--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------1.

--1. According to the text, product life cycles are: A. getting longer. B. speeding up in the later stages. C. now about the same length as 100 years ago. D. getting shorter. E. slowing down in the early stages. 2. New-product specialists at Whirlpool buy washing machines made by other firms and take them apart to look for new ideas. This is called A. reverse engineering. B. positioning. C. S.W.O.T. analysis. D. concept testing. E. clustering. 3. A new-product idea moves through the early stages of the life cycle more quickly when it has all the following characteristics EXCEPT: A. the product is easy to use. B. the product can be tried on a limited basis, without a lot of risk to the customer. C. the product has no competitive advantage over those already in the market. D. the product is compatible with the values and experiences of target customers. E. the product's advantages are easy to communicate. 4. Which of the following provides high immediate satisfaction and high long-run consumer welfare? A. Salutary products B. Deficient products C. Desirable products D. Pleasing products 5. The _____ step in the new-product development process could involve R&D and engineering to design and build the physical part of the product. A. screening B. idea evaluation C. roll out D. commercialization E. development 6. Which of the following statements about "new products" is FALSE? A. In order for it to be advertised as new, there should be a functionally significant change in the productaccording to the FTC. B. A product should be considered "new" by a particular firm if it is new in any way for that company. C. The FTC considers six months as the maximum time that a product should be called "new." D. According to the FTC, a product may be called "new" (for example, in advertising) as long as the firm has made at least some minor change in the package or product. E. A marketing manager should consider a product new if it is aimed at new markets. 7. "Product life cycles" are concerned with sales and profits: A. in generic marketsnot individual product-markets. B. of a firm's individual products or brands. C. of goods but not services. D. in a product-market. E. Both A and C.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------8. As a product moves through its product life cycle: A. industry profits may decrease while industry sales increase. B. the nature of competition moves toward pure competition or oligopoly. C. entirely different target markets may be aimed at. D. customers' attitudes and needs may change. E. All of the above are true. Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire coated with special paints. 1) WPI's "Wire Closet" products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market continue to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as "Wire Fold-Fence." Previously, WPI had never made fences or been in lawn and garden - although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed "Oil Wire," a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is "Wire Locker" used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire style lockers is only half of what it was 10 years ago. 5) WPI's "Wire Window" product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called "Wire Car Top." There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. "Wire Car Top" is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new product idea, tentatively called "Wire Tent," is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. 9. According to the definition in your text, which of WPI's products can be called a new product? A. Wire Closet B. Wire Locker C. Wire Fold-Fence D. Wire Window E. None of these products fits the definition of a new product 10. Jack Johnson uses a Pareto chart to identify the frequency of different complaints from his customers. After identifying the biggest problem, he may create a _____ to solve it. A. demographic report B. waterfall chart C. fishbone diagram D. competitor profile E. pie chart 11. The big cost of poor quality is the cost of A. replacing defective parts. B. lost customers. C. recalling defective goods. D. rework and training. E. induction training.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------12. A drug company has developed a new diet pill that helps people lose weight easily. Research shows a high level of consumer immediate satisfaction. However, their effect on long-term consumer welfare is low because they permanently increase the consumer's blood pressure. In this (hypothetical) situation, the product should be thought of as a A. desirable product. B. pleasing product. C. salutary product. D. deficient product. E. There is not enough information to tell. 13. Concerning the product life cycle: A. profits and sales begin to decline in the maturity stage. B. individual products may enter and leave the market at any stage. C. a successful introduction almost guarantees that the product will remain a success over the life cycle. D. All of the above are true. E. None of the above is true. 14. In the idea evaluation stage A. an actual product is developed. B. companies cannot estimate likely costs. C. concept testing is used for getting reactions from customers. D. there is some engineering to design and develop the physical part of a product. E. the final ROI is estimated. 15. Which of the following is LESS LIKELY to happen as a product moves through the later stages of the product life cycle? A. Place - move toward selective distribution. B. Promotion - build selective demand. C. Price - meet competition. D. Competitive situation - Heading toward pure competition. E. Product - Some drop out. 16. Concerning product life cycles: A. each of a producer's individual products follows the life cycle pattern. B. in the early part of market maturity, new products begin to replace the old. C. the stages usually have varying lengths. D. in general, life cycles are getting longer. E. None of the above is true. 17. Rita Scavone manages a pizza restaurant. She spends a night reviewing customer comments and sorting them on what went right and what went wrong. Rita is following a principle of A. total quality management. B. fishbone diagramming. C. complaint management. D. franchisee analysis. E. ignoring small problems. 18. Which of the following activities is NOT typical of the commercialization stage? A. Goods have to be produced to fill the channels of distribution. B. People must be hired and trained to provide services. C. Manufacturing or service facilities have to be set up. D. Full-scale market testing is conducted. E. Products are introduced city by city or region by region in a gradual "rollout."

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------19. Because firms must be developing new products all the time, which of the following statements is true? A. Competitors are likely to rapidly introduce product improvements in the market growth stage. B. The developed economies experience technological advances quicker than the less-developed economies. C. Although the life of different products varies, product life cycles are getting shorter. D. One new invention may make possible many new products to replace old ones. E. All of the above are true. 20. Because of _____, a court rules that a fast-food restaurant has a legal obligation to pay damages to a family whose child was injured when it swallowed an unsafe toy that came in a kids' meal box. A. consumer compensation B. product liability C. consumer protection D. product quality assurance E. pleasing products 21. Bank of the Great North provides customer service over the phone. The bank evaluates its service performance by comparing customer evaluations of its service with those of leading retailers. This is a form of _______. A. negative reinforcement B. internalization C. benchmarking D. empowerment E. differentiation 22. During the sales decline stage A. price competition from dying products is reduced. B. profits are non-existent. C. new products replace the old. D. profits increase and then decrease. E. none of the above. 23. In which stage of the product life cycle is "Oil Wire"? A. Market introduction B. Sales decline C. Market growth D. Market maturity E. Market development 24. Which of the following provides high immediate satisfaction but low long-run consumer welfare? A. Pleasing products B. Salutary products C. Deficient products D. Desirable products 25. Competition is toughest in which of the following product life cycle stages? A. market introduction. B. market growth. C. market maturity. D. market development. 26. Ideas about potential new products should A. be encouraged from any and all sources, since only a few ideas will develop into successful products. B. not be eliminated from consideration until they have been tested in the commercialization stage. C. come primarily from employees of the firmso that time won't be wasted evaluating product ideas that are inconsistent with the firm's objectives and resources. D. come from outside the firm, since studies show that really new ideas require a fresh perspective. E. None of the above is correct.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------27. Which of the following provides low immediate satisfaction and low long-run consumer welfare? A. Pleasing products B. Deficient products C. Desirable products D. Salutary products 28. The shape, length, and current stage of a product life cycle may vary depending: A. on how the market is defined. B. on the nature of the competition. C. on the nature of the products involved. D. All of the above. E. None of the above. 29. Which of the following provides low immediate satisfaction but high long-run consumer welfare? A. Pleasing products B. Desirable products C. Deficient products D. Salutary products 30. Seeking to stop declining sales for an established mouthwash, a sales manager suggests that new coloring be added to the product and a major promotion effort be started for the "new" product. The Federal Trade Commission would: A. be concerned about the possibility of the firm getting a monopoly. B. allow the company to call the product "new" for only six months. C. probably not approve of this at all because the product doesn't meet the FTC's definition of "new." D. allow the promotion effort if it felt that consumers would think the coloring made it "new." E. none of the above is true. 31. During the SALES DECLINE stage of the product life cycle: A. firms with strong brands may make profits almost until the end. B. no profits are earned. C. price competition usually declines. D. brand loyalty declines. E. monopoly is typical. 32. Which of the following is an effective source of ideas at the idea generation stage of the new-product development process? A. customer complaints. B. lead-users of the product. C. competitors' products. D. products found in overseas markets. E. all of the above. 33. Which of the following statements about the idea evaluation step is FALSE? A. Companies can often estimate likely costs, revenue, and profitability at this stage. B. Product planners can compare the cost advantages and limitations of a new product with those currently being used. C. Product tests with customers are used to revise the early versions of the product. D. This step should gather enough information to help decide whether there is an opportunity. E. None of the above is false. 34. According to your text, which of the following is an example of a "new product"? A. An existing product that has been modified in some way. B. An existing product for which new uses have been found in other product-markets. C. A wholly new product idea. D. An existing product being offered to new markets. E. All of the above.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------35. The Consumer Product Safety Commission can: A. order costly repairs of "unsafe products." B. back up its orders with fines or jail sentences. C. set safety standards for products. D. All of the above. E. Both A and Cbut NOT B. 36. Pfizer Corp. is introducing a really new product idea. Pfizer is spending a lot of money to inform potential customers and intermediaries about the availability and advantages of the new product. Although sales are rising slowly, Pfizer doesn't expect the product to become profitable for at least another year. Pfizer's new product is in which stage of the product life cycle? A. Market introduction B. Sales decline C. Market development D. Market growth E. Market maturity 37. Which of the following statements is NOT TRUE of the product life cycle? A. How long a whole product life cycle takes, and the length of each stage, varies a lot across products. B. Although the life of different products varies, on average product life cycles are getting longer. C. The greater the comparative advantage of a new product over those already on the market, the more rapidly its sales will grow. D. If the product can be tried on a limited basis, without a lot of risk to the customer, it can usually be introduced more quickly. E. A product idea may be in a different life-cycle stage in different markets. 38. Industry profits are largest in which of the following product life cycle stages? A. market introduction. B. market growth. C. market maturity. D. sales decline. E. any of the above. 39. Which of the following products is not in the growth stage of the product life cycle? A. laptop computers B. public pay telephones C. gas powered automobiles D. washing machines E. none of the above is in the growth stage. 40. Cargill, Inc. is finally earning a profit on the unique product it introduced six months ago. Cargill's advertising is both informative and persuasive. Much money is being spent on Place development. There is little price competition, although several competitors have come out with reasonable imitations. Total industry sales and profits are both rising. In which stage of the product life cycle is Cargill operating? A. Market growth B. Market introduction C. Sales decline D. Market maturity E. Market development 41. In the _____ stage of the product life cycle, organizations focus on building primary demand. A. market decline B. market maturity C. sales decline D. market growth E. market introduction

