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MULTIPLE CHOICE
1. The term marketing refers to:
a. new product concepts and improvements
b. selling
c. advertising and promotion activities
d. a philosophy that stresses customer satisfaction
e. planning sales campaigns
ANS: D
PTS: 1
REF: 3
TOP: AACSB Reflective Thinking| TB&E Model Strategy
2. A business is concerned with many day-to-day activities. Some of the most important of these
activities are the planning and development of a product, its pricing policy, and the distribution
strategy. These activities are all a part of:
a. a control system
b. marketing
c. accounting
d. production
e. human resources
ANS: B
This description contains three of the four main activities included in the marketing function. Many
students may mistakenly believe that marketing is only concerned with promotion.
PTS: 1
REF: 3
OBJ: 01-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model
Distribution
3. _____ is a philosophy, an attitude, a perspective, or a management orientation that stresses customer
satisfaction.
a. Planning strategy
b. Customer management
c. Marketing
d. A control system
e. Reciprocity
ANS: C
PTS: 1
REF: 3
TOP: AACSB Reflective Thinking| TB&E Model Product
10. Indonesian logging companies harvest the rainforests for timber and assume that a market exists for
their products. The typical Indonesian logging company has a(n) _____ orientation.
a. exchange
b. product
c. production
d. sales
e. environmental
ANS: C
The logging companies do not focus on the needs and desires of the marketplace.
PTS: 1
REF: 4-5
OBJ: 01-2 TYPE: App
TOP: AACSB Ethics| TB&E Model Product
11. The concept of exchange is important to marketing because:
a. if all the conditions for an exchange are in place, then the exchange will be completed
b. exchange provides money to marketers
c. marketing activities help to create exchange
d. marketing activities are a requirement for exchange to take place
e. money is the only medium of exchange for business marketers
ANS: C
Marketing activities help the exchange to take place, but marketing can occur without an exchange.
PTS: 1
REF: 3-4
OBJ: 01-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Product
15. Firms with a _____ orientation focus on the internal capabilities of the firm rather than on the desires
and needs of the marketplace.
a. sales
b. production
c. market
d. customer
e. customer-benefit
ANS: B
PTS: 1
REF: 4-5
TOP: AACSB Reflective Thinking| TB&E Model Product
16. A company that sets its goals and strategies based on what its current equipment can produce, what
products engineering can design, and what the company itself can do best, has a(n) _____ orientation.
a. marketplace
b. sales
c. market
d. exchange
e. production
ANS: E
PTS: 1
REF: 4-5
OBJ: 01-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product
ANS: B
The production orientation can survive in the short term under a variety of conditions; however, if
market needs change, long-term survival is difficult.
PTS: 1
REF: 4-5
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
20. A firm that adopts a(n) _____ orientation to marketing will fail to consider whether what the firm
produces most efficiently also meets the needs of the marketplace.
a. customer
b. exchange
c. product
d. market
e. production
ANS: E
The production orientation forces a company to build whatever it builds best, that is, whatever it has
the experience and expertise in doing.
PTS: 1
REF: 4-5
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
22. The _____ orientation assumes people will buy more if aggressive selling techniques are used.
a. market
b. sales
c. customer
d. production
e. exchange
ANS: B
The sales orientation assumes aggressive selling is what is needed to increase demand.
PTS: 1
REF: 5
OBJ: 01-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Pricing
23. A _____ orientation assumes marketing means selling things and collecting money. It also assumes
people will buy more goods and services if aggressive marketing techniques are used.
a. sales
b. production
c. market
d. customer
e. marketplace
ANS: A
PTS: 1
REF: 5
TOP: AACSB Reflective Thinking| TB&E Model Customer
29. Companies that rely on the marketing concept and that have implemented a market orientation strategy
recognize that:
a. price is the most important variable for customers
b. sales depend predominantly on an aggressive sales force
c. what the customer thinks he or she is buying is what is important
d. a company has to apply scientific management techniques to survive
e. selling and marketing are essentially the same thing
ANS: C
The perceived product and perceived value are what the customer is buying, and the marketing
concept and market orientation have endeavored to understand those perceptions.
PTS: 1
REF: 5-6
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
30. A company that has a market orientation and adheres to the marketing concept does NOT:
a. integrate all the activities of the firm to satisfy customer wants
b. focus on consumer needs and wants
c. differentiate the firm's products from its competitor's products
d. fuel sales growth through the application of aggressive sales techniques
e. concentrate on long-term goal achievement (such as profits and growth) for the firm
ANS: D
Aggressive sales techniques are part of the sales orientation and are not needed if a company is
meeting needs and wants of its customers.
PTS: 1
REF: 5
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product
31. The statement, "Marketing should be introduced at the beginning rather than the end of the production
cycle and integrated into each phase of the business," is consistent with a(n) _____ orientation.
a. production
b. market
c. retail
d. sales
e. enterprise
ANS: B
Understanding the competitive arena and competitors' strengths and weaknesses is a critical
component of market orientation.
PTS: 1
REF: 5-6
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Product
37. The marketing concept includes a goal orientation to remind managers that:
a. achieving long-term organizational goals is as important as satisfying customers
b. customers must be satisfied no matter what the long-term effect on the firm
c. the only reason for any business to exist is to make a profit
d. the objective is to find a target market that differs from that of the competition
e. functional integration of all departments is useful but not essential
ANS: A
The goal orientation refers to the company's goals, such as profit, growth, service, and survival.
PTS: 1
REF: 5-6
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
38. The marketing concept stresses that the social and economic justification for an organization's
existence is the satisfaction of customer needs and wants while:
a. producing a good or service at the lowest possible cost
b. improving the general standard of living
c. constantly increasing sales volumes
d. applying scientific management techniques to improve efficiency
e. simultaneously meeting organization objectives
ANS: E
The marketing concept holds that the needs and wants of both the customer and the firm be served.
PTS: 1
REF: 5-6
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
40. An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs
and to meet organizational objectives but also to preserve or enhance individuals' and society's longterm best interests.
a. sales orientation
b. market orientation
c. ethical business mission
45. Which of the following statements about the societal orientation is true?
a. Companies that protect the environment by using all-natural materials in their products are
showing a societal marketing orientation.
b. Marketers cannot deliver all benefits sought by customers because these benefits may not
be in the long-term best interests of the customers.
c. The societal marketing concept is an important refinement of the market concept.
d. Organizations have both a social and economic justification for their existence.
e. All of these statements about the societal orientation are true.
ANS: E
PTS: 1
REF: 6
OBJ: 01-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer
48. Organizations that sell products that are often unsought (such as life insurance and retirement plans)
may find themselves adopting a _____ orientation because the companies are marketing products that
most people do not want.
a. sales
b. production
c. marketing
d. product
e. customer
ANS: A
Aggressive selling is sometimes used by companies that sell products their customers do not want to
buy.
PTS: 1
REF: 5
OBJ: 01-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Promotion
57. _____ gives customers the feeling their concerns are being addressed and at the same time gives
employees the feeling their expertise matters to management.
a. Management-employee synergy
b. Organizational entropy
c. Managerial reciprocity
d. Empowerment
e. Delegation
ANS: D
PTS: 1
REF: 9
TOP: AACSB Reflective Thinking| TB&E Model Customer
ANS: E
Market-oriented firms are focused outward toward their customers.
PTS: 1
REF: 6
OBJ: 01-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
59. Which of the following statements about a typical sales-oriented business is true?
a. The company develops its products to meet the needs of specific groups of people.
b. The primary goal of the company is profit through customer satisfaction.
c. The company invests the majority of its resources in promoting its products and services.
d. The company is in business to satisfy customers' wants and needs and deliver superior
value.
e. All of these statements about a typical sales-oriented business are true.
ANS: C
See Review Learning Outcome 3.
