref: 487 Skill: Concept Objective: 13-3

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60) ________ is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time.

A) Reach B) Qualitative value C) Impact D) Premium E) Frequency Answer: A Diff: 2 Type: MC Page Ref: 487 Skill: Concept Objective: 13-3 61) When selecting media, the advertiser must decide on the desired qualitative value, known as the ________, of a message through a given medium.

A) reach B) media engagement C) media impact D) exposure costs E) frequency Answer: C Diff: 2 Type: MC Page Ref: 487 Skill: Concept Objective: 13-3 62) For many years, ________ have dominated the media mix used by national advertisers.

A) radio and television B) television and magazines C) direct mail and billboards D) radio and digital media E) newspapers and direct mail Answer: B Diff: 2 Type: MC Page Ref: 488 Skill: Concept Objective: 13-3 63) Advertisers are increasingly shifting larger portions of their budgets to media that cost less and target more effectively. Which of the following purchase options ignores this shift?

A) outdoor advertising B) cable television C) television D) digital satellite television systems E) Internet advertising Answer: C Diff: 2 Type: MC Page Ref: 489 Skill: Concept Objective: 13-3 17 Copyright © 2017 Pearson Canada Inc.

64) The media planner looks both at the total cost of using a medium and at the ________.

A) cost per thousand persons reached B) cost of premium offers C) cost of the magazine it is using D) opportunity cost E) continuity cost Answer: A Diff: 2 Type: MC Page Ref: 490 Skill: Concept Objective: 13-3 65) La-Z-boy makes recliner armchairs. The company places some of its La-Z-boy chairs in a movie theatre. This is an example of what type of media?

A) alternative media B) major media C) media vehicles D) media multitaskers E) micromedia Answer: A Diff: 2 Type: MC Page Ref: 489 Skill: Concept Objective: 13-3 66) MacLean's and Hockey Night in Canada are both examples of ________, specific media within a general media type.

A) alternative media B) major media C) media vehicles D) media multitaskers E) micromedia Answer: C Diff: 2 Type: MC Page Ref: 490 Skill: Concept Objective: 13-3 67) In selecting media vehicles, the planner must balance media costs against several media effectiveness factors. First, the planner should evaluate the media vehicle's ________.

A) audience quality B) audience attention C) editorial quality D) market coverage E) pass-along audience Answer: A Diff: 3 Type: MC Page Ref: 490 Skill: Concept Objective: 13-3 18 Copyright © 2017 Pearson Canada Inc.

68) ________ means scheduling ads evenly within a given period. ________ means scheduling ads unevenly over a given time period.

A) Pulsing; Continuity B) Continuity; Seasonal C) Continuity; Pulsing D) Pulsing; Seasonal E) Sequencing; Routing Answer: C Diff: 2 Type: MC Page Ref: 491 Skill: Concept Objective: 13-3 69) Scheduling ads unevenly, or ________, builds awareness that is intended to be carried over to the next advertising period.

A) continuity B) pulsing C) hard hitting D) sequencing E) segmenting Answer: B Diff: 2 Type: MC Page Ref: 491 Skill: Concept Objective: 13-3 70) One way to measure the ________ effects of advertising is to compare past sales with past advertising expenditures.

A) sales and profit B) promotion and cost C) communication D) loyalty E) interest and return Answer: A Diff: 2 Type: MC Page Ref: 491 Skill: Concept Objective: 13-4 71) Large companies might use ________ to organize and deliver their advertising strategies.

A) lower advertising costs B) greater global advertising penetration C) higher appeal to varying demographics D) consistent worldwide image E) advertising agencies Answer: E Diff: 2 Type: MC Page Ref: 492 Skill: Concept Objective: 13-4 19 Copyright © 2017 Pearson Canada Inc.

72) Advertising programs ________ from country to country.

A) usually are adapted B) remain about the same C) are rarely negotiated D) are impossible to compare E) are usually comparable Answer: A Diff: 1 Type: MC Page Ref: 492 Skill: Concept Objective: 13-4 73) Lobbying, or building and maintaining relations with legislators and government officials to influence legislation and regulation, is a function of ________.

A) message strategy B) press relations C) press agencies D) public relations E) a mass market strategy Answer: D Diff: 2 Type: MC Page Ref: 494 Skill: Concept Objective: 13-5 74) Which of the following functions is least likely to be performed by a public relations department?

A) product publicity B) lobbying C) public affairs D) investor relations E) media vehicle selection Answer: E Diff: 2 Type: MC Page Ref: 494 Skill: Concept Objective: 13-5 75) When nonprofit organizations need financial or volunteer support, they often turn to public relations experts to help them in the area of ________.

A) public affairs B) press relations C) product publicity D) development E) lobbying Answer: D Diff: 2 Type: MC Page Ref: 494 Skill: Concept Objective: 13-5 20 Copyright © 2017 Pearson Canada Inc.

76) News features, speeches, and special events are tools of particular value to ________.

A) advertising agencies B) advertising specialists C) public relations professionals D) media buyers E) media planners Answer: C Diff: 2 Type: MC Page Ref: 495 Skill: Concept Objective: 13-5 77) Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company trucks are all examples of ________ that help a company create an identity the public immediately recognizes.

A) direct marketing B) social marketing C) public service activities D) corporate identity materials E) special events Answer: D Diff: 1 Type: MC Page Ref: 497 Skill: Concept Objective: 13-5 78) 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 Diff: 2 Type: MC Page Ref: 468 Skill: Application Objective: 13-1

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79) Tara Keegan owns Live Well, a small chain of health stores offering a variety of natural health products and related services. In order to implement integrated marketing communications, Tara has hired a marketing communications director, whose job it will be to ensure that each ________ will deliver a consistent and positive message about the company.

A) public relations message B) brand contact C) advertisement D) logo E) media vehicle Answer: B Diff: 2 Type: MC Page Ref: 470 Skill: Application Objective: 13-2 80) An email from Amazon.ca 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) an advertising objective E) a push strategy Answer: A Diff: 2 Type: MC Page Ref: 475 Skill: Application Objective: 13-2 81) Mariah Goldberg, a marketing manager for a manufacturer of children's toys, is looking for ways to reach potential customers who typically avoid salespeople and advertisements. Which of the following would be the most economical promotional tool for Mariah to use?

A) direct marketing B) sales promotions C) public relations D) brand contacts E) personal selling Answer: C Diff: 2 Type: MC Page Ref: 475 Skill: Application Objective: 13-2

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82) Clean and Clear, a large producer of all-natural hair care and beauty products, is most likely to use which of the promotion mix strategies to gain increased shelf space in stores and to gain increased customer sales?

A) push B) pull C) push and pull D) pulse E) continuity Answer: C Diff: 2 Type: MC Page Ref: 476 Skill: Application Objective: 13-2 83) When Proctor & Gamble developed the Mr. Clean Magic Eraser, the company needed to explain how the product cleans grime from walls without removing paint. What type of campaign was most likely used by Proctor & Gamble for the Mr. Clean Magic Eraser?

A) informative advertising B) persuasive advertising C) reminder advertising D) developmental advertising E) comparative advertising Answer: A Diff: 2 Type: MC Page Ref: 478 Skill: Application Objective: 13-3 84) Suave ran ads featuring a woman with beautiful hair questioning "Suave or Matrix? Can You Tell?" This is an example of ________.

A) informative advertising B) reminder advertising C) comparative advertising D) secondary advertising E) buzz marketing Answer: C Diff: 2 Type: MC Page Ref: 478 Skill: Application Objective: 13-3

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85) Chris Stemen, the owner of an independent gift store, is developing an advertising budget.

Chris has totaled his company's revenues and deducted operating expenses and capital outlays.

He intends to use a percentage of the remaining funds for advertising. Which budget setting method is Chris using?

A) affordable method B) integrated method C) percentage-of-sales method D) competitive-parity method E) objective-and-task method Answer: A Diff: 2 Type: MC Page Ref: 479 Skill: Application Objective: 13-3 86) In its advertisements, Timex promotes its affordable and sturdy watches. Fossil emphasizes style and fashion in its advertisements, while Rolex stresses luxury and status. These are all examples of ________ appeals.

A) creative B) meaningful C) believable D) entertainment E) distinctive Answer: E Diff: 2 Type: MC Page Ref: 484-485 Skill: Application Objective: 13-3 87) An ad for a new convection oven shows a busy professional woman serving dinner to her family. The convection oven is seen in the background, and the headline reads, "The latest development in time travel." This is an example of what type of execution style?

A) slice of life B) testimonial evidence C) fantasy D) scientific evidence E) mood or image Answer: A Diff: 2 Type: MC Page Ref: 485 Skill: Application Objective: 13-3

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88) 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 ________ execution style.

A) slice of life B) lifestyle C) fantasy D) scientific evidence E) personality symbol Answer: B Diff: 2 Type: MC Page Ref: 485 Skill: Application Objective: 13-3 89) When Taco Bell uses a Chihuahua, a small dog, to represent its product, which type of execution style is being used?

A) mood or image B) fantasy C) personality symbol D) technical expertise E) musical Answer: C Diff: 2 Type: MC Page Ref: 485 Skill: Application Objective: 13-3 90) When Maxwell House shows one of its buyers carefully selecting coffee beans, which type of execution style is being used?

A) mood or image B) fantasy C) personality symbol D) musical E) technical expertise Answer: E Diff: 2 Type: MC Page Ref: 485 Skill: Application Objective: 13-3

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91) Apple recently ran ads featuring real people who had switched from Microsoft Windowsbased PCs to Macs. When companies use people, actors, or sports celebrities as product endorsers, what kind of execution style is being used?

A) musical B) testimonial evidence C) scientific evidence D) lifestyle E) fantasy Answer: B Diff: 2 Type: MC Page Ref: 486 Skill: Application Objective: 13-3 92) Mike's Bike Shop has a new print advertisement appearing in the local newspaper. Readers will notice which of the following first in the advertisement?

A) headline B) illustration C) copy D) subheadlines E) color Answer: B Diff: 2 Type: MC Page Ref: 486 Skill: Application Objective: 13-3 93) You receive a report that says the 68% of your target market had been exposed to your ad campaign during a given period of time. This is an example of ________.

A) reach B) frequency C) impact D) engagement E) qualitative value Answer: A Diff: 2 Type: MC Page Ref: 487 Skill: Application Objective: 13-3

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94) You are looking to advertise your new product, and you want good mass-marketing coverage and low cost per exposure. You should choose ________ as your advertising media.

A) newspaper B) radio C) outdoor D) television E) direct mail Answer: D Diff: 3 Type: MC Page Ref: 488 Skill: Application Objective: 13-3 95) Franklin & Marshall College wishes to contact high school seniors at independent schools in British Columbia. Which of the following media would be most effective and efficient?

A) a 30-second commercial on local cable channels throughout the state B) local newspapers ads throughout the state C) radio ads throughout the state D) online mail sent to the schools E) billboards throughout the state Answer: D Diff: 2 Type: MC Page Ref: 489 Skill: Application Objective: 13-3 96) Kathy Champe, a public relations specialist for a regional chain of pharmacies, regularly contacts members of the local and state-wide media with information about community events and charity fundraisers sponsored by her company. This is an example of the ________ function of public relations.