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------42. Which of the following observations concerning a phase-out strategy is incorrect? A. If prospects are poor in a product-market, a phase-out strategy may be needed. B. Phasing out a product may involve some difficult implementation problems. C. Phase-out is also a strategy, and it must be market-oriented to cut losses. D. The need for phasing out becomes more obvious as the market maturity stage arrives. E. It is sometimes better to phase out products gradually. 43. Building quality into services: A. can be easily accomplished by spending more. B. can be accomplished without top-level support because it is such a simple idea. C. is not necessary unless the service is guaranteed. D. can be easily accomplished with surprise quality inspections. E. can be improved by giving employees the authority to correct a problem on their own. 44. In the market introduction stage of the product life cycle A. sales are the highest. B. most companies experience losses. C. industry profits rise. D. industry sales level off. E. total industry profit is highest. 45. The new-product development process A. should have ongoing support from top management. B. should avoid applying quantitative screening criteriasince applying such criteria tends to eliminate most of the "really new" ideas. C. should be informalto encourage creativity. D. should start whenever the majority of current products are in the market maturity stage of the product life cycle. E. All of the above are correct. 46. Many small cars get better gas mileage than the old "gas-guzzlers." This was achieved by using lighter (and less protective) materials. Using less gas while being less safe makes such a car a: A. desirable product. B. salutary product. C. pleasing product. D. deficient product. E. There is not enough information to tell. 47. It is toward the end of the _____ stage of the product life cycle when industry profits begin to decline. A. market maturity B. market introduction C. market growth D. sales decline E. market decline 48. Which of the following statements about organizing for new-product development is TRUE? A. New-product development departments or committees usually cause delays and should be avoided. B. Few new-product ideas fail when product managers control the new-product development process. C. The specific organization arrangement may not be too importantas long as there is top-level support. D. Marketing managers should control new-product development. E. All of the above are true. 49. Total industry profits reach their maximum during the __________ stage of the product life cycle. A. market maturity B. sales decline C. market development D. market introduction E. market growth

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------50. In the MARKET GROWTH stage of the product life cycle: A. competing products become almost the same in the minds of potential consumers. B. distribution moves from intensive to selective. C. many competitors drop out of the market. D. total industry sales increase very slowly. E. total industry profits reach their peak and begin to decline. 51. Health Care Products Company has noticed that in one of its product-markets industry sales have leveled off and competition has been getting tougher This product-market appears to be in the ____ stage of the product life cycle. A. market maturity B. market introduction C. market growth D. sales decline E. market decline 52. Sales of a producer's wax paper food-wrap are declining fast. The advertising managerlooking for a way to attract attention to the brandsuggests changing the package somewhat and promoting it as a "new" product. The Federal Trade Commission A. would allow the company to call the product "new" for only six months. B. probably would not approve of this at all. C. would allow the advertising campaign if it concluded that consumers thought the different package made it new. D. does not regulate advertising, so it would not pay any attention to this firm. E. None of the above is true. 53. Which of the following is true of product liability? A. Product liability is a consideration, but it's not important until the development stage of the new-product development process. B. Relative to most other countries, U.S. courts enforce a very strict product liability standard. C. Sellers are usually not held responsible for injuries related to their products especially when the items are well designed. D. None of the above is true. 54. Total quality management: A. requires that everyone in the organization be concerned with improving quality. B. means more than just using statistical controls to reduce manufacturing defects. C. views the cost of lost customers as an important result of quality problems. D. applies to service producers as well as manufacturers. E. all of the above are correct. 55. The total sales of a product, by all competitors in the industry, is A. highest in the introduction stage. B. lowest in the market maturity stage. C. highest in the sales decline stage. D. lowest in the market growth stage. E. lowest in the market introduction stage. 56. In which stage of the product life cycle is "Wire Fold-Fence"? A. Sales decline B. Market introduction C. Market maturity D. Market growth E. Market development 57. All of the following observations are true of a fishbone diagram except A. it helps organize cause-and-effect relationships for "things gone wrong." B. it helps figure out why things go wrong. C. it is a visual aid. D. it is used to identify the frequency of different problems. E. it helps summarize the various causes of a problem.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------58. Wujin Chu, marketing manager for Innovative Electronics Products, reviews a S.W.O.T. analysis to help him evaluate four new product ideas his company is currently considering. Chu is operating in the ____ step of the new-product development process. A. idea evaluation B. development C. commercialization D. screening E. idea generation 59. This type of a new-product idea is high on both long-run consumer welfare and immediate satisfaction. A. Desirable product B. Salutary product C. Pleasing product D. Deficient product E. Safety product 60. An industry's sales have leveled off and profits are declining in oligopolistic competition. Consumers see competing products as "homogeneous." Several firms have dropped out of the industry, but a new one entered recently. Firms in the industry are trying to avoid price-cutting by spending on persuasive advertising. These firms are competing in which stage of the product life cycle? A. Market growth B. Market maturity C. Market development D. Market introduction E. Sales decline 61. Which of the following is a common cause of new product failures? A. The product fails to offer the customer a unique benefit. B. The company tries to follow an organized new-product development processrather than using a faster and more spontaneous, "race-to-market" approach. C. The managers worry too much about the competition. D. The company delays putting the product on the market until it has developed a complete marketing plan. E. All of the above. 62. Regarding product life cycles, good marketing managers know that: A. all new brands start off in the market introduction stage. B. product life cycles can be extended through product modifications. C. a product must pass through all the product life cycle stages. D. no strategy planning is needed during the sales decline stage. E. a firm should use penetration pricing during market introduction, especially if the cycle is expected to move slowly. 63. High immediate satisfaction and high long-run consumer welfare is provided by: A. salutary products. B. pleasing products. C. desirable products. D. deficient products. 64. Low long-run consumer welfare but high immediate satisfaction is provided by: A. deficient products. B. pleasing products. C. desirable products. D. salutary products. 65. In the idea generation stage of the new-product development process A. many new ideas in business markets come from competitors. B. customers are given new products to test. C. a S.W.O.T. analysis helps evaluate new product ideas. D. a firm decides which ideas to pursue based on return on investment screening. E. final ROI estimates are done.

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------66. Regarding what a "new product" is, your text says: A. a product should be considered "new" if it is new in any way for the company concerned. B. that the FTC would not call an existing product new, even if it were changed in a functionally significant way. C. there is no legal limit on how long a product can be called "new." D. a new product must be totally different before it can be called a "new product." E. All of the above. 67. When moving into the market maturity stage of the product life cycle, a firm might be able to obtain a competitive advantage: A. with lower production costs. B. by being more successful at promotion. C. by having a slightly better product than competitors. D. all of the above. E. none of the above. 68. Low immediate satisfaction and low long-run consumer welfare is provided by: A. pleasing products. B. salutary products. C. deficient products. D. desirable products. 69. Is it a good idea for a company like WPI to have several product managers? A. No, because the company has several different product categories. B. Yes, because the company would want to eliminate the job of advertising manager. C. Yes, because the company has several different product categories. D. No, because the company would need someone to give direction to the advertising manager. 70. Product ideas that provide a low degree of immediate satisfaction but a high degree of long-run consumer welfare are A. desirable products. B. salutary products. C. pleasing products. D. deficient products. E. unsought products. 71. In the _____ step of the new-product development process, a marketing manager evaluates how well the idea fits with the company's objectives. A. idea generation B. commercialization C. screening D. development E. roll out 72. Low immediate satisfaction but high long-run consumer welfare is provided by: A. salutary products. B. desirable products. C. deficient products. D. pleasing products. 73. From a "social responsibility" viewpoint, marketers should try to design and sell: A. deficient products. B. salutary products. C. pleasing products. D. desirable products.