PTS: 1
REF: 6 | 10
OBJ: 01-3 TYPE: Comp
TOP: AACSB Analytic| TB&E Model Customer
60. _____ is defined as the relationship between benefits and the sacrifice necessary to obtain those
benefits.
a. Opportunity cost
b. Marketing utility
c. Market quality
d. Satisfaction percentage
e. Customer value
ANS: E
PTS: 1
REF: 6
TOP: AACSB Reflective Thinking| TB&E Model Customer
66. _____ is a strategy that entails forging long-term partnerships with customers.
a. Commitment selling
b. Relationship marketing
c. Transactional marketing
d. Market engineering
e. Organization-customer synergy
ANS: B
PTS: 1
REF: 8
TOP: AACSB Reflective Thinking| TB&E Model Customer
71. Which of the following measures would be the best indicator of whether your organization's personnel
have a customer orientation?
a. Ask each employee's boss if that person is customer-oriented.
b. Assess each employee's impact on the profitability of the firm.
c. Survey customers on how oriented the organization's personnel are to customer needs and
desires.
d. Assess how well each employee has contributed to the marketing success of the firm by
examining every financial statement created by the organization.
e. Test employees on their knowledge of customer service techniques.
ANS: C
The key to assessing how customer-oriented a firm's personnel are is to ask the customer. Only the
customer can provide this type of information.
PTS: 1
REF: 8
OBJ: 01-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
73. Some market-oriented firms give employees expanded authority to solve customer problems on the
spot. This is known as:
a. training
b. deregulation
c. empowerment
d. commissioning
e. mediating
ANS: C
PTS: 1
REF: 9
TOP: AACSB Communication| TB&E Model Customer
77. Dofasco, Inc. is a Canadian steel manufacturer. According to its CEO, "People can make a phenomenal
difference if you stop telling them to come to work, put their brains in a box, and do whatever the
supervisor says. We let our employees work in teams." This quote implies that by using teamwork,
Dofasco:
a. operates successfully using a production orientation
b. provides its customer with a high level of satisfaction
c. has a high employee turnover rate
d. does not deliver superior customer service
e. has a sales orientation
ANS: B
Teamwork is one way a company with a market orientation creates customer satisfaction.
PTS: 1
REF: 9
OBJ: 01-3 TYPE: App
TOP: AACSB Analytic| TB&E Model Customer
78. Dofasco, Inc. is a Canadian steel manufacturer. According to its CEO, "People can make a phenomenal
difference if you stop telling them to come to work, put their brains in a box, and do whatever the
supervisor says. We let our employees work in teams." Teamwork would benefit Dofasco by:
a. enhancing employee performance
b. doing away with the need for empowerment
c. creating managerial entropy
d. refining the definition of customer value
e. doing all of these
ANS: A
Enhanced employee performance leads to improved customer satisfaction.
PTS: 1
REF: 9
OBJ: 01-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Strategy
79. Redefining the business mission of a mattress manufacturer as "a good night's sleep," rather than
stating the mission as "the manufacture of high-quality mattresses," will:
a. not stimulate an awareness of changes in consumer desires
b. be too broad a statement to be of any real use in serving customers
c. stifle creativity in discovering opportunities to serve customers
d. help ensure the firm retains its focus on consumers and does not become preoccupied with
its products and internal needs
e. ensure the core products will be retained
ANS: D
The broader business mission of "a good night sleep" will stimulate innovation and creativity because
not all sleep aids are mattresses. It will lead the company to further growth.
PTS: 1
REF: 9
OBJ: 01-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer
80. One of the reasons given for the decline of the passenger rail industry in the United States is that the
industry defined its mission as trains and not as transportation sources. The railroad industry failed to:
a. define its mission in terms of the benefits its customers seek
b. ignore the marketing concept of serving customer needs and wants
c. realize "customers only want what they know"
d. have a sales orientation
87. _____ is the primary tool used by a sales-oriented organization to achieve its corporate goals.
a. Price
b. Promotion
c. Product design
d. Place (distribution)
e. Production
ANS: B
A sales-oriented organization seeks to generate sales volume based upon intensive promotional
activities.
PTS: 1
REF: 10
OBJ: 01-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Promotion
88. For a market-oriented organization, the primary tool used to achieve its goals is:
ANS: A
A market-oriented organization seeks to generate sales volume based on serving customer needs and
wants, utilizing all of the elements of the marketing mix to do so.
PTS: 1
REF: 10
OBJ: 01-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Distribution| TB&E Model Pricing| TB&E Model
Product| TB&E Model Promotion
REF: 11-12
7. _____ is the idea that socially responsible companies will outperform their peers by focusing on the
world's social problems and viewing them as opportunities to build profit and help the world at the
same time.
a. Sustainability
b. Philanthropy
c. Cause marketing
d. Creative ethics
e. International ethics
ANS: A
PTS: 1
REF: 29
TOP: AACSB Ethics| TB&E Model Strategy
17. Which of the following sayings best describes how people with conventional morality act?
a. Don't put all of your eggs in one basket.
b. When in Rome, do as the Romans do.
c. Be wary of strangers bearing gifts.
d. A rolling stone gathers no moss.
e. Don't count your chickens before they hatch.
ANS: B
PTS: 1
REF: 31
TOP: AACSB Ethics| TB&E Model Strategy
22. Which of the following factors does NOT tend to influence ethical decision making and judgments?
ANS: C
PTS: 1
REF: 31
OBJ: 03-2 TYPE: Comp
TOP: AACSB Ethics| AACSB Diversity| TB&E Model Strategy
24. A human resources manager is creating a code of ethics for the employees of the retirement home she
works for. Which of the following is NOT an ethics principle she should keep in mind as she creates
this code?
a. The principles should not upset current retirement home workers and future job applicants.
b. Any decisions should be fair to all concerned: retirement home nurses, cleaning personnel,
and administrative staff.
c. Input on the code should be gained from other knowledgeable individuals or groups.
d. Principles can deviate from common practices because of the prestigious nature of the
facility.
e. She should not have to pull rank or use coercion to implement her ethics code.
ANS: D
An unethical code would presume that the company is an exception to a common practice in the
industry.
PTS: 1
REF: 31-32
OBJ: 03-2 TYPE: Comp
TOP: AACSB Ethics| TB&E Model Strategy
25. A(n) _____ is a defined group that managers feel is most likely to buy a firm's product.
a. target market
b. buying center
c. aggregated unit
d. consumer cluster
e. demographic sample
ANS: A
PTS: 1
REF: 32
TOP: AACSB Reflective Thinking| TB&E Model Customer
27. Which of the following statements best describes the typical target market?
a. A target market will remain stable over time, with the same group of consumers.
b. Target markets change over time as consumers drop in or out of the market, and as tastes
change.
c. Target markets are not strongly affected by changes in the external environment.
d. Target markets only change when the features and benefits of the product offering change.
e. Target markets cannot be specifically defined according to age, income, or location
because these factors are continually changing.
ANS: B
Target markets are defined and described, but they are always changing in response to environmental
changes.
PTS: 1
REF: 32
OBJ: 03-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
30. The external environment is a strong influence on a target market and can be a source of _____ for the
marketing manager.
a. opportunities and threats
b. threats and strengths
c. environmental loopholes
d. opportunities and weaknesses
e. product myopia
ANS: A
The external environment can provide opportunities to serve new and changing needs, as well as
warnings about changes that could threaten the current position of the firm. Students will need to
remember what a SWOT analysis is to answer this question.
PTS: 1
REF: 32
OBJ: 03-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
31. Marketing managers cannot control _____, but they can at times influence it.
a. where advertising is placed
b. the external environment
c. the sales force
d. the distribution strategy
e. how products are priced
ANS: B
The external environment is basically uncontrollable, but the other four answers are part of the
marketing mix.
PTS: 1
REF: 32-33
OBJ: 03-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
33. What is apparently the most difficult external variable for marketing managers to forecast, influence,
or integrate into marketing plans?
a. technology
b. social factors
c. demography
d. competition
e. economic conditions
ANS: B
Social factors and changes are difficult to foresee, because they are usually slow and/or small changes.
Also, it is very difficult for one company to affect social factors in any appreciable manner.