A) press relations B) product publicity C) public affairs D) lobbying E) development Answer: A Diff: 2 Type: MC Page Ref: 494 Skill: Application Objective: 13-5

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97) 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 Diff: 2 Type: MC Page Ref: 497 Skill: Application Objective: 13-5 98) A company's marketing communications mix is also called its promotion mix.

Answer: TRUE Diff: 1 Type: TF Page Ref: 468 Skill: Concept Objective: 13-1 99) Large companies still routinely invest large chunks of their advertising budgets in massmedia outlets such as television and magazines.

Answer: TRUE Diff: 2 Type: TF Page Ref: 469 Skill: Concept Objective: 13-2 100) Mass markets have fragmented; thus, marketers are shifting away from mass marketing.

Answer: TRUE Diff: 1 Type: TF Page Ref: 469 Skill: Concept Objective: 13-2 101) Developments in communications technology are speeding the movement toward segmented marketing.

Answer: TRUE Diff: 2 Type: TF Page Ref: 469 Skill: Concept Objective: 13-2 102) New communications technologies such as cell phones and the Internet give companies new media for interacting with targeted consumers, but these new technologies also give consumers more control of the advertising messages they receive.

Answer: TRUE Diff: 2 Type: TF Page Ref: 469 Skill: Concept Objective: 13-2 28 Copyright © 2017 Pearson Canada Inc.

103) Mass marketers can expect consumers to distinguish between commercial message sources to maintain a clear image of a company and its brands.

Answer: FALSE Diff: 2 Type: TF Page Ref: 472 Skill: Concept Objective: 13-2 104) Integrated marketing communications encourages brand messages to be developed by different departments within an organization.

Answer: FALSE Diff: 1 Type: TF Page Ref: 472 Skill: Concept Objective: 13-2 105) Because of advertising's public nature, consumers tend to think of large-scale advertised products as more legitimate.

Answer: TRUE Diff: 2 Type: TF Page Ref: 474 Skill: Concept Objective: 13-2 106) Advertising is the most directly persuasive communications vehicle.

Answer: FALSE Diff: 2 Type: TF Page Ref: 475 Skill: Concept Objective: 13-2 107) If the pull strategy is effective, consumers will then demand the product from channel members, who will in turn demand it from producers.

Answer: TRUE Diff: 2 Type: TF Page Ref: 476 Skill: Concept Objective: 13-2 108) Advertising is never used by not-for-profit organizations, professionals, and social agencies to promote their causes to target publics.

Answer: FALSE Diff: 2 Type: TF Page Ref: 477 Skill: Concept Objective: 13-3 109) A specific communication task to be accomplished with a specific target audience during a specific period of time is called an advertising objective.

Answer: TRUE Diff: 1 Type: TF Page Ref: 478 Skill: Concept Objective: 13-3 29 Copyright © 2017 Pearson Canada Inc.

110) Informative ads are used primarily in the growth stage of the product life cycle.

Answer: FALSE Diff: 2 Type: TF Page Ref: 478 Skill: Application Objective: 13-3 111) Weekend advertisements for Rona encourage consumers to visit the store immediately.

Rona is practicing reminder advertising.

Answer: FALSE Diff: 3 Type: TF Page Ref: 479 Skill: Application Objective: 13-3 112) The percentage-of-sales method of setting an advertising budget wrongly treats sales as a cause of promotion rather as a result.

Answer: TRUE Diff: 2 Type: TF Page Ref: 480 Skill: Concept Objective: 13-3 113) The objective-and-task method of setting a promotion budget is the most logical method because it forces management to articulate its assumptions about the relationship between dollars spent and promotion results.

Answer: TRUE Diff: 2 Type: TF Page Ref: 480 Skill: Concept Objective: 13-3 114) When developing an advertising strategy, a company's creative department should first create good advertisements, and then the media department should select the best media for those advertisements.

Answer: FALSE Diff: 2 Type: TF Page Ref: 481 Skill: Concept Objective: 13-3 115) Participants of the reality show Survivor win a team contest and receive a gift basket of Crest toothpaste, Ivory soap, and Charmin toilet paper. Proctor and Gamble, the maker of these products, has just participated in a brand message.

Answer: FALSE Diff: 2 Type: TF Page Ref: 483 Skill: Application Objective: 13-3

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116) Slice of life, lifestyle, and personality symbol are all execution styles used in public relations.

Answer: FALSE Diff: 2 Type: TF Page Ref: 485 Skill: Concept Objective: 13-3 117) Technical expertise, scientific evidence, and testimonial evidence are all examples of execution styles that creative teams use in advertising messages.

Answer: TRUE Diff: 2 Type: TF Page Ref: 485 - 486 Skill: Concept Objective: 13-3 118) The copy is the main block of text in an ad.

Answer: TRUE Diff: 2 Type: TF Page Ref: 486 Skill: Concept Objective: 13-3 119) Reach is a measure of how many times the average person in the target market is exposed to the message.

Answer: FALSE Diff: 2 Type: TF Page Ref: 487 Skill: Concept Objective: 13-3 120) An advertiser needs to know the reach, frequency, and impact needed to achieve an advertising objective.

Answer: TRUE Diff: 2 Type: TF Page Ref: 487-488 Skill: Concept Objective: 13-3 121) Pulsing means scheduling ads evenly over a given period of time.

Answer: FALSE Diff: 2 Type: TF Page Ref: 491 Skill: Concept Objective: 13-3 122) The communication effects of advertisements and ad campaigns are more difficult to measure than the sales and profit effects.

Answer: FALSE Diff: 2 Type: TF Page Ref: 491 Skill: Concept Objective: 13-4 31 Copyright © 2017 Pearson Canada Inc.

123) In large companies, advertising is typically handled by an individual in the sales department.

Answer: FALSE Diff: 2 Type: TF Page Ref: 492 Skill: Concept Objective: 13-4 124) Today's advertising agencies are staffed with specialists who can often perform advertising tasks better than a producer or retailer's own employees can.

Answer: TRUE Diff: 2 Type: TF Page Ref: 492 Skill: Concept Objective: 13-4 125) International advertisers must determine the degree to which their global advertising should be adapted to fit the unique characteristics of various markets.

Answer: TRUE Diff: 1 Type: TF Page Ref: 492 Skill: Concept Objective: 13-4 126) Advertising standardization for global brands allows for lower costs in advertising and a more consistent worldwide brand image.

Answer: TRUE Diff: 1 Type: TF Page Ref: 493 Skill: Concept Objective: 13-4 127) Recently, the increased use of online social networks and video sharing has reduced the need for advertising standardization for global brands.

Answer: FALSE Diff: 3 Type: TF Page Ref: 493 Skill: Concept Objective: 13-4 128) A company typically spends comparable budgets on public relations and advertising.

Answer: FALSE Diff: 2 Type: TF Page Ref: 494-495 Skill: Concept Objective: 13-5 129) A company's website can be an important public relations vehicle.

Answer: TRUE Diff: 2 Type: TF Page Ref: 497 Skill: Concept Objective: 13-5 32 Copyright © 2017 Pearson Canada Inc.

130) A company's marketing communications mix—also called its promotion mix—blends five different tools. Name and define these tools.

Answer: Advertising is any paid for or nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Sales promotion includes short-term incentives to encourage the purchase or sale of a product or service. Public relations includes building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, or events. Personal selling includes a personal presentation by the firm's sales force for the purpose of making sales and building customer relationships. Direct marketing includes direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

Diff: 2 Type: ES Page Ref: 468 Skill: Application Objective: 13-1 131) Why are profound changes in marketing communications creating both exciting and scary times for marketing communicators?

Answer: In the past, marketers relied heavily on mass marketing. Today, however, mass markets have fragmented, consumers are better informed and more empowered, and sweeping changes in technology have changed how companies and consumers communicate with each other. These three factors have led to a new marketing communications model that is specialized to reach smaller customer segments with messages that are more personalized. Mass marketing can no longer be solely relied upon to deliver a marketer's message. Although these changes may frighten marketing communicators, these changes afford tremendous opportunities to reach new customers and strengthen relationships with existing customers.

Diff: 3 Type: ES Page Ref: 469-470 Skill: Application Objective: 13-2 132) Marketers can choose from two basic promotion mix strategies—push promotion or pull promotion. Compare these two strategies.

Answer: Using the pull strategy, the producer directs its marketing activities toward final consumers to induce them to buy the product; if the pull strategy is effective, consumers will then demand the product from channel members who will in turn demand it from producers.

Using a push strategy, the producer focuses instead on the channel members, persuading them to carry the product and promote it to final consumers.

Diff: 2 Type: ES Page Ref: 476 Skill: Application Objective: 13-2

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133) Marketing management must make four important decisions when developing an advertising program. Name and describe these four decisions.

Answer: a. Set advertising objectives, which can be classified by primary purpose: to inform, persuade, or remind. b. Set the advertising budget: the choices often depend on product's stage in the product life cycle. Methods to consider include affordable, percentage of sales, competitive-parity, and objective-task. c. Develop advertising strategy: this consists of creating an advertising message and selecting advertising media. d. Evaluate advertising campaigns: monitor how well the advertising worked.

Diff: 2 Type: ES Page Ref: 477 Skill: Application Objective: 13-3 134) Identify and describe the three characteristics advertising appeals should have.

Answer: Advertising appeals should be meaningful, believable, and distinctive. Meaningful appeals point out benefits that make the product more desirable or interesting to consumers.

Believable appeals lead consumers to believe that the product or service will deliver the promised benefits. Finally, distinctive appeals should tell how the product is better than the competing brands.

Diff: 3 Type: ES Page Ref: 484 Skill: Application Objective: 13-3 135) The creative team must find the best way to execute an advertising message. Name and describe three of these styles of execution.

Answer: a. Slice of life: shows one or more typical people using the product in a normal setting. b. Lifestyle: shows how a product fits in with a particular lifestyle. c. Fantasy: creates a fantasy around the product or its use. d. Mood or image: builds a mood or image around the product or service. e. Musical: shows people or cartoon characters singing about the product. f. Personality symbol: creates a character to represent the product. g. Technical expertise: depicts the company's expertise in making the product. h. Scientific evidence: presents survey or scientific evidence that the brand is better than other brands. i. Testimonial evidence/endorsement: features a highly believable or likable source endorsing the product.

Diff: 3 Type: ES Page Ref: 485-486 Skill: Application Objective: 13-3

34 Copyright © 2017 Pearson Canada Inc.

136) How are companies taking advantage of interactive technologies to tap consumers for message ideas and actual ads? What are the benefits and disadvantages of consumer-generated advertising?

Answer: Companies can now search existing video sites such as YouTube, set up their own Web sites, create accounts on social networks such as MySpace, and sponsor ad-creation contests.

Several companies, such as PepsiCo's Doritos, have used consumer-generated ads in national promotions. Consumer-generated advertising offers companies a way to gather new perspectives on their products and develop insights into how their products are used and seen by actual consumers. Also, consumer-generated advertising is very inexpensive. On the other hand, companies do not control consumer-generated material, which can lead to conflicting, or even negative, messages about a brand.

