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Chapter 5: Target market :

Any group of people who, as individuals or as organizations, have needs for products in a
product class and who have the ability, willingness, and authority to buy such products is
a(n)
a) business market.
b) market.
c) undifferentiated market
d) segmented market
e) market variable
b) market. ::
Which of the following is not a characteristic of a consumer market?

a) it consists of purchasers who intend to consume or benefit from the purchased
products
b) they do not buy products for the main purpose of making a profit
c) they are sometimes referred to as B2C markets
d) their purchasing decisions are always made by only one individual
e) each of us belongs to numerous markets of this type
d) their purchasing decisions are always made by only one individual
Which of these statements is not true about business markets?

a) the purchase may be made to resell the item
b) the purchase is always made by more than one individual
c) the purchase may be made to use in general daily operations
d) the purchase may be made to use in production of another product
e) they can also be referred to as organizational markets
b) the purchase is always made by more than one individual
Which of the following is not a requirement or characteristic of a market?

a) The ability to purchase a product
b) A large number of people or organizations
c) The authority to buy a product


d) The willingness to use buying power
e) The need for a specific product in a specific product category
b) A large number of people or organizations
In order to be considered a market, people do not have to have

a) a need or desire for a particular product.
b) the ability to purchase the product.
c) discretionary income to purchase the product.
d) the willingness to use their buying power.
e) the authority to buy the specific products.
c) discretionary income to purchase the product.
Consumers that do not own dogs are not likely to be in the market for dog food because
a) they lack the authority to purchase the dog food.
b) they do not possess the buying power for purchasing dog food.
c) their ability to purchase the dog food is questionable.
d) they do not have the need or desire for dog food.
e) they are willing to use their buying power.
d) they do not have the need or desire for dog food.
The ability to purchase a product is a function of

a) buying power.
b) desire.
c) willingness.
d) authority.
e) needs.
a) buying power.
Adolescents are not considered part of the market for casinos because they
a) have very little buying power.
b) do not have the desire to gamble.
c) are not willing to spend their money on gambling.
d) cannot afford to gamble their savings.
e) do not have the authority to gamble.
e) do not have the authority to gamble.
Generally speaking, individuals who are unemployed would not be considered a target market
for Mercedes or other luxury European import sedans because
a) they would not desire such products.


b) they would not be willing to purchase such products.
c) they would not have the ability to purchase such products.
d) such markets are narrowly defined geographically.
e) they are not authorized to purchase such products.
c) they would not have the ability to purchase such products.
Sixteen-year-old high school students do not form a market for alcoholic beverages because
they
a) lack sufficient buying power to form a market.
b) lack the authority to purchase this type of product.
c) do not want to purchase this type of product.
d) do not have sufficient experience with this type of product.
e) lack the money to purchase this type of product.
b) lack the authority to purchase this type of product.
When marketing research shows that a group of people does not desire a particular product,
the people in that group
a) are a market.
b) do not have the ability to purchase the product.
c) do not have the authority to purchase the product.
d) are not a market for the product.
e) are a market but will not purchase the product.
d) are not a market for the product.
The first step in the target market selection process is

a) determining which segmentation variables to use.
b) selecting specific target markets.
c) identifying an appropriate targeting strategy.
d) evaluating relevant market segments.
e) developing market segment profiles.
c) identifying an appropriate targeting strategy.
To find a target market, a firm can use the

a) total market strategy and the undifferentiated strategy.
b) product differentiation strategy and the customer differentiation strategy.
c) demographic strategy and the psychographic strategy.
d) socioeconomic strategy and the psychological strategy.
e) undifferentiated strategy, the concentrated strategy, and the differentiated strategy.
e) undifferentiated strategy, the concentrated strategy, and the differentiated strategy.


Pillsbury defines all purchasers of flour as its target market. What targeting strategy would be
most appropriate in this case?
a) Concentrated
b) Differentiated
c) Wide appeal
d) Undifferentiated
e) Clustered
d) Undifferentiated
When a firm designs a single marketing mix and directs it at an entire market for a particular
product, the company is using a(n) _________ strategy.
a) concentrated targeting
b) differentiated
c) heterogeneous market
d) undifferentiated
e) single mix
d) undifferentiated
Why would a company use the undifferentiated strategy?

a) The needs of individual consumers are dissimilar, and distinctive marketing mixes are
required to satisfy them.
b) The undifferentiated strategy is the one strategy that provides maximum satisfaction to
the whole market.
c) The needs of individual consumers in the target market for a specific product are
similar, so the organization can satisfy most customers with a single marketing mix.
d) The undifferentiated strategy is expensive to implement but tends to produce the most
sales.
e) The undifferentiated strategy requires less time and fewer resources
c) The needs of individual consumers in the target market for a specific product are similar, so
the organization can satisfy most customers with a single marketing mix.
When the needs of individual consumers in a target market for a specific product are similar
and the organization can satisfy most customers with a single marketing mix, the best
approach to use may be the ___________ strategy.
a) undifferentiated
b) differentiated
c) segmented
d) concentrated
e) heterogeneous


a) undifferentiated
Which of the following statements about the undifferentiated targeting strategy is false?
a) The undifferentiated targeting strategy should be used when the needs of individual
customers are similar.
b) The undifferentiated targeting strategy uses one promotional program aimed at
everyone in the target market.
c) The undifferentiated targeting strategy is good for use with staple items, such as sugar
and salt.
d) The undifferentiated targeting strategy uses multiple distribution systems to best reach
individuals in the target market.
e) The opposite of the undifferentiated targeting strategy is the differentiated targeting
strategy.
d) The undifferentiated targeting strategy uses multiple distribution systems to best reach
individuals in the target market.
The ProMark Company manufactures and sells only one type of ballpoint pen at just one price.
All its advertising is the same and is directed at the mass market. What type of targeting
strategy is the ProMark Company using?
a) Extensive
b) Undifferentiated
c) Concentrated
d) Intensive
e) Differentiated
b) Undifferentiated
Marketers for C & H Sugar believe that consumers have similar needs for the product. C & H will
most likely use a(n) ___________ approach in defining a target market.
a) undifferentiated
b) differentiated
c) product strategy
d) cost-benefit
e) demographic
a) undifferentiated
If Morton Salt saw all table salt customers as pretty much alike and thus offered only one
marketing mix, it would be using the ___________ strategy.
a) directed
b) undifferentiated
c) segmented


d) differentiated
e) product-use
b) undifferentiated
A market in which a large proportion of customers have similar needs for a product is called
a(n) _____ market.
a) undifferentiated
b) heterogeneous
c) homogenous
d) differentiated
e) concentrated
a) undifferentiated
The undifferentiated targeting strategy for finding a target market will likely not be successful
if
a) product positioning is needed.
b) the firm defines the total market as its target market.
c) people within the market have heterogeneous needs.
d) people within the market have homogeneous needs.
e) the firm is capable of developing a single marketing mix that satisfies all people's
needs.
c) people within the market have heterogeneous needs.
Most markets for products are made up of individuals or groups with diverse needs for
products and are called ________ markets.
a) undifferentiated
b) concentrated
c) homogenous
d) differentiated
e) heterogeneous
e) heterogeneous
Toyota has learned that some people want sports cars, while others want vans, trucks, sedans,
and economy cars. In this instance, Toyota has found its markets to be
a) heterogeneous.
b) undifferentiated.
c) concentrated.
d) homogeneous.
e) focused.
a) heterogeneous.


Individuals, groups, or organizations with one or more similar characteristics that cause them
to have similar product needs are classified as
a) market segments.
b) heterogeneous markets.
c) concentrated markets.
d) demographic segments.
e) strategic segments.
a) market segments.
Mattel views the toy market as composed of four age groupings, each with different needs and
desires. Each of these groups are known as
a) an undifferentiated market.
b) heterogeneous.
c) a market segment.
d) a marketing mix.
e) a concentrated market.
c) a market segment.
The purpose of market segmentation is to

a) differentiate products.
b) divide a total market to enable a marketer to develop a more precise marketing mix.
c) reduce the overall cost of marketing activities.
d) identify a single marketing mix that will be satisfactory for the general market.
e) meet the needs of homogeneous markets.
b) divide a total market to enable a marketer to develop a more precise marketing mix.
The process of dividing a total market into market groups because people within each group
have relatively similar product needs is called
a) segmentation.
b) diversification.
c) target marketing.
d) concentration.
e) customization.
a) segmentation.
Several conditions must exist for market segmentation to be successful. These conditions
include all of the following except
a) the total market should be divided so that segments can be compared on sales


potential, costs, and profits.
b) customers' needs for the product must be homogeneous.
c) the company must be able to reach the chosen segment with a particular marketing
mix.
d) segments must be identifiable and divisible.
e) at least one segment must have enough profit potential to justify developing and
maintaining a special marketing mix for that segment.
b) customers' needs for the product must be homogeneous.
A business advantage of the concentrated targeting strategy for any company is that it
a) requires less market research and information.
b) requires less intensive analysis of customers' characteristics and needs.
c) allows a firm to utilize all of its production capacity.
d) maintains the firm's flexibility in moving into other market segments.
e) allows a firm to develop a special marketing mix for a single market segment.
e) allows a firm to develop a special marketing mix for a single market segment.
A targeting strategy in which an organization targets a single market segment using one
marketing mix is called a(n) _____ strategy.
a) selective
b) focused
c) differentiated
d) concentrated
e) undifferentiated
d) concentrated
When markets are comprised of people with differing product needs, the marketing manager
should use a(n) ___________ strategy.
a) concentrated or differentiated targeting
b) market-intensive
c) integrated
d) product-oriented
e) undifferentiated
a) concentrated or differentiated targeting
A disadvantage of the concentrated targeting strategy is that

a) the firm's financial condition is tied to a single and specialized marketing mix.
b) large sales volumes cannot be generated.
c) production costs may be higher than with other strategies.
d) marketing personnel may become dissatisfied with the limited opportunities provided


by this approach.
e) marketing costs are often higher than for other strategies.
the firm's financial condition is tied to a single and specialized marketing mix.
If Jaguar focused all its marketing efforts for the new Jaguar XKR on professionals earning more
than $250,000, it would be using a(n) ___________ strategy.
a) homogeneous
b) undifferentiated
c) multisegmented
d) concentrated
e) stratified
d) concentrated
Tiffany's markets its exclusive jewelry and gifts to high-income individuals interested in high-
quality products and a well-known brand name. It uses the same marketing mix to reach
this market. Tiffany's uses a(n) ______ strategy.
a) undifferentiated
b) differentiated targeting
c) exclusive targeting
d) heterogeneous
e) concentrated targeting
e) concentrated targeting
Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories using a
single marketing mix and is therefore most likely using a(n) _____ targeting strategy.
a) concentrated
b) differentiated
c) exclusive
d) focused
e) undifferentiated
a) concentrated
The primary advantage of a concentrated targeting strategy is

a) it meets the needs of a wide range of consumers.
b) it allows a firm to specialize to meet specific customer needs.
c) it is more flexible than any other approach.
d) it is the least risky targeting approach.
e) its customers are the most willing to repurchase the same brands.
b) it allows a firm to specialize to meet specific customer needs.