PTS: 1
REF: 33
38. _____ factors are the environmental factors concerned with the changes in people's values, lifestyles,
and family roles.
a. Social
b. Economic
c. Political
d. Competitive
e. Demographic
ANS: A
PTS: 1
REF: 33
TOP: AACSB Reflective Thinking| TB&E Model Customer
43. Consumer preference for low-carb diets has greatly modified the way food is being marketed. This
concern with health issues is an example of a(n) _____ factor.
a. economic
b. political and legal
c. technological
d. demographic
e. social
ANS: E
PTS: 1
REF: 33
OBJ: 03-4 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Customer
45. What do self-sufficiency, upward mobility, and conformity have in common?
a. These are no longer valued attitudes.
b. They are attitudes that can easily be changed.
c. These are three perceptions that Americans have of the Asian lifestyle.
d. These are three of the core values that have influenced lifestyles in the United States.
e. They are the determinants of a component lifestyle.
ANS: D
The fourth value is work ethic.
PTS: 1
REF: 33
OBJ: 03-4 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer
56. Which of the following events has had a greater effect on marketing than any other social change?
a. the growing number of one-child families
b. the increasing number of immigrants from Northern Europe
c. the growing number of people on the Internet
d. the increasing number of working women
e. the growing number of people of retirement age who are continuing work
ANS: D
PTS: 1
REF: 34
TOP: AACSB Reflective Thinking| TB&E Model Customer
58. The study of people's vital statistics, such as their ages, births, deaths, and locations, is called:
a. cultural sociology
b. psychometrics
c. ecology
d. ethnography
e. demography
ANS: E
PTS: 1
REF: 34-35
TOP: AACSB Reflective Thinking| TB&E Model Customer
74. The higher your _____, the higher your purchasing power:
a. gross income
b. social class
c. disposable income
d. cost of living
e. inflation index
ANS: C
Purchasing power is measured by comparing income to the relative cost of a set standard of goods an
services. It is a aligned with net income, or income minus a standard set of expenses. Assuming a
constant income, the higher the cost of living (the expenses), the lower the purchasing power.
PTS: 1
REF: 39-40
OBJ: 03-7 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
76. Factors, such as interest rates, inflation, and consumer income that influence the marketing
environment, are called _____ factors.
a. economic
b. socio-demographic
c. political
d. government
e. consumption
ANS: A
PTS: 1
REF: 39
78. When income is high relative to the cost of living, consumers _____.
a. have more discretionary income
b. begin anticipating a period of price deceleration
c. stop buying luxury goods and services
d. have significantly less disposable income
e. anticipate price escalation by stockpiling
ANS: A
PTS: 1
REF: 39-40
TOP: AACSB Reflective Thinking| TB&E Model Customer
80. ____ is measure of the decrease in the value of money, expressed as the percentage reduction in value
since the previous year.
a. Inflation
b. Recession
c. Depression
d. Consumer break-even
e. Price escalation
ANS: A
PTS: 1
REF: 40
TOP: AACSB Reflective Thinking| TB&E Model Pricing
81. When planning marketing strategies during times of inflation, marketers must be aware inflation
causes consumers to:
a. purchase more goods and services to support their psychological selves, such as
counseling and stress management training
b. consume more meals away from home
c. buy in small quantities until inflation is over
d. decrease their brand loyalty to products they have traditionally used
e. put more money into savings accounts because prices are too high
ANS: D
In times of inflation, consumers are more price conscious and less brand-loyal.
PTS: 1
REF: 40
OBJ: 03-7 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Pricing
82. A period of economic activity when income, production, and employment tend to fall, reducing overall
demand, is called:
a. stagnation
b. an inflation
c. a recession
d. price escalation
e. a depression
ANS: C
PTS: 1
REF: 40
TOP: AACSB Reflective Thinking| TB&E Model Pricing
85. Which of the following strategies is appropriate for a marketer to use during a time of economic
recession?
a. Promote product value.
b. Maintain and improve customer services.
c. Emphasize top-of-the-line products in promotions.
d. Offer products that are economical and efficient.
e. Do all of these.
ANS: E
PTS: 1
REF: 40-41
TOP: AACSB Technology| TB&E Model Pricing
86. Which of the following is sometimes an effective weapon for fighting inflation and recession?
a. technology
b. line extensions
c. increased capital gains taxes
d. introducing product-line extensions
e. reducing R&D expenditures
ANS: A
PTS: 1
REF: 40-41
TOP: AACSB Reflective Thinking| TB&E Model Research
87. Research that attempts to expand the frontiers of knowledge rather than solving a specific, pragmatic
problem is called:
a. technical diversity
b. reactive research
c. applied research
d. experiential research
e. basic research
ANS: E
PTS: 1
REF: 41
TOP: AACSB Reflective Thinking| TB&E Model Research
100. Laws and regulations of various governments and their ongoing development and change are an
example of _____ factors and are part of all organizations' external environment.
a. economic investment
b. political and legal
c. research and development
d. competitive
101. The _____ Act strengthened the Clayton Act to prevent corporate acquisitions that reduce competition.
a. Hart-Scott-Rodino
b. Lanham-Scott
c. Celler-Kefauver Antimerger
d. Robinson-Patman
e. Sherman
ANS: C
See Exhibit 3.2. The Celler-Kefauver Act bolstered the Clayton Act's provision dealing with
interlocking directorates and closed another loophole that had allowed corporate takeovers.
PTS: 1
REF: 42
OBJ: 03-9 TYPE: Def
TOP: AACSB Analytic| TB&E Model Strategy
102.The _____ Act requires large companies to notify the government of their intent to merge.
a. Hart-Scott-Rodino
b. Sherman
c. Celler-Kefauver Antimerger
d. Robinson-Patman
e. Lanham
ANS: A
See Exhibit 3.2.
PTS: 1
REF: 42
OBJ: 03-9 TYPE: Def
TOP: AACSB Analytic| TB&E Model Strategy
103. The Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act are both
important laws designed to:
a. protect the channels of commerce
b. restrict alcohol and tobacco advertising
c. eliminate certain products from being advertised on childrens television programs
d. protect consumers from identity theft
e. penalize marketers selling merchandise with counterfeit brand names
ANS: D
PTS: 1
REF: 42
TOP: AACSB Analytic| TB&E Model Strategy
A circle trap
A market barrier entry
A reactive focus
Unempowerment
Marketing myopia
ANS: E
PTS: 1
REF: 18
TOP: AACSB Reflective Thinking| TB&E Model Product
21. A popular technique for managing a large organization with different technologies and markets is to
divide it into:
a. strategic business units
b. different technologies
c. strategic target markets
d. design matrices
e. tactical segments
ANS: A
PTS: 1
REF: 18
TOP: AACSB Analytic| TB&E Model Strategy
25. An SBU:
a. competes with the same companies as the other SBUs in the parent organization
b. shares the same mission with all the other SBUs in the parent organization
c. controls its business independent of other SBUs in the organization
d. usually benefits from the combined corporate raw materials purchases
e. still has strategic planning performed back at corporate headquarters
ANS: C
SBUs have separate business functions from one another and have their own mission statements,
markets, and planning.
PTS: 1
REF: 18
OBJ: 02-2 TYPE: Def
TOP: AACSB Analytic| TB&E Model Strategy
27. After management agrees on a mission statement, it must set objectives. Which of the following is
NOT a characteristic of a good objective?
a. profitable
b. realistic
c. measurable
d. time-specific
e. consistent
ANS: A
Good objectives are not necessarily stated in terms of profit.
PTS: 1
REF: 18
OBJ: 02-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Pricing
30. When an organization creates a mission statement that is too narrow, _____ results.
a. marketing synergy
b. marketing myopia
c. directional marketing
d. an internal threat
e. sustainable competitive advantage
ANS: B
Marketing myopia defines a business in terms of goods and services rather than in terms of benefits
customers seek. See Review Learning Outcome 2.
PTS: 1
REF: 18
OBJ: 02-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Product
35. For marketing objectives to be realized, they must meet all of the following criteria EXCEPT:
a. be consistent with organization objectives
b. be measurable
c. be attainable
d. be challenging
e. be set within a one-year time frame
ANS: E
There is no one-year time frame restriction for marketing objectives although specifying a particular
time frame makes an objective more clear and precise.