Diff: 2 Type: ES Page Ref: 486-487 Skill: Application Objective: 13-3 137) Name and describe the four major steps in media selection.

Answer: a. Decide on reach, frequency, and impact. Reach is a measure of the percentage of people that are exposed to the advertisement; frequency is the measure of how many times the average person is exposed to the message; impact is how people feel about the advertisement in a given medium. b. Choose among major media types: television, newspapers, magazines, direct mail, radio, outdoor, and Internet. c. Select specific media vehicles, such as choosing TV shows that the target would watch so he or she will see the commercial. d. Decide on media timing. Determine how to schedule the advertising over the course of a year.

Diff: 3 Type: ES Page Ref: 487-491 Skill: Application Objective: 13-3

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138) Identify four of the major media types and identify some of the strengths and weaknesses of each type.

Answer: a. Television: Advantages are good mass-marketing coverage, low cost per exposure, and appeals to the senses; weaknesses are high absolute costs and high clutter. b. Newspapers: Strengths are timeliness, good local market coverage, and high believability; weaknesses are short life and poor reproduction quality. c. Direct mail: Strengths are flexibility and capacity for personalization; weaknesses are relatively high cost per exposure and "junk mail" image. d. Magazines: Strengths are high audience selectivity, credibility, and good pass-along readership; weaknesses are high costs and long lead times. e. Radio: Strengths are good local acceptance and low cost; weaknesses are low attention and fleeting exposure to messages. f. Outdoor: Strengths are flexibility, low cost, and low message competition; weaknesses are low audience selectivity and creative limitations. g. Online, mobile, and social media: Strengths include high selectivity, low cost, and interactive capabilities; weaknesses are audience control of exposure, difficult to administer and control, and potentially narrow impact.

Diff: 3 Type: ES Page Ref: 488-490 Skill: Application Objective: 13-3 139) Describe public relations and three of its main functions.

Answer: Public relations departments build good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Functions include: a. Product publicity: publicizing specific products b. Public affairs: building and maintaining national or local community relations c. Lobbying: building and maintaining relations with legislators and government officials to influence legislation and regulation d. Press relations: creating and placing newsworthy information in the new media to attract attention to a person, product, or service associated with the company e. Investor relations: maintaining relationships with shareholders f. Development: PR with donors or members of nonprofit organizations to gain financial or volunteer support Diff: 3 Type: ES Page Ref: 494 Skill: Application Objective: 13-5 140) How are advertising and direct marketing different?

Answer: Advertising is the nonpersonal promotion of ideas, goods, or services, while direct marketing is the promotion of ideas, goods, or services to carefully targeted individual and is more personal and engaging.

Diff: 2 Type: ES Page Ref: 433-434 Skill: Application Objective: 3-1 36 Copyright © 2017 Pearson Canada Inc.

141) What are the major factors changing the face of today's marketing communications?

Answer: First, customers are changing. Consumers are better informed and more communications empowered. They can use digital media to find information rather than depend on the seller. They can share experiences with other customers. Second, marketing strategies are changing. Mass marketers are changing to focused marketing programs designed to build closer relationships with customers in narrowly defined markets. Thirdly, digital technologies has had a major impact on marketing communications, engaging the consumer to create messages.

Diff: 2 Type: ES Page Ref: 468 Skill: Application Objective: 13-2 142) 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.

Diff: 2 Type: ES Page Ref: 472-474 Skill: Application Objective: 13-2 143) Why is personal selling the most effective tool for building up a buyer's preferences and actions?

Answer: Personal selling involves personal interaction, so the seller can observe the buyer's needs and make quick adjustments; personal selling focuses on relationships, so a buyer feels a greater need to listen and respond.

Diff: 3 Type: ES Page Ref: 475 Skill: Application Objective: 13-2 144) Explain a push strategy.

Answer: A push strategy involves pushing the product through distribution channels to final consumers; the producer directs marketing activities toward channel members to induce them to carry the product and to promote it to final consumers.

Diff: 2 Type: ES Page Ref: 476 Skill: Application Objective: 13-2 145) Explain a pull strategy.

Answer: With a pull strategy, the producer directs its marketing activities toward final consumers to induce them to buy the product; if this strategy is effective, consumers will then demand the product from channel members, who will in turn demand it from producers.

Diff: 2 Type: ES Page Ref: 476 Skill: Application Objective: 13-2

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146) What are the three primary purposes of advertising objectives?

Answer: Advertising objectives can be classified by primary purpose—whether the aim is to inform, persuade, or remind.

Diff: 2 Type: ES Page Ref: 478 Skill: Application Objective: 13-3 147) When does a marketer use informative ads?

Answer: Informative ads are used heavily when introducing new product categories.

Diff: 2 Type: ES Page Ref: 478 Skill: Application Objective: 13-3 148) When does a marketer use a comparative ad?

Answer: Comparative ads are a type of persuasive ads in which a company directly or indirectly compares its brand with one or more other brands. Comparative ads are used to compete with another brand.

Diff: 2 Type: ES Page Ref: 478 Skill: Application Objective: 13-3 149) When does a marketer use reminder ads?

Answer: Reminder ads are important for mature products; they keep consumers thinking about the product.

Diff: 2 Type: ES Page Ref: 478 Skill: Application Objective: 13-3 150) How has clutter in television and other ad media created an increasingly hostile advertising environment?

Answer: More than 70% of network television viewers believe there are too many television commercials. They are faced with almost 20 minutes of commercials for each hour of prime-time television; viewers are increasingly using technologies to skip past commercials. Sixty-nine percent of advertisers agree!

Diff: 2 Type: ES Page Ref: 482 Skill: Application Objective: 13-3 151) How might a marketer create a message strategy when targeting a product toward children?

Answer: Answers will vary. When directing marketing efforts toward children, the marketer will want to create a message that is most appealing to children. The market will likely relate to specific situations in which children usually find themselves or the marketer may use a personality symbol with which the children can relate.

Diff: 3 Type: ES Page Ref: 484-487 Skill: Application Objective: 13-3 38 Copyright © 2017 Pearson Canada Inc.

152) Give a hypothetical example of a slice of life message execution style.

Answer: Slice of life examples should show one or more typical people using a product in a normal setting.

Diff: 2 Type: ES Page Ref: 485 Skill: Application Objective: 13-3 153) How does a personality symbol affect a brand?

Answer: A personality symbol is a character that represents the product and helps a consumer connect with the product.

Diff: 2 Type: ES Page Ref: 485 Skill: Application Objective: 13-3 154) Give a hypothetical example of testimonial evidence.

Answer: Testimonial evidence features a highly believable or likable source endorsing the product.

Diff: 2 Type: ES Page Ref: 486 Skill: Application Objective: 13-3 155) What does reach tell a marketer?

Answer: Reach is a measurement of the percentage of people in the target market who are exposed to the ad campaign during a given period of time.

Diff: 2 Type: ES Page Ref: 487 Skill: Application Objective: 13-3 156) What does frequency tell a marketer?

Answer: Frequency is a measure of how many times the average person in the target market is exposed to the advertising message.

Diff: 2 Type: ES Page Ref: 487 Skill: Application Objective: 13-3 157) Explain how different types of messages may require different media.

Answer: For example, a message announcing a major sale tomorrow will require radio or newspapers; a message with a lot of technical data might require magazines, direct mailings, or an online ad.

Diff: 3 Type: ES Page Ref: 488-489 Skill: Application Objective: 13-3

39 Copyright © 2017 Pearson Canada Inc.

158) Explain how seasonality affects media timing.

Answer: Seasonality will affect how often an advertisement is aired or printed. For example, during the Halloween season, ads from marketers of various products are seen more frequently.

Diff: 2 Type: ES Page Ref: 490 Skill: Application Objective: 13-3 159) Give an example of how a company might run an experiment to measure the sales and profit effects of its advertising.

Answer: Answers will vary. Post might vary the amount it spends on advertising a new food product in different market areas and compare the resulting sales and profit levels. But, because other variables affect sales and profit levels, the sales and profit effects of advertising are difficult to measure.

Diff: 2 Type: ES Page Ref: 491 Skill: Application Objective: 13-4 160) Explain why an ad may have to be altered from one country to the next.

Answer: Differences in culture, demographics, and economic conditions will impact how effective or acceptable an advertisement will be in other countries. Also, countries have varying laws regulating advertising.

Diff: 3 Type: ES Page Ref: 459-460 Skill: Application Objective: 13-4 161) Why can public relations efforts have a strong impact on public awareness at a substantially lower cost than advertising can?

Answer: With public relations, the company is paying for staff to develop and circulate information and plan events instead of paying for space or time in the media.

Diff: 2 Type: ES Page Ref: 494 Skill: Application Objective: 13-5 162) How can a company's website be used as a public relations tool?

Answer: Consumers often visit Web sites for information and entertainment, so a creative company Web site can help serve PR goals. A strong Web site can also help a company handle a crisis situation, providing crucial and timely information to millions of consumers.

Diff: 2 Type: ES Page Ref: 495 Skill: Application Objective: 13-5

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Second Avenue, a small retailer of quality second-hand children's clothing, thrives on the sale of a vast inventory of children's clothing placed there on consignment. Its clientele are the result of word-of-mouth communication. The small retailer of quality second-hand children's clothing has never advertised.

"Small children grow so quickly," Second Avenue's owner commented. "Most of the clothes we carry have hardly been worn! We're extremely picky about the condition of the clothing we stock, but we sell most items at a 60 percent discount."

Because of this, many of Second Avenue's consigners are also customers. Second Avenue provides a way for people to sell their children's clothing, earn a few dollars, and buy the next larger size. According to the owner, "This keeps customers coming back."

163) Though Second Avenue has thrived merely through word of mouth, how could the business benefit from advertising?

Answer: With an ad campaign, Second Avenue could become better known in a larger geographic area; in addition, the products offered and customer benefits could be better sold as a benefit in consumers' minds.

Diff: 2 Type: ES Page Ref: 474 Skill: Application Objective: 13-2 164) What appeals might Second Avenue use? Explain.

Answer: The message appeals should be meaningful, believable and distinctive. The message should point out the distinctive cost-saving benefits of shopping at Second Avenue and compare the store's stock to the quality of new clothing.

Diff: 2 Type: ES Page Ref: 484 Skill: Application Objective: 13-3 165) How could Second Avenue use the slice of life message execution style in an ad?

Answer: The marketer could show a mother trying outgrown clothes on a toddler, then show the mother packing clothes neatly into a box, then delivering them to Second Avenue. It could show the same mother purchasing larger clothes at Second Avenue and the child happily wearing them.

Diff: 2 Type: ES Page Ref: 485 Skill: Application Objective: 13-3 166) Would a personality symbol affect Second Avenue's image? How? Answer: Though the benefits of Second Avenue are geared toward parents' pocketbooks, a personality symbol may attract and positively influence children, who represent a strong force in the target audience.

Diff: 2 Type: ES Page Ref: 485 Skill: Application Objective: 13-3 41 Copyright © 2017 Pearson Canada Inc.

167) What media options might best benefit Second Avenue's promotional efforts? Explain.