Procter & Gamble markets Cheer detergent to young singles and couples and Tide detergent to
families. Procter & Gamble is using a(n) ___________ targeting strategy for laundry
detergents.
a) multiuse
b) differentiated
c) stratified
d) undifferentiated
e) concentrated
b) differentiated
. Volkswagen markets its Routan to large families, its R32 racecar to men, and its Jetta to young
singles. What targeting approach is Volkswagen using?
a) Concentrated
b) Strategic
c) Differentiated
d) Undifferentiated
e) Multisegmented
c) Differentiated
A targeting strategy in which an organization directs its marketing efforts at several segments
is called a(n) ___________ targeting strategy.
a) differentiated
b) total market
c) concentrated
d) undifferentiated
e) integrated
a) differentiated
Which of the following products is most likely to be marketed, using an undifferentiated

approach?
a) bicycle
b) computer
c) notebook
d) seasoning salt
e) oscillating fan
d) seasoning salt


After a firm has identified an appropriate targeting strategy, the next step in the target market
selection process is
a) determining the demographic variables of the target market.
b) developing market segment profiles.
c) determining which segmentation variables to use.
d) selecting specific target markets.
e) evaluating relevant market segments.
c) determining which segmentation variables to use.
Characteristics of individuals, groups, or organizations that are used for dividing a total market
into smaller homogeneous groups are called ___________ variables.
a) marketing
b) classification
c) segmentation
d) stratification
e) dividing
c) segmentation
Age, rate of product use, location, and gender are all examples of common
a) demographic variables.
b) geographic characteristics.
c) targeting strategies.
d) psychographic variables.
e) segmentation variables.
e) segmentation variables.
Segmentation variables are usually grouped into four categories:

a) demographic, geographic, religion, and income.
b) geopolitical, income, behavioristic, and psychographic.
c) attitudes, lifestyles, behaviors, and gender.
d) geographic, demographic, psychographic, and attitudes.
e) demographic, geographic, psychographic, and behavioristic.
e) demographic, geographic, psychographic, and behavioristic.
Which of the following is not one of the major categories of consumer market segmentation
variables?
a) Demographic characteristics
b) Geographic variables
c) Psychographic dimensions


d) Situational variables
e) Behavioristic characteristics
d) Situational variables
Alpine Ski Shops U.S, is looking for new markets. Since their market is based mainly on access
to snow, they would most likely use which base for segmentation?
a) behavioristic
b) demographic
c) psychographic
d) environmental
e) geographic
e) geographic
McDonald's uses a segmentation strategy for its sandwiches based on market characteristics
such as age, gender, or income. Which of the following segmentation variables is
McDonald's using?
a) Demographic
b) Geographic
c) Psychographic
d) Product-related
e) Education
a) Demographic
With its Venus razor, Gillette was the first marketer to offer a triple blade razor specifically
designed for women. This is an example of market segmentation using ___________
variables.
a) demographic
b) psychographic
c) geographic
d) family life cycle
e) product use
a) demographic
Kelly's Kids is a home-based business that sells high-quality children's clothing at premium
prices using in-home parties. These in-home parties typically cater to families with small
children and middle- to upper-middle-class income. Kelly's Kids is using _____ variables
to segment its market.
a) demographic
b) psychographic
c) sociographic


d) behavioristic
e) geographic
a) demographic
Cosmopolitan magazine, Secret deodorant, and Eve cigarettes are all products whose marketers
have used segmentation based on
a) age.
b) education.
c) product use.
d) gender.
e) income.
d) gender.
A marketer that targets customers based on marital status and the presence and age of
children is using
a) behavioristic segmentation.
b) lifestyle variables.
c) psychographic variables.
d) family life cycle.
e) phase of life segmentation.
d) family life cycle.
Which of the following products is most likely to have its market segment based on age?
a) Bass shoes
b) Lipton Iced Tea
c) Bic pens
d) Legos
e) Carpet
d) Legos
If Campbell were to offer single serving "Soup for One" packages to small household markets, it
would be using segmentation based on
a) income.
b) ethnicity.
c) taste.
d) geographic considerations.
e) family life cycle.
e) family life cycle.


Which of the following products is least likely to be segmented according to stages in the
family life cycle?
a) Single-family homes
b) Ford automobiles
c) European vacations
d) Diet Coke
e) General Electric appliances
d) Diet Coke
Family life cycle is most typically based on

a) income.
b) geographic location.
c) marital status and age of children.
d) occupation.
e) buying power.
c) marital status and age of children.
Population density and city size are _______ variables used for market segmentation.
a) geographic
b) demographic
c) psychographic
d) environmental
e) geodemographic
a) geographic
Zerex markets its radiator liquid as a coolant in the South and an antifreeze in the North. Which
of the following segmentation variables is Zerex using?
a) Demographic
b) Psychographic
c) Life cycle
d) Geographic
e) Product use
d) Geographic
Many marketers are concerned about the number of potential customers within a certain area
of land because of the different requirements to serve dissimilar areas. What is this
segmentation variable called?
a) Micromarketing
b) Population
c) Market density


d) MSA
e) PMSA
c) Market density
Subaru is producing a new crossover van with all-wheel drive. Which of the following would be
a likely variable for segmenting the market for this new model?
a) Religion
b) Geographic location
c) Income
d) Political views
e) Ethnicity
b) Geographic location
Systems such as PRIZM and Acorn provide companies with lifestyle and demographic
information about neighborhoods throughout the United States. This information is used
to aid
a) behavioristic segmentation.
b) geodemographic segmentation.
c) market density analysis.
d) demographic segmentation.
e) geographic segmentation.
b) geodemographic segmentation.
Justin Franklin's company is interested in locating areas where the average income is high, the
average age range is 25-35 years, and the lifestyles of the people involve extreme
adventures and dangerous leisure activities. His company would most likely find possible
markets through
a) U.S. Census Bureau information.
b) geographic segmentation variables.
c) geodemographic segmentation.
d) climate information.
e) psychographic segmentation.
c) geodemographic segmentation.
Micromarketing is
a) a market segmentation approach in which firms focus precise marketing efforts on very
small geographic markets.
b) developing a very specific marketing mix that will effectively meet the needs of only a
small segment of the market.
c) marketing efforts that are tightly controlled by high-level executives in the


organization.
d) a way to segment the market to meet the needs of individuals with the same motives
and personality attributes.
e) creating advertising that is so specific to a certain type of individual that few people
outside that micromarket will respond to the message.
a) a market segmentation approach in which firms focus precise marketing efforts on very
small geographic markets
Retail-site location analyses, unique product offerings, and special advertising campaigns are
all examples of the use of
a) market density.
b) demographic segmentation.
c) behavioristic segmentation.
d) environmental segmentation.
e) micromarketing.
e) micromarketing.
Which of the following is the biggest drawback to using psychographic variables?

a) They are not strongly reflective of consumer behavior.
b) They are difficult to measure.
c) They give poor information about consumer needs.
d) They do not reflect socioeconomic characteristics of consumers.
e) The resulting segments are difficult to be reached.
b) They are difficult to measure.
The three most commonly used psychographic segmentation variables are

a) personality, perception, and learning.
b) personality, perception, and behavior.
c) motives, attitudes, and lifestyles.
d) attitudes, personality, and perception.
e) personality, motives, and lifestyles.
e) personality, motives, and lifestyles.
When research indicated that Bluetooth's products were not reaching the correct target market,
marketers of Bluetooth decided to change from demographic segmentation to
psychographic segmentation. Which group of new segmentation variables will Bluetooth
now be using?
a) Geographic location of customers
b) Age, sex, and socioeconomic characteristics
c) Social class variables


d) Personality characteristics, motives, and lifestyles
e) Family life cycle, social class, and religion
d) Personality characteristics, motives, and lifestyles
When using personality characteristics as a market segmentation variable, marketers generally

a) conduct personality assessments of their potential target market to determine which
personality characteristics they possess.
b) use research developed by clinical psychologists to determine which personality
characteristics consumers using their products are most likely to have.
c) use generic characteristics that all members of the population have.
d) use a positively viewed characteristic they assume much of their target market has or
would like to have.
e) conduct a series of focus groups to determine both the positive and negative
characteristics members of their target market are perceived to have.
d) use a positively viewed characteristic they assume much of their target market has or would
like to have.
The psychographic variable that includes numerous characteristics related to people's activities,
interests, and opinion is
a) motive.
b) social class.
c) personality.
d) stage in family life cycle.
e) lifestyle.
e) lifestyle.
If a company segments its market on the basis of their reasons for purchasing a particular
product, the primary segmentation variable in use is
a) lifestyle.
b) motives.
c) personality.
d) benefit expectations.
e) personality attributes.
b) motives.
Demographic variables such as income and occupation, as well as how people spend their time
and the importance of things in their surroundings, are all factors considered in ______
segmentation.
a) psychographic
b) social class


c) lifestyle
d) personality
e) family life cycle
c) lifestyle
A widely used system for classifying individuals on the basis of lifestyle is

a) VALS.
b) PRIZM.
c) CMSA.
d) LIFO.
e) Prospect Zone.
a) VALS.
Which of the following is an example of a behavioristic segmentation variable?

a) Family size
b) Climate
c) Age
d) Usage rate
e) Personality characteristics
d) Usage rate
Budweiser may choose to segment its market based on heavy, moderate, and light drinkers of
its alcoholic beverages. This is an example of market segmentation based on
a) behavioristic variables.
b) benefits.
c) lifestyles.
d) psychographic variables.
e) demographic variables.
a) behavioristic variables.
End use, price sensitivity, and brand loyalty are all _____ variables that can be used in market
segmentation.
a) psychographic
b) usage
c) demographic
d) geodemographic
e) behavioristic
e) behavioristic


Alli segments its diet pills based on those who have morning cravings, those who tend to
overeat near the end of the day, those who need all day long appetite suppression, and
those who want appetite control and more energy. This is an example of market
segmentation based on variables of
a) demographics.
b) lifestyles.
c) psychographics.
d) behavior.
e) personality characteristics.
d) behavior.
The division of a market according to what benefits consumers want from the product is called
______ segmentation.
a) behavioristic
b) product usage
c) benefit
d) end-purpose
e) advantage
c) benefit
Variables such as geographic location, type of organization, customer size, and type of product
usage are used to segment ___________ markets.
a) consumer
b) business
c) government
d) international
e) most target
b) business
Dell segments its business markets into small business, corporate, government agencies, K-12
schools, and higher education institutions. The primary segmentation variable used in this
example is
a) geographic location.
b) type of organization.
c) secondary product use.
d) customer size.
e) market potential.
b) type of organization.