PTS: 1
REF: 18
OBJ: 02-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
37. A _____ is a formal study conducted by an organization to ascertain its current status and capabilities
and its future expectations.
situation analysis
marketing audit
trend analysis
strategic alternative selection
competitive advantage audit
ANS: A
PTS: 1
REF: 19
TOP: AACSB Analytic| TB&E Model Research
43. _____ is defined as the collection and interpretation of information about forces, events, and
relationships that may affect the organization.
a. Market sampling
b. An internal audit
c. Opportunity analysis
d. Environmental scanning
e. Stakeholder analysis
ANS: D
PTS: 1
REF: 19
TOP: AACSB Reflective Thinking| TB&E Model Research
61. _____ show costs declining at a predictable rate as experience with a product increases.
a. Liquidity growth curves
b. EOQ graphs
c. Breakeven analyses
d. Experience curves
e. Supply/demand curves
ANS: D
PTS: 1
REF: 20
OBJ: 02-5 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Pricing
62. Which of the following is NOT a source of a cost competitive advantage?
a. reengineering
b. experience curves
c. break-even analyses
d. efficient labor
e. production innovation
ANS: C
PTS: 1
REF: 20-21
TOP: AACSB Reflective Thinking| TB&E Model Pricing
67. Which of the following is a type of strategic alternative that matches products and markets?
a. vertical integration
b. product penetration
c. divestment
d. horizontal integration
e. market penetration
ANS: E
PTS: 1
REF: 22
TOP: AACSB Reflective Thinking| TB&E Model Strategy
68. _____ is a strategy of increasing market share for present products in existing markets.
a. Market penetration
b. Product development
c. Market development
d. Diversification
e. Product penetration
ANS: A
PTS: 1
REF: 22
TOP: AACSB Reflective Thinking| TB&E Model Strategy
75. _____ is a strategy that creates new products for present markets.
a. Product penetration
b. Market penetration
c. Product development
d. Market development
e. Diversification
ANS: C
PTS: 1
REF: 22
TOP: AACSB Reflective Thinking| TB&E Model Strategy
76. _____ is the strategy of increasing sales by introducing new products into new markets.
a. Product penetration
b. Product development
c. Market penetration
d. Market development
e. Diversification
ANS: E
PTS: 1
REF: 22
OBJ: 02-6 TYPE: Def
TOP: AACSB Diversity| TB&E Model Strategy| TB&E Model International Perspective
102. A(n) _____ describes and estimates the size and sales potential of market segments of interest to the
firm and assesses key competitors in these market segments.
a. marketing orientation
b. environmental scan
c. marketing mix audit
d. target market strategy
e. market opportunity analysis
ANS: E
PTS: 1
REF: 24
TOP: AACSB Reflective Thinking| TB&E Model Strategy
105. The _____ is the unique blend of product, distribution, promotion, and pricing strategies designed to
produce mutually satisfying exchanges with a target market.
a. internal environmental mix
b. marketing mix
c. product mix
d. product line
e. market portfolio
ANS: B
PTS: 1
REF: 25
TOP: AACSB Reflective Thinking| TB&E Model Strategy
ANS: C
PTS: 1
REF: 49-50
OBJ: 04-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model
Distribution
10. Which of the following describes a common criticism of multinational companies?
a. the transference of the wrong kind of technology to a developing nation
b. excessive employment information
c. countertrading
d. the transference of labor-intensive technology
e. dumping
ANS: A
Typically, the technology needed to run operations in developing nations is capital-intensive and thus
does not substantially increase employment.
PTS: 1
REF: 50
OBJ: 04-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
11. A company that is capital-intensive:
a. has an altered fiscal strategy for overseas operations
b. spends more on equipment than on labor
c. makes better use of benchmarking than other types of business
d. creates employment monopolies
e. must engage in countertrading due to restrictive foreign legislature
ANS: B
PTS: 1
REF: 50
OBJ: 04-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
13. With a _____, a firm produces standardized products to be sold the same way all over the world.
a. traditional marketing strategy
b. global marketing standardization approach
c. product extension approach
d. culturally based marketing strategy
e. synergistic approach to marketing
ANS: B
PTS: 1
REF: 50
OBJ: 04-2 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product
14. Global marketing standardization:
a. is becoming less popular with the large multinationals
b. encourages product, packaging, and advertising variations for each nation or local market
c. actually raises production costs
d. presumes markets throughout the world are becoming more alike
e. is more popular with consumer products than with industrial goods
ANS: D
With a global marketing standardization approach, a firm produces standardized products to be sold
the same way worldwide. This approach assumes all customers have the same needs and wants.
PTS: 1
REF: 50
OBJ: 04-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
24. Which of the following is an important cultural factor that should be considered by global marketers?
a. competitive synergy
b. language
c. natural resources
d. technology sensitivity
e. level of economic development
ANS: B
PTS: 1
REF: 51
TOP: AACSB Diversity| TB&E Model Strategy
26. Which of the following statements about the political environment is true?
a. A recession is part of the political environment.
b. A country is either socialistic or capitalistic, but never both.
c. The countries with the least across-the-board regulations and political structures foster the
strongest economies.
d. The European Union is purely an economic arrangement and has no political impact on
marketing.
e. All of these statements about the political environment are true.
ANS: C
Recession is an economic factor. Countries are a combination of socialism and capitalism. The
European Union is a means for the member nations to pursue an economic, monetary, and political
union.
PTS: 1
REF: 51-52
OBJ: 04-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
31. A tax levied on the goods entering a country is called a(n):
a. license
b. quota
c. boycott
d. exchange control
e. tariff
ANS: E
PTS: 1
REF: 52
OBJ: 04-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product
33. A(n) _____ is a limit on the amount of a specific product that can enter a country.
a. quota
b. tariff
36. An exclusion of all products from certain countries or companies by a government or group is called
a(n):
a. expropriation
b. quota
c. tariff
d. exchange control
e. boycott
ANS: E
PTS: 1
REF: 52
TOP: AACSB Reflective Thinking| TB&E Model Product
39. A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a
central bank rather than sending the money out of the country.
a. tariff
b. quota
c. fiscal prerequisite
d. exchange control
e. transfer barrier
ANS: D
PTS: 1
REF: 52
TOP: AACSB Reflective Thinking| TB&E Model Pricing
40. _____ are trade alliances in which several countries agree to work together to form a common trade
area that enhances trade opportunities among those countries.
a. Boycotts
b. Regional unifications
c. Market groupings
d. Free trade nations
e. Expropriation members
ANS: C
PTS: 1
REF: 52
TOP: AACSB Reflective Thinking| TB&E Model Strategy
41. Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate
global exchange and remove barriers are called _____ agreements.
a. trade
b. joint venture
c. CRM
d. exchange
e. licensing
ANS: A
PTS: 1
REF: 52
TOP: AACSB Reflective Thinking| TB&E Model Strategy
42. _____ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador,
Paraguay, Peru, and Uruguay. This agreement eliminated the tariffs among these trading partners.
NAFTA
Maastricht
WTO
GATT
Mercosur
ANS: E
PTS: 1
REF: 52
TOP: AACSB Reflective Thinking| TB&E Model Strategy
43. The latest round of World Trade Organization (WTO) talks has been contentious. A major goal of this
_____ is to bolster the developing economies of Africa, Asia, and Latin America where up to twothirds of the population works in agriculture.
a. Mercosur covenant
b. CAFTA Alliance
c. Doha Round
d. Uruguay Round
e. WTO Round
ANS: C
PTS: 1
REF: 52-53
OBJ: 04-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
44. The _____ of trade negotiations created the _____, which replaces GATT. This trade agreement
dramatically lowers trade barriers worldwide.
a. Uruguay Round; World Trade Organization
b. Doha Round; European Union
c. Doha Round; NAFTA
d. Paraguay Round; South American Free Trade Agreement
e. Mercosur; European Union
ANS: A
The Uruguay Round created the WTO.