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------74. Managers who use the TQM approach think of quality improvement as a _____ process. A. branching B. netting C. sorting D. averaging E. benchmarking 75. Which of the following observations concerning the market maturity stage is NOT TRUE? A. Many aggressive competitors have entered the race for profits. B. There is a long-run downward pressure on prices. C. New firms cannot enter the market at this stage. D. Promotion costs rise and some competitors cut prices to attract business. E. Persuasive promotion becomes more important during this stage. 76. Persuasive promotion is especially important in which of the following product life cycle stages? A. market maturity. B. sales decline. C. market introduction. D. market growth. 77. During the MARKET INTRODUCTION stage of the product life cycle: A. large profits are typicaluntil competition arrives. B. Price and Promotion are more important than Place and Product. C. much money is spent on Promotion, while spending on Place is left until later. D. money is investedin the hope of FUTURE profits. E. most customers will try really new products. 78. Regarding the new-product development process: A. the hypothesis tested is that the new product idea will not be profitable. B. a gradual "roll-out" of the productregion by regionallows for more market testing. C. concept tests are done before any physical models are produced. D. likely ROI should be estimated throughout the process to force the new idea to prove itself. E. All of the above are true. 79. Among the types of new product opportunities, "Wire Car Top" is best thought of as a: A. Desirable product B. Pleasing product C. Deficient product D. Salutary product 80. Pressure from consumer groups is encouraging some producers to develop more ______________ products. A. deficient. B. desirable. C. acceptable. D. pleasing. E. salutary. 81. As a product moves through its product life cycle: A. a firm should change its target marketbut not its marketing mix. B. the competitive situation moves toward monopoly. C. industry profits keep increasing along with industry sales. D. customers' needs and attitudes may change. E. All of the above are true.

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------82. Regarding product life cycle planning, good marketing managers know that: A. a "me-too" new brand may immediately enter during market growth or market maturity. B. every brand must go through the sales decline stage. C. market introduction is usually profitable for the innovator. D. any change in an existing product results in a new product life cycle. E. All of the above are true. 83. In which stage of the product life cycle is "Wire Closet"? A. Market development B. Sales decline C. Market maturity D. Market introduction E. Market growth 84. For which product does WPI need to build primary demand? A. Wire Closet B. Wire Fold-Fence C. Oil Wire D. Wire Window E. Wire Locker 85. Which of the following observations concerning the product life cycle is NOT TRUE? A. Product life cycles describe industry sales and profits for a product idea within a particular product-market. B. The sales and profits of an individual brand follow the life-cycle pattern. C. A product idea may be in a different life-cycle stage in different markets. D. Product life cycles should be related to specific markets. E. A given firm may introduce or drop a specific product during any stage of the product life cycle. 86. In which stage of the product life cycle is "Wire Locker"? A. Market introduction B. Sales decline C. Market development D. Market growth E. Market maturity 87. In which step of the new-product development process is the "Wire Tent"? A. Screening B. Development C. Idea evaluation D. Idea generation E. Commercialization 88. The Consumer Product Safety Commission A. sets safety standards for new products, but has little power until after a consumer accident occurs. B. must approve every new product (including foods and drugs) before it can be sold. C. provides product liability insurance. D. can order costly returns of products it considers unsafe. E. has very little power. 89. As a product moves into the market maturity stage of its life cycle, the marketing manager should: A. try to build primary demand. B. move toward exclusive distribution. C. expect the market to move toward pure competition. D. All of the above are true. E. None of the above is true.

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------90. In screening new product ideas, Willie Baker came upon an idea for a new mountain bike that struck him as relatively dangerous and potentially harmful to consumer welfare. However, he thought it would provide very high immediate customer satisfaction. Such a product would be considered a A. pleasing product. B. deficient product. C. star product. D. salutary product. E. desirable product. 91. Identify the INCORRECT statement pertaining to the stages of the product life cycle. A. The market introduction stage can be seen as investing in the future. B. In the market growth stage profits keep rising steadily with no sign of decline. C. Sales level off and profits continue down in the market maturity stage. D. The sales decline stage can be seen as a time of replacement. E. Industry profits go down throughout the market maturity stage. 92. Regarding product life cycles, which of the following is NOT true? A. Industry profits are likely to level off or decline before sales level off. B. The level of promotion usually decreases in market maturity since there is less revenue to cover the cost. C. Many close substitutes are usually competing in the market maturity stage. D. It is usually expensive for a new firm to enter in the market maturity stage. E. There is a downward pressure on prices over time. 93. Concept testing: A. takes place during the screening step of the new-product development process. B. involves usage tests by potential customers. C. seeks potential customers' reactions and attitudes toward new product ideasbefore actual models are developed. D. is the last step before commercialization of a new product idea. E. Both A and D. 94. In which step of the new-product development process is the "Wire Car Top"? A. Commercialization B. Idea evaluation C. Idea generation D. Screening E. Development 95. Regarding product life cycles, a good marketing manager knows that A. entirely different target markets may be involved at different stages of the product life cycle. B. a product that doesn't get beyond the introduction stage is still likely to be very profitable. C. industry profits are increasing well after sales start to decline. D. once a market goes into sales decline, oligopoly conditions set in. E. All of the above are true. 96. A good marketing manager knows that: A. a fashion is the currently accepted or popular style. B. the faster fashions change, the harder marketing strategy planning is. C. modern technology affects the speed of fashion change. D. all of the above. E. none of the above. 97. For which product is it most critical for WPI to build brand familiarity? A. Wire Closet B. Wire Window C. Wire Locker D. Wire Tent E. It is equally important for each of these products

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------98. Regarding product life cycles, which is TRUE? A. Industry sales and profits tend to reach their maximum during the market maturity stage. B. Product life cycles describe industry sales and profits within some product-market. C. Product life cycles are generally getting shorter and cannot be extended. D. Every new brand must pass through all four stages of the product life cycle. E. All of the above are true. 99. Which of the following gives the correct order of the steps in the new-product development process? A. Screening, idea generation, idea evaluation, development, commercialization B. Idea generation, screening, idea evaluation, development, commercialization C. Idea generation, idea evaluation, development, screening, commercialization D. Development, idea generation, screening, commercialization, idea evaluation E. Commercialization, idea generation, idea evaluation, screening, development 100. In the market introduction stage of a fast product life cycle, _____ helps develop loyal customers early and keeps competitors out. A. a low initial penetration price B. intensive distribution C. promotion that builds selective demand D. promotion that reminds E. a market skimming price 101. It is difficult to maintain consistent quality in services because A. services are nonperishable. B. as opposed to products, services are tangible in nature. C. the server is inseparable from the service. D. variability is reduced as more humans are involved in delivery. E. it requires minimum human interaction. 102. In which stage of the product life cycle is "Wire Window"? A. Market maturity B. Market development C. Sales decline D. Sales Growth E. Market introduction 103. Regarding new-product development, market tests: A. are used mostly for durable products because of their high production costs and risks. B. seek customer reactions to ideasnot actual products. C. should test the product and specific marketing mix variables. D. are costly, but not testing can be even more expensive. E. Both C and D. 104. An ROI estimate is needed during the ______________ step of the new-product development process. A. commercialization B. development C. idea evaluation D. screening E. All of the above. 105. Based on the text's recommendations for different stages in the product life cycle, for which product does WPI most need to consider developing different markets? A. Wire Window B. Oil Wire C. Wire Closet D. It would be equally important to develop new markets for all of these products.

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------106. In which step of the new-product development process is "Oil Wire"? A. Screening B. Development C. Idea evaluation D. Commercialization E. Idea generation

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--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH ---------------------------------------------------------------------------------------------------------------------------------------

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1. (p. 265) D 2. (p. 274) A 3. (p. 265) C 4. (p. 274) C 5. (p. 277) E 6. (p. 271) D 7. (p. 263) D 8. (p. 261) E 9. (p. 271) C 10. (p. 283) C 11. (p. 281) B 12. (p. 274) B 13. (p. 269) B 14. (p. 276) C 15. (p. 268) A 16. (p. 264) C 17. (p. 282) A 18. (p. 278) D 19. (p. 265-266) E 20. (p. 276) B 21. (p. 284) C 22. (p. 263) C 23. (p. 261-263) A 24. (p. 274) A 25. (p. 263) C 26. (p. 273) A

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------27. (p. 274) B 28. (p. 264) D 29. (p. 274) D 30. (p. 271) C 31. (p. 263) A 32. (p. 273) E 33. (p. 276) C 34. (p. 271) E 35. (p. 275) D 36. (p. 261-262) A 37. (p. 265) B 38. (p. 262) B 39. (p. 266) E 40. (p. 262) A 41. (p. 261-262) E 42. (p. 271) D 43. (p. 284) E 44. (p. 262) B 45. (p. 279) A 46. (p. 274) C 47. (p. 262) C 48. (p. 279) C 49. (p. 262) E 50. (p. 262) E 51. (p. 263) A 52. (p. 271) B 53. (p. 276) B 54. (p. 281) E 55. (p. 261-262) E 56. (p. 261-263) C 57. (p. 283) D

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------58. (p. 276) D 59. (p. 274) A 60. (p. 263) B 61. (p. 272) A 62. (p. 269) B 63. (p. 274) C 64. (p. 274) B 65. (p. 273) A 66. (p. 271) A 67. (p. 269) D 68. (p. 274) C 69. (p. 280) C 70. (p. 274) B 71. (p. 275) C 72. (p. 274) A 73. (p. 274) D 74. (p. 282) C 75. (p. 263) C 76. (p. 263) A 77. (p. 261-262) D 78. (p. 278) E 79. (p. 274) A 80. (p. 274) B 81. (p. 261) D 82. (p. 263) A 83. (p. 261-263) E 84. (p. 267-269) C 85. (p. 263) B 86. (p. 261-263) B 87. (p. 273-278) A 88. (p. 275) D

--------------------------------------------------------------------------------------------------------------------------------------10 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 10 CH --------------------------------------------------------------------------------------------------------------------------------------89. (p. 268-269) C 90. (p. 274) A 91. (p. 262) B 92. (p. 263) B 93. (p. 276) C 94. (p. 273-278) B 95. (p. 261) A 96. (p. 266) D 97. (p. 267-269) A 98. (p. 263) B 99. (p. 273) B 100. (p. 267) A 101. (p. 284) C 102. (p. 261-263) D 103. (p. 278) E 104. (p. 273) E 105. (p. 270) A 106. (p. 273-278) D