Answer: Periodic advertising in a local/regional newspaper would provide large coverage at a relatively low cost. TV would, perhaps, provide too much geographic coverage or, at the least, be too expensive. A few radio spots may be profitable, especially during times of seasonal inventory changes at Second Avenue.

Diff: 3 Type: ES Page Ref: 488-490 Skill: Application Objective: 13-3 168) Hypothetically, if the second-hand clothing concept were to be implemented in England or France, for example, in what way(s) might clientele perceptions be different?

Answer: Consumers abroad may or may not accept the "idea" of purchasing second-hand clothing; furthermore, some cultures may not provide consignment options in their marketplaces.

Diff: 3 Type: ES Page Ref: 492-493 Skill: Application Objective: 13-4 169) What roles does public relations play at Second Avenue?

Answer: Relationships with customers are critical, especially considering that many of these people comprise Second Avenue's customer base and supplier base. Press relations are also important for a small business.

Diff: 2 Type: ES Page Ref: 494 Skill: Application Objective: 13-5

42 Copyright © 2017 Pearson Canada Inc.

Marketing: An Introduction, 6e (Armstrong et al.)

Chapter 14 Personal Selling and Sales Promotion 1) Which of the following promotion tools involves personal presentation by the firm's sales force for the purpose of making sales and building customer relationships?

A) personal selling B) advertising C) E-commerce D) publicity E) public relations Answer: A Diff: 1 Type: MC Page Ref: 509 Skill: Concept Objective: 14-1 2) Of the following, which is the least creative sales position?

A) order taker B) order getter C) account executive D) account development rep E) outside salesperson Answer: A Diff: 3 Type: MC Page Ref: 510 Skill: Concept Objective: 14-1 3) A(n) ________ serves as a critical link between a company and its customers by performing one or more of the following: prospecting, communicating, selling, servicing, information gathering, and relationship building.

A) manager B) executive C) support person D) salesperson E) consultant Answer: D Diff: 1 Type: MC Page Ref: 510 Skill: Concept Objective: 14-1

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4) ________ involves two-way, personal communication between salespeople and individual customers—whether face-to-face, by telephone, through video or web conferences, or by other means.

A) Advertising B) Public relations C) Personal selling D) Mass marketing E) Direct marketing Answer: C Diff: 1 Type: MC Page Ref: 510-511 Skill: Concept Objective: 14-1 5) Which one of the following do members of a sales force typically represent?

A) They represent the company to competitors.

B) They represent the company to investors.

C) They represent the customer to the company.

D) They represent the company to industry.

E) They represent the goods they sell.

Answer: C Diff: 3 Type: MC Page Ref: 511 Skill: Concept Objective: 14-1 6) A company can unite its marketing and sales functions through many activities. Which is the least likely to be effective?

A) assigning a telemarketer the task of visiting a customer B) arranging joint meetings to clarify all aspects of communication C) appointing a chief customer officer to oversee both departments D) having a salesperson preview ads and sales-promotion campaigns E) sending brand managers on sales calls with a salesperson Answer: A Diff: 3 Type: MC Page Ref: 512 Skill: Concept Objective: 14-1 7) A company could benefit from appointing a high-level marketing executive because such a person could perform what duty/duties?

A) oversee sales B) oversee marketing C) oversee both marketing and sales D) represent customers to the company E) represent the company to customers Answer: C Diff: 2 Type: MC Page Ref: 512 Skill: Concept Objective: 14-1 2 Copyright © 2017 Pearson Canada Inc.

8) When a firm sets out to analyze, plan, implement, and control sales force activities, it is undertaking ________.

A) marketing design B) sales force management C) team selling efforts D) co-op selling and advertising E) promotional objectives Answer: B Diff: 1 Type: MC Page Ref: 512 Skill: Concept Objective: 14-2 9) Of the three typical types of sales force structures, which one assigns an exclusive geographical area to each salesperson and requires each salesperson to represent the company's full line of products to customers within that area?

A) territorial B) product C) customer D) complex E) team Answer: A Diff: 1 Type: MC Page Ref: 512 Skill: Concept Objective: 14-2 10) Territorial sales force structures have many benefits. Which is the least likely benefit?

A) Travel expenses can be minimized.

B) Each salesperson's job is clearly defined.

C) Salespeople have the opportunity and incentive to build strong relationships with customers.

D) Salespeople develop in-depth knowledge of a product line.

E) Accountability is clearly defined for each salesperson.

Answer: D Diff: 2 Type: MC Page Ref: 512 Skill: Concept Objective: 14-2 11) Which of the following is a definite disadvantage of a product sales force structure?

A) selling costs reduce with multiple sales visits from separate divisions B) overlapping use of resources with big customers C) salespeople spending time prospecting new customers D) increased customer delivery time E) sales force specializes along product lines Answer: B Diff: 2 Type: MC Page Ref: 513 Skill: Concept Objective: 14-2 3 Copyright © 2017 Pearson Canada Inc.

12) Which sales force structure would a company that sells a wide variety of products to many types of customers over a broad geographic area consider using?

A) territorial B) product C) customer D) complex E) team Answer: D Diff: 1 Type: MC Page Ref: 513 Skill: Concept Objective: 14-2 13) After a company has determined its sales force structure, it is ready to determine what ________ it needs.

A) team structure B) sales force size C) marketing-sales liaison D) sales force supervision E) compensation package Answer: B Diff: 2 Type: MC Page Ref: 513 Skill: Concept Objective: 14-2 14) Companies that use a customer sales force structure organize their salespeople by ________.

A) product B) territory C) industry D) demand E) specialty knowledge Answer: C Diff: 1 Type: MC Page Ref: 513 Skill: Concept Objective: 14-2 15) Management uses the workload approach to ________.

A) set the size of the sales force B) determine product availability C) identify desirable characteristics of the sales force D) establish sales quotas E) analyze profit margins Answer: A Diff: 2 Type: MC Page Ref: 513 Skill: Concept Objective: 14-2 4 Copyright © 2017 Pearson Canada Inc.

16) Which of the following is the term for the individuals in a company who travel to call on customers in the field?

A) outside sales force B) inside sales force C) complex sales force D) customer sales force E) product sales force Answer: A Diff: 1 Type: MC Page Ref: 514 Skill: Concept Objective: 14-2 17) Members of a company's ________ conduct business from their offices through the telephone, the Internet, or visits from customers.

A) outside sales force B) inside sales force C) complex sales force D) customer sales force E) product sales force Answer: B Diff: 1 Type: MC Page Ref: 514 Skill: Concept Objective: 14-2 18) To reduce time demands on their outside sales forces, many companies have increased the size of their inside sales forces, which include technical support people, sales assistants, and ________.

A) retail supervisors B) sales managers C) telemarketers D) human resource professionals E) public relations profession Answer: C Diff: 2 Type: MC Page Ref: 514 Skill: Concept Objective: 14-2 19) Which activity is typical for a sales assistant?

A) call ahead and confirm appointments B) determine price points C) initiate administrative tasks D) make deliveries E) forward customers' questions Answer: A Diff: 2 Type: MC Page Ref: 514 Skill: Concept Objective: 14-2 5 Copyright © 2017 Pearson Canada Inc.

20) Which of the following is the growing trend of using a group of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts?

A) department selling B) inside selling C) team selling D) continuous selling E) simultaneous selling Answer: C Diff: 1 Type: MC Page Ref: 515 Skill: Concept Objective: 14-2 21) Which of the following best explains why many companies are adopting the team selling approach to service large, complex accounts?

A) Products have become too complex, and customers too big for one salesperson to support.

B) Customers prefer dealing with many salespeople rather than one salesperson.

C) Salespeople prefer working in groups because of the opportunity for flex hours and job sharing.

D) A group of salespeople assigned to one account is cost effective for corporations.

E) Fewer skilled salespeople are working in the high-tech industry.

Answer: A Diff: 2 Type: MC Page Ref: 515 Skill: Concept Objective: 14-2 22) Which of the following is a pitfall or disadvantage of team selling?

A) Selling teams can simplify the process for consumers.

B) Individual salespeople like to work with and trust others.

C) Only a few major buying organizations use a team structure to make purchasing decisions.

D) Equitable compensation means each receives an equal share.

E) Salespeople have been trained to excel in individual performance.

Answer: E Diff: 2 Type: MC Page Ref: 515 Skill: Concept Objective: 14-2

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23) Which of the following problems resulting from poor selection of salespeople is least likely to become a real crisis?

A) lower sales B) costly turnover C) less productivity D) less office support E) disrupted customer relationships Answer: D Diff: 1 Type: MC Page Ref: 516 Skill: Concept Objective: 14-3 24) According to research conducted by Gallup Management Consulting Group, which of the following is one of the four key talents a successful salesperson should possess?

A) easy-going nature B) disciplined work style C) creativity D) technological know-how E) understanding of many cultures Answer: B Diff: 3 Type: MC Page Ref: 516 Skill: Concept Objective: 14-2 25) Sales applicants are most likely to be tested for ________.

A) accounting skills, sales aptitude B) organizational skills, accounting skills C) accounting skills, perseverance D) personality traits, analytical skills E) personality traits, accounting skills Answer: D Diff: 2 Type: MC Page Ref: 517 Skill: Concept Objective: 14-2 26) The purpose of a training program for salespeople is to teach them ________.

A) customers' buying habits and motives B) customers' buying motives and economic cycle C) the economic cycle and company's main competitors D) the company's retirement benefits and organizational structure E) the company's organizational structure and benefits plan Answer: A Diff: 2 Type: MC Page Ref: 517 Skill: Concept Objective: 14-2

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27) Why are many companies using e-learning to conduct sales training programs?

A) Customers appreciate the flexibility of e-learning.

B) The company's objectives are more easily conveyed through e-learning.

C) E-learning allows for more customer feedback.

D) E-learning is more efficient and sometimes even fun.

E) E-learning is the best way to simulate sales calls.

Answer: D Diff: 2 Type: MC Page Ref: 517 Skill: Concept Objective: 14-2 28) A salesperson's compensation plan is typically made up of several elements—a fixed amount, ________, expenses, and fringe benefits.

A) a base salary B) a pension plan C) a variable amount D) nonmonetary rewards E) recognition Answer: C Diff: 2 Type: MC Page Ref: 518 Skill: Concept Objective: 14-2 29) Which of the following describes two of the four basic types of compensation plans?

A) commission plus bonus, straight commission B) straight salary, commission plus bonus C) salary and commission, straight salary D) commission plus bonus, sliding scale E) salary plus bonus, sliding scale Answer: C Diff: 2 Type: MC Page Ref: 518 Skill: Concept Objective: 14-2 30) Helping the salesforce "work smart" is the goal of ________.

A) sales supervision B) sales motivation C) sales compensation D) the organizational climate E) return on sales investment Answer: A Diff: 2 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2

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31) The aim of sales motivation is to encourage salespeople to ________.

A) "work smart" B) "work hard" C) "work cooperatively" D) "work creatively" E) "work quickly" Answer: B Diff: 2 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2 32) Which sales management tool shows a salesperson which customers and prospects to see, as well as which activities to carry out?