PTS: 1
REF: 53
OBJ: 04-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Strategy
45. The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced
tariffs by one-third worldwide.
a. Uruguay Round
b. Mercosur
c. GATT
d. NAFTA
e. Maastricht Treaty
ANS: A
PTS: 1
REF: 52-53
TOP: AACSB Reflective Thinking| TB&E Model Strategy
46. The North American Free Trade Agreement (NAFTA) did NOT:
a. create the world's largest free-trade zone including Canada, the United States, and Mexico
b. substantially reduce economic growth in Mexico
c. allow U.S. and Canadian financial-services companies to own subsidiaries in Mexico
d. remove many tariffs and duties so that Mexico, Canada, and the United States can trade
more freely
e. expand opportunities for U.S. businesses in Mexico
ANS: B
49. Which of the following statements about the European Union (EU) is true?
a. The EU creates a single Europroduct for a generic Euroconsumer.
b. The EU removes all internal trade barriers and standardizes regulations in European
countries for easier trade.
c. The EU can correctly be called the "United States of Europe" because all European voters
have agreed to these changes.
d. The existence of the EU eliminates protectionist movements by United Europe against the
Japanese and the United States.
e. None of these statements about the EU is true.
ANS: E
Because of diverse languages and cultures, no "United States of Europe" or a generic Euroconsumer
results from United Europe. There exists the possibility of a protectionist movement and increased
competition. It does not eliminate all trade barriers.
PTS: 1
REF: 54
OBJ: 04-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
51. A multinational company that makes a labor-intensive product would be interested in the _____
makeup of countries. Factors such as median age, gender, and literacy rates would determine the
success of its global expansion.
a. demographic
b. lifestyle
c. natural
d. cultural
e. economic
ANS: A
Demographics include age and educational levels as well as ethnicity and gender.
PTS: 1
REF: 54-55
OBJ: 04-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
54. Vast differences in natural resources create all of the following EXCEPT:
a. potential for military intervention
b. shifts in wealth between nations
c. inflation and recession
d. global dependencies
e. export opportunities for countries with no natural resources
ANS: E
While differences do create shifts in wealth, dependencies, inflation, recession, and the potential for
conflict, they only hinder opportunities for the countries that do not have resources.
PTS: 1
REF: 55
OBJ: 04-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
55. Which method of entering the global marketplace would be LEAST risky?
a. exporting
b. licensing
c. contract manufacturing
d. joint ventures
e. direct investment
ANS: A
See Exhibit 4.1.
PTS: 1
REF: 55-56
OBJ: 04-4 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
63. A(n) _____ is a global intermediary that operates primarily in agriculture and raw materials by
bringing the buyer and seller together.
a. buyer for export
b. export agent
c. license agent
d. import agent
e. export broker
ANS: E
PTS: 1
REF: 55
TOP: AACSB Reflective Thinking| TB&E Model Strategy
64. A cooperative of egg producers believes a profitable market for eggs exists overseas where people are
not as concerned about cholesterol. If the cooperative decides to export, it will most likely use a(n):
a. commission merchant
b. drop shipper
c. export broker
d. import agent
e. export agent
ANS: C
Export brokers typically handle agriculture and raw materials.
PTS: 1
REF: 56
OBJ: 04-4 TYPE: App
TOP: AACSB Analytic| TB&E Model Product
66. The _____ is an intermediary in the global market who assumes all risks and sells globally for its own
account. The domestic manufacturer usually treats it like a domestic customer.
a. buyer for export
b. export agent
c. joint venturer
d. contract manufacturer
e. market group
ANS: A
PTS: 1
REF: 55
TOP: AACSB Reflective Thinking| TB&E Model Customer
2. _____ is the creation of a large computerized file of customers' and potential customers' names,
profiles, and purchase patterns.
a. Electronic targeting
b. Sampling procedure specification
c. Database marketing
d. Competitive data mining
e. Consumer behavior marketing
ANS: C
PTS: 1
REF: 113
TOP: AACSB Technology| TB&E Model Strategy
4. According to the text, a true marketing decision support system should be:
a. reactive
b. customer-oriented
c. interactive
d. rigorous
e. descriptive
ANS: C
A true DSS should be flexible, interactive, discovery-oriented, and accessible.
PTS: 1
REF: 113
OBJ: 08-1 TYPE: Def
TOP: AACSB Technology| TB&E Model Strategy
5. To help understand why attendance at the teams games was so poor, the Atlanta Falcons used
marketing research to gather factual information. The organization used in-game surveys and end-ofseason surveys of ticket holders. The gathering of factual statements is an example of marketing
research in its _____ role.
a. historical
b. descriptive
8. A bowling alley operator could use _____ to determine why customers do not seem to like his bowling
alley's new location.
a. transactional marketing
b. public relations
c. an EDI system
d. market synergy
e. marketing research
ANS: E
Marketing research can be used by management to trace problems and their causes.
PTS: 1
REF: 114
OBJ: 08-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
9. Soon after the Harriet Tubman Museum expanded its hours and began charging a small fee to pay for
the extra help needed to keep it open longer, attendance decreased. To determine why this decrease in
attendance occurred, the museum staff could rely on:
a. a production audit
database marketing
marketing research
an internal marketing audit
secondary data
ANS: C
Marketing research could be used to find out why attendance declined.
PTS: 1
REF: 114
OBJ: 08-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
10. The publisher of a Canadian business magazine wanted to make several major changes in the
magazine's content and format. To determine what changes would be supported by its subscribers and
what changes would not be welcomed, the publisher should engage in:
a. advertising
b. database marketing
c. marketing research
d. a data retrieval system
e. secondary data
ANS: C
Marketing research would be appropriate to use to determine how the publisher could provide greater
customer satisfaction.
PTS: 1
REF: 114
OBJ: 08-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
11. Marketing managers can use marketing research to:
a. improve the quality of their decision making
b. find out why a marketing plan failed
c. learn how to more efficiently retain customers
d. understand the ever-changing marketplace
e. do all of these
ANS: E
PTS: 1
REF: 114-116
TOP: AACSB Reflective Thinking| TB&E Model Research
14. A manufacturer of an all-natural fruit and veggie bar targeted to people who want nutritious snacks has
asked for marketing research to explain the reasons for the recent failure of its Apple-Broccoli bar.
This type of research is described as:
a. descriptive
b. predictive
c. diagnostic
d. normative
e. historical
ANS: C
One of the roles of marketing research is to be diagnostic and to explain what happened.
PTS: 1
REF: 114
OBJ: 08-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
15. Volkswagen developed an 18-month-long project to gain a better understanding of the American
culture so it could develop cars more appealing to this market. The research project was called
Moonraker. Moonraker was intended to play a(n) _____ role in Volkswagen's marketing research.
a. diagnostic
b. descriptive
c. predictive
d. heuristical
e. demonstrative
ANS: B
One of the roles of marketing research is the gathering of descriptive data, which includes reporting
consumers attitude toward products.
PTS: 1
REF: 114
OBJ: 08-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer
16. The first step in the marketing research process is to:
a. specify the sampling plan
b. collect the data
c. analyze the marketplace
d. plan the research design
e. identify and formulate the problem/opportunity to be studied
ANS: E
PTS: 1
REF: 114
TOP: AACSB Reflective Thinking| TB&E Model Research
17. There are five Major League Baseball markets with more than one team. So far this season, the
average combined attendance for the Chicago Cubs and the Chicago White Sox ranks lowest. Before
conducting any marketing research to explain low attendance figures, the teams will need to:
a. determine who will be most likely to respond to a survey
b. select a market sample from everyone in the population
c. define the problem to be researched
d. develop a survey to find out exactly what's wrong
e. enumerate the decision factors
23. Managers must combine specific pieces of information needed to identify the marketing research
problem. Their _____ is to provide insightful decision-making information.
a. company-correlated goal
b. autonomous task
c. dichotomous goal
d. marketing research objective
e. field service objective
ANS: D
PTS: 1
REF: 114 | 115
TOP: AACSB Reflective Thinking| TB&E Model Research
24. Post Properties is a company that manages apartments in various communities. It is concerned with a
glut of apartments in Atlanta, Orlando, and Dallas Its market researcher begins by examining the rental
markets in the Southeast, the history of apartment buildings, local economies, competitive rents, and
ownership--all information that was on hand and did not require any new research to locate. The
market researcher looked at:
a. a closed study
b. secondary data
c. primary data
d. a statistical analysis
e. priority databases
ANS: B
PTS: 1
REF: 115
TOP: AACSB Reflective Thinking| TB&E Model Research
25. Data previously collected for purposes other than the one at hand are an important source of
information as the researcher defines the problem. These data are called _____ data.