Which of the following variables would most likely be used to segment a business market?
a) An attitude of the company's CEO
b) The geographic location of the company
c) The lifestyle of the company's buying agent
d) Net income generated by the company
e) Common opinions of the company's employees
b) The geographic location of the company
Through marketing newsprint to newspaper publishers and glass manufacturers that use it in
packing, International Paper segments its market based on
a) customer size.
b) psychographics.
c) demographics.
d) use of product.
e) geographic location.
d) use of product.
Bethlehem Steel provides steel for a variety of uses to its various customers. Customers have
different needs for the steel and thus Bethlehem has to prepare the raw steel differently
depending on how customers will use it in their production processes. The primary
business segmentation variable in this example is
a) geographic location.
b) customer size.
c) product use.
d) customer importance.
e) organization classification.
c) product use.
After an organization has determined which of the many segmentation variables it will use, the
next step in the target market selection process is
a) evaluating each of the relevant market segments.
b) selecting the specific target markets.
c) reviewing the appropriate marketing strategy.
d) analyzing the interaction between segmentation variables.
__________ describe the similarities among potential customers within a market segment and
explain the differences among people in different market segments.
a) Market segmentation variables


b) Market segment profiles
c) Segmentation grids
d) Market differentiation indexes
e) Market concentrations
b) Market segment profiles
Yvonne and Garret are looking at information about how their organization's products could fit
potential customers' needs. This information deals with demographic characteristics,
product benefits sought, lifestyles, geographic factors, brand preferences, and usage
rates. They are most likely looking at
a) the sales force survey results.
b) the results of sales forecasting.
c) a market trend analysis.
d) a market segmentation discrimination analysis.
e) a market segment profile.
e) a market segment profile.
The total volume of a product, for all firms in an industry, that would be purchased by specific
customer groups within a specified time period at a given level of industry-wide
marketing activity, is the
a) competitor sales potential.
b) sales objective.
c) forecasted sales.
d) company sales potential.
The maximum percentage of market potential that an individual firm can expect to obtain for a
specific product is the
a) sales forecast.
b) market potential.
c) company sales potential.
d) company sales objective.
e) market share goal.
c) company sales potential.
General Electric calculates that the total number of light bulbs sold to consumers in the next
year by all light bulb producers is 1 billion, given anticipated marketing efforts by the
firms involved. This figure represents the industry's
a) sales potential.


c) target growth rate.
d) sales forecast.
e) sales objective.
If Baskin-Robbins calculates that it could sell up to 25 percent of all ice cream cones sold in the
United States, this percentage would represent the ice cream marketer's
a) target growth rate.
b) sales forecast.
c) sales objective.
Using the breakdown approach to sales potential, estimates are made

a) by referring to specific geographic factors.
b) by establishing levels of marketing effort that will be required to achieve specific levels
of sales.
c) without reference to industry marketing efforts.
d) without reference to general economic conditions.
e) by starting with general economic conditions.
e) by starting with general economic conditions.
The manager at a local recreational vehicle store, Off-Road Rage, believes the next two years
will be difficult because of an economic recession. Using this forecast, he determines the
effect on the industry's market potential and then estimates how his company's potential
sales will look based on this outlook. This manager is using a _________ approach to
estimating sales potential.
a) breakdown
b) recessionary
c) buildup
d) pyramid
e) dimensional
a) breakdown
Alex Wren of Owens Corning Fiberglass talks to Terry Jones, a homebuilder, to find out how
much fiberglass insulation he intends to use in building homes during the next year.
Albert then multiplies that number by the total number of builders in the territory. He is
using a ___________ approach to measure sales potential.


a) multivariable
b) use of product
c) breakdown
d) regression
e) buildup
e) buildup
The buildup approach measure of sales potential

a) starts with broad estimates of general economic activity.
b) ends with an estimate of a single firm's sales of a specific product.
c) starts with forecasts about demand for a specific product within a relatively small area.
d) does not use sales estimates.
e) is seldom employed by industrial firms.
c) starts with forecasts about demand for a specific product within a relatively small area.
When evaluating market segments, assessment of competitors is important because

a) it is difficult to segment a market when it has multiple competitors.
b) an absence of competitors usually creates difficulties in accurately measuring segment
sales potential.
c) sales estimates may cause a segment to appear to be lucrative, but there may be
several competitors that together have a large share of that segment.
d) a competitive analysis may lead to confusion as to who are the key competitors.
e) competition is generally not a major problem as long as a marketer is aware of it.
c) sales estimates may cause a segment to appear to be lucrative, but there may be several
competitors that together have a large share of that segment.
Estimating the cost of entering a market and focusing on a specific target segment is important
because
a) cost estimates are crucial to estimating sales potential accurately.
b) higher costs will keep other potential competitors from entering that particular
segment.
c) customers are more likely to be attracted to marketers that invest heavily in the target
segment.
d) the organization's marketers need to know if they can reach the segment at costs equal
to or below competitors' costs.
e) higher cost generally ensures long-term success.
d) the organization's marketers need to know if they can reach the segment at costs equal to or
below competitors' costs.


The final step in the target market selection process is
a) implementing the appropriate marketing mix for the target market.
b) evaluating relative market segments.
c) eliminating market segments that are cost prohibitive.
e) revising the final segmentation variables based on target selection.
Frito-Lay Snack Foods is currently conducting market segmentation studies. For several
segments, they have completed competitive assessments and cost estimates. The next
major step they must take is to
a) determine which segmentation variables to use.
b) develop market segment profiles.
c) identify the appropriate targeting strategy.
d) select specific target markets.
e) develop sales forecasts.
d) select specific target markets.
When a marketer is engaged in the target market selection process and has assessed relevant
market segments by considering such factors as sales estimates, competition, and
estimated costs, the marketer is ready for the next step, which is to
a) identify the appropriate targeting strategy.
b) determine which segmentation variables to use.
c) develop market segment profiles.
d) evaluate relevant market segments.
e) select specific target markets.
e) select specific target markets.
When selecting specific target markets, a firm should

a) revert to an undifferentiated approach if the market is deemed heterogeneous.
b) choose the segments most in line with the firm's objectives and long-term growth.
c) choose all segments that are determined to be profitable for the organization.
d) choose the minimum number of segments necessary to achieve company sales
potential.
e) pick the segments with the best sales forecasts for the upcoming period of time.
b) choose the segments most in line with the firm's objectives and long-term growth.
. Evaluating and making product positioning decisions is important for

a) new products only.
b) existing products only.


c) new and existing products.
d) product deletions only.
e) new products and product deletions.
c) new and existing products.
Product positioning refers to

a) the area in retail stores in which the manufacturer strives to position its products.
b) product price but not to product image.
c) product image but not to product price.
d) the decisions and activities intended to create and maintain a certain concept of the
firm's product in customers' minds.
e) the length of time a product has survived in the market.
d) the decisions and activities intended to create and maintain a certain concept of the firm's
product in customers' minds.
All of the following statements about product positioning are true except
a) product positioning decisions are not only for new products.
b) product positioning is the customer's absolute perception of a product's attributes.
c) effective product positioning helps serve a specific market segment by creating an
appropriate concept in the minds of customers in that market segment.
d) product positioning is concerned with creating and maintaining a certain concept of the
firm's product in customers' minds.
e) when marketers position a product, they try to position it so that it seems to possess
the characteristics the target market desires.
b) product positioning is the customer's absolute perception of a product's attributes.
Pepsi wants to know where its Sierra Mist soft drink fits in with other drinks in the mind of the
consumer. Marketers question a sample of consumers about Sierra Mist and other drinks
on two different dimensions. They will most likely put this information into a _____ to
show Sierra Mist's position.
a) perceptual map
b) ideal cluster
c) product position chart
d) market graph
e) product matrix
a) perceptual map
If PepsiCo and Coca-Cola use celebrities to challenge the taste of the other firm's cola, this is
referred to as ___________ positioning.
a) direct


b) focused
c) head-to-head
d) avoidance
e) parallel
c) head-to-head
Positioning a product to avoid competition may be best when the

a) competing products are priced higher than or at least equal to the new product.
b) company has an established reputation with the consumers of that particular market.
c) market is characterized by consumers who are not sensitive to price or value.
d) market is characterized by consumers who are price conscious and brand specific.
e) product's performance characteristics are not significantly different from those of
competing brands.
e) product's performance characteristics are not significantly different from those of competing
brands.
When a company is introducing a new brand in a market where it already has one or more
brands, which type of product positioning is most likely to be used?
a) Positioning to avoid competition
b) Head-to-head competition
c) Parallel positioning
d) Segmented positioning
e) Counter positioning
a) Positioning to avoid competition
If a company extends a line of products by introducing a new product to the market, and the
firm does not distinctly position this product (i.e., separately from the other products in
the line), the result could be
a) poor product positioning.
b) product deletion.
c) product repositioning.
d) cannibalization.
e) new-product development.
d) cannibalization.
In the context of marketing, cannibalization means

a) one company eating up another company's market share.
b) sales of a new product hurts sales of the company's existing products.
c) a product is past its prime and should be deleted from the product mix.


d) a company illegally uses copyrights and patents from another company.
e) sales of a new product may exceed sales of an older, more established product.
b) sales of a new product hurts sales of the company's existing products.
Guess? will be spending $22 million on marketing activities next year and expects to sell 30
million pairs of jeans. These 30 million pairs represent the company's
a) sales potential.
c) sales forecast.
d) market sales.
e) selected market.
c) sales forecast.
The amount of product a company expects to sell during a specific period at a specified level of
marketing activity is called the
a) company sales potential.
b) revenue estimate.
c) company sales prediction.
d) market potential.
e) sales forecast.
e) sales forecast.
All of the following are categories of common forecasting techniques for business except
a) surveys.
b) time series analysis.
c) customer determined.
d) executive judgment.
e) market tests.
c) customer determined.
Relying on executive judgment for forecasting may be adequate when

a) levels of marketing efforts put forth by competitors vary considerably.
b) recent events give the executive specific impressions of product demand.
c) product demand is erratic.
d) the executive conducts surveys.
e) the executive has considerable experience and product demand is relatively stable.
e) the executive has considerable experience and product demand is relatively stable.


Intuition and expediency are primary characteristics of which of the following sales forecasting
methods?
a) Surveys
b) Executive judgment
c) Cycle analysis
d) Market tests
e) Industry indicators
Company sales forecasts are least likely to be based on

a) executive judgment.
b) customer surveys or sales force surveys.
c) time series analysis.
d) market tests.
e) single-variable segmentation.
e) single-variable segmentation.
When a business has a relatively small number of customers, a preferred method of forecasting
is
a) regression analysis.
b) trend analysis.
c) the Delphi technique.
d) a market test.
e) a customer forecasting survey.
e) a customer forecasting survey.
The most important reason that a firm might use a sales force forecasting survey to determine
its sales forecast is
a) salespeople are generally optimistic about the future and will provide excellent forecast
targets.
b) most salespeople tend to have a pessimistic outlook, which is more likely to result in an
achievable sales forecast.
c) this tends to be the fastest way to determine a good sales forecast for the upcoming
period.
d) the averaging and other statistical techniques applied to these forecasts result in
extremely accurate numbers.
e) the sales staff is closer to the actual customers on a regular basis than anyone else in
the organization.
e) the sales staff is closer to the actual customers on a regular basis than anyone else in the
organization.


When a company has its sales forecasts prepared by management consultants, economists, or
college professors, it is using a(n)
a) expert forecasting survey.
b) Delphi technique.
c) random factor analysis.
d) external judgment survey.
e) market test.
a) expert forecasting survey.
Often, the Delphi technique is used in conjunction with an expert forecasting survey. The major
objective is to
a) allow an opportunity to obtain diverse expert opinions.
b) allow experts to work separately to reach a consensus as to their forecasts.
c) reach an accurate sales forecast through the use of multiple sales forecasting
techniques.
d) determine if the expert forecasting survey is superior to regression analysis.
e) assess the extent to which this year's sales forecast is more accurate than that of
previous years.
b) allow experts to work separately to reach a consensus as to their forecasts.
The forecasting techniques that assume past sales patterns will continue into the future are all
variations of
b) random factor analysis.
c) seasonal analysis.
d) time series analysis.
e) past sales forecasting surveys.
d) time series analysis.
A forecasting method that predicts sales based on relationships between past sales and other
variables is called
b) customer forecasting surveys.
c) the Delphi technique.
d) random factor analysis.
e) time series analysis.