A) time-and-duty analysis B) sales force automation system C) annual call plan D) sales quota plan E) positive incentives plan Answer: C Diff: 1 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2 33) Companies are always looking for ways to save time. Which of the following are ways to save time to accomplish this goal?

A) Travel to meet more customers face-to-face.

B) Increase record keeping.

C) Develop better call and routing plans.

D) Reduce the number of customers each sales rep must visit.

E) Supply more customer information.

Answer: C Diff: 2 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2 34) Which of the following is an advantage created by a sales force automation system?

A) lower costs for training sales personnel B) increased motivation to acquire new customers C) decreased need for an inside sales force D) stronger organizational climate developed by the sales team E) more efficient scheduling of sales calls and sales presentations Answer: E Diff: 3 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2

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35) Which of the following is a part of sales force automation systems frequently used by salespeople?

A) customer-contact and relationship management software B) time-and-duty analysis software C) telephones D) desktop computers E) time-motion software Answer: A Diff: 2 Type: MC Page Ref: 519 Skill: Concept Objective: 14-2 36) The latest development in sales force automation is ________.

A) the cell phone B) the laptop computer C) the video game D) the merging of sales processes with social networking E) Canada Post Answer: D Diff: 1 Type: MC Page Ref: 520-524 Skill: Concept Objective: 14-2 37) Internet-based technologies can produce organizational benefits for sales forces. Which of the following is not one of the advantages of online technology?

A) Lists of prospective customers can be generated.

B) Sales teams can have dialogues directly with prospective customers.

C) Sales teams can have live chats with customers.

D) Sales teams can present any kind of information and teach most effectively through the Internet.

E) Sales teams can monitor Internet interactions between customers and discover what they like to buy.

Answer: D Diff: 2 Type: MC Page Ref: 524 Skill: Concept Objective: 14-2

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38) Three common tools sales managers use to boost sales force morale include the organizational climate, sales quotas, and positive ________.

A) positive incentives B) thinking C) meetings D) vocabularies and mannerisms E) teamwork Answer: A Diff: 1 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 39) According to your text, which of the following statements is true about motivating salespeople?

A) A company that treats its salespeople as valuable contributors with unlimited income opportunities is rare.

B) Salespeople often need special encouragement to do their best.

C) Most salespeople need little or no outside encouragement. They know the job and they do it.

D) Sales structure is the most important aspect to motivating individual salespeople.

E) Workload of salespeople is entirely self-managed.

Answer: B Diff: 2 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 40) Management sets standards that state the amount each salesperson should sell and how sales should be divided among the company's products with ________.

A) sales prospecting B) company quotas C) sales quotas D) sales incentives E) sales contests Answer: C Diff: 1 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 41) A salesperson's ________ is often related to how well he or she meets a set quota.

A) time-and-duty analysis B) compensation C) call report D) organizational climate E) expense report Answer: B Diff: 2 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 11 Copyright © 2017 Pearson Canada Inc.

42) Sales ________ encourage a sales force to make a selling effort that is above and beyond the normal expectation.

A) contests B) quotas C) teams D) reports E) plans Answer: A Diff: 1 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 43) A(n) ________ is a way that salespeople write-up their completed sales activity.

A) expense report B) call report C) travel report D) sales quota E) time-and-duty analysis Answer: B Diff: 2 Type: MC Page Ref: 520 Skill: Concept Objective: 14-2 44) The selling process consists of several steps that the salesperson must master, focusing on the goals of ________ and ________ from them.

A) closing sales; getting orders B) getting new customers; obtaining service ideas C) getting new customers; obtaining orders D) overcoming objections; developing relationships E) managing old customers; following up Answer: C Diff: 2 Type: MC Page Ref: 524 Skill: Concept Objective: 14-3 45) Prospecting is the step in the 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 qualified potential customers D) tells the product's "value story" to the customer E) clarifies and overcomes customer objections to buying Answer: C Diff: 1 Type: MC Page Ref: 524 Skill: Concept Objective: 14-3 12 Copyright © 2017 Pearson Canada Inc.

46) The step that follows approach in the selling process is ________.

A) presentation and demonstration B) closing C) handling objections D) prospecting E) qualifying Answer: A Diff: 1 Type: MC Page Ref: 525 Skill: Concept Objective: 14-3 47) The prospecting step in the selling process includes identifying and ________ the prospects.

A) calling on B) qualifying C) preselling D) making an appointment with E) approaching Answer: B Diff: 1 Type: MC Page Ref: 524 Skill: Concept Objective: 14-3 48) Which of the following is the most relevant characteristic that a salesperson should consider when qualifying a prospect?

A) financial ability, longevity in the market B) longevity in the market, competition C) special needs, declining sales D) location, competition E) financial ability, volume of business Answer: E Diff: 3 Type: MC Page Ref: 525 Skill: Concept Objective: 14-3 49) A salesperson who researches a prospective customer's buying styles and product line is most likely in the ________ stage of the selling process.

A) prospecting B) preapproach C) approach D) presentation E) closing Answer: B Diff: 1 Type: MC Page Ref: 525 Skill: Concept Objective: 14-3

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50) The salesperson meets the customer for the first time in the ________ step of the selling process.

A) prospecting B) qualifying C) preapproach D) approach E) presentation Answer: D Diff: 1 Type: MC Page Ref: 525 Skill: Concept Objective: 14-3 51) Which description of a salesperson fits best with today's relationship marketing focus and solutions approach?

A) hard-sell salesperson B) a listener, an understander, and a problem-solver salesperson C) razzle-dazzle salesperson D) salesperson on bonus and not on commission E) salesperson on commission and not on salary Answer: B Diff: 2 Type: MC Page Ref: 527 Skill: Concept Objective: 14-3 52) The qualities that buyers value most in salespeople include empathy, honesty, dependability, thoroughness, follow-through, and ________.

A) good listening B) good presenting C) sympathy D) caring E) candor Answer: A Diff: 2 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 53) The qualities buyers dislike most in salespeople include which of the following?

A) being pushy, being early B) being pushy, being deceitful C) being too reliant on technology, being arrogant D) being unprepared, being opportunistic E) being disorganized, being ungrateful Answer: B Diff: 2 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 14 Copyright © 2017 Pearson Canada Inc.

54) In this step of the sales process, salespeople can now take advantage of technologies such as DVDs, handheld computers, interactive white boards, and laptop computers to show customers images that support the salesperson's verbal message.

A) prospecting B) preapproach C) presentation and demonstration D) closing E) follow-up Answer: C Diff: 2 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 55) In the handling objections step of the selling process, a salesperson should seek out hidden objections, ask the buyer to clarify objections, treat objections as opportunities to provide more information, and ________.

A) offer the buyer a discount for placing an order early B) seek to minimize or play down the objections C) compliment the buyer for bringing the objections up D) turn the objections into reasons for buying E) move on to closing the sale Answer: D Diff: 3 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 56) The ________ step of the selling process is difficult for some salespeople because they lack confidence, feel guilty about asking for an order, or may not recognize the right time to ask for an order.

A) approaching the prospect B) making a professional presentation C) handling objections D) closing the sale E) following up Answer: D Diff: 2 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3

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57) Salespeople should know how to recognize ________ signals from the buyer, which can include physical actions such as leaning forward and nodding or questions about prices and credit terms.

A) qualifying B) approach C) objection D) closing E) follow-up Answer: D Diff: 1 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 58) In which step of the sales process would a salesperson call on a customer to ensure proper installation and servicing of a product?

A) approach B) presentation and demonstration C) handling objections D) follow-up E) prospecting and qualifying Answer: D Diff: 1 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 59) The selling process must be understood in the context of building and maintaining ________.

A) value B) short-term sales C) competitive advantage D) profitable customer relationships E) profit margin Answer: D Diff: 2 Type: MC Page Ref: 527 Skill: Concept Objective: 14-3 60) The steps in the selling process, as described by the text, is an example of a ________ process. The aim is to help salespeople close a sale with a customer A) low prices B) transaction oriented C) closing quota D) short-term sales E) customer challenge Answer: B Diff: 3 Type: MC Page Ref: 527 Skill: Concept Objective: 14-3 16 Copyright © 2017 Pearson Canada Inc.

61) The ________ is necessary if the salesperson wants to ensure customer satisfaction and repeat business.

A) value proposition B) lowest price C) follow-up D) sales document E) profit margin Answer: C Diff: 3 Type: MC Page Ref: 526 Skill: Concept Objective: 14-3 62) ________ consists of short-term incentives to encourage the purchase or sale of a product or service. This offers reasons to buy it now.

A) A patronage reward B) A segmented promotion C) Advertising D) Sales promotion E) Publicity Answer: D Diff: 1 Type: MC Page Ref: 529 Skill: Concept Objective: 14-4 63) Sales promotions motivate the consumer to buy ________.

A) soon B) from retailers C) from wholesalers D) on credit E) now Answer: E Diff: 2 Type: MC Page Ref: 529 Skill: Concept Objective: 14-4 64) Pressure to increase short-term sales, less differentiated brands, declining advertising efficiency, and increasingly deal-oriented customers are all factors contributing to the ________.

A) growth of personal selling B) decline of personal selling C) growth of sales promotion D) decline of sales promotion E) decline of customer relationships Answer: C Diff: 2 Type: MC Page Ref: 530 Skill: Concept Objective: 14-4 17 Copyright © 2017 Pearson Canada Inc.

65) The growing use of sales promotions as a type of marketing tool has resulted in ________.

A) advertising specialization B) promotion clutter C) promotional marketing D) advertising clutter E) promotion fatigue Answer: B Diff: 2 Type: MC Page Ref: 530 Skill: Concept Objective: 14-4 66) Which of the following is an objective for trade promotions?

A) to get retailers to carry new items B) to get retailers to discount products C) to gain more consumer confidence D) to get salespeople to sign up new accounts E) to get retailers to reduce competition Answer: A Diff: 2 Type: MC Page Ref: 530 Skill: Concept Objective: 14-4 67) Rather than creating only short-term sales or temporary brand switching, ________ should help to reinforce the product's position and build long-term customer relationships.

A) sales promotions B) promotion clutter C) samples D) trade promotions E) publicity Answer: A Diff: 1 Type: MC Page Ref: 530 Skill: Concept Objective: 14-4 68) Of the major consumer promotion tools, which is the most effective for introducing a new product or creating excitement for an existing one?

A) coupons B) samples C) cash refunds D) advertising E) rebates Answer: B Diff: 2 Type: MC Page Ref: 531 Skill: Concept Objective: 14-4

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69) Of the main consumer promotion tools, which is the most costly?

A) coupons B) samples C) cash refunds D) advertising E) billboards Answer: B Diff: 2 Type: MC Page Ref: 531 Skill: Concept Objective: 14-4 70) Which consumer promotion tool requires consumers to send a proof of purchase to the manufacturer?

A) cents-off deals B) coupons C) samples D) cash refunds E) promotional products Answer: D Diff: 2 Type: MC Page Ref: 532 Skill: Concept Objective: 14-4 71) ________ offer consumers savings off the regular price of a product, with the reduced price marked by the producer directly on the label or package.

A) Premiums B) Patronage rewards C) Price packs D) Samples E) Rebates Answer: C Diff: 2 Type: MC Page Ref: 532 Skill: Concept Objective: 14-4 72) ________ are goods offered either free or at low cost as an incentive to buy a product; they may come in-pack, on-pack, or delivered through the mail.