a. single-source
b. secondary
c. primary
d. consensual
e. convenience
ANS: B
PTS: 1
REF: 115
32. _____ specifies the research questions to be answered, how and when the data will be gathered, and
how the data will be analyzed.
a. A secondary data use plan
b. The research collaborative plan
c. An autonomous director
d. The research design
e. The sampling plan
ANS: D
PTS: 1
REF: 116
TOP: AACSB Reflective Thinking| TB&E Model Research
ANS: E
PTS: 1
REF: 116-117
TOP: AACSB Reflective Thinking| TB&E Model Research
34. Pulte Homes, a national home builder, needs to control costs. Research done by Pulte Homes
determined that 80 percent of its homebuyers selected the same countertops, floors, carpets, and
toilets. Pulte Homes used these _____ data to cut its costs by reducing the variety of options offered
without having any effect on the majority of its buyers.
a. primary
b. secondary
c. dichotomous
d. convenience
e. ethnographic
ANS: A
Primary data are information that is gathered for the first time for solving a particular problem.
PTS: 1
REF: 116
OBJ: 08-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer
35. An engineer of Volkswagen America spent three and a half hours on a Greyhound bus to experience
the vast distances Americans travel in their automobiles and to try to understand why Americans treat
their automobiles as rolling extensions of their living rooms. What kind of data did the engineer
collect?
a. heuristic
b. primary
c. cohesive
d. random
e. secondary
ANS: B
Primary data are information that is gathered for the first time for solving a particular problem.
PTS: 1
REF: 116
OBJ: 08-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
36. Information collected for the first time for the purpose of solving a particular problem under
investigation is called _____ data.
a. primary
b. secondary
c. dichotomous
d. observation
e. convenience
ANS: A
PTS: 1
REF: 116
TOP: AACSB Reflective Thinking| TB&E Model Research
37. To determine new product opportunities, British Colombia's Sun-Rype Products conducted focus
groups in which it learned Canadians are having trouble getting their required servings of fruits and
vegetables each day--especially the vegetables. It gathered _____ data.
a. heuristic
b. primary
c. consensual
d. random
e. collaborative
ANS: B
PTS: 1
REF: 117
TOP: AACSB Reflective Thinking| TB&E Model Research
38. Stair Specialist, Inc. builds customized circular staircases for homes in southern California. Its sales
have plateaued. Nothing it does seems to change its sales picture. Its owner has asked you to advise the
company on what it should do to increase its sales. Which of the following is an example of primary
data that could be used for examining this marketing research problem?
a. data from a study of new home start-ups in southern California
b. an article in a construction trade journal predicting fewer housing starts during the next
decade
c. industry predictions that the number of new homes built in the Southwest will increase by
15 percent
d. information from the Los Angeles Yellow Pages showing the number of building
contractors has declined over the past five years
e. none of the choices
ANS: E
Information collected for the first time for the purpose of solving a particular problem under
investigation is called primary data. All of these data are examples of secondary data.
PTS: 1
REF: 116
OBJ: 08-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research
39. Mel and Mimi is the name of an upscale boutique that has outgrown the building it has been located in
for the last two decades. Its owners want to know how its customers will react to a move and if the
addition of new product lines will make the new location more attractive to its loyal customers. The
store's owners have surveyed several of their customers to gauge their reaction to various potential
locations and changes in product lines. The survey results are an example of _____ data.
a. primary
b. secondary
c. dichotomous
d. observation
e. collaborative
ANS: A
Information that is collected for the first time for the purpose of solving a particular problem under
investigation is called primary data.
PTS: 1
REF: 116
OBJ: 08-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer
40. What is the chief advantage of primary data?
a. low cost compared to secondary data
b. relevance to the problem at hand
c. availability to any interested party for use
d. accessibility through computerized databases
e. avoiding interviewer biases
ANS: B
Primary data are information collected for the first time for the purpose of solving a particular problem
under investigation.
PTS: 1
REF: 116
OBJ: 08-3 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Research
2. A group of middle school students stop by a sporting goods store. The store has just received a new
shipment of high-end racing bicycles. The bicycles range in price from $1,200 to $3,000. All of the
students want one of these new bikes, but none has the means to buy one. Is this group of consumers a
potential market for the expensive bikes?
a. Yes, they are a potential market since they are all about the same age.
b. No, they do not have the ability to purchase at this time.
c. No, to qualify as a market, they must need the product.
d. Yes, they are a market because this product could satisfy their consumer wants and desires.
e. Yes, they are a market because this group shares relatively similar product needs and
purchasing characteristics.
ANS: B
A market is a group of people or organizations that has wants and needs that can be satisfied by
particular product categories, has the ability to purchase these products, and is willing to exchange
resources for the products. There is no suggestion of ability in this case.
PTS: 1
REF: 97
OBJ: 07-1 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer
3. A market is people or organizations that have:
a. the ability, willingness, and power to buy
b. a medium of exchange and products they desire
c. needs and wants and an ability and willingness to buy
d. unmet needs or wants and products or services that satisfy those unmet needs or wants
e. communication, financial, and capital resources
ANS: C
A market is defined as having four imperative characteristics: people or organizations, needs and
wants, ability, and willingness to buy.
PTS: 1
REF: 97
OBJ: 07-1 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer
4. A(n) _____ is a subgroup of individuals or organizations sharing one or more characteristics that cause
them to have relatively similar product needs.
a. market universe
b. market segment
c. aggregated market
d. segmentation base
5. _____ is the process of dividing a market into meaningful groups that are relatively similar and
identifiable.
a. Perceptual mapping
b. Positioning
c. Micromarketing
d. Market sampling
e. Market segmentation
ANS: E
PTS: 1
REF: 97
TOP: AACSB Reflective Thinking| TB&E Model Strategy
6. E&V Bridal Studios is a wedding consulting business designed to appeal to East Asians. At one time it
used the same marketing mix for all of its customers, but it has discovered that it needs a different
marketing mix to appeal to its ethnic customers. For example, Chinese brides want elaborate red
gowns, and Vietnamese brides wear a brocaded gown with long sleeves and a Mandarin collar. E&V
Bridal Studios uses a procedure called _____ to divide its large market.
a. micromarketing
b. positioning
c. market segmentation
d. cannibalization
e. perceptual mapping
ANS: C
Dividing one large market into divisions based on a variable such as size is called market
segmentation.
PTS: 1
REF: 97
OBJ: 07-1 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Strategy
7. The purpose of market segmentation is to:
a. reduce the market down to a specific size that the firm can handle
b. divide the market into equal size and profit regions for sales territories
c. group a large number of markets together enabling a company to serve them
simultaneously
d. develop a generalized definition of the market as a whole
e. enable the marketer to tailor marketing mixes to meet the needs of one or more specific
groups
ANS: E
The purpose of segmentation is to group similar consumers and to serve their needs with a specialized
marketing mix.
PTS: 1
REF: 97-98
OBJ: 07-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
8. Hildy Webb and LaTishe Brown own Creative Catering and would like to improve customer
satisfaction and increase repeat business. When you ask them to describe a typical customer, they say
it is impossible and explain that with corporate functions, family affairs, and fund-raisers, they do not
have a typical customer. You suggest it is time for market segmentation because:
a. it will enable them to build an accurate description of customer needs by group and to
b.
c.
d.
e.
ANS: A
The purpose of segmentation is to group similar consumers and to serve their needs with a specialized
marketing mix.
PTS: 1
REF: 97
OBJ: 07-1 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer
9. Market segmentation can assist marketers to do all of the following EXCEPT:
a. develop more precise definitions of customer needs and wants
b. identify which variable base should be used for segmenting
c. more accurately define marketing objectives
d. improve resource allocation
e. evaluate performance
ANS: B
Market segmentation itself does not signal which base should be used, but it will define needs and
wants, and help marketers define marketing objectives, improve resource allocation, and evaluate
performance.