While developing a company sales forecast at Safeway, Barb Herrington discovered a pattern in
sales volume over the past five years. She likely used which sales forecasting technique?
a) Surveys
c) Time series analysis
d) Market tests
e) Regression analysis
Katy Ramirez is a marketer for a golf equipment manufacturer. When forecasting company
sales, she finds a direct association between past sales and per capita income. Which sales
forecasting technique is Katy using?
a) Surveys
d) Market tests
The sales prediction technique based on the correlation between sales and other factorssuch
as population density, per capita income, or family sizeis
a) executive judgment.
b) time series analysis.
c) regression analysis.
d) a market test.
e) an expert survey.
c) regression analysis.
The Sara Lee Company is attempting to forecast sales for a new ice cream cake. To come up
with an accurate forecast, Sara Lee places the product in Atlanta supermarkets for a
period of four months. In this instance, Sara Lee is using which forecasting method?
a) Time series analysis
b) Market test
c) Executive judgment
d) Regression analysis
e) Survey
b) Market test
The sales forecasting method that consists of making a product available to buyers in one or
more locations and measuring purchase response is


a) a market test.
b) regression analysis.
c) trend analysis.
d) a survey.
e) the Delphi technique.
a) a market test.
The forecasting method that utilizes a firm's historical sales data to find patterns in the firm's
sales volume over time is
a) the regression method.
b) customer forecasting.
c) a market test.
d) sales force forecasting.
In an effort to forecast his firm's sales for the coming year, Henry Thompson takes sales for the
last three years and calculates a growth trend. Henry is employing which forecasting
method?
bExecutive judgment
c) Surveys
d) Regression analysis
e) Market tests
Which of the following sales forecasting techniques would generally be most suitable for
estimating sales of a new product?
a) Executive judgment
b) Customer surveys
d) Market tests
e) Regression methods
d) Market tests
Which of the following forecasting methods is least dependent on historical sales data?
a) Regression analysis
b) Trend analysis


d) Cycle analysis
e) A market test
e) A market test
What is the main problem with using a market test as a forecasting tool?
a) Difficult to interpret
b) Expensive
c) Inaccurate
d) Unacceptable to consumers
e) Overused
b) Expensive
T F A market is a group of people who, as individuals, have needs for products in a product
class and have the ability, willingness, and authority to purchase such products.
t
T F Individuals' ability to buy depends on the amount of their buying power.

t
T F The four requirements of a market are that the individuals in the market must have a need
for the product and the ability, willingness, and authority to buy it.
t
T F A person who has buying power also has the authority to buy.
f
T F The five-step process usually used for target market selection includes identifying the
appropriate targeting strategy, determining which segmentation variables to use,
developing market segment profiles, evaluating relevant market segments, and deciding
which targeting strategy to use.
f
T F There are only two basic strategies for selecting target markets: the undifferentiated
targeting strategy and the concentrated targeting strategy.
f
T F A company sometimes defines a total market as its target market.

t


T F One condition for effective segmentation is that at least one segment must have substantial
profit potential.
t
T F A firm using a concentrated targeting strategy aims its marketing activities at one segment
of a market.
t
T F The undifferentiated strategy can be effective for an organization that has a homogeneous
market and can develop and maintain a single marketing mix.
t
T F An undifferentiated targeting strategy does not target a single market with one marketing
mix.
f
T F The concentrated targeting strategy is one in which an organization directs its marketing
efforts toward a single market segment through one marketing mix.
t
T F A differentiated targeting strategy is when the organization targets two or more markets by
developing a single marketing mix.
f
T F Only one variable can be used to segment a market.

f
T F Segmentation variables are characteristics of individuals, groups, or organizations in a total

market.
t
T F A segmentation variable is used to group smaller markets into one larger market.
f
T F Demographic characteristics are commonly used to segment a market because they are
closely related to consumers' product needs and purchasing behavior.
t


T F Family life cycle is a psychological dimension used for segmenting markets.
f
Chapter 11 : pricing Fundamentl

:
-------------------------------------------------------------
E

Price is
a) money paid in a transaction.
b) not important to buyers.
c) of limited interest to sellers.
d) the most inflexible marketing mix decision variable.
e) the value that is exchanged for products in a marketing transaction.
d
The oldest form of exchangetrading of productsis known as
a) credit.
b) buying.
c) purchasing.
d) barter.
e) pricing.
d
What do all of the following have in common: tuition, fee, premium, retainer,
dues?
a) They all must be paid in cash.
b) They are forms of exchange similar to, but not identical with, money.
c) They are forms of exchange similar to, but not identical with, barter.
d) They are different terms for the concept of price.
e) They have nothing in common.
d
The tuition and fees each student paid for this semester of college are both
terms for
a) expenses.
b) charges.
c) bills.
d) price.
e) exchange valuations.
b
Which of the following is the most flexible variable in the marketing mix?
a) Product
b) Price
c) Advertising
d) Personal selling
e) Distribution
c
What equation shows organizations the relationship between price and profit?
a) Total Variable Costs + Total Fixed Costs = Sales - Profit
b) Price = Profit per Item Number of Units Sold
c) (Price Quantity Sold) - Total Costs = Profits
d) (Price - Profits) Total Costs = Sales
e) Total Costs = (Price Quantity Sold) - Profits
d
Price is a key element in the marketing mix because it relates directly to
a) the size of the sales force.
b) the speed of an exchange.
c) quality controls.
d) the generation of total revenue.
e) brand image.
b
In conducting an assessment of her accounting firm, Pauline Santana discovers
the following annual results: average charge per customer = $250; rent =
$12,000; total billings = $150,000; employee compensation and benefits =
$60,000; and other costs = $110,000. Given these results, Mary's profits would
equal
a) a loss of $20,000.
b) a loss of $32,000.
c) $28,000.
d) $40,000.
e) $222,000.
e
Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer
believes that the target market for these ties comprises men who are very
status-conscious. In keeping with this assessment, department stores selling

the ties should
a) charge a price based on their cost.
b) charge prices consistent with their existing ties.
c) discount the ties.
d) negotiate the price with individual tie shoppers.
e) use price symbolically.
a
When marketers emphasize price as an issue and match or beat the prices of
other companies, they are using
a) price competition.
b) nonprice competition.
c) comparative pricing strategies.
d) demand-based pricing.
e) supply-based pricing.
e
Safe Auto advertises its low-cost automobile insurance as "minimum coverage
for minimum budgets." Safe Auto is engaging in
a) non-price competition.
b) demand-based pricing.
c) prestige pricing.
d) price differentiation.
e) price competition.
c
Advertisements for Suave shampoos emphasize that other shampoos may cost
more but don't work any better than Suave. In this example, Suave is competing
on the basis of
a) service.
b) market share.
c) price.
d) selection.
e) packaging.
b
A danger associated with engaging in price competition is that competitors can
also change prices quickly and aggressively, which can result in a(n) _____ that
will be harmful to both companies.
a) reduction in cost
b) price war
c) competitive draw
d) industry collapse
e) advertising battle
b
Sellers that emphasize distinctive product features to encourage brand
preferences among customers are practicing
a) product competition.
b) nonprice competition.
c) brand differentiation.
d) price competition.
e) competitor differentiation.
c
One advantage of nonprice competition is that
a) a firm can react quickly to competitive efforts.
b) market share becomes less important.
c) a firm can build customer loyalty.
d) marketing efforts are completely eliminated.
e) pricing is no longer a factor.
a
Which of the following statements about nonprice competition is false?
a) Companies that use nonprice competition do not need to keep track of their
competitor's prices.
b) A company must be able to distinguish its brand through some unique
feature in order to successfully engage in nonprice competition.
c) A firm using nonprice competition can build loyalty to both its company and
its products.
d) When using nonprice competition, a company should promote the
distinguishing characteristics of its brand.

e) Buyers must view the distinguishing characteristics of a product offered
through nonprice competition as being important.
b
A product under nonprice competition would most likely not succeed in the
market if
a) a new advertising campaign is established for it.
b) it is easy to duplicate.
c) it is packaged differently from similar products.
d) it is priced near the competitors' price.
e) its quality has been upgraded.
e
For most firms in the United States, demand curves are
a) upward sloping.
b) completely horizontal.
c) completely vertical.
d) c-shaped.
e) downward sloping.
a
If Wilson Sporting Goods faces a standard demand curve that exists for most
products, as it raises the price of its tennis rackets, the
a) quantity demanded goes down.
b) demand remains constant.
c) quantity demanded increases.
d) demand increases.
e) breakeven increases.
b
For most products, a(n) ____ relationship exists between the price of a
particular product and the quantity demanded.
a) inelastic
b) inverse
c) positive
d) unknown
e) elastic
e
A graph of the quantity of products marketers expect to sell at various prices if
other factors remain constant is a
a) price graph.
b) supply curve.
c) price/quantity graph.
d) marginal revenue curve.
e) demand curve.
d
When marketers at Consolidated Mustard Company tried to determine demand
for their product, they found that at 50 cents, consumers wanted 2,000 jars; at
$1.00, they wanted 6,000 jars; and at $1.50, they wanted 4,000 jars. What can
Consolidated conclude?
a) Consolidated did poor market demand research.
b) Consolidated has an elastic product.
c) Consolidated has an inelastic product.
d) Consolidated mustard is a prestige good.
e) Consolidated mustard has a normal demand curve.
e
French Quarter Inns drops the price of a suite from $225 to $195 per night and
experiences a reduction in the quantity of rooms demanded of an average of
five per night. This is an indication that suites at this hotel are apparently an
example of a(n) ___________ product.
a) reverse-demand
b) inferior
c) standard
d) secondary-demand
e) prestige
What does the demand curve for a prestige product look like?
a) It is a straight line where the quantity sold continues to increase as the price
of each product increases.
b) It is a curve where the highest and the lowest prices yield the greatest
quantity sold and mid-range prices produce the fewest sales.
c) It forms a curve where the greatest quantity sold comes at a medium price
and the quantities fall as the price increases or decreases.
d) It forms a straight vertical line because of the prestige of the product, and
quantity sold will remain stable regardless of the price.
e) It slopes from left to right at a very mild slope; that is, as quantity increases,
price decreases slowly.
c
If Seagram's marketers found that the firm's Crown Royal bourbon was a
prestige product and raised its price, which of the following would most likely
happen?
a) The quantity demanded would immediately fall.
b) The quantity demanded would always increase.
c) Above some price level, the quantity demanded would begin to decrease.
d) The demand curve for the product would always shift to the right.
e) The demand curve for the product would always shift to the left.
b
Which of the following products is most likely to have an inverted C-shaped
demand curve?
a) Levi jeans
b) Giorgio perfume
c) Maxwell House coffee
d) Pillsbury cake mix
e) Ford Taurus
d
A measure of sensitivity of demand in relation to changes in price is
a) a demand curve.
b) a prestige graph.
c) marginal analysis.
d) price elasticity of demand.