A) Rebates B) Premiums C) Price packs D) Cash refund offers E) Point-of-purchase promotions Answer: B Diff: 2 Type: MC Page Ref: 532 Skill: Concept Objective: 14-4 19 Copyright © 2017 Pearson Canada Inc.

73) A(n) ________ has the advertiser's name on it and is given as a gift to consumers.

A) premium B) POP promotion C) advertising specialty D) price pack E) sample Answer: C Diff: 2 Type: MC Page Ref: 532 Skill: Concept Objective: 14-4 74) Manufacturers direct more sales promotion dollars toward ________ than to ________.

A) consumers; retailers B) customers; wholesalers C) retailers and wholesalers; consumers D) mature consumers; teenagers E) retailers; wholesalers Answer: C Diff: 3 Type: MC Page Ref: 533 Skill: Concept Objective: 14-4 75) Manufacturers may offer a(n) ________ in return for the retailer's agreement to feature the manufacturer's products in advertising or display.

A) POP promotion B) allowance C) incentive promotion D) price pack E) premium Answer: B Diff: 2 Type: MC Page Ref: 533 Skill: Concept Objective: 14-4 76) Business promotion tools are used for which of the following?

A) generate business leads, increase manufacturing B) increase manufacturing, stimulate purchases C) reward resellers, get rid of extra stock D) increase manufacturing, motivate customers E) motivate people, generate business leads Answer: E Diff: 2 Type: MC Page Ref: 534 Skill: Concept Objective: 14-4

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77) In order to develop a full sales promotion program, marketers must make several decisions.

Which of the following is not part of that decision-making process?

A) Set conditions for participation.

B) Determine the length of time the promotion will run.

C) Evaluate the sales promotion.

D) Decide on the size of the promotion incentive.

E) Motivate suppliers to help with the sales promotion.

Answer: E Diff: 3 Type: MC Page Ref: 534 Skill: Concept Objective: 14-4 78) Sunny Snacks is a large consumer product company that sells its products to wholesalers and retailers. The sales force at Sunny Snacks is least likely to do which of the following?

A) Work directly with final customers.

B) Build relationships with wholesalers.

C) Help retailers effectively sell the company's products.

D) Communicate regularly with business customers.

E) Represent their wholesale and retail customers.

Answer: A Diff: 2 Type: MC Page Ref: 511 Skill: Application Objective: 14-1 79) At Finley's Fine Goods, members of the sales force and marketing department tend to have disagreements when things go wrong with a customer. The marketers blame the salespeople for poorly executing their strategies, while the salespeople blame the marketers for being out of touch with the customer. Which of the following steps should upper-level management at Finley's Fine Goods take to help bring the sales and marketing functions closer together?

A) Establish a customer sales force structure.

B) Establish a complex sales force structure.

C) Create an inside sales force.

D) Adopt a sales force automation system.

E) Employ a high-level marketing executive to oversee the marketing and sales teams.

Answer: E Diff: 3 Type: MC Page Ref: 512 Skill: Application Objective: 14-1

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80) New Wave Music Company has decided to switch to a customer sales force structure. Which of the following is the company now not likely to experience?

A) The company can become more customer-focused.

B) The company can build closer relationships with important customers.

C) The company can better serve different industries.

D) The company can better serve current customers and find new customers.

E) The company can expect salespeople to develop in-depth knowledge of numerous and complex product lines.

Answer: E Diff: 2 Type: MC Page Ref: 513 Skill: Application Objective: 14-2 81) Lyall Electric, Inc., maintains a sales force for its small appliance customers and a separate sales force for its automotive customers. Lyall Electric utilizes a ________ structure.

A) product sales force B) customer sales force C) territorial sales force D) workload sales force E) complex sales force Answer: B Diff: 2 Type: MC Page Ref: 513 Skill: Application Objective: 14-2 82) Morrill Motors splits Canada into 10 sales regions. Within each of those regions, the company maintains two sales teams—one for existing customers and one for prospects. What type of sales force structure does Morrill Motors use?

A) territorial B) product C) customer D) complex E) workload Answer: D Diff: 2 Type: MC Page Ref: 513 Skill: Application Objective: 14-2

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83) East Bay Communications has increased its inside sales force. Which of the following will least likely help its outside sales force?

A) It will allow them more time to sell to major accounts.

B) It will allow them more time to find major new prospects.

C) It will allow them more time to provide after-the-sale customer service.

D) It will ensure that their customers' questions can be answered in a timely way.

E) It will improve their use of sales automation technology.

Answer: E Diff: 2 Type: MC Page Ref: 514 Skill: Application Objective: 14-2 84) Stahl, Inc. has 1,000 Type-A accounts, each requiring 28 calls per year, and 2,200 Type-B accounts, each requiring 15 calls per year. What is the sales force's workload?

A) 40,000 calls B) 41,000 calls C) 50,000 calls D) 61,000 calls E) 71,000 calls Answer: D Diff: 3 Type: MC Page Ref: 513-514 Skill: Application Objective: 14-2 85) Stahl, Inc. has 1,000 Type-A accounts, each requiring 28 calls per year, and 2,200 Type-B accounts, each requiring 15 calls per year. If each salesperson at Stahl, Inc. makes 1,500 sales calls per year on average, approximately how many salespeople will be needed?

A) 31 B) 35 C) 41 D) 45 E) 48 Answer: C Diff: 3 Type: MC Page Ref: 514 Skill: Application Objective: 14-2

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86) You are responsible for hiring inside salespeople at Acme, Inc. Which of the following jobs isn't all that important for these new salespeople to perform?

A) free outside salespeople to spend time with major accounts B) use the phone to find new leads C) act as liaisons between outside salespeople and customers D) service accounts E) travel to call on customers Answer: E Diff: 2 Type: MC Page Ref: 514 Skill: Application Objective: 14-2 87) The sales force at Messimer Computing recently began telemarketing and online selling.

How will telemarketing and Web selling most likely benefit Messimer Computing?

A) The inside sales force of Messimer will receive better compensation than the outside sales force.

B) Messimer sales reps will need to spend less face-to-face time with large, high-value customers.

C) Messimer sales reps will be able to service hard-to-reach customers more effectively.

D) Messimer sales reps will be able to work from home offices more regularly.

E) The outside sales force of Messimer will be freed up to work more with the marketing department.

Answer: C Diff: 3 Type: MC Page Ref: 514 Skill: Application Objective: 14-2 88) An IBM sales representative is giving a product demonstration to a Best Buy representative.

Assisting with the demonstration are a Best Buy engineer, a financial analyst, and an information systems specialist. If IBM wins the Best Buy account, then all four IBM representatives will service the Best Buy account. This is an example of ________.

A) team selling B) territorial selling C) inside selling D) prospecting E) sales promoting Answer: A Diff: 2 Type: MC Page Ref: 515 Skill: Application Objective: 14-2

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89) Sales management at Noble Printing is planning a training program to improve the performance of its sales force. Which of the following should definitely be included in the training sessions?

A) tests to identify the personality traits of members of the sales force B) tests to measure the analytic and organizational skills of the sales force C) information about the marketing strategies used by other printing companies D) time-and-duty analysis for each salesperson E) instructions on completing expense reports Answer: C Diff: 3 Type: MC Page Ref: 517 Skill: Application Objective: 14-2 90) At Garden and Deck Decor, a manufacturer of outdoor furniture and accessories, the marketing and sales force objectives are to grow relationships with existing customers while at the same time acquiring new business. Which of the following sales force compensation plans is most likely to encourage the sales force to pursue both of these objectives?

A) straight salary B) straight commission C) salary plus bonus for customer satisfaction D) commission plus bonus for new accounts E) salary plus commission plus bonus for new accounts Answer: E Diff: 3 Type: MC Page Ref: 518 Skill: Application Objective: 14-2 91) You want to collect information to evaluate your sales force in the Atlantic Provinces. Which of the following could you likely ignore in doing so?

A) sales reports B) call reports C) expense reports D) profit performance in the territory E) personality trait assessments Answer: E Diff: 2 Type: MC Page Ref: 520 Skill: Application Objective: 14-2

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92) Your inside 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 outside sales force will call on all prospects.

C) A salesperson may have to approach many qualified customers just to make one sale.

D) Your inside sales force will attend meetings with qualified customers.

E) The inside sales force will be telemarketing.

Answer: C Diff: 3 Type: MC Page Ref: 524 Skill: Application Objective: 14-3 93) Marlene Gillespie is a member of the sales force at Urban Fashions, a clothing manufacturer.

Marlene is preparing for a first meeting with a wholesaler who is a potential customer, and she is preparing herself by learning as much as she can about the wholesaler's organization. Marlene is in the ________ step of the personal selling process.

A) prospecting B) qualifying C) preapproach D) approach E) handling objections Answer: C Diff: 2 Type: MC Page Ref: 525 Skill: Application Objective: 14-3 94) An email from Amazon.ca offers free shipping on your next purchase of more than $40. This is an example of a ________.

A) sales promotion B) POP promotion C) rebate D) price pack E) premium Answer: A Diff: 2 Type: MC Page Ref: 529 Skill: Application Objective: 14-4

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95) When airlines award customers points for miles traveled that can be turned in for free airline trips, they are using a(n) ________.

A) price pack B) POP promotion C) premium reward D) loyalty program E) advertising specialty Answer: D Diff: 2 Type: MC Page Ref: 530-531 Skill: Application Objective: 14-4 96) Kirk O'Hare renewed his cell phone contract with Zip Wireless and purchased a new cell phone through the Zip Web site. If Kirk mails Zip his phone receipt, proof of purchase, and a completed form, he will receive $50 in the mail. What type of sales promotion is being used by Zip? A) point of purchase B) advertising specialty C) premium D) price pack E) rebate Answer: E Diff: 2 Type: MC Page Ref: 532 Skill: Application Objective: 14-4 97) An example of a(n) ________ is a two meter high cardboard display of Cap'n Crunch next to Cap'n Crunch cereal boxes.

A) sample B) POP promotion C) display pack D) advertising specialty E) premium Answer: B Diff: 2 Type: MC Page Ref: 532 Skill: Application Objective: 14-4 98) Today, most salespeople are well-educated, well-trained professionals who are encouraged to work to build and maintain long-term customer relationships by listening to their customers, assessing their needs, and organizing the company's efforts to solve customer problems.

Answer: TRUE Diff: 2 Type: TF Page Ref: 510 Skill: Concept Objective: 14-1

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99) Personal selling is the interpersonal component of the promotion mix.

Answer: TRUE Diff: 2 Type: TF Page Ref: 510 Skill: Concept Objective: 14-1 100) Personal selling can be more effective than advertising in some situations.

Answer: TRUE Diff: 2 Type: TF Page Ref: 511 Skill: Concept Objective: 14-1 101) Salespeople act as "champions" for customers' interests.

Answer: TRUE Diff: 2 Type: TF Page Ref: 511 Skill: Concept Objective: 14-1 102) Designing sales force strategy and structure is a minor element of sales force management.