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------1. Roscoe Hardware carries stock on the complete line of Ever-Green Push Lawn Mowers. Its competitor down the street sells the same mowers at a special price by special order but does not carry any inventory. This situation creates A. vertical conflict. B. exclusive distribution rights. C. competitive discrepancy. D. horizontal conflict. E. reverse channels. 2. The lowest cost and lowest risk way to enter a foreign market is through A. a joint venture. B. licensing. C. management contracting. D. a direct investment. E. exporting. 3. In a licensing agreement, the licensee A. makes no initial investment to get started. B. does most of the marketing strategy planning for the markets it is licensed to serve. C. has more control over marketing than other approaches for entering international markets. D. assumes almost no risk in a foreign market. E. does not pay any fee or royalties to the licensor. 4. If a producer agrees to enter into a management contracting arrangement with a zinc mining operation in Chile, A. the company should be prepared to invest large amounts in mining facilities. B. the company should be prepared to send people to Chile. C. success will depend on how well the Chilean managers know what needs to be done. D. the company must assume no political problems will arise, otherwise the risk is very high. E. None of the above is true. 5. When Amazon.com collects products from many small producers, the company is involved in _____. A. assorting B. accumulating C. bulk-breaking D. quantitizing E. sorting 6. Licensing, in international marketing, A. refers to foreign intermediaries agreeing to sell products produced in this country. B. requires a producer to pay a licensing fee to the country where it wants to sell its products. C. increases the risk that a company's production facilities will be taken over by the foreign country. D. means a company selling the right to use a process, trademark, patent, or other right for a fee or royalty. E. None of the above is true. 7. Because of long-run effects, decisions about one of the four Ps is often harder to change than the others. This P is: A. Product. B. Place. C. Promotion. D. Price. 8. The desirability of a common "product-market commitment" is based on the idea that: A. each member of the channel should focus on a different target market. B. the whole channel is competing with other channel systems. C. the producer should always be the "channel captain." D. a channel can eliminate the marketing functions. E. All of the above are true.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------9. AsianArt4U.com brings together the art produced by many different Asian painters and sculptors and offers them for sale on its website. This is an example of A. accumulating B. sorting C. a franchise channel D. a discrepancy intermediary E. bulk-breaking 10. A producer that enters into a licensing agreement with a foreign company to better reach foreign customers is MOST likely selling the rights to use its: A. production facilities. B. brand name. C. channels of distribution. D. sales force. E. Any of the above are equally likely. 11. When planning channels of distribution, a marketing manager should know that A. vertically integrated systems are seldom usedbecause of the difficulty of maintaining control. B. a contractual system offers both flexibility and stability for its members. C. the disadvantage of a corporate channel system is reduced control over distribution activities. D. all of the above. E. none of the above. 12. Which of the following is NOT a true statement about traditional channel systems? A. Channel members make little or no effort to cooperate with each other. B. Channel members buy and sell from each other. C. Each channel member does only what it considers to be in its own best interest. D. Members of these channels have their independence, but they may pay for it too. E. Control is maintained by economic power and leadership. 13. Worldwide Drilling, Inc. of Fort Worth, Texas, operates an oil well in Russia for its owners. Worldwide is involved in: A. management contracting. B. exporting. C. a direct investment. D. a joint venture. E. licensing. 14. Lacey Springs Apple Co. buys fresh apples in truckload quantities, regroups the heterogeneous commodities into homogeneous lots according to grade and quality, and then sells them to retailers. This "regrouping activity" is called: A. accumulating. B. bulk-breaking. C. sorting. D. wholesaling. E. assorting.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the U.S. Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through four regional distributors who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channel, but maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through two distributors - each with half the country. The distributors then sell through 6 sporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. 15. A wholesaler for American Tennis Ball is likely to perform which of the following regrouping activities: A. Accumulating B. Bulk-breaking C. Assorting D. All of the above E. None of the above 16. Intensive distribution is often very appropriate for: A. shopping products and convenience products. B. convenience products and business supplies. C. business products of all classes. D. unsought products and specialty products. E. shopping, specialty, and unsought products. 17. "Exclusive distribution" means selling through: A. the most prestigious retail outlets. B. only one wholesaler or retailer in a particular geographic area. C. only responsible and suitable retailers or wholesalers. D. retailers that handle specialty products. E. only those wholesalers or retailers who will give the product special attention. 18. "Discrepancies of assortment" means: A. there are more producers than consumers. B. consumers want more output than producers make. C. the difference between the product lines the typical producer makes and the assortment wanted by final consumers or users. D. there are more consumers than producers. E. the difference between the quantity of products the typical producer makes and the quantity wanted by individual consumers. 19. InterContinental Hardware Co. buys carload quantities of bolts, screws, nuts, washers, and other hardware from a large producer in the Netherlands, breaks these shipments into smaller quantities, and sells them to other wholesalers and retail chains. This "regrouping activity" is called: A. assorting. B. wholesaling. C. accumulating. D. bulk-breaking. E. sorting.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------20. Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers uses _____ distribution. A. intensive B. ideal C. selective D. specialized E. exclusive 21. These three tennis ball producers all rely on retailers to reach consumers who want to buy only a few balls at a time. Apparently they all think that this is an efficient way to A. deal with sorting activities. B. address discrepancies of quantity C. handle discrepancies of assortment D. minimize the potential for conflict in the channel E. achieve intensive distribution. 22. Which of the following is NOT one of the "regrouping activities?" A. Assorting B. Ranking C. Sorting D. Bulk-breaking E. Accumulating 23. INDIRECT channels are probably a better choice than direct channels when: A. the firm has limited financial resources. B. the product is a consumer product instead of a business product. C. target customers already have established buying patterns for where to search for the product. D. retailers are already conveniently located where consumers shop. E. all of the above. 24. Oceanside Tools, Inc. of Newport, Rhode Island has agreed to work with a Thai company to produce and sell chemicals in Thailand. The U.S. firm will provide technical and marketing know-how, while its Thai partner will provide knowledge of Thai markets and political connections. The partners will share the costs and profits 50/50. This type of international involvement is called: A. direct investment. B. management contracting. C. licensing. D. multinational marketing. E. joint venturing. 25. If a producer has a technically superior and expensive productwhich has achieved brand preferenceand wants retailers to provide aggressive promotion and maximum customer service, this producer should seek: A. Multichannel distribution. B. Exclusive distribution. C. Administered distribution. D. Intensive distribution. E. Selective distribution. 26. Many firms prefer to distribute directly to the final customer or consumer because they A. want to control the whole marketing job. B. believe they can serve target customers at a lower cost. C. think they can do the work more effectively than intermediaries. D. can use the Internet to make direct distribution easier. E. all of the above.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------27. Discrepancy of quantity is A. the difference between the lines a typical producer makes and the assortment final consumers or users want. B. adjusting the quantities of products handled at each level in a channel of distribution. C. collecting products from many small producers. D. the difference between the quantities of products that it is economical for a producer to make and the quantity final users or consumers normally want. E. usually seen with producers who specialize by product. 28. Which of the following is the easiest way for a firm to enter foreign markets? A. joint ventures B. licensing C. multinational bargaining D. direct investment E. management contracting 29. If American Tennis Ball adds more wholesalers and more retail outlets, this is likely to A. create horizontal channel conflict. B. lead to vertical channel conflict. C. require that the largest wholesaler take over the channel captain role. D. increase trust and cooperation in the channel. E. prompt both vertical and horizontal channel conflict. 30. Intensive distribution is A. selling through only those wholesalers or retailers who will give the product special attention. B. selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. C. selling through only one wholesaler or retailer in a particular geographic area. D. making a product available widely enough to satisfy target customers' needs but not exceed them. E. used to gain some of the advantages of exclusive distribution - while still achieving fairly widespread market coverage. 31. Which of the following is NOT a benefit that an intermediary is likely to provide for producer-suppliers? A. reduce credit risk B. reduce the need to store inventory C. reduce the need for marketing research D. reduce the need for working capital E. All of the above are likely benefits provided to suppliers. 32. Choosing an INDIRECT channel probably will be better than a direct channel if a producer wants to: A. provide special technical service. B. make it easier to do marketing research. C. be more sensitive to coming changes in customer needs and attitudes. D. obtain a very aggressive selling effort. E. adjust large discrepancies of quantity and assortment. 33. The marketing manager for a producer of mattresses and box springs distributes its products through discount stores (like Costco), department stores, furniture stores, and specialty bedding stores. To avoid conflict with channel members, the manager A. should offer purchase discounts based on the quantity of mattresses that the retailer sells. B. assume that all channel members have a common commitment to target consumers at the end of the channel. C. trust retailers to emphasize sales of his brand rather than the brand of some other manufacturer. D. develop different brands or product lines for different channels. E. expect one of the large retail chains to step up to the responsibilities of being the channel captain. 34. Which of the following statements about Place is true? A. Most consumer products and most business products are sold to intermediaries who then sell them to final customers. B. Place decisions are usually harder to change than other marketing mix decisions. C. There is always one Place arrangement that is "best" for a product. D. A series of individuals who aid in the flow of goods and services from producer to final customer is called a distribution network. E. None of the above is true.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------35. Channels of distribution: A. that include intermediaries result in higher distribution costs than channels without intermediaries. B. should be designed to increase discrepancies of quantity between producers and consumers. C. usually do not involve conflicts as long as each channel member has profit as a goal. D. usually require longer-term planning than other market mix elements because channel decisions are more difficult to change quickly. E. are always characterized by conflict among channel members. 36. "Discrepancies of quantity" means: A. there are more producers than consumers. B. there are more consumers than producers. C. the difference between the product lines the typical producer makes and the assortment wanted by consumers or final users. D. consumers want more products than producers can make. E. the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users. 37. A joint venture is: A. a firm that provides only management skills, while others own the production and distribution facilities. B. a firm selling the right to use some process, trademark, or other right for a fee. C. a separate firm owned by a parent company. D. a domestic firm entering into a partnership with a foreign firm. E. none of the above. 38. A type of vertical integration system that develops by acquiring firms at different levels of channel activity is called: A. Corporate B. Traditional C. Administered D. Contractual E. Technical 39. Which tennis ball manufacturer is involved in direct distribution? A. World Tennis Ball B. American Tennis Ball C. National Tennis Ball D. All of the firms use direct distribution E. None of the firms use direct distribution 40. Exporting A. is selling some of what the firm produces to foreign markets. B. can be a way to get rid of surplus output. C. can come from a real effort to look for new opportunities. D. all of the above. E. A and B, but not C. 41. Some channel conflict may A. be inevitable when channel members have different objectives. B. be useful if that is what it takes for customers at the end of the channel to receive better value. C. be avoided when a producer does not sell identical products through different (competing) channels. D. reduced if there is a channel captain who thinks about all of the members of a channel and helps to direct their activities. E. All of the above are true. 42. Which of the following is true of selective distribution? A. It is commonly needed for convenience products and business supplies used by all offices. B. It is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. C. It is selling through only one intermediary in a particular geographic area. D. It is making a product available widely enough to satisfy target customers' needs but not exceed them. E. It is selling through only those intermediaries who will give the product special attention.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------43. A publisher of photography books finds that it is cost-effective to print 10,000 or more at a time. But a bookstore orders only a few copies of each book since its customers want to select from a wide variety. This example shows A. why discrepancies of quantity occur. B. why both discrepancies of quantity and assortment occur. C. neither discrepancies of assortment or quantity. D. why discrepancies of assortment occur. E. multichannel distribution. 44. Which of the following statements about Place is FALSE? A. Place variations are required when target markets have different needs. B. Product classes suggest Place objectives. C. Place decisions have relatively little impact on competition in a product-market. D. Place decisions have longer-run implications than Price decisions. E. Place decisions need to consider when customers want products. 45. A "channel captain" A. might be any member of the channel (that is, at any level in the channel) B. views the members of the channel as a unit. C. should help to make the channel more efficient by reducing conflict. D. all of the above. E. none of the above. 46. Consumers usually want to shop for milk, meat, vegetables, and fruits at one convenient location. Grocery stores that offer all of these products help to alleviate this ___________. A. discrepancy of quantity B. accumulation deficit C. sorting error D. discrepancy of assortment E. bulk-breaking 47. In _____ channel systems the amount of cooperation among members of the channel is very high. A. contractual B. traditional C. corporate D. administered E. horizontal 48. When the Rosco International chain of restaurants enters foreign markets, locals own the restaurant facilities, but look to Rosco to provide expertise in management and marketing. Rosco uses the _______ approach to enter international markets. A. management contracting B. direct investment C. exporting D. joint venture E. licensing 49. A good "channel captain" knows that: A. direct-to-customer channels usually cost less and perform more efficiently than indirect channels. B. marketing functions can be shifted and shared within a channelbut they cannot be completely eliminated. C. a channel system works best when all its members have a shared product-market commitment. D. some marketing functions can usually be completely eliminated by using short channels instead of long channels. E. Both B and C are true.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------50. A direct-to-customer channel A. includes a retailer but not a wholesaler. B. usually helps the producer to be more aware of changes in final customer attitudes. C. eliminates some of the marketing functions. D. is typical to reach final consumer markets. E. is most suitable when a large number of transactions are required in the channel or when orders are smaller. 51. A common "product-market commitment" in a channel system helps to eliminate: A. the need for a channel captain. B. unnecessary and costly duplication of marketing functions. C. all production-oriented channel members. D. competition among different channel systems. E. the need for marketing managers in individual firms. 52. Legal concerns about channel of distribution arrangements are most likely to arise when: A. a traditional channel system is involved. B. there are horizontal arrangements between firms at the same level of the channel. C. the firm is using intensive distribution. D. a firm uses multichannel distribution to reach its target markets. E. a corporate channel system is involved. 53. Some sporting goods manufacturers do not make a "full line" of equipment. So the Sports World retail chain carefully selects the brands of several manufacturers to sell. This regrouping activity is called: A. accumulating. B. assorting. C. retailing. D. bulk-breaking. E. sorting. 54. Nature Fresh Cereal does not feel satisfied with the location and amount of shelf space it is given at Sunshine Health Food Markets. This creates a source of A. vertical conflict. B. diagonal conflict. C. horizontal conflict. D. parallel conflict. E. placement conflict. 55. Rizzo Shoes sells through ________ channel system. Rizzo has informal agreements with its wholesalers and retailers they cooperate pretty well by placing orders, and sharing inventory and sales information over a computer network. A. a contractual B. a traditional C. a power leadership D. a corporate E. an administered 56. "Intensive distribution" means selling through: A. only one channel of distribution. B. all responsible and suitable retailers or wholesalers. C. only one intermediary in a particular geographic area. D. only those intermediaries who give the product special attention. E. all retail outlets.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------57. The need for reverse channels may arise in all of the following situations EXCEPT A. a consumer buys something in error and wants to return it. B. a firm makes an error in completing an order. C. a product is recalled for safety reasons. D. a consumer changes her mind after purchasing a product. E. All of the above create a need for reverse channels. 58. In ______ channel systems, ordering is routinized, inventory and sales information is shared over computer networks, accounting is standardized, and promotion efforts are coordinated. A. contractual B. traditional C. administered D. integrated E. corporate 59. Selective distribution: A. is likely to reduce high administrative expenses caused by a large proportion of small orders. B. may be suitable for all categories of products. C. is becoming more popular. D. is a good idea if some of the available intermediaries are not financially solid. E. All of the above are true. 60. Which of the following statements about exporting is NOT TRUE? A. Export agents can handle the arrangements as products are shipped outside the country. B. Channel relationships in international markets take time to build and shouldn't be treated lightly. C. Exporting requires a firm to establish permanent relationships with international partners. D. A firm often invests a minimum amount of time and money. E. Both A and C. 61. Which of these companies appears to operate as a channel captain? A. WTB B. ATB C. NTB D. All of the companies appear to be channel captains E. None of the companies is a channel captain 62. Direct marketing is A. personal sales contact between a representative of the company and an individual consumer. B. primarily concerned with the degree of market exposure. C. direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. D. an effort to sell through only one intermediary. E. a strategy that works best when a producer has little working capital. 63. If a Universal computer monitor breaks while it is still under warranty, someone needs to get it to the repair center. In this case, Universal will need: A. reverse channels. B. multichannels. C. intensive distribution. D. exclusive distribution. E. selective distribution.