e) quantity elasticity.
c
If Carnival Cruise Lines increased the price of its seven-day cruise package by
10 percent and, as a result, experienced a 20 percent decline in customer
bookings, Carnival's demand would be
a) steady.
b) inelastic.
c) elastic.
d) prestige.
e) marginal.
e
Which of the following is most likely to have an inelastic demand curve?
a) Automobile
b) Vacation
c) Nonelective surgery
d) Recreational vehicle
e) Computer
a
If a product has an inelastic demand and the manufacturer raises its price,
a) total revenue will increase.
b) quantity demanded will decrease.
c) the demand schedule will shift.
d) the demand will become more inelastic.
e) total revenue will decrease.
d
Which of the following statements about price elasticity is false?
a) Steak is an example of a product that has an elastic demand for most people,
because when price goes up quantity demanded goes down proportionally
more.
b) Elasticity of demand is the relative responsiveness of a change in quantity
demanded to changes in price.
c) If marketers can determine price elasticity, then setting prices at optimum

levels is much easier.
d) When price is raised on a product that has an inelastic demand, then total
revenue will decrease.
e) A product like electricity has an inelastic demand.
e
If Pacific Power and Light increased its rates 10 percent and experienced only a
2 percent reduction in the demand for power, the demand would be
a) elastic.
b) prestige.
c) common.
d) horizontal.
e) inelastic.
e
Dividing the percentage change in quantity demanded by the percentage
change in price gives the
a) prestige demand curve.
b) breakeven point.
c) marginal cost curve.
d) price sensitivity curve.
e) price elasticity of demand.
a
Marginal analysis involves examining
a) what happens to a firm's costs and revenues when production is changed by
one unit.
b) the extra revenue produced by the sale of one more product.
c) the extra cost incurred by the production of one more unit.
d) the difference between marginal revenue and total revenue.
e) the difference between marginal cost and total cost.
Costs that do not vary with changes in the number of units produced and sold
are called ____ costs.
a) fixed
b) total
c) invariable
d) variable
e) set
c
Which of the following is most likely to be a fixed cost?
a) Component parts
b) Raw materials
c) Rent
d) Electricity
e) Transportation
b
Costs that vary directly with changes in the number of units produced or sold
are called
a) changeables.
b) variable costs.
c) direct costs.
d) fixed costs.
e) marginal costs.
d
If a firm currently produces 2,500 products per month and decides to produce
2,501, it will incur
a) more fixed costs.
b) higher average fixed costs.
c) fewer variable costs.
d) a marginal cost.
e) higher average variable costs.
Roberts Electronics calculates that if it produces 15 radar detectors, its costs

are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this
instance, $90 is the firm's ___________ cost.
a) average
b) fixed
c) variable
d) marginal
e) average variable
e
If Roberts Electronics finds that the average total cost of its radar detectors
and the marginal cost of its radar detectors are both $85, then
a) its marginal costs are falling.
b) average total cost is at its maximum.
c) average total costs are rising.
d) demand is elastic.
e) average total cost is at its lowest level.
b
Michelin notices that when the number of tires it sells increases from
1,000,000 to 1,000,001, total revenue rises $35. The $35 represents the
firm's
a) average revenue.
b) marginal revenue.
c) price elasticity.
d) average variable revenue.
e) average total cost.
a
At what point does a firm maximize profit?
a) The point at which marginal cost equals marginal revenue
b) The point at which the firm sells its product at the highest price
c) The breakeven point plus the adjusted marginal cost
d) The point at which marginal profits equal marginal revenue
e) The point at which marginal cost equals marginal profits
c
When marginal cost is equal to marginal revenue, the firm should
a) produce more to increase profits.
b) produce less to decrease total costs.
c) stop producing additional units to maximize profits.
d) provide discounts to encourage purchases.
e) intensify distribution to increase sales.
d
If Colgate-Palmolive wants to maximize profit on its toothpaste, it should
operate at the point where
a) total costs and total revenues are equal.
b) marginal revenue is at its highest level.
c) marginal revenue exceeds marginal cost.
d) marginal revenue equals marginal cost.
e) demand is most elastic.
a
At the breakeven point,
a) the money a company brings in from selling products equals the amount
spent producing the products.
b) the total fixed costs are exactly equal to the total variable costs.
c) profits are exactly equal to the difference between revenue and total
variable costs.
d) the marginal revenue of a product is exactly equal to the marginal cost of
producing one more unit.
e) the marginal cost curve and the average cost curve will be identical for a
particular product.
b
The point at which the costs of producing a product equal the revenue earned
from selling the product is
a) elasticity of demand.
b) the breakeven point.
c) variable costs.
d) price elasticity.
e) the sum of fixed and variable costs.
a
Suppose managers at Caterpillar have determined the costs associated with
producing hay balers are equal to the price that they charge for the hay balers.
This indicates that Caterpillar is producing at the ___________ point.
a) breakeven
b) marginal revenue less than marginal cost
c) profit margin
d) competitive price
e) profit maximizing
c
To determine the breakeven point in units, divide the fixed costs by
a) total costs.
b) variable costs time price.
c) price minus variable costs.
d) price per unit.
e) total revenue minus fixed costs.
b
If the product price is $100, average variable cost $40 per unit, and the total
fixed costs are $120,000, what is the breakeven point?
a) 500 units
b) 2,000 units
c) 1,200 units
d) 300 units
e) 3,000 units
a
Markum Industries determines that for its air compressors the following
results are achieved at a price of $250: total costs = $250,000; variable costs
per unit = $100; fixed costs = $175,000. Given these figures, Markum would
break even at ___________ units.
a) 1,167
b) 1,000
c) 1,750
d) 2,500
e) 700
b
A certain location of O'Charley's Restaurant has annual fixed costs of
$200,000. If an average tab at the restaurant is $60 and the variable costs per
tab is $20, how many groups of customers must O'Charley's serve per year in
order to break even?
a) 2,000
b) 5,000
c) 10,000
d) 3,333
e) 2,500
c
The Highland Racquet Club found that with annual fixed costs of $60,000, its
breakeven point is 2,000 members when the membership charge is $60 per
person per year. What is the variable cost per person for Highland?
a) $45
b) $50
c) $30
d) $25
e) $40
e
Below the breakeven point, a firm is operating
a) with fixed costs only.
b) with minimal variable costs.
c) with no revenue.
d) profitably.
e) at a loss.
What assumption does breakeven analysis make that limits its overall
usefulness?
a) It focuses on how to achieve a price objective.
b) It assumes a company wants to gain a certain market share.
c) It relies on demand for a product being inelastic.
d) It focuses only on competitive factors and not costs.
e) It assumes demand is elastic for the product.
e
Which factor is least likely to affect pricing decisions?
a) Competitive prices
b) Legal and regulatory issues
c) Organizational and marketing objectives
d) Customers' interpretation and response
e) Shifting stock values
c
Which of the following is not a major factor for firms making price decisions?
a) Costs
b) Competition
c) Previous sales
d) Channel member expectations
e) Legal and regulatory issues
b
A company trying to position itself as value oriented should not
a) set prices that are reasonable relative to product quality.
b) use premium pricing for its products.
c) set prices similar to those of its competitors.
d) use any advertising for its products.
e) consider costs when determining the price of products.
b
A marketer sometimes uses temporary price reductions to
a) increase the number of competitors.
b) gain market share.
c) decrease volume sold.

d) increase revenue per item.
e) control demand.
a
Temporary price reductions through sales, rebates, and special discounts are
often used to
a) raise cash quickly.
b) decrease costs.
c) increase profitability.
d) run off the competition.
e) create a value image.
d
Marketers generally view _____ as the minimum price a product can be sold
for.
a) fixed costs
b) variable costs
c) profits
d) costs
e) moderate losses
c
In the long run, the J. F. Smucker Company must view ___________ as the
absolute lowest price for its Jif brand peanut butter.
a) a 10 percent return on investment
b) product development costs
c) total costs
d) advertising expenditures
e) Nestl's prices
c
To maintain market share and revenue in an increasingly price-sensitive
market, companies have focused on quality, used labor-saving technologies,
and used efficient manufacturing processes. These tactics have provided gains
in productivity that have translated into ___________ for the consumer.
a) higher costs for the company and higher prices

b) higher costs for the company and lower prices
c) lower costs for the company and lower prices
d) lower costs for the company and higher prices
e) no change in the costs for either the company or
a
For most consumers, there is an assumed relationship between
a) price and quality.
b) value and cost.
c) internal and external reference prices.
d) value and price consciousness.
e) prestige prices and value.
e
Premium-priced products are usually marketed through
a) complex marketing channels.
b) intensive or selective distribution.
c) exclusive or intensive distribution.
d) exclusive distribution only.
e) selective or exclusive distribution.
c
The type of prices most likely to appear in advertising is
a) prestige.
b) future.
c) bargain.
d) internal reference.
e) cost-plus.
c
The types of prices that appear least often in ads are ___________ prices.
a) reference
b) discount
c) premium
d) comparison
e) sale
b
Which of the following products is most likely to involve personal selling?
a) Blenders
b) Riding lawn mowers
c) Fresh peaches
d) Picture frames
e) Footballs
c
The amount of profit a channel member expects depends on
a) the amount of discounts for large orders provided by the producers.
b) the number of channel support activities provided by the producers.
c) what the intermediary could earn if it were handling a competing product
instead.
d) the type of distribution channels involved.
e) the amount of effort required to carry the product.
c
What a price means or what it communicates to customers is called
a) reference.
b) response.
c) interpretation.
d) internalization.
e) signaling.
a
The degree to which the price of a product enhances a customer's satisfaction
with the purchase experience and with the product after the purchase is part
of their
a) response.
b) reference.
c) interpretation.
d) price satisfaction.
e) price-consciousness.
a
Generally, customers are most likely to rely on the price-quality association
when
a) they cannot judge the quality of the product for themselves.
b) the product is a well-known brand.
c) customers can judge the product's quality for themselves.
d) the product is purchased through the use of the Internet.
e) products are being purchased from well-established retailers that are
familiar to customers.
a
To gain market share, when Hyundai first entered the U.S. car market it did so
with a comparatively low price strategy. One of the negative side effects of
making this pricing decision is
a) a negative impact on consumers' perceptions of quality.
b) competitive matching.
c) a high return on investment level affecting tax balances owed.
d) poor survival chances.
e) higher developmental costs.
e
A price developed in the consumer's mind through experience with the
product is called a(n)
a) external reference price.
b) value-price guideline.
c) frame of reference.
d) internalized price.
e) internal reference price.
e
When a customer is considering the purchase of a product in a less-familiar
product category, that individual is likely to rely more heavily on
a) internal reference prices.
b) symbol prices.
c) high value products.
d) discounted reference prices.
e) external reference prices.
e
Lucy buys a new dress at T.J. Maxx that has a price tag with "Compare at
$50.00. Our Price $29.99." This is an example of the use of
a) internal referencing.
b) cumulative discounts.
c) seasonal discounts.
d) base-point pricing.
e) an external reference price.
a
The perception of price depends on a
a) product's actual price and consumers' expectations regarding price.
b) consumer's analysis of competitive prices.
c) consumer's reference price.
d) consumer's expectation of price.
e) product's actual price in comparison with the manufacturer's suggested
price.
c
___________ consumers are concerned about both the price and the quality
aspects of a product.
a) Price-conscious
b) Prestige-sensitive
c) Value-conscious
d) Price-conscious and prestige-sensitive
e) Quality-conscious
d
Buyers who focus on purchasing products that signify prominence and status
are
a) value-conscious consumers.
b) price-conscious consumers.
c) socially elite buyers.
d) prestige-sensitive buyers.
e) brand aware consumers.
e
A customer who is ___________ is likely to say, "People notice when you buy the
most expensive brand of a product."
a) price-conscious
b) quality-conscious
c) value-conscious
d) socially conscious
e) prestige-sensitive
c
ACE Electronics introduces a new voice-activated personal computer that no
longer requires a keyboard. ACE charges the high price of $11,000 per unit,
thus generating large profits because it has a 20 percent market share. ACE's
major problem in the future will most likely be
a) survival.
b) cash flow.
c) competition.
d) return on investment.
e) profit.
b
Monopolies usually keep their prices at a level that generate a reasonable, but
not excessive, return primarily because
a) they want to avoid new competitors entering their market.
b) they want to avoid government regulations on their pricing.
c) they try to satisfy the demands of value-conscious consumers.
d) firms can increase market share more rapidly this way.
e) customers will discontinue use of these products if prices rise.
Marketers have no flexibility in setting prices under conditions of