PTS: 1
REF: 97-98
OBJ: 07-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
10. The process of market segmentation involves breaking down a heterogeneous market into
homogeneous and identifiable segments. If this process is carried to its extreme, then one could say
that:
a. this is the reason segmentation cannot be used by small firms
b. all individuals have the same needs in spite of cultural differences
c. everyone belongs to the same segment
d. segmentation controls the demand for products
e. every individual in the world is a market segment
ANS: E
The ultimate segmentation would have each individual occupying his or her own segment, because
everyone has somewhat different needs.
PTS: 1
REF: 97-98
OBJ: 07-1 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer
11. ProtecTV is a product that selectively mutes words and phrases some people find objectionable. It can
be connected to a television, VCR, DVD player, or a satellite TV system. The manufacturer of
ProtecTV targeted parents who did not want their children exposed to what they consider to be
offensive language. The primary market segment for ProtecTV is:
a. all parents
b. educators
c. children under the age of 12
13. Which of the following is NOT one of the four criteria identified in the text for successful market
segmentation?
a. substantiality
b. identifiability and measurability
c. accountability
d. accessibility
e. responsiveness
ANS: C
The four criteria are substantiality, identifiability and measurability, accessibility, and responsiveness.
PTS: 1
REF: 98
OBJ: 07-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Strategy
14. To be useful, a segmentation scheme must produce segments that meet four basic criteria. The criteria
are:
a. segmentable, targetable, reliable, and homogeneous
b. tangibility, flexibility, causality, and accessibility
c. substantiality, identifiability and measurability, accessibility, and responsiveness
d. reliability, flexibility, tangibility, and accessibility
e. responsiveness, reliability, homogeneity, and causality
ANS: C
PTS: 1
REF: 98
TOP: AACSB Reflective Thinking| TB&E Model Strategy
15. A manufacturer of lenses used in microscopes, binoculars, and telescopes has segmented its market
into scientific equipment manufacturers, sporting equipment manufacturers, and retailers who sell
replacement lenses. In order for this segmentation scheme to be successful, all of the following criteria
must be met EXCEPT:
a. substantiality
b. accessibility
c. identifiability and measurability
d. complexity
e. responsiveness
ANS: D
Complexity is not a criterion; simplicity would be preferred.
PTS: 1
REF: 98
17. The marketing researcher for Chickadee, a manufacturer of designer clothing for infants and toddlers,
has submitted a report on potential segments for expansion of its marketing efforts. She noted an
increase of professional women over the age of 35 who are leaving their jobs to have their first babies.
She described this segment as having substantiality. This means it:
a. has enough special stores, magazines, and other outlets that it will be possible to direct
advertisements at this group
b. is large enough to permit a profitable market effort toward its members
c. exhibits a response rate to marketing variables different from the rates of other segments
d. is too large and needs to be reduced to a more easily identifiable and measurable size
e. will be difficult to develop a product to match this group of buyers
ANS: B
Substantiality means the selected segment will be large enough to warrant developing and maintaining
a special marketing mix. Serving the specific needs of this segment must be commercially viable, even
if the number of potential customers is small.
PTS: 1
REF: 98
OBJ: 07-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer
18. DCS Corporation makes barbecue grills. It has expanded into high-priced, multi-purpose grills for
people who want to be able to cook all their food outside. Facing little competition, DCS designed an
excellent line of specialty grills, had good distribution, used effective promotion with this market, and
within four years had a respectable market share. Yet financial losses every year have caused DCS to
decide to drop this line. The reason could be that this market segment, relative to the resources devoted
to it, lacked:
a. reliability
b. identifiability and measurability
c. substantiality
d. accessibility
e. causality
ANS: C
Substantiality means the selected segment is large enough to warrant developing and maintaining a
special marketing mix. Serving the specific needs of this segment must be commercially viable. Based
on four years of losses, this one apparently was not.
PTS: 1
REF: 98
OBJ: 07-3 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Product
28. E&V Bridal Studios is a wedding consulting business targeted to East Asians. It accommodates the
various cultures by providing services to appeal to Koreans, Vietnamese, Chinese, and Japanese
customers. E&V Bridal Studios markets its services to its customers by using ethnicity to divide its
customers into segments. Ethnicity is its primary:
a. perceived image
b. accessibility quotient
c. environmental control
d. segmentation base
e. differentiation guide
ANS: D
A segmentation base is the characteristic used to segment the market.
4. As a result of hearing the adventures of returning soldiers, Monroe decided to enlist in the U.S. Army.
These stories he heard from the soldiers acted as:
a. affective states
b. external stimuli
c. internal stimuli
d. purchase outcomes
e. a dissonance creator
ANS: B
The adventures he heard were stimuli that were not physiological.
PTS: 1
REF: 64
OBJ: 05-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model International Perspective
5. Hector loves cola and is always on a diet. He will only drink Diet Coke. When offered a Diet Pepsi
one afternoon as an alternative, he refused to even consider it as part of his evoked set even though he
generally drinks a soft drink about the time of day the offer was made. This illustrates that Hector:
a. is satisfying a want
b. is satisfying a need
c. is satisfying a belief
d. has a physiological drive
e. has a need motivator
ANS: A
A want is often brand specific, whereas a need is something an individual depends on to function
efficiently. A person may need food but wants specific brands.
PTS: 1
REF: 64
OBJ: 05-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product
6. Which of the following is the BEST example of an internal stimulus that would create need
recognition?
a. a friend comments on how shabby your coat looks
b. a radio station runs an ad for a new video game rental store
c. a headache
d. an invitation to a graduation for which you need a gift
e. a billboard promoting a new national Internet service provider
ANS: C
Aches and pains are generated internally by your body without outside inputs from anything or
anyone.
PTS: 1
REF: 64
OBJ: 05-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Customer
7. After a need or want is recognized, a consumer may be motivated to clarify the options available and
generate an evoked set of brands. This occurs during which part of the consumer decision-making
process?
a. evaluation of alternatives
b. information search
c. cognitive dissonance
d. consideration stage
e. product identification
ANS: B
PTS: 1
REF: 64
TOP: AACSB Reflective Thinking| TB&E Model Customer
8. While Martin was looking at the DVDs at Wal-Mart, he was trying to remember the name of the horror
movie he saw that starred Bruce Campbell so he could buy the DVD. This is likely to occur during
which part of the consumer decision-making process?
a. antecedent state
b. need recognition
c. external information search
d. alternative evaluation
ANS: D
PTS: 1
REF: 64-65
TOP: AACSB Reflective Thinking| TB&E Model Strategy
13. Pregnant Niceae has been shopping for a baby crib. She has visited several sites on the Internet that
provide information about cribs and has consulted a book on how to keep her baby safe by a consumer
group. Niceae has also asked several new mothers for recommendations. In her decision-making
process, Niceae has been using:
a. marketing-controlled information sources
b. demographic information sources
c. nonmarketing-controlled information sources
d. secondary data sources
e. internal search sources
ANS: C
Public sources of information, such as Web sites and consumer groups, are known as nonmarketingcontrolled information sources.
PTS: 1
REF: 64-65
OBJ: 05-2 TYPE: App
TOP: AACSB Technology| TB&E Model Product| TB&E Model Online/Computer
14. Which of the following is NOT an example of a marketing-controlled information system?
a. a television ad for Geico insurance
b. a NASCAR automobile sponsored by the U.S. Army
c. a $1-off coupon for Campbells soup
d. an article in Bicycling magazine about the newest Shimano brand shoes
e. a real estate agent
ANS: D
The article in Bicycling would NOT have originated with the Shimano organization.
PTS: 1
REF: 65
OBJ: 05-2 TYPE: App
TOP: AACSB Technology| TB&E Model Online/Computer
15. While Robinson was looking at the CDs at Wal-Mart, he was trying to remember the name of the
group that sang the song he liked on last night's episode of Smallville, so he could buy it. Since
recording companies pay to have their CDs promoted on television shows that air on the WB, the
source of information Robinson is trying to recall is:
a. a fortuitously evoked set
b. marketing-controlled
c. nonmarketing-controlled
d. unitary data
e. a credible consideration set
ANS: B
PTS: 1
REF: 65
TOP: AACSB Technology| TB&E Model Customer
18. Zoran wants to buy a pair of sunglasses he can wear when he is riding his bicycle in competitions. He
wants sunglasses with a rubberized nose piece, built-in anti-fogging technology, and the ability to
block light from all angles. The criteria for his decision appear to be based on:
a. marketing-controlled information sources
b. evoked set finalists
c. routine response behavior
d. attitudes of others
e. product attributes
ANS: E
Physical characteristics and traits used in decision making are called product attributes.