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------64. "Selective distribution" means selling through: A. retailers but not wholesalers. B. multichannel distribution. C. all responsible and suitable wholesalers. D. only those wholesalers and retailers who give the product special attention. E. only one wholesaler or retailer in each geographic area. 65. Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called: A. bulk-breaking. B. assorting. C. sorting. D. wholesaling. E. accumulating. 66. A computer manufacturer runs training programs for its "cooperating" retailers' salespeople, as well as providing newspaper advertising layouts, point-of-purchase materials, and sales manuals. This is an example of: A. an administered channel system. B. a contractual channel system. C. a traditional channel system D. a vertically integrated corporate channel system. E. a franchising system. 67. Midwest Tools, Inc. of Indianapolis, Indiana owns a plant in Poland for manufacturing and selling machine tools in Europe. This type of international involvement is called: A. management contracting. B. licensing. C. a joint venture. D. a direct investment. E. multichanneling. 68. Which of the following statements about direct channel systems is NOT true? A. There is no reliance on independent intermediaries whose objectives may be different from the producer's objectives. B. Suitable intermediaries are always available even when they're needed at the last minute. C. The producer can be more aware of changes in customer attitudes. D. Direct channels are more typical with business products than with consumer products. E. All of the above are true. 69. If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales, it would be using: A. licensing. B. joint venturing. C. management contracting. D. exporting. E. direct investment. 70. Which of the following statements about Place is NOT true? A. Most consumer products move from producer to intermediaries to final customer. B. A series of participants in the flow of goods and services from producer to final customer is called a channel of distribution. C. There is always one Place arrangement that is "best" for a product. D. Intermediaries develop to adjust discrepancies in quantity and assortment. E. All of the above are true.