Answer: FALSE Diff: 2 Type: TF Page Ref: 512 Skill: Concept Objective: 14-2 103) Of all the ways to structure a sales force, product sales force structure is most effective in helping the company to become more customer focused and build closer relationships with important customers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 513 Skill: Concept Objective: 14-2 104) The growth of product management has contributed to the increasing adoption of customer sales force structures.

Answer: FALSE Diff: 2 Type: TF Page Ref: 513 Skill: Concept Objective: 14-2 105) Ken Klein is a Superior Frozen Foods salesman responsible for customers in the southwest region of Texas. Superior Frozen Foods uses a territorial sales force structure.

Answer: TRUE Diff: 2 Type: TF Page Ref: 512 Skill: Application Objective: 14-2

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106) Complex sales force structures include those specialized by customer and territory, by product and territory, by product and customer, and by territory, product, and customer.

Answer: TRUE Diff: 2 Type: TF Page Ref: 513 Skill: Concept Objective: 14-2 107) The workload approach to estimate sales force size is rarely used.

Answer: FALSE Diff: 2 Type: TF Page Ref: 513 Skill: Concept Objective: 14-2 108) Blue Star Supply Company wants its outside salespeople to spend more time with customers. One way for Blue Star to accomplish this goal would be to hire additional inside technical support people and sales assistants.

Answer: TRUE Diff: 2 Type: TF Page Ref: 514 Skill: Application Objective: 14-2 109) As a result of the federal government's Do Not Call Registry, telemarketing is now rarely used.

Answer: FALSE Diff: 2 Type: TF Page Ref: 514 Skill: Concept Objective: 14-2 110) Team selling is ideal when customer problems become more complex and customers become larger and more demanding.

Answer: TRUE Diff: 2 Type: TF Page Ref: 515 Skill: Concept Objective: 14-2 111) Few companies provide sales training beyond a few weeks or months for new members of the sales force.

Answer: FALSE Diff: 2 Type: TF Page Ref: 517 Skill: Concept Objective: 14-2 112) Using e-learning to train salespeople offers few advantages and is limited in application.

Answer: FALSE Diff: 1 Type: TF Page Ref: 517 Skill: Concept Objective: 14-2 29 Copyright © 2017 Pearson Canada Inc.

113) To discourage a salesperson from ruining a customer relationship by pushing too hard to close a deal and earn a commission, companies are designing compensation plans that reward salespeople for building customer relationships and growing the long-run value of each customer.

Answer: TRUE Diff: 2 Type: TF Page Ref: 518 Skill: Concept Objective: 14-2 114) Sales force automation systems have been developed for improving how salespeople feel about their opportunities and value.

Answer: FALSE Diff: 2 Type: TF Page Ref: 519 Skill: Concept Objective: 14-2 115) Though web-based technologies are useful selling tools, it is often more advantageous for a salesperson to have a face-to-face meeting with a customer when it comes time to close a deal.

Answer: TRUE Diff: 2 Type: TF Page Ref: 521 Skill: Concept Objective: 14-2 116) Formal sales force evaluation forces management to develop and communicate clear standards for judging performance and provide constructive feedback and motivation to perform well.

Answer: TRUE Diff: 1 Type: TF Page Ref: 520 Skill: Concept Objective: 14-2 117) The purpose of evaluating a salesperson's performance is to set his or her quota appropriately.

Answer: FALSE Diff: 2 Type: TF Page Ref: 520 Skill: Concept Objective: 14-2 118) Sales management is responsible for supplying prospect leads to the sales force so salespeople can focus on qualifying prospects.

Answer: FALSE Diff: 2 Type: TF Page Ref: 524 Skill: Concept Objective: 14-3

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119) The step in the selling process in which the salesperson learns as much as possible about the buying organization, what its needs are, and who is involved in the buying, is called qualifying.

Answer: FALSE Diff: 1 Type: TF Page Ref: 525 Skill: Concept Objective: 14-3 120) During the presentation step of the selling process, the salesperson tells the product "story" and explains the product benefits to the customer.

Answer: TRUE Diff: 1 Type: TF Page Ref: 525-526 Skill: Concept Objective: 14-3 121) Because customers almost always have objections during the presentation or closing step of the selling process, all salespeople need training in the skills of handling objections.

Answer: TRUE Diff: 2 Type: TF Page Ref: 526 Skill: Concept Objective: 14-3 122) Sales promotion consists of long-term incentives to encourage purchases or sales of a product or service.

Answer: FALSE Diff: 1 Type: TF Page Ref: 529 Skill: Concept Objective: 14-4 123) The most effective consumer promotion tool is coupons.

Answer: FALSE Diff: 2 Type: TF Page Ref: 531 Skill: Concept Objective: 14-4 124) The most expensive consumer promotion tool is mobile couponing.

Answer: FALSE Diff: 2 Type: TF Page Ref: 531 Skill: Concept Objective: 14-4 125) Quaker Oats inserted $5 million worth of gold and silver coins in Ken-L Ration dog food packages. This is an example of a point-of-purchase promotion.

Answer: FALSE Diff: 2 Type: TF Page Ref: 532 Skill: Application Objective: 14-4 31 Copyright © 2017 Pearson Canada Inc.

126) Event marketing includes displays and demonstrations that take place at a sponsored event.

Answer: TRUE Diff: 2 Type: TF Page Ref: 533 Skill: Concept Objective: 14-4 127) Manufacturers direct more sales promotion dollars toward consumers than toward retailers.

Answer: FALSE Diff: 2 Type: TF Page Ref: 533 Skill: Concept Objective: 14-4 128) Manufacturers may offer an allowance in return for the retailer's agreement to feature the manufacturer's products in some way.

Answer: TRUE Diff: 2 Type: TF Page Ref: 533 Skill: Concept Objective: 14-4 129) The most common evaluation method for determining the effect of a sales promotion program is to compare sales before, during, and after a promotion.

Answer: TRUE Diff: 2 Type: TF Page Ref: 535 Skill: Concept Objective: 14-4 130) You hear a friend say, "personal selling is just manipulating customers to buy things they do not need." How would a marketer respond to this statement?

Answer: The best salespeople listen to what their prospective customers want. Then, they help find a solution to the customer's issue. If a salesperson does a good job at this, then the customer will keep coming back and will have a very desirable customer lifetime (recall Chapter 1). If a salesperson were to sell goods and services that the customer did not want or need, the salesperson would lose his/her reputation and not be able to make future sales.

Diff: 2 Type: ES Page Ref: 525-526 Skill: Application Objective: 14-3

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131) Describe the nature of personal selling and the role of the sales force.

Answer: Today, most salespeople are well-educated and well-trained professionals who work to build and maintain long-term customer relationships by listening to their customers, assessing customer needs, and organizing the company's efforts to solve customer problems. Salespeople may act as order takers, order getters, or creative sellers. Personal selling is the interpersonal arm of the promotion mix. The sales force acts as a critical link between a company and its customers. Salespeople represent the company to the customer and the customer to the company to produce customer satisfaction and company profit.

Diff: 2 Type: ES Page Ref: 510-511 Skill: Application Objective: 14-1 132) Compare and contrast the three major sales force structures.

Answer: In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. This organization clearly defines each person's job, fixes accountability, and increases the person's desire to build local business relationships that improve selling effectiveness. The product sales force structure allows the sales force to sell along product lines; the seller becomes very knowledgeable about products. This method can cause duplication of efforts and several salespersons calling on the same accounts. The customer sales force structure organizes along customer or industry lines; this can help a company to become more customer focused and build closer relationships with important customers. Complex sales force structures combine aspects of these structure types.

Diff: 3 Type: ES Page Ref: 512-513 Skill: Application Objective: 14-2 133) Why are more companies using team selling? What are the pros and cons of this approach?

Answer: Team selling is useful to service large, complex accounts. Sales teams can uncover problems, solutions, and sales opportunities that no individual salesperson could. The move to team selling is in part a reaction to similar changes within customers' buying organizations; selling teams now call on buying teams. Some pitfalls exist in the team approach. Selling teams can confuse or overwhelm customers who are used to working with only one salesperson. Some salespersons have trouble working with others. Finally, difficulties in evaluating individual contributions to the team selling effort can create some sticky compensation issues.

Diff: 2 Type: ES Page Ref: 515 Skill: Application Objective: 14-2

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134) What are the steps in finding and training an adequate sales force? Which step is most important?

Answer: Recruiting and selecting the sales force comes first. Following selection, orientation and training must be conducted based upon the knowledge and skill levels of the recruits. The proper compensation method must be selected to motivate and assist each person to reach his or her goals and the company's goals. Management must supervise salespeople and assist them in reaching their goals. Management must also evaluate salespeople and provide feedback to improve performance. The most important step is the recruitment and selection step. Good performers produce results; typically, 30 percent of the sales force produces 60 percent of the sales.

Diff: 3 Type: ES Page Ref: 516-520 Skill: Application Objective: 14-2 135) Describe some of the methods used to supervise salespeople and help them work more efficiently.

Answer: Through supervision, or helping salespeople "work smart," management can help salespeople do the right things in the right way. This includes helping salespeople identify target customers and manage their time. A weekly, monthly, or annual call plan is used in many companies to show salespeople which customers and potential customers to call on within a given time period. And because companies are always looking for ways to make their employees more efficient, they often use a time-and-duty-analysis to identify how salespeople spend their time and how they can spend more time actively selling. To increase efficiency, many companies use sales force automation systems—including laptops, smart phones, videoconferencing, and relationship management software—so that their sales force can work anywhere, anytime.

Diff: 2 Type: ES Page Ref: 519-520 Skill: Application Objective: 14-2 136) Describe several ways in which management can evaluate sales force performance.

Answer: To evaluate its sales force, management needs to get regular information about the performance of its salespeople. Sales reports, including weekly or monthly work plans and longer-term marketing plans, are the most important source. Management also uses salespeople's expense reports and call reports to gauge sales call volume and success rates. In addition, management can use sales and profit performance data in each salesperson's territory, along with personal observation and customer surveys, to identify strengths and weaknesses in the sales force. Taking information gathered from these sources into consideration, management should provide salespeople with constructive feedback aimed at helping each salesperson succeed.

Diff: 2 Type: ES Page Ref: 520 Skill: Application Objective: 14-2

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137) Identify the seven steps in the selling process. What is often the most difficult step for most salespeople? Why? Answer: Prospecting and qualifying begin the process, followed by the preapproach. Next, the salesperson makes an approach to make a presentation or demonstration. 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. They may lack confidence, feel guilty about asking for the order, or fail to recognize the right time to close the sale.

Diff: 2 Type: ES Page Ref: 524-526 Skill: Application Objective: 14-3 138) Explain the follow-up step of the selling process.

Answer: The follow-up step is necessary if the salesperson wants to ensure customer satisfaction and repeat business. Right 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 there is proper installation, instruction, and servicing. This visit would reveal any problems, assure the buyer of the salesperson's interest, and reduce any buyer concerns that might have arisen since the sale.

Diff: 2 Type: ES Page Ref: 526 Skill: Application Objective: 14-3 139) How are the personal selling process and the management of customer relationships related?