PTS: 1
REF: 65
OBJ: 05-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Product
19. Another name for evoked set is:
a. called array
b. reminder assortment
c. induced memory
d. consideration set
e. reminder induction
ANS: D
PTS: 1
REF: 65
TOP: AACSB Reflective Thinking| TB&E Model Customer
20. People tend to be more satisfied with a purchase if:
ANS: A
New information that reinforces positive ideas about the purchase tends to reduce cognitive dissonance
and increases satisfaction.
PTS: 1
REF: 66
OBJ: 05-2 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product
21. Cecelia is a receptionist and just spent $347 on a new riding saddle for her boyfriend Claude, a
weekend cowboy. When she got home with the saddle, she experienced a high level of anxiety about
whether she has made the right purchase decision. Cecelia experienced:
a. selective dissatisfaction
b. temporal distortion
c. perceptual disharmony
d. cognitive dissonance
e. self-actualization involvement
ANS: D
Cognitive dissonance is the term for postpurchase tension and anxiety.
PTS: 1
REF: 66
OBJ: 05-2 TYPE: App
TOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product
22. Miller has just purchased a new Allez A1 Specialized bicycle for $1,000. Miller realizes that the Allez
A1 costs more than most bikes, and even at that price it doesn't come with a set of pedals. Even though
other brands of bicycles cost much less than the Allez A1, Miller tells himself that the Allez A1 is more
comfortable and has greater durability than most road bikes. As Miller wonders if he made the right
purchase decision, he is experiencing:
a. attribute remorse
b. cognitive dissonance
c. evaluation distortion
d. consumer cognition
e. perceptual disharmony
ANS: B
Cognitive dissonance involves the realization of the advantages and disadvantages of the purchased
product.
PTS: 1
REF: 66
OBJ: 05-2 TYPE: App
TOP: AACSB Analytic| TB&E Model Product
23. _____ is the amount of time and effort a buyer invests in the search, evaluation, and decision processes
of consumer behavior.
a. Economic value
b. Involvement
c. Opportunity cost
d. Temporal cost
e. Perceived level of personal risk
ANS: B
PTS: 1
REF: 67
PTS: 1
REF: 67
OBJ: 05-3 TYPE: App
TOP: AACSB Analytic| TB&E Model Customer
28. The electricity for lighting outdoor billboards is powered by transformers. The operator of a company
that installs and manages billboards has purchased many such transformers. Today he plans to buy a
replacement for one that was destroyed by a recent hurricane. Before making this purchase, he will
look at cost and also see if he can find one that is more weatherproof. He wants to make sure he buys
the best transformer for the job and that he does not pay more money than he should. In other words,
he will engage in _____ decision making.
a. limited
b. extended
c. habitual
d. classical
e. routine
ANS: A
The billboard operator is familiar with the product, but he is not immediately knowledgeable about the
products currently on the market.
PTS: 1
REF: 67
OBJ: 05-3 TYPE: App
TOP: AACSB Analytic| TB&E Model Customer
29. When a consumer is purchasing an unfamiliar or expensive product, the consumer often uses the
_____ process.
a. extensive decision making
b. cognitive harmonizing
c. limited problem solving
d. strategic behavior
e. stimulus discrimination
ANS: A
PTS: 1
REF: 67-68
OBJ: 05-3 TYPE: Def
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product
TOP: AACSB Reflective Thinking| TB&E Model Customer| TB&E Model Product
14. In a CRM environment, _____ is defined as the informal process of collecting customer information
through customer contacts and feedback on product performance.
a. corporate modification
b. attitude adjustment
c. organizational perception
d. stimulus/response research
e. learning
ANS: E
PTS: 1
REF: 295-296
TOP: AACSB Reflective Thinking| TB&E Model Customer
15. _____ is the process by which learned information from customers is centralized and shared in order to
enhance the relationship between customers and the organization.
a. Knowledge management
b. Learning
c. Database marketing
d. Interactive marketing
e. Information marketing
ANS: A
PTS: 1
REF: 295
TOP: AACSB Reflective Thinking| TB&E Model Customer
17. _____ refers to the latitude organizations bestow on their representatives to negotiate mutually
satisfying commitments with customers.
a. Consumer learning
b. Customerization
c. Empowerment
d. Autonomy
19. A(n) _____ is the point at which a customer and a company representative exchange information and
develop learning relationships.
a. social contact
b. interaction
c. empowering moment
d. equilibrium point
e. transactional dyad
ANS: B
PTS: 1
REF: 296
TOP: AACSB Reflective Thinking| TB&E Model Customer
TOP: AACSB Technology| AACSB Reflective Thinking| TB&E Model Online/Computer| TB&E
Model Customer
28. _____ interactions occur when customers buy products in a store.
a. Point-of-sale
b. Relationship-based
c. Cost-based
d. Retail-centric
e. Distribution-focused
ANS: A
PTS: 1
REF: 297
TOP: AACSB Reflective Thinking| TB&E Model Customer
31. Which of the following is an example of a channel through which customer data are traditionally
gathered?
a. store visits
b. conversations with salespeople
c. interactions via the Web
d. phone conversations
e. all of these
ANS: E
PTS: 1
REF: 298
TOP: AACSB Reflective Thinking| TB&E Model Customer
33. When viewed as an interaction between the organization and the customer, a transaction can produce
all of the following customer data EXCEPT:
a. name, address, and phone number
b. information about the customer's relationship with other customers
c. past purchase history
d. information about the customer's relationship with the organization
e. average amount spent on purchases
ANS: B
PTS: 1
REF: 298
40. A _____ is essentially a very large, corporate-wide database, culled from a number of separate
systems, such as billing, accounting, order fulfillment, distribution, customer service, and marketing
and sales, already in place within an organization.
a. data mart
b. customer information system
c. data warehouse
d. decision support system
e. data cluster
ANS: C
PTS: 1
REF: 298-299
TOP: AACSB Technology| TB&E Model Online/Computer
45. A(n) _____ list generally includes names and addresses gleaned from directories or membership
rosters.
a. predictive
b. compiled
c. response
d. actionable
e. disintegrated
ANS: B
PTS: 1
REF: 299
TOP: AACSB Reflective Thinking| TB&E Model Customer
47. _____ is the addition of information to customer or prospect records for the purpose of better
describing or better determining the responsiveness of customers or prospects.
a. Information formatting
b. Database enhancement
c. Data mining
57. Which of the following techniques used to analyze marketing databases considers whether a customer
has made a purchase recently as well as how often that customer makes a purchase?
a. recency-frequency-monetary analysis (RFM)
b. predictive modeling
c. customer valuation
d. data mining
e. lifetime value analysis
ANS: A
PTS: 1
REF: 300
TOP: AACSB Technology| TB&E Model Customer
58. The basic assumption of _____ is that marketing to repeat customers is more profitable than marketing
to first-time buyers.
a. customer segmentation
b. predictive modeling
c. customer valuation
d. data manipulation
e. lifetime value analysis
ANS: E
Lifetime value analysis is a data manipulation technique that projects the future value of the customer
over a period of years using the assumption that marketing to repeat customers is more profitable than
marketing to first-time buyers.
PTS: 1
REF: 300
OBJ: 19-6 TYPE: Comp
TOP: AACSB Reflective Thinking| TB&E Model Strategy
65. _____ involves developing product offerings customized for the appropriate customer segment and
then pricing and communicating these offerings for the purpose of enhancing customer relationships.
a. Transaction management
b. Campaign management
c. Data mining
d. Consumerism
e. Knowledge management
ANS: B
PTS: 1
REF: 302
TOP: AACSB Reflective Thinking| TB&E Model Customer