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--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------71. Bulk-breaking A. means putting together a variety of products to give a target market what it wants. B. involves collecting products from many small producers. C. involves dividing larger quantities into smaller quantities as products get closer to the final market. D. means separating products into grades and qualities desired by different target markets. E. is most important with specialized producers of professional services. 72. Intensive distribution: A. gives a retailer more incentive to promote a product than he would have with exclusive distribution. B. is not very likely to be used in combination with multichannel distribution. C. is more likely to be used with relatively high priced products than with low priced products. D. is often used for convenience products and business supplies. E. none of the above. 73. Which of the following is NOT a likely advantage of vertical integration? A. Lower capital requirements. B. Lower executive overhead. C. Better control of distribution. D. Better quality control. E. Greater buying power. 74. Which of the following is NOT an advantage of vertical integration? A. Lower executive overhead B. Better control of distribution C. Easier adjustment of discrepancies of quantity and assortment. D. Greater buying power E. Stable sources of supplies 75. Which degree of market exposure would probably be most suitable for a heterogeneous shopping product which has achieved brand preference and sells for about $300? A. Concentrated distribution B. Selective distribution C. Administered distribution D. Intensive distribution E. Exclusive distribution 76. Selling through only one wholesaler or retailer in a particular geographic area is called: A. Ideal market distribution B. Intensive distribution C. Selective distribution D. Exclusive distribution E. Equivalent distribution 77. In international markets, a firm can sell its management and marketing know-how while letting locals own the production and distribution facilities by using A. licensing. B. exporting. C. joint venturing. D. management contracting. E. direct investment. 78. The role of "channel captain": A. should be taken by producers because they have more power. B. is to force other channel members to accept the channel captain's plan. C. should be taken by retailers because they are closer to consumers. D. may not be necessary if the channel members are satisfied with the "status-quo." E. is to help a channel system compete more effectively with other channel systems.

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--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------79. If a producer's marketing manager wants intermediaries to take over all responsibility for promoting his product he probably should use A. exclusive distribution. B. any of the above, since every channel member must support a product with promotion. C. intensive distribution. D. a vertically integrated distribution system. E. selective distribution. 80. Which of the following appears to best describe ATB's channel arrangements: A. Intensive distribution B. Exclusive distribution C. Selective distribution D. Global distribution E. Direct distribution 81. National Tennis Ball's channel arrangement: A. is called horizontal distribution B. is an example of intensive distribution C. illustrates a traditional channel system D. relies on exclusive distribution E. is likely to be characterized by a high level of conflict between channel members. 82. Traditional channels of distribution A. do not perform bulk-breaking activities. B. are usually preferred to other distribution arrangements. C. are easier to control than corporate channel systems. D. may involve little or no cooperation among channel members. E. are usually controlled through strong legal contracts. 83. Which of these companies uses a corporate channel of distribution? A. World Tennis Ball. B. American Tennis Ball. C. National Tennis Ball. D. Both World Tennis Ball and National Tennis Ball use a corporate channel. E. There is not enough information to tell which company uses a corporate channel of distribution. 84. A good reason for developing or joining a vertical marketing system A. is that the whole channel focuses on the same target market at the end of the channel and seems to be more effective. B. market competition at each level of the channel eliminates inefficient firms and serves consumers' needs better. C. is that no member of the channel has to bear the costs of the regrouping activities. D. is that no member of the channel has to plan for the whole channel since good decisions at each level run the channel. E. All of the above. 85. Which of the following best illustrates "discrepancies of quantity"? A. Michelin makes tires, but most consumers also want a large selection of car-care services. B. Some stores sell large quantities of Michelin tires, but only small quantities of tires made by other companies. C. There are over 309 million consumers in the U.S. but only a small portion buy tires in any given year. D. Four firms make over 90 percent of all the tires sold in the United States. E. Michein made millions of tires last yearbut most customers bought only one set. 86. Which of the following is true of direct distribution? A. It requires a significant investment in facilities. B. It reduces a producer's need for working capital. C. Direct distribution always serves customer needs better and at a lower cost. D. Most firms selling consumer products rely on direct distribution. E. It is easy to change customer buying patterns from indirect distribution to direct distribution.

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--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------87. Exclusive distribution A. should generally be used only if it is not possible to generate intermediary interest in intensive distribution. B. is legal as long as it does not involve vertical channel arrangements. C. arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S. D. usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. E. None of the above is true. 88. Which of the following describes WTB's channel arrangements: A. Intensive distribution B. Corporate channel system C. Exclusive distribution D. Traditional channel system E. Reverse channels 89. Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been A. shown to increase competition. B. a regular practice in the U.S. C. encouraged in the U.S. but not in many international markets. D. a successful strategy for entering international markets. E. ruled illegal by the U.S. Supreme Court. 90. If American Tennis Ball adds more retail outlets, which of the following would help it to manage channel conflict: A. assign the channel captain role to the largest retail chain. B. sell a different brand of tennis ball through the new retailers than what it sells through current retailers. C. select new retail outlets that target the same customers as those who buy from its current retailers D. choose new retailers in the same geographic market as its current retailers but who sell at lower prices E. drop its national advertising and leave it to retailers to promote its tennis balls. 91. A disadvantage of direct-to-customer channels is that A. most organizational buyers are used to relying on intermediaries to serve as their purchasing advisors. B. they require producers to shift many marketing functions to others. C. this approach makes is hard to achieve coordination among the required marketing activities. D. they make it more difficult to get information about changing needs of the market. E. None of the above is a disadvantage. 92. A wholesaler selling golf carts and mowers to golf courses might also carry grass seed and grass fertilizer. This would be an example of A. bulk-breaking. B. sorting. C. accumulating. D. assorting. E. discrepancy of quantity. 93. Which of the following statements about ideal market exposure is TRUE? A. As a firm goes from exclusive to intensive distribution, it loses progressively more control over price and service offered by retailers. B. A producer usually should seek maximum market exposure. C. Intensive distribution means trying to sell through all retail stores. D. It is necessary to get almost 100 percent market exposure to justify national promotion. E. All of the above are true.

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--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------94. Which of the following statements about channel systems is TRUE? A. Traditional channel systems are more efficient because of their greater freedom. B. Vertical integration works best when discrepancies of quantity are large. C. Most corporate channel systems use multichannel distribution. D. Some administered channel systems obtain the advantages of vertically integrated systems while still retaining flexibility. E. All of the above are true. 95. To reduce conflicts in channels, a firm should: A. Offer different products through each channel. B. Provide some compensation to members of the older channel. C. Treat channel partners fairly even when one partner is more powerful. D. Focus on segments not currently served by existing channels. E. All of the above. 96. When selecting the degree of market exposure for a firm's products, it's important to remember that: A. vertical arrangements between producers and intermediaries which limit sales by customer or territory are definitely illegal. B. the Federal Trade Commission prohibits exclusive distribution. C. vertical arrangements between producers and intermediaries which limit sales by customer or territory may be legal according to a recent Supreme Court ruling. D. horizontal arrangements among competing producers or intermediaries which limit sales by customer or territory are generally considered legal. E. Both B and D are true. 97. If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohiowith the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, this arrangement: A. WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal. B. MAY OR MAY NOT BE LEGALthe courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition. C. WOULD DEFINITELY BE LEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are legal. D. WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all horizontal arrangements between competitors are illegal. E. WOULD DEFINITELY BE LEGAL because the courts have ruled that all horizontal arrangements between competitors are legal. 98. Sony manufactures clock radios in quantities of more than 100,000 in a given time period but the average consumer wants only one clock radio at a time. This difference is an example of A. a regrouping activities. B. a discrepancy of assortment. C. a discrepancy of quantity. D. a sorting error. E. re-assorting.

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--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------27. (p. 297) D 28. (p. 310) B 29. (p. 300) E 30. (p. 305) B 31. (p. 296) E 32. (p. 297) E 33. (p. 300) D 34. (p. 292) B 35. (p. 299-300) D 36. (p. 297) E 37. (p. 311) D 38. (p. 303) A 39. (p. 294) A 40. (p. 309-310) D 41. (p. 300-301) E 42. (p. 305) E 43. (p. 297) B 44. (p. 292) C 45. (p. 301) D 46. (p. 297) D 47. (p. 302-303) C 48. (p. 311) A 49. (p. 301) E 50. (p. 294) B 51. (p. 299) B 52. (p. 307) B 53. (p. 298) B 54. (p. 300) A 55. (p. 303-304) E 56. (p. 305) B 57. (p. 309) E

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------58. (p. 303-304) C 59. (p. 305) E 60. (p. 310) C 61. (p. 301) A 62. (p. 296) C 63. (p. 309) A 64. (p. 305) D 65. (p. 298) E 66. (p. 303-304) A 67. (p. 311) D 68. (p. 294) B 69. (p. 310) A 70. (p. 292) C 71. (p. 298) C 72. (p. 305) D 73. (p. 303) A 74. (p. 303) C 75. (p. 305) B 76. (p. 306) D 77. (p. 311) D 78. (p. 301) E 79. (p. 306) A 80. (p. 305-306) C 81. (p. 306) D 82. (p. 299) D 83. (p. 303) C 84. (p. 302) A 85. (p. 297) E 86. (p. 296) A 87. (p. 306) D 88. (p. 305) A

--------------------------------------------------------------------------------------------------------------------------------------11 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 11 CH --------------------------------------------------------------------------------------------------------------------------------------89. (p. 307) E 90. (p. 300) B 91. (p. 294-295) E 92. (p. 298) D 93. (p. 305-306) A 94. (p. 303-304) D 95. (p. 300) E 96. (p. 307) C 97. (p. 307) B 98. (p. 297) C