Answer: The selling process should be understood in the context of building and maintaining profitable customer relationships, as companies are interested in more than simply securing a one-time sale. Instead, they are interested in winning and keeping major customers, creating ongoing, mutually beneficial relationships. Because they have significant contact with customers, salespeople play an important role in building and managing profitable customer relationships. Salespeople need to think of the first sale as the beginning of a relationship that will involve listening to customers, understanding their needs, solving their problems, and helping to coordinate the company's efforts to create customer value.

Diff: 2 Type: ES Page Ref: 527 Skill: Application Objective: 14-3 140) Explain how sales promotion campaigns are developed and implemented.

Answer: Sales promotion campaigns first call for setting sales promotions objectives and selecting consumer, trade, business, and/or sales force promotion tools to achieve those objectives. Other necessary decisions include the size of the incentive, the conditions for participation, how to promote and distribute the promotion package, and the length of the promotion. After the campaign has been implemented, the company evaluates the results.

Diff: 3 Type: ES Page Ref: 530-531 Skill: Application Objective: 14-4 35 Copyright © 2017 Pearson Canada Inc.

141) How might a salesperson represent his or her customers to his or her company?

Answer: To develop greater customer value, a salesperson would learn about customer needs and then work with members of his or her company to satisfy those needs.

Diff: 2 Type: ES Page Ref: 511 Skill: Application Objective: 14-1 142) What type of company would be likely to use the territorial sales force structure?

Answer: A company with limited product lines in one industry with customers in many locations would most likely use a territorial sales force structure.

Diff: 2 Type: ES Page Ref: 512 Skill: Application Objective: 14-2 143) What type of company would be likely to use a product sales force structure?

Answer: A product sales force structure will most likely be used by companies that carry extensive product lines that are complex, requiring special product knowledge on the part of the sales force.

Diff: 2 Type: ES Page Ref: 513 Skill: Application Objective: 14-2 144) What type of company might use a customer sales force structure?

Answer: A customer sales force would most likely be used by companies that sell products to many different types of customers who have different needs.

Diff: 2 Type: ES Page Ref: 513 Skill: Application Objective: 14-2 145) Explain how the workload approach helps companies set sales force size.

Answer: Using this approach, the company first groups accounts into different classes according to size, account status, or other factors related to the amount of effort required to maintain them.

The company can then determine the number of salespeople needed to call on each class of accounts the desired number of times.

Diff: 2 Type: ES Page Ref: 513-514 Skill: Application Objective: 14-2 146) Why might a company need to hire both an inside and an outside sales force?

Answer: Larger accounts may require special nurturing and face-to-face interaction, so an outside sales force can call on those customers. Smaller accounts and harder-to-reach customers may be able to be taken care of by an inside sales force.

Diff: 2 Type: ES Page Ref: 514 Skill: Application Objective: 14-2

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147) Why do many companies invest in ongoing training for their salespeople?

Answer: Though training is expensive, it can be very effective in helping salespeople learn about the needs and motives of their customers, techniques for effectively selling, the company's objectives, and the strategies of major competitors. With this training, salespeople are able to better do their jobs, resulting in more revenue for the company.

Diff: 2 Type: ES Page Ref: 517 Skill: Application Objective: 14-2 148) Compare the four types of compensation plans available to salespeople.

Answer: A straight salary is a fixed amount that is not dependent on sales performance, while a straight commission is entirely based on sales performance. The two other types, salary plus bonus and salary plus commission, make a portion of the compensation fixed and a portion based on sales performance.

Diff: 3 Type: ES Page Ref: 518 Skill: Application Objective: 14-2 149) Why do sales supervisors provide their salespeople with weekly, monthly, or annual call plans?

Answer: A call plan shows which customers and prospects to call on when, as well as which sales activities to carry out, giving supervisors more control over the activities of their salespeople.

Diff: 2 Type: ES Page Ref: 520 Skill: Application Objective: 14-2 150) What does a time-and-duty analysis reveal?

Answer: This tool, which can be used to help sales management determine how to increase selling time, indicates a salesperson's time spent selling, traveling, prospecting, taking personal time, and doing administrative tasks.

Diff: 2 Type: ES Page Ref: 519 Skill: Application Objective: 14-2 151) Why have firms adopted sales force automation systems?

Answer: Many firms have adopted sales force automation systems to help their salespeople work more effectively anytime and anywhere, improve customer service, lower sales costs, and increase sales performance.

Diff: 2 Type: ES Page Ref: 519 Skill: Application Objective: 14-2

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152) Why is a firm's organizational climate an important part of building a successful sales staff?

Answer: How salespeople feel about their opportunities, value, and rewards for a good performance affects how well salespeople will perform; when salespeople are treated as special contributors and have great opportunities for income and promotion, their sales performance is higher.

Diff: 2 Type: ES Page Ref: 520 Skill: Application Objective: 14-2 153) Why does a firm's number of prospects always equal or exceed its number of actual customers?

Answer: Prospecting identifies the total number of qualified potential customers; not all qualified potential customers will become actual customers.

Diff: 2 Type: ES Page Ref: 524 Skill: Application Objective: 14-3 154) Why does a salesperson set call objectives?

Answer: Call objectives might be to qualify the prospect, gather more or better information, or make an immediate sale; with a call objective identified in the preapproach step, a salesperson can be more focused on how to prepare for the sale.

Diff: 3 Type: ES Page Ref: 525 Skill: Application Objective: 14-3 155) Why is it crucial to listen to the customer during the approach step of the sales process?

Answer: The approach is the salesperson's opportunity to get the relationship with the customer off to a great start. The approach should involve key questions to learn more about the customer's needs; the salesperson can use the answers to these questions to tailor the presentation and demonstration.

Diff: 2 Type: ES Page Ref: 525 Skill: Application Objective: 14-3 156) In what situation might the customer-solution approach be important to the salesperson?

Answer: This approach calls for good listening and problem-solving skills. The salesperson commits him or herself to listening to the customer's problems, providing viable solutions, follow-up, and so forth. This approach would be important in any situation in which the salesperson wants to build a long-term relationship with a customer.

Diff: 3 Type: ES Page Ref: 525 Skill: Application Objective: 14-3

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157) Why might the follow-up be considered the most critical step of the sales process?

Answer: The follow-up allows the salesperson to assure the buyer of his or her continued interest and to address buyer concerns that might have arisen since the sale; good follow-up is key to building long-term relationships with customers and repeat business.

Diff: 2 Type: ES Page Ref: 526 Skill: Application Objective: 14-3 158) Give three examples of consumer sales promotions tools.

Answer: Sales promotions may include contests, games, free samples, or coupons.

Diff: 1 Type: ES Page Ref: 531 Skill: Application Objective: 14-4 159) How can a marketer using sales promotion rise above promotion clutter?

Answer: The marketer can, for example, offer fewer but more targeted coupons or create more dramatic point-of-purchase displays.

Diff: 2 Type: ES Page Ref: 531 Skill: Application Objective: 14-4 160) How does mobile couponing benefit both consumers and marketers?

Answer: Consumers don't have to find and clip coupons. Mobile coupons allow marketers to carefully target customers and make them personal as well as eliminate the costs associated with printing and distributing paper coupons.

Diff: 2 Type: ES Page Ref: 531 Skill: Application Objective: 14-4 161) What type of sales promotion may benefit a political candidate the most?

Answer: A political candidate would likely benefit most from using event marketing. The event links to the politician's value proposition.

Diff: 3 Type: ES Page Ref: 533 Skill: Application Objective: 14-4

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Reliable Tool Company manufactures hubs and axles for the trailer and heavy truck industry.

Though the customer base is small, monthly sales at Reliable are approximately $1 million. "You might say we have all of our eggs in one basket," says owner Arthur Deetz. Reliable Tool has captured "a small piece of the pie" but is the sole supplier of hub and axle components to its customers; therefore, it is critical that a competent sales force be maintained in order to nurture those few but large accounts. Ninety-five percent of Reliable's customers are located in Michigan, Ohio, and Indiana. Travel time to all customers is short but, given the nature of the industry, time spent with each customer is essential.

162) Why might personal selling be the best promotional tool for Reliable?

Answer: Personal selling provides face-to-face contact with Reliable's customers. This is essential because the scenario indicates that the current customer base demands a fair amount of personal attention. In addition, a heavy emphasis on personal selling helps to build Reliable Tool's credibility among prospects as they quickly become familiar with Reliable's face-to-face efforts.

Diff: 1 Type: ES Page Ref: 525 Skill: Application Objective: 14-3 163) What sales force structure will work best for Reliable Tool?

Answer: A customer sales force structure may work best; this structure assigns separate salespeople to major accounts and allows salespeople to build closer relationships with important customers and prospects. In addition, for some of the larger accounts, a team effort may prove to be successful; this approach would allow various employees from various departments at Reliable to make contact with their customer counterparts.

Diff: 3 Type: ES Page Ref: 513 Skill: Application Objective: 14-2 164) Will an inside or outside sales force benefit Reliable Tool more?

Answer: An outside sales force would provide Reliable with the face-to-face contact necessary to nurture these "few but large" accounts. In addition, attracting new customers may require intense face-to-face communication with prospects in the industry. An inside sales force would not serve Reliable's needs as well.

Diff: 2 Type: ES Page Ref: 514 Skill: Application Objective: 14-2 165) In order to motivate Reliable Tool's workforce, which of the four compensation plans may work best?

Answer: Answers will vary. However, because Reliable Tool's accounts require special nurturing, a straight salary may work best. A straight salary may eliminate aggressiveness or assertiveness that salespeople who are working to earn a commission or bonus may use with customers. A bonus may be added for particularly satisfied customers.

Diff: 3 Type: ES Page Ref: 518 Skill: Application Objective: 14-2 40 Copyright © 2017 Pearson Canada Inc.

166) Describe the ideal organizational climate for Reliable Tool.

Answer: Descriptions will vary. Because Reliable's customers require a level of attentiveness that may go beyond typical accounts in other industries, Arthur Deetz must certainly understand that salespeople turnover, at whatever rate, would be detrimental to the customer-vendor relations necessary for Reliable's success. Therefore, the organizational climate should be one that treats salespeople as valued contributors and that allows ample opportunity for promotion and income.

Diff: 3 Type: ES Page Ref: 519-520 Skill: Application Objective: 14-2 167) What are some factors that may be considered when qualifying customer prospects at Reliable Tool Company?

Answer: The prospects' ability to pay, annual amount purchased, possibility for growth, special needs, and location may all play a role in the qualifying process.

Diff: 2 Type: ES Page Ref: 524-525 Skill: Application Objective: 14-3 168) What is an effective way for salespeople at Reliable Tool Company to follow-up after a call?

Answer: As with any sales call, a good follow-up will include making sure that there is proper installation, instruction, and servicing. The follow-up should assure the buyer of the salesperson's interest and reduce any buyer concerns that have arisen since the sale.

Diff: 2 Type: ES Page Ref: 526 Skill: Application Objective: 14-3 169) What kind of sales promotions would Reliable Tool be likely to use?

Answer: Answers will vary, but could include discounts, free goods, and conventions and trade shows.

Diff: 2 Type: ES Page Ref: 531-534 Skill: Application Objective: 14-4

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