a) a monopoly.
b) an oligopoly.
c) perfect competition.
d) monopolistic competition.
e) no competition.
a
The ___________ prohibits price fixing among firms in an industry.
a) Sherman Antitrust Act
b) Federal Trade Commission Act
c) Wheeler-Lea Act
d) Robinson-Patman Act
e) Clayton Act
e
Which of the following acts does not directly affect pricing decisions?
c) Wheeler-Lea Act
d) Clayton Act
e) Simpson-Marshall Act
c
Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit
a) freezing prices.
b) independent pricing policies.
c) deceptive pricing.
d) price fixing.
e) price differentials.
a
If a company provides price differentials that harm competition by giving one
or more buyers a competitive advantage, it is committing
a) price discrimination.
b) price-consciousness.
c) functional discounting.
d) price competition.
e) price fixing.
b
Which of the following prohibits price discrimination that lessens competition
among wholesalers and retailers?
b) Robinson-Patman Act
c) Lanham Trademark Act
d) Federal Trade Commission Act
e) Wheeler-Lea Act
b
Which of the following prohibits price discrimination that lessens competition
among wholesalers and retailers?
b) Robinson-Patman Act
c) Lanham Trademark Act
d) Federal Trade Commission Act
e) Wheeler-Lea Act
d
Provisions of the Robinson-Patman Act, as well as those of the ___________,
limit the use of price differentials.
a) Simpson-Marshall Act
c) Wheeler-Lea Act
d) Clayton Act
e) Sherman Antitrust Act
e
Which of the following is not a discount provided to business customers?
a) Trade
b) Cumulative
c) Cash
d) Seasonal
e) Differentiated
e
What type of discount is given to a business purchaser for performing
activities such as transporting, storing, and selling?
a) Quantity
b) Cash
c) Geographic
d) Service
e) Trade
a
The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line.
Its basic promotional tool is the discount. These discounts offered to
middlemen for performing certain channel activities are referred to as
____________ discounts.
a) trade
b) cumulative
c) noncumulative
d) push
e) intermediary
d
Laura Spangler, of North Central Novelties, reduces the price of games sold to
Robertson's Entertainment by 10 percent to allow for expenses associated with
Robertson's promoting the games to consumers. This is an example of a
___________ discount.
a) quantity
b) cash
c) seasonal
d) trade
e) complementary
If Ralph Lauren offers to reduce the price of its women's blazers when retailers
buy more than 100 pieces, the designer is offering a ____________ discount.
a) quantity
b) cash
c) seasonal
d) trade
e) complementary
c
A deduction from list price for purchasing large quantities aggregated over a
stated period of time is a
a) noncumulative quantity discount.
b) additive cash discount.
c) cumulative quantity discount.
d) cumulative discount allowance.
e) additive quantity reduction.
b
Justin Caprese phones Ben Kirkland of Southside Furniture to inform him that
if he will increase his recent order of 15 mattress sets to 20, he will receive a
14 percent price reduction. This offer is due to a recent overstock condition at
the factory and will not be available in the future. The discount offered here is
a) cash.
b) noncumulative.
c) seasonal.
d) trade.
e) cumulative.
e
Tim O'Brien gets the invoice for a load of gravel he purchased last week. The
price of the gravel was $55, and the terms are 2/10, n/45. If Tim pays the
invoice in five weeks, he will owe
a) a penalty.
b) $53.90.
c) $56.10.
d) $58.30.
e) $55.00.
e
If the terms of a business exchange are 2/10 net 30, this means that the
transaction
a) involves a cumulative discount if paid in 30 days.
b) involves a noncumulative discount.
c) offers a discount if the buyer lives within a ten-mile radius.
d) price does not include the cost of freight.
e) involves a cash discount if paid within ten days.
a
A concession in price in business markets to achieve a desired goal is called
a(n)
a) allowance.
b) objective-oriented discount.
c) cash discount.
d) trade discount.
e) cumulative discount.
e
Reductions for transportation and other costs related to the physical distance
between buyer and seller are known as
a) base-point pricing.
b) freight absorption pricing.
c) price zoning.
d) location pricing.
e) geographic pricing.
b
If a retailer orders a quantity of merchandise to be delivered to his store in
Phoenix and is quoted a price that does not include shipping charges, the
retailer is paying a(n) ___________ price.
a) F.O.B. destination
b) F.O.B. factory
c) transfer
d) postage-stamp
e) base-point
e
Rob Johnson orders 16 dozen fishing lures from Strike Right for $375. When
he gets the invoice, he is furious that $25 in freight charges has been tacked
onto his bill because he thought the price included freight costs. Rob should
have been certain that the order terms were
a) F.O.B. origin.
b) F.O.B. factory.
c) C.O.D.
d) 2/10, n/30.
e) F.O.B. destination.
e
The fact that a gas station in Texas pays less for fuel than a gas station in
Maine from a producer in Louisiana suggests that refineries are using which of
the following pricing methods?
a) Price differentiation
b) Base-point pricing
c) Freight absorption pricing
d) Transfer pricing
e) Zone pricing
d
Suppose that the frozen foods division of Swanson purchases food trays and
boxes from the packaging division. The form of pricing used to charge the
frozen foods division is called
a) zone pricing.
b) base-point pricing.
c) business-unit pricing.
d) transfer pricing.
e) price discrimination.
When Cadillac buys headlights from Delco (both of which are divisions of
General Motors), ___________ pricing occurs.
a) base-point
b) zone
c) transfer
d) uniform geographic
e) matrix
a
Which of the following is not a method used to determine transfer prices?
a) Discounted standard cost
b) Actual full cost
c) Standard full cost
d) Cost plus investment
e) Market-based cost
e
Suppose that the watchband department of Timex sells completed watchbands
to the finished watch department. The finished watch department is charged
the price it would have to pay an outside watchband manufacturer less a
discount to reflect low sales and transportation costs. This method of pricing
is called _______ pricing.
a) zone
b) actual full cost
c) standard full cost
d) cost plus investment
e) market-based cost
Chapter 15 : ITEGRATED MARKETING

COMMUNICATION

The coordination of promotion and other marketing efforts for maximum

informational and persuasive impact defines
a) communication.
b) integrated marketing communications.
c) tactile communication.
d) kinesic communication.
e) proxemic communication.
b
Chris sees a television commercial for Arby's promoting its roast beef sandwiches
at 5 for $5.95. Later that day he goes to the nearest Arby's for a roast beef feast,
but is told that the special offer is not available at that location. Arby's seems to
lack
a) communication.
b) promotional efforts.
c) integrated marketing communications.
d) channel capacity.
e) coordinated awareness.
c
Effective management of integrated marketing communications is based upon

a) consumer attitudes towards promotion.
b) information about customers.
c) the communication process model.
d) budgetary allowances.
e) the firm's organizational structure.
b
If FedEx-Kinko's decided to outsource all of its marketing efforts to the MaxPro

Company, which specializes in advertising, sales promotion activities, and public
relations, FedEx-Kinko's would likely be striving to practice
a) one-stop shopping.
b) more expertise.
c) pioneer promotional efforts.
d) competitive promotional programming.
e) integrated marketing communications.
e
In order for customers to receive greater customization and service, they must be
willing to
a) pay high prices for standard goods.
b) give up all their rights to privacy.
c) use the Internet for communication with companies.
d) give information about themselves and their tastes.
e) spend significant amounts of time to purchase products.
d
A sharing of meaning defines

a) promotion.
b) information.
c) noise.
d) interference.
e) communication.
e
A person, group, or organization that has a meaning it intends and attempts to

share with a receiver or an audience is a
a) communications channel.
b) source.
c) relay channel.
d) decoder.
e) sender.
b
In the Gillette advertisement that claims, "Gillette, the best a man can get," Gillette
is the communication
a) receiver.
b) transmitter.
c) decoder.
d) source.
e) noise.
d
The individual or group that decodes a coded message is called a

a) sender.
b) receiver.
c) source.
d) decoder.
e) receptor.
b
Sierra is driving to work on I-95 and notices a billboard for new salads at Wendy's.
She reads the message and sees the pictures of the new salads. In this case, Sierra
is the _____ and Wendy's is the _____ of this communication.
a) receiver; source
b) audience; promoter
c) decoder; coder
d) communicatee; communicator
e) feedback; noise
a
The process of putting one's thoughts (meaning) into signs (symbols) is called
a) decoding.
b) noise.
c) interference.
d) transmission.
e) the coding process.
e
When a source converts meaning into a series of signs or symbols representing

ideas or concept, the source is undergoing
a) communication.
b) the coding process.
c) the decoding process.
d) the conversion process.
e) communications channel.
b
As Emily Jeffries prepares the script for a radio commercial for her boutique, she is
engaging in the _______ stage of the communication process.
a) encoding
b) sourcing
c) decoding
d) sending
e) receiving
a
When encoding the message, the source should use signs that have
a) new and exciting meanings.
b) different meanings to different people.
c) contemporary jargon.
d) meanings that the target market will understand.
e) broad interpretations.
d
Radio and television signals as well as ink on the paper of a magazine or

newspaper are all considered
a) noise.
b) communication links.
c) communication resources.
d) communication channels.
e) decoding sources.
d
The Barrister's Deli decides to run advertisements for its lunch specials on a local
FM radio station. Marketing research later reveals that the restaurant's target
market listens primarily to satellite radio stations. This promotion program
suffered from an error in the selection of
a) shared symbols.
b) targeted customers.
c) communication channel.
d) decoded meanings.
e) noise minimizers.
c
The vehicle through which the coded message is transmitted from the source to
the receiver is called a(n)
a) coder.
b) decoder.
c) encoder.
d) relay channel.
e) communication channel.
e
OES Office Systems' use of fax machines to carry its advertising messages to its
business customers is which component of the communication process?
a) Communication channel
b) Decoding process
c) Encoding process
d) Sharing of meaning
e) Noise minimization
a
During the decoding process, the

a) intensity of the transmission becomes stronger.
b) receiver attempts to convert signs or symbols into concepts and ideas.
c) source attempts to convert signs or symbols into concepts and ideas.

d) source converts meaning into a series of signs or symbols that represent ideas
or concepts.
e) receiver filters noise from the feedback.
b
The message that a source originally encodes and the meaning a receiver
ultimately decodes
a) contain circular feedback.
b) may be different because of noise.
c) are usually exactly the same.
d) rarely are similar because of feedback.
e) are collectively termed the communications channel.
b
During a one-minute television ad for Nike, the National Weather Service interrupts
to announce a flash flood warning for surrounding counties. Such an occurrence is
an example of ___________ in the communication process.
a) encoding
b) bad luck
c) noise
d) deflected transmission
e) poor implementation
c
Sonya is watching the six o'clock news as she prepares dinner. As commercial
breaks come on, Sonya's dinner preparation would be considered
a) a communication inhibitor.
b) feedback.
c) noise.
d) decoding blocker.
e) interference.
c
Which is the best example of noise that originates with the receiver in the
communication process?
a) Sarah drives through a tunnel, and her radio signals become very weak.
b) Maria has been studying English for two years and does not understand the
symbolism being used in a commercial.
c) Kevin simply tunes out pop-up ads on the Internet so that they don't even enter
his awareness.
d) Because of poor printing, Claire cannot read an advertisement in her local
newspaper.
e) A mother fails to hear a new commercial for diapers because her new baby is
crying.
c
The receiver's response to a message is ___________ for the source.