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------1. Compared to a public warehouse, a private warehouse A. requires no fixed investment. B. has lower unit costs. C. has less flexibility. D. works better when large volumes of goods must be stored irregularly. E. tends to have less managerial control. 2. The right physical distribution system should be based primarily on A. the desired customer service level. B. how customers store the product. C. the physical characteristics of the product. D. what is the lowest cost method of transportation for the product. E. the inventory level that allows the smoothest production runs. 3. Storing: A. must be provided by all channel members. B. is necessary when production does not match consumption. C. is related to Placebut not to Price. D. makes goods available where they're needed. E. All of the above. 4. Modern warehouses typically do NOT have: A. power-operated lift trucks. B. electric hoists. C. battery-operated motor scooters. D. roller-skating order pickers. E. freight elevators. Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers - a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand, but demand for its products is fairly consistent over time so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each optionand the distribution service levels that can be achievedare as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that means some products will occasionally be out of stock, if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the the retail chain's warehouses. Cross-country shipments usually go by rail while regional shipments usually go by truck.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------5. In designing the right physical distribution system, United Tools should primarily focus on: A. the inventory level that its current warehouse can support. B. the lowest cost transportation method for each of its products. C. where customers store their inventory. D. the desired customer service level. E. the physical characteristics of each product. 6. Regarding alternative transporting modes: A. trucks are good for speed, frequency, dependability, and number of locations served. B. pipelines are slower and less dependable than water transport, but also less expensive and able to serve more locations. C. airways are faster, cheaper, and more dependable than railways. D. waterways are slow, costly, and unable to handle a variety of shipments. 7. Which of the following statements concerning physical distribution trade-offs is NOT true? A. The trade-offs that must be made in the physical distribution area can be complicated. B. The lowest-cost approach may not be the best as customer service level varies from one market to the other. C. Many firms are trying to address trade-off complications with e-commerce. D. Most physical distribution decisions involve trade-offs between costs, customer service level, and sales. E. An efficient physical distribution system does not have to make trade-offs for customers. 8. Public warehouses: A. generally do not provide all the services that could be obtained in a company's own branch warehouse. B. are not usually responsible for the risk of damage in the warehouse. C. provide flexibility because the user pays only for the space used. D. are not very useful to manufacturers who must maintain stocks in many locations, including foreign countries. E. All of the above. 9. Physical distribution decisions interact with which other marketing mix decisions? A. Price decisions. B. Promotion decisions. C. Product decisions. D. All of the above. E. None of the above. 10. Containerization: A. is widely used by railroads, but has not caught on with other modes. B. makes it easier to load and unload products, but it increases the risk of damage. C. has increased competition between railroads and water shippers since both offer this service. D. is commonly used for international shipments from Japan. E. None of the above is true. 11. Storing of goods is necessary when A. there is more demand and no supply. B. quality doesn't match demand. C. production doesn't match consumption. D. production doesn't match quality demanded. E. products are produced in small batches. 12. As a mode of transportation, railroad freight would be least suited for ____ A. iron ore. B. sand. C. fresh fruit. D. automobiles. E. coal.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------13. Trucks A. are best at moving large quantities of goods for longer distances. B. are the most expensive of any of the modes. C. are very slow compared to railroads, and this makes it hard to compete effectively. D. compete aggressively with other modes for high-value shipments. E. All of the above are true. 14. Regarding transportation modes, which of the following statements is NOT true? A. The majority of the pipelines in the U.S. are in the Southwest. B. Airfreight costs about the same as trucks for long distances, not counting the cost of transporting to and from the airport. C. Water transportation is the slowest shipping mode. D. Most cities in the United States are less than 200 miles from a major petroleum pipeline. 15. Regarding alternative transporting modes, which of the following statements is TRUE? A. Waterways usually provide the lowest cost way of shipping heavy freight. B. Airways are quickest. C. Pipelines offer reliability in moving oil and natural gas. D. Trucks serve the most locations. E. All of the above are true. 16. Just-in-time (JIT) delivery A. is always the best approach. B. reduces customers' physical distribution costs. C. increases storing and handling costs. D. shifts responsibility for physical distribution activities forward in the channel. E. requires customers to have high quality standards in physical distribution activity. 17. Regarding airfreight, which of the following statements is NOT true? A. Airfreight may reduce the total cost of distribution. B. Inventory costs usually increase, since only small quantities can be shipped at a time. C. Very bulky items cannot be shipped economically. D. Airfreight is opening up new markets for many perishable items. E. There are usually fewer problems from theft and damage with airfreight. 18. Logistics costs A. are important to both firms and consumers. B. don't vary from firm to firm. C. are very similar across different countries. D. total less than 10 percent of the cost of groceries. E. have little impact on a macro marketing system. 19. The physical distribution customer service level concerns A. the costs to carry a product in inventory. B. the length of time a product is stored in inventory. C. the effort put in by channel members to meeting customer needs. D. the location of distribution centers. E. how rapidly and dependably a firm can deliver what customers want. 20. Logistics decisions include all of the following except: A. distribution service level. B. transporting of goods. C. handling of goods. D. prices to charge for delivery. E. storage of goods.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------21. Which of the following statements about supply chains is FALSE? A. A supply chain includes all the activities involved in procuring materials, transforming them into products, and distributing them to customers. B. A supply chain includes one or more channels of distribution. C. The primary aim of any firm in a supply chain is to contribute to customer value by minimizing its own distribution costs. D. Few firms are willing to give "outsiders" access to information in their computer systems, so it is likely to be quite some time before computers have the impact on managing a supply chain that they have had in other areas of business. E. None of the above is false. 22. One of United's biggest customers has placed a very large, heavy order. Its warehouse is in a location served by all transport modes, and the customer has directed United to ship the order by the mode with the lowest transport costs. In this situation, United will probably ship the tools by A. Airfreight B. Trucks C. Waterways D. Railroads 23. Most physical distribution decisions involve trade-offs between A. the total cost of physical distribution and consumer service levels only. B. transportation costs and inventory carrying costs only. C. costs, consumer service levels, and sales. D. sales and consumer service levels only. E. availability and speed of delivery only. 24. Piggyback service means A. loading truck trailers on railcars to increase flexibility. B. linking truck trailers to save fuel. C. providing door-to-door service in cities. D. special handling of important farm equipment. E. combining small shipments of many shippers into more economical quantities. 25. Airfreight A. has rates one third the rates of trucks. B. efficiently delivers all types of goods. C. serves many more locations than trucks. D. can reduce the cost of preparing goods for distribution. E. can help reduce inventory costs. 26. Transportation helps to A. make products available when they're needed. B. achieve economies of scale in production. C. make products available where they're needed. D. make exchange easier. E. all of the above. 27. Which of the following does NOT contribute to total inventory cost? A. Costs of damage to products while in inventory. B. Costs of risks such as theft and fire. C. Costs of inventory becoming obsolete. D. Increase in the value of goods. E. Handling costs.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------28. Which of the following statements is NOT TRUE? A. Storing is a marketing function. B. Storing allows producers and intermediaries to keep stocks at convenient locations. C. Storing allows the producer to achieve economies of scale in production. D. Storing is necessary when production of goods doesn't match consumption. E. Storing can increase the value of goods, but does not involve costs. 29. Efficient Consumer Response (ECR) A. involves collaboration between supermarket chains and consumers. B. started in 2005. C. saves U.S. consumers almost $5 billion per year. D. involves computer links between grocers and their suppliers. E. started in Europe and then moved to the United States. 30. Which of the following transportation modes is "best" at handling a variety of goods? A. Truck B. Rail C. Water D. Air E. Pipeline 31. Jackie works in transportation for a company that ships expensive, high quality fish all across the United States. The perishable nature of her product, the value of freshness, and the high prices she charges would lead you to recommend which transportation mode? A. Airfreight B. Trucks C. Railroads D. Inland waterways E. Piggyback truck 32. A major benefit of _____ is that it protects the products and simplifies handling during shipping. A. fast freight B. truck servicel C. containerization D. airfreight E. piggyback 33. Which physical distribution system is best suited for Ralston Supply? A. Airfreight. B. Inland waterways. C. Truck. D. Rail and warehouse. E. Cannot be determined without more information. 34. Physical distribution differs from logistics in that A. logistics deals with storing and physical distribution does not. B. logistics uses JIT to coordinate activities among firms and physical distribution does not. C. logistics includes customer service decisions and physical distribution does not. D. logistics includes transporting goods and physical distribution does not. E. physical distribution is another common name for logistics. 35. Inventory refers to A. the amount of goods being stored. B. minimizing storage costs. C. the amount of goods being sold. D. the marketing function of holding goods. E. the quality of goods being stored.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------36. It is usually most economical to ship bulky nonperishable items, such as coal and iron ore, by A. water. B. pipeline. C. truck. D. air. E. None of the above is a good answer, since the cost of shipping a product usually does not vary from one mode to another. 37. United ships to the regional distribution centers of one of the retail hardware chains that is serves. The main advantage of the distribution centers for the retailer is likely to be that they A. can store a larger inventory than traditional warehouses. B. eliminate the need for electronic communications between the distribution centers and the individual stores. C. speed the flow of tools from the factory to the stores. D. all of the above are typical advantages of distribution centers. E. none of the above are advantages. 38. Physical distribution A. should not require tradeoffs for managers. B. means that consumers get products for low prices. C. includes transportation of products, but logistics does not. D. is invisible to most consumers in the United States. E. All of the above are true. 39. Which of the following observations about the total cost approach is NOT true? A. Includes transportation costs. B. Helps find the lowest total cost for the right service level. C. Focuses on direct costs and doesn't consider the possible costs of lost sales. D. Uses the tools of cost accounting and economics. E. Involves evaluating each possible physical distribution system and identifying all of the costs of each alternative. 40. Radio frequency identification tags can A. make it easy for computers to monitor inventory. B. help computers to order needed stock. C. track storing costs. D. transmit details about carton contents. E. all of the above. 41. Compared to private warehouses, PUBLIC warehouses: A. are not any more flexible because long-term leases are usually required. B. may not always be conveniently available. C. require no fixed investment but per unit storing costs are usually higher. D. reduce managerial flexibility. E. All of the above. 42. More freight is carried more miles _____ than any other mode of transportation. A. by railroads B. by air C. by pipeline D. by trucks E. over water 43. Information technology helps physical distribution in what ways? A. It improves service levels, but doesn't coordinate activities. B. While it cannot cut costs, it can coordinate activities. C. It can cut costs and improve service levels. D. It is overrated and generally fails to improve service levels and coordinate activities. E. It improves service levels while raising costs.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------44. When United Tools considers its total inventory cost, which of the following would NOT be included? A. Costs of damage to products while in inventory. B. Costs of inventory becoming obsolete. C. Cost of a storage facility. D. Cost of capital invested in the inventory. E. All of the above should be included in total inventory cost. 45. There are big shifts in demand from season to season for the lawn mowers produced by GreenVision Co.and its need for storage facilities also varies. GreenVision should think about using: A. piggyback service. B. private warehousing facilities. C. distribution centers. D. public warehousing facilities. E. None of the above is a good answer. 46. United Tools is considering building a new private warehouse for its tools. Which of the following are benefits of private warehouses? A. Low unit storing cost, if volume is high. B. Very flexible if storage needs expand or contract in the future. C. Low fixed investment. D. All of these are benefits of private warehouses. 47. Products that require a high frequency of scheduled shipments would be least suited to travel by A. truck. B. rail. C. air. D. water. E. pipeline. 48. Alex has to transport iron ore from New Orleans to Memphis. Which mode of transport is he more likely to use? A. Airways B. Truck C. Railroad D. Inland waterways E. Monorail 49. The "physical distribution concept" is probably being used in a firm if: A. inventories are set based on just-in-time delivery policies. B. the total cost of distribution is as low as possible. C. storing costs have been minimized. D. transporting, storing, and product-handling are seen as interrelated parts of one PD system. E. transporting costs have been minimized. 50. Compared to public warehouses, PRIVATE warehouses: A. may have low unit costs if the volume is high. B. are better if space will only be needed infrequently. C. offer low fixed investments. D. increase managerial flexibility. E. All of the above. 51. Which of the following statements about electronic data interchange is FALSE? A. Inventory information is automatically updated. B. EDI has not yet spread to international markets. C. A customer transmits its order information directly to the supplier's computer. D. EDI is very common in the United States. E. EDI puts information into a standardized format.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------52. As part of their move toward unification, European countries are _____ transport regulations. A. strengthening B. more tightly enforcing C. reducing D. strictly monitoring E. adding many new 53. Good marketing strategy planners know that: A. transporting costs may limit a marketing manager's possible target markets. B. the transporting costs for some bulky or low-value products may be greater than their manufacturing costs. C. transporting is vital for mass distribution and modern urban life. D. the cost of shipping some "high-value" products to users is less than 5 percent of their selling prices. E. All of the above are true. 54. Which physical distribution system should Harter choose for Ricotta Tool Co.? A. Airfreight. B. Inland waterways. C. Truck. D. Rail and warehouse. E. Cannot be determined without more information. 55. Considering weight, which one of the following transporting modes usually has the LOWEST cost? A. Waterways B. Airways C. Trucks D. Railroads E. Pipelines 56. Which of the following statements about the transporting function is TRUE? A. Among transportation modes, an advantage of air transport is its ability to handle a variety of goods. B. Because transportation costs are less than 1 percent of costs for most products, marketing managers do not need to consider them when making strategy decisions. C. Pipelines are generally one of the fastest modes of transportation. D. In most countries, government plays little role in transportation. E. Transporting costs can be a large part of the total cost for heavy products that are low in value. 57. Tammy works in transportation for a company that manufactures tractors and other farm equipment in China for the U.S. market. Cost is her primary concern in getting products to farm states in the U.S. Midwest. Which mode(s) of transportation would you suggest? A. Water then truck. B. Air then rail. C. Air then truck D. Air only. E. Water then rail. 58. Regarding alternative transporting modes, which of the following statements is TRUE? A. Waterways serve the most locations. B. Airways offer the most expensive transporting mode. C. Railways provide the lowest cost considering weight. D. Trucks offer the fastest speed. E. Pipelines in the U.S. are located mostly in the Northeast.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------59. Which of the following is NOT true about the supply chain for Ford Motor Company? A. The supply chain includes the Ford dealers that sell its cars to consumers. B. The supply chain does not include production plants where Ford cars are built. C. The supply chain includes a tire supplier to Ford's production plants. D. The supply chain includes a company that sells rubber to Ford's tire supplier. E. The supply chain includes trucks that deliver cars to Ford dealers. 60. Which of the following is true about public warehouses? A. They are leased by companies for their own use. B. They are designed to speed the flow of goods C. They are very expensive. D. They are useful for manufacturers that must maintain stock in many locations, including foreign countries. E. They are used by firms who must regularly store large volumes of goods. 61. Which of the following is true regarding JIT systems? A. JIT systems do not have backup inventory. B. JIT usually entails less frequent deliveries. C. JIT requires manufacturers to add new warehouses. D. JIT requires suppliers to respond to very short order lead times and the customer's production schedule. E. Manufacturers must locate their facilities next to important customers in order to practice JIT. 62. Fresh Farm Produce Co. has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000, while airfreight would cost $250,000. Because the costs of the actual fruits and vegetables are the same for each transportation mode, Fresh Farm Produce should A. try to determine other physical distribution costs before deciding on whether to use airfreight. B. immediately switch to rail to save money. C. conduct marketing research to determine which fruits and vegetables customers want most. D. immediately switch to airfreight because it is clearly a faster mode of transportation. E. ship with airfreight and store the fruit and vegetables in warehouses. 63. To help in managing excess inventory, United Tools would most likely use: A. a private warehouse. B. a public warehouse. C. piggyback mode. D. a distribution center. E. all of the above would help with excess inventory. 64. Which of the following statements about inventory and storage is TRUE? A. A distribution center is used to avoid unnecessary storing costs. B. Only government agencies can store products in public warehouses. C. Decisions about inventory levels are usually not of concern to marketing managerssince inventory levels are best determined based on the amount of the product produced. D. Achieving customer service goals makes a large inventory almost inevitable. E. Minimizing storage costs will lead to lower total distribution costs. 65. Physical distribution customer service level means all of the following EXCEPT: A. Honda wants enough bumpers to build cars that day. B. A vacationer wants Avis to have his rental car clean and ready when he arrives at the rental car counter. C. Sears' shirts are priced at a fair value. D. McDonald's has enough large cups so that customers can buy the larger size drinks which are on sale. E. Safeway's loaves of bread are in stock and not crushed when customers want them.

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------66. At least ________ percent of all freight shipped in the United States moves by trucksat least part of the wayfrom producer to user. A. 20 B. 75 C. 15 D. 5 E. 10

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12CHprvw09fa Key

1. (p. 333) C 2. (p. 319) A 3. (p. 331) B 4. (p. 334) E 5. (p. 317) D 6. (p. 327) A 7. (p. 318-319) E 8. (p. 333) C 9. (p. 322) D 10. (p. 330) D 11. (p. 332) C 12. (p. 328) C 13. (p. 328) D 14. (p. 328-329) B 15. (p. 327-329) E 16. (p. 322) B 17. (p. 329) B 18. (p. 316) A 19. (p. 317) E 20. (p. 316) D 21. (p. 325) D 22. (p. 328-329) C 23. (p. 318) C 24. (p. 330) A 25. (p. 329) E 26. (p. 326) E

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------27. (p. 332-333) D 28. (p. 331-332) E 29. (p. 317) D 30. (p. 327) C 31. (p. 329) A 32. (p. 330) C 33. (p. 327-330) A 34. (p. 316) E 35. (p. 331) A 36. (p. 328) A 37. (p. 335) C 38. (p. 318) D 39. (p. 321) C 40. (p. 334) E 41. (p. 333-334) B 42. (p. 328) A 43. (p. 319) C 44. (p. 333) E 45. (p. 333) D 46. (p. 333) A 47. (p. 328) D 48. (p. 328-329) D 49. (p. 319) D 50. (p. 333) A 51. (p. 325) B 52. (p. 327) C 53. (p. 326-327) E 54. (p. 327-330) C 55. (p. 328) A 56. (p. 326-327) E 57. (p. 328) A

--------------------------------------------------------------------------------------------------------------------------------------12 CH MKG 300 PREVIEW QUESTIONS PROFESSOR MOSER PREVIEW QS 12 CH --------------------------------------------------------------------------------------------------------------------------------------58. (p. 329) B 59. (p. 323) B 60. (p. 333-334) D 61. (p. 322) D 62. (p. 321) A 63. (p. 333) B 64. (p. 335) A 65. (p. 317) C 66. (p. 328) B