a) feedback
b) the communications channel
c) noise
d) channel capacity
e) decoding
a
Communication can be viewed as a circular process because

a) during feedback, the receiver can be viewed as the source of the message while
the original source becomes the receiver.
b) the message goes from encoding by the source to decoding by the receiver.
c) during a personal selling situation, both verbal and nonverbal feedback can be
very fast and immediate.
d) channel capacity is determined by the least efficient component.
e) the message goes from person to person.
a
Reba Vincent is employed as a consultant for Mary Kay Cosmetics. This illustrates
a) personal selling.
b) retailing.
c) public relations.
d) advertising.
e) sales promotion.
a
In one corner of its magazine advertisement for office copiers, Epson places a small
box asking for the names and addresses of individuals or companies seeking more
information. Epson has included this box to facilitate ___________ for this
communication.
a) decoding
b) feedback
c) encoding
d) perceptual attention
e) noise reduction
b
Sara Dickson is concerned about the effectiveness of Magnum, Inc.'s promotional

messages, and is seeking an approach with immediate feedback. Sara is most likely
to achieve this through
a) television advertising.
b) newspaper advertising.
d) sales promotion.
e) personal selling.
e
Channel capacity is determined by the

a) most efficient component of the communication process.
b) least efficient component of the communication process.
c) source.
d) receiver.
e) meanings of the message.
b
Each communication channel has a limit on the volume of information it can handle
effectively. This limit is called
a) transmission load.
b) feedback.
c) encoding.
d) noise.
e) channel capacity.
e
Although a radio announcer can read several hundred words a minute, a one-
minute advertising message should not exceed 150 words because most
announcers cannot articulate words into understandable messages at faster rates.
This illustrates the ___________ consideration in effective communication.
a) transmission load
b) feedback
c) encoding
d) noise
e) channel capacity
e
For many consumers, the pages near the back of magazines with dozens of very
small black and white advertisements exceed their
a) channel capacity.
b) threshold of awareness.
c) decoding abilities.
d) transmission limitations.
e) noise limit.
a
Anything that reduces the accuracy and clarity of communication is called

a) distraction.
b) feedback.
c) interference.
d) discordance.
e) noise.
e
Claire Nevsky is in charge of advertising for her company and has produced a 30-
second television spot to promote one of the company's new products. One of her
assistants just out of college believes that the commercial has too much visual and
audio information packed into such a small amount of time. The assistant is
specifically concerned about limits in the receiver's

a) noise.
b) coding process.
c) encoding.
d) channel capacity.
e) feedback.
d
What is the overall role of promotion?

a) To stimulate product demand
b) To identify prospects
c) To retain loyal customers
d) To encourage product trial
e) To reduce sales fluctuations
a
Communication that builds and maintains favorable relationships by informing and

persuading one or more audiences to view an organization more positively and to
accept its product is the role of
a) the vice president of sales.
b) manipulation.
c) promotion.
d) information.
e) sales promotion.
c
Companies tend to view promotion from many vantage points. Which of the
following alternatives is most accurate?
a) Promotion costs cause product costs to be higher.
b) Promotion activities make up the bulk of marketing.
c) The role of promotion is to stimulate product demand.
d) Promotion should be directed toward numerous audiences.
e) Most promotional efforts are performed through advertising.
c
___________ links the purchase of an organization's products to support of

philanthropic organizations favored by the target market.
a) Promotion
b) Cause-related marketing
c) Charity-related promotion
d) Selective demand promotion
e) Charitable nonprofit marketing
b
When Yoplait Yogurt gives a portion of its profits to Breast Cancer Research, it is
using
a) promotion.
b) integrated marketing communications.
c) charity marketing.
d) charitable promotion.
e) cause-related marketing.
e
Threatt Production makes low-priced, convenience products that are widely

available. It is most likely to focus its promotion efforts on
a) public relations.
b) personal selling.
c) viral marketing.
d) advertising.
e) sales promotion.
d
To gain maximum benefit from promotional efforts, marketers must strive to

a) become directly involved rather than indirectly involved.
b) obtain information about the marketing environment through their MIS.
c) realize the needs of their target market and try to meet them.
d) properly plan, implement, coordinate, and control communications.
e) use promotion during the growth stage of the product's life cycle.
d
Often when a company introduces a new product or line extension, its promotion
will focus on _____ in order to initiate the product-adoption process.
a) creating awareness
b) stimulating demand
c) retaining loyal customers
d) combating competitive promotional efforts
e) identifying prospects
a
By promoting the fact that "orange juice is not just for breakfast anymore," the
Florida Orange Growers Association attempted to stimulate
a) primary demand.
b) secondary demand.
c) competition.
d) comparison of orange juices.
e) demand elasticity.
a
Primary demand is defined as

a) demand for a product category.
b) demand for a new product.
c) consumer awareness of a product category.
d) stimulating demand for any products.
e) demand for a particular brand.
a
When Blue-ray disc players were first introduced to the market, what would the
logical choice for promotion have been?
a) Selective demand
b) Pioneer promotion
c) Comparative promotion
d) Primary demand promotion
e) Retention promotion
b
Which of the following types of promotion informs potential customers about a

product and what it is?
a) Reminder
b) Competitive
c) Comparative
d) Pioneer
e) Repetitive
d
During the introduction stage of the product life cycle, which type of promotion
would a firm focus on?
a) Reminder
b) Competitive
c) Comparative
d) Pioneer
e) Repetitive
d
Pioneer promotion is most likely to be used during the _____ stage of the product
life cycle.
a) maturity
b) decline
c) growth
d) introduction
e) presentation
d
When a marketer makes an effort in promotion to point out the strengths and
benefits of a specific brand, it is an attempt to build _________ demand.
a) primary
b) secondary
c) selective
d) economic
e) competitive
c
Selective demand is demand for a

a) general type of product.
b) particular brand.
c) new product.
d) competitor's product.
e) service.
b
When Sears promotes the benefits and strengths of its Kenmore brand appliances,
it is attempting to build
a) primary demand.
b) pioneer promotion.
c) prospects.
d) brand awareness.
e) selective demand.
e
Retro64 distributes free downloadable versions of its computer games for a short
time. These efforts have a primary promotional objective of
a) encouraging product trial.
b) stimulating demand.
c) identifying prospects.
d) creating awareness.
e) reducing sales fluctuations.
a
Promotional efforts designed to reduce the risk to consumers for using a product
for the first time seek to
a) stimulate demand.
b) encourage product trial.
c) create awareness.
d) combat competitive promotional efforts.
e) retain loyal customers.
b
Bowflex uses infommercials to demonstrate its fitness products and encourage

customers to call and receive a free video with more information about its
products. This promotional effort is directed at
a) creating awareness.
b) encouraging product trial.
c) identifying prospects.
d) stimulating demand.
e) retaining loyal customers
c
A direct-response information form found in a magazine advertisement that allows

customers to send for more information has a primary objective of
b) retaining loyal customers.
c) stimulating demand.
d) creating awareness.
e) identifying prospects.
e
The cost of _____ is usually substantially lower than the cost of _____.
a) stimulating primary demand; stimulating selective demand
b) identifying prospects; encouraging product trial
c) retaining existing customers; acquiring new customers
d) comparative advertising; pioneer promotion
e) personal selling; public relations
c
Blockbuster offers its customers a Blockbuster Rewards Card that allows them to
rent every sixth movie free and provides various discounts throughout the year.
The primary promotional objective of programs such as this is
b) retaining existing customers.
c) stimulating demand.
d) combating competitive promotional offers.
b
Cooperative advertising efforts between manufacturers and retailers demonstrate

the promotional objective of
a) stimulating demand.
b) reducing sales fluctuations.
c) combating competitive promotional efforts.
d) facilitating reseller support.
e) retaining loyal customers.
d
When Hamburger Helper introduced its Oven Varieties, it gave special offers to
supermarkets to purchase the new product and supplemented these offers with
consumer advertising. Hamburger Helper's primary objective is to
a) facilitate reseller support.
b) reduce sales fluctuations.
c) combat competitive promotional efforts.
d) encourage product trial.
a
Which of the following is the best example of the promotional objective of

combating competitive promotional efforts?
a) Joy advertises that its dish soap has more suds than Dawn, Sunlight, and other
leading dish soaps.
b) Joe Boxer and Kmart collaborate to promote Joe Boxer's lines of clothing and
housewares.
c) The Pork Council advertises pork as the "other white meat" and a healthier
alternative to beef.
d) After Ford promotes the towing capacity of its F-series trucks, DaimlerChrysler
soon emphasizes the towing capacity of its Dodge trucks.
e) Hyundai offers 10-year/100,000 mile warranties on its vehicles in order to give
customers confidence in its brand name and automotive offerings.
d
Which of the following industries is most likely to employ combative promotional

efforts?
a) Fast food
b) Computer processors
c) Tax-preparation services
d) Television producers
e) Automotive paints
a
Factors such as climate, seasons, and holidays tend to lead to the promotional
objective of
a) combating competitive promotional offers.
b) facilitating reseller support.
c) encouraging product trial.
d) retaining loyal customers.
e
Newspaper ads for Blue Haven Pools offering discounted prices during October are
examples of which of the following uses of promotion?
a) Retaining loyal customers
b) Promoting new product uses
c) Making salespeople more effective
d) Stimulating primary demand
e) Reducing sales fluctuations
e
A spokesperson for Mott's apple juice encourages television audiences to use its
juice in the winter by serving it hot with a cinnamon stick. In this instance, Mott's is
using promotion to
a) stimulate primary demand.
b) offset competitors' promotional efforts.
c) facilitate reseller support.
d) retain loyal customers.
e) reduce sales fluctuations.
e
An advertisement from a ski lodge extolling the benefits of a summer getaway in

the mountains uses promotion to
a) combat competitive promotional efforts.
b) stimulate demand.
c) reduce sales fluctuations.
d) encourage product trial.
c
Advertising, personal selling, sales promotion, and public relations are called
a) promotion mix ingredients.
b) marketing mix components.
c) characteristics of a product.
d) advertising tools.
e) nonpersonal communication.
a
A paid form of nonpersonal communication about an organization and/or its

products that is transmitted to a target audience through a mass medium is
a) advertising.
b) public relations.
c) sales promotion.
d) personal selling.
e) campaigning.
a
Slow feedback, high absolute-dollar outlay, and difficulty in measuring effects on

sales are disadvantages of which promotion mix ingredient?
a) Advertising
b) Public relations
c) Sales management
d) Sales promotion
e) Personal selling
a
Cost efficiency, repetition, and adding product value are all potential benefits of
a) public relations.
b) advertising.
c) personal selling.
d) promotion.
e) guerilla marketing.
b
One of the biggest problems associated with ___________ as an element of

promotion is the high absolute dollar outlay often required.
a) personal selling
b) advertising
c) public relations
d) sales promotion
e) packaging
b
Paid personal communication that seeks to inform customers and persuade them
to purchase products in an exchange situation is
a) personal promotion.
b) advertising.
d) public relations.
e) individual promotion.
c
Which promotion mix ingredient costs considerably more than advertising to reach
just one person but can provide more immediate feedback?
a) Publicity
b) Sales management
c) Sales promotion
d) Personal selling
e) Public relations
d
Kinesic communication is an element in which type of promotional method?

a) Advertising
b) Public relations
c) Personal selling
d) Packaging
e) Sales promotion
c
Head nodding, winking, hand gestures, and arm motions are all forms of _________
communication.
a) kinesic
b) spacing
c) proxemic
d) touching
e) tactile
a
As they walk to the car, Erin Brandeis tells her sales representative, Joachin Perez,
that they may need to modify the price structure they just presented to the
prospect. Erin bases her statement on the way the prospect folded his arms when
Joachin quoted him the prices on the new system. Joachin says he didn't notice.
Erin recommends a book on ___________ communication to Joachin.
a) tactile
b) proxemic
c) kinesic
d) verbal
e) signal
c
When a salesperson varies the physical distance between himself and a customer
he is using
a) kinesic communication.
c) tactile communication.
d) comfort relations.
e) proxemic communication.
Brandon walks around behind purchasing agent Shannon Wise as she looks at the
pamphlet describing Hyster's new conveyer system. Shannon stands up and walks
to a table on the other side of her office. Brandon follows, but he does not
understand the ___________ communication Shannon is sending.
a) tactile
b) proxemic
c) kinesic
d) verbal
e) promotional
b
As their meeting concludes, Jamal rises and thanks Gina for taking the time to
come by and explain her firm's new line of industrial fasteners. A(n) ___________,
which is a form of tactile communication, concludes the session.
a) smile
b) walk to the door
c) handshake
d) exchange of business cards
e) pleasant good-bye
c
A common form of tactile communication in U.S. business activities is

a) hugging.
b) kissing.
c) handshaking.
d) eye contact.
e) head nodding.
c
_____ is a broad set of communication efforts used to create and maintain favorable
relationships between a company and its stakeholders.
a) Stakeholder management
b) Personal selling
c) Integrated marketing communications
d) Sales promotion
e) Public relations
e
Communication through the use of brochures, annual reports, event sponsorships,

and news stores is referred to as
a) advertising.
c) sales promotion.
d) publicity.
e) public relations.
e
The Sharper Image likes to use nonpersonal communication in news story form
such as press releases for its new and improved products. This is an example of
a) sales promotion.
b) advertising.
d) publicity.
e) kinesic communication.
d
All of the following are examples of publicity-based public relations tools except
a) press conferences.
b) feature articles.
c) news releases.
d) annual reports.
e) news stories.
d
Public relations
a) should be used mostly to counteract any competitive promotions or negative
publicity.
b) is an element of promotion that should be handled on a continuous basis.
c) should be used solely to respond to emergencies that could significantly damage
the company's reputation.
d) is paid communication that helps enhance a company's image by highlighting its

philanthropic efforts.
e) is generally not given much weight because the information is generated by the
company itself.
b
An activity and/or material that offers added value or incentive to resellers,

salespeople, or consumers is
a) advertising.
d) sales promotion.
e) packaging.
d
Frequently, Burger King restaurants offer 32-ounce glasses depicting currently

popular movie characters free with the purchase of a large drink. This example
illustrates Burger King's use of which one of the following elements of the
promotion mix?
a) Packaging
b) Personal selling
c) Sales promotion
d) Public relations
e) Telemarketing
c
When McDonald's uses the Monopoly game in which customers receive game
pieces with each visit and try to assemble a set of properties to win prizes,
McDonald's is utilizing
a) sales promotion.
b) advertising.
c) guerilla marketing.
a
Marketers of highly seasonal products tend to have more irregular use of

a) advertising.
b) sales promotion.
e) marketing.
b
Hunt's decided to put a much larger share of its promotion budget into ___________
because of the heavy reliance it will be placing on coupons in the second quarter.
a) advertising
b) sales promotion
c) public relations
d) telemarketing
e) personal selling
b
Procter & Gamble periodically sends out coupons and free samples of products like
Downy fabric softener. This illustrates P&G's use of which of the following elements
of the promotion mix?
a) Advertising
b) Personal selling
c) Sales promotion
d) Public relations
e) Telemarketing
c
A consumer contest is an example of

a) personal selling.
b) sales promotion.
c) advertising.
d) indirect selling.
b
Sweepstakes, free samples, coupons, and rebates are examples of

a) advertising.
b) sales promotion techniques.
c) publicity.
d) personal selling techniques.
e) packaging methods.
b
Generally, promotion mixes for companies with extremely limited promotional

budgets tend to concentrate on
a) advertising.
b) publicity.
c) sales promotions.
e) distributor incentives.
d
Which of the following target market characteristics are most important to consider
before determining the promotion mix ingredients?
a) The size, geographic distribution, and demographic characteristics
b) The cultural diversity and population size
c) The age, sex, religion, and race characteristics
d) Existing product adoption categories
e) Existing levels of price consciousness
a
If a firm's promotional budget were extremely limited, for which of the following
reasons would it be more likely to rely on personal selling as its main promotional
tool?
a) People are more likely to believe a human being than a print ad.
b) TV and radio ads are not feasible for smaller companies.
c) It can achieve more sales through business customers than through individual
consumers.
d) It is easier to measure a salesperson's effects on sales than advertising's effects
on sales.
e) The firm is charging a higher price to cover the expensive salaries of its
salespeople.
d
Organizations that sell products to industrial markets or a few wholesalers tend to

focus their promotion efforts on
a) advertising.
b) word-of-mouth communication.
d) sales promotion.
e) personal selling.
e
High-priced products usually depend heavily on which promotion mix ingredient?

a) Advertising
b) Personal selling
c) Public relations
d) Sales promotion
e) Telemarketing
b
The use of heavy advertising in the promotion mix is least likely to occur in which
product life cycle stage?
a) Introduction
b) Decline
c) Maturity
d) Growth
e) Plateau
b
If the push policy is used in promoting a product, the firm

a) promotes directly to consumers.
b) promotes only to the next marketing institution down the marketing channel.
c) promotes the product to wholesalers only.
d) promotes the product to retailers only.
e) will be assured of having an effective promotional mix.
If a manufacturer decides to use a push policy to promote its products, it is most

likely to focus its efforts on
a) retailers.
b) wholesalers.
c) ultimate consumers.
d) other producers.
e) institutional users.
b
When Hershey Dark Chocolate Kisses were introduced, Hershey promoted directly
to consumers and told them to ask for the product at their favorite stores. This is
an example of a _________ policy.
a) reseller promotional
b) push
c) customer promotional
d) pull
e) channel promotional
d
If a pull policy is to be used in promoting a product, the firm

a) promotes directly to consumers.
b) promotes only to the next marketing institution down the marketing channel.
c) promotes the product to retail stores only.
d) promotes the product to wholesalers only.
e) must also use the push policy to be effective.
a
The use of a pull policy may require heavy expenditures for

a) advertising and sales promotion.
b) public relations and distribution.
c) personal selling and public relations.
d) distribution and advertising.
e) sales promotion and personal selling.
a
Which of the following are personal informal exchanges of communication that

customers share with one another about products, brands, and companies?
a) Guerilla communication
b) Word-of-mouth communication
c) Buzz marketing
d) Viral marketing
e) Conversational promotion
b
An attempt to create a trend or acceptance of a product through word-of-mouth

communication is called
a) guerilla marketing.
b) viral marketing.
c) buzz marketing.
d) personal publicity.
e) conversational promotion.
c
Andrea receives an e-mail from her sister-in-law that is actually a recommendation

for a website with a demonstration of a new home hair-coloring system. She later
discovers that her sister-in-law received a free trial kit for passing Andrea's and
four other friends' e-mail addresses along to the marketer. This is known as
a) viral marketing.
b) buzz marketing.
c) guerilla marketing.
d) a word-of-mouth pyramid.
e) personal advertising.
a
If promotion does not do its job of stimulating demand, then the

a) price of the promoted product is likely to increase.
b) price of the promoted product will remain reasonably stable.
c) price of the promoted product will decrease.
d) cost of promotion will decline.
e) cost will remain about the same.
The two main reasons for criticism of promotional activities are that promotion
a) has some flaws, and it is deceptive.
b) is deceptive, and it causes prices to rise.
c) pervades our daily lives, and it creates needs in us.
d) creates needs in us, and it encourages materialism.
e) has some flaws, and it pervades our daily lives.
e
Promotion can help keep prices lower because

a) demand for the product does not increase.
b) promotion of prices intensifies price competition.
c) promotion of prices leads to nonprice competition.
d) promotion tends to reduce consumers' price sensitivity.
e) promotion tends to stabilize a product's price elasticity of demand.
b
A commercial for a weight-loss program that explains that the customer pays only
one dollar for every pound he or she wants to lose but specifies in fine print that
the cost of meals is extra exemplifies ____________ advertising.
a) unfair
b) illegal
c) deceptive
d) push
e) pull
c
If a marketer of a perfume ad develops a commercial involving a man being

attracted to a woman who wears a particular perfume, it is attempting to influence
one's need for
a) love and affection.
b) safety.
c) self-esteem.
d) self-actualization.
e) respect from others.

a
If children and teenagers are insisting on wearing expensive name-brand apparel, a

criticism of promotion can be made that promotion
a) forces people to spend too much.
b) forces prices to go up.
c) encourages materialism.
d) creates needs.
e) can be harmful.
c
Promotion tends to
a) create needs.
b) capitalize on existing needs.
c) be overly focused on the self-actualization needs.
d) overemphasize physiological and safety needs.
e) avoid focusing on people's needs.
b
Promotion helps consumers because it

a) costs billions of dollars each year, which stimulates the U.S. economy.
b) always stresses wholesome values, which benefits society.
c) persuades consumers to make the right choices.
d) informs consumers and places them in a position to specify the products that
they seek.
e) tends to be informative and not persuasive.
d
Some critics, including consumer groups and government officials, suggest that certain
products should not be promoted because they
a) cost too much.
b) are illegal.
c) are potentially harmful.
d) do not last.
e) are not competitive


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Chapter 5: Target market :

Which of the following is not a characteristic of a consumer market?

Which of these statements is not true about business markets?

Which of the following is not a requirement or characteristic of a market?

In order to be considered a market, people do not have to have

The ability to purchase a product is a function of

The first step in the target market selection process is

To find a target market, a firm can use the

Why would a company use the undifferentiated strategy?

The purpose of market segmentation is to

A disadvantage of the concentrated targeting strategy is that

The primary advantage of a concentrated targeting strategy is

Which of the following products is most likely to be marketed, using an undifferentiated

Segmentation variables are usually grouped into four categories:

Family life cycle is most typically based on

Which of the following is the biggest drawback to using psychographic variables?

The three most commonly used psychographic segmentation variables are

When using personality characteristics as a market segmentation variable, marketers generally

A widely used system for classifying individuals on the basis of lifestyle is

Which of the following is an example of a behavioristic segmentation variable?

Using the breakdown approach to sales potential, estimates are made

The buildup approach measure of sales potential

When evaluating market segments, assessment of competitors is important because

When selecting specific target markets, a firm should

. Evaluating and making product positioning decisions is important for

Product positioning refers to

Positioning a product to avoid competition may be best when the

In the context of marketing, cannibalization means

Relying on executive judgment for forecasting may be adequate when

Company sales forecasts are least likely to be based on

T F Individuals' ability to buy depends on the amount of their buying power.

T F A company sometimes defines a total market as its target market.

T F Only one variable can be used to segment a market.

T F Segmentation variables are characteristics of individuals, groups, or organizations in a total

Chapter 11 : pricing Fundamentl

status-conscious. In keeping with this assessment, department stores selling

distinguishing characteristics of its brand.

d) price elasticity of demand.

c) If marketers can determine price elasticity, then setting prices at optimum

Roberts Electronics calculates that if it produces 15 radar detectors, its costs

c) decrease volume sold.

a) higher costs for the company and higher prices

Marketers have no flexibility in setting prices under conditions of

Chapter 15 : ITEGRATED MARKETING

The coordination of promotion and other marketing efforts for maximum

Effective management of integrated marketing communications is based upon

If FedEx-Kinko's decided to outsource all of its marketing efforts to the MaxPro

A sharing of meaning defines

A person, group, or organization that has a meaning it intends and attempts to

The individual or group that decodes a coded message is called a

When a source converts meaning into a series of signs or symbols representing

Radio and television signals as well as ink on the paper of a magazine or

During the decoding process, the

c) source attempts to convert signs or symbols into concepts and ideas.

The receiver's response to a message is ___________ for the source.

Communication can be viewed as a circular process because

Sara Dickson is concerned about the effectiveness of Magnum, Inc.'s promotional

Channel capacity is determined by the

Anything that reduces the accuracy and clarity of communication is called

specifically concerned about limits in the receiver's

What is the overall role of promotion?

Communication that builds and maintains favorable relationships by informing and

___________ links the purchase of an organization's products to support of