Answer the following questions:

When General Motors designs specific models for different income and age groups, it is practicing which of the following?
• micromarketing
• niche marketing
• mass marketing
• differentiated segmentation

Soft Sheen Corp. is introducing a new brand of shampoo in a highly competitive market. Wholesalers might be willing to handle the new product, except that retailers are already complaining about overcrowded shelf space. Therefore, Soft Sheen has decided to spend $10 million on TV advertising and send free samples to 3,000,000 households to convince consumers of the new product's superiority—and to get them to ask for it at their retail store. Soft Sheen is using
• dual distribution
• a “pulling” policy
• direct marketing
• a “pushing” policy

_____________ is demand that ultimately comes from the demand for another good or service.
• derived demand
• inelastic demand
• elastic demand
• fluctuating demand

Integrated marketing communications is best described as
• an advertising campaign with a highly focused target market
• extensive use of pop-up internet ads
• coordination of multiple communication channels to deliver a clear, consistent, compelling message
• network of memos and newsletters used to communicate with employees within the firm

The measure of the average number of times a person in the target market is exposed to an advertisement, given that he has been exposed at least once, is called
• reach
• frequency
• impact
• performance

Which of the following types of scale is the most powerful?
• nominal
• ordinal
• ratio
• interval

Which of the following statements is true for open-ended questions?
• tabulation of results is cheap and easy
• they are often used to probe for additional information
• the lower educated classes will be over-represented
• they should never be used as opening questions

Komatsu Mfg. Co. uses target return pricing and expects to sell 40,000 units of its product in the coming year. Its fixed costs will be $500,000 and its variable costs will be about $20 per unit. If Komatsu seeks to earn a 20 percent return on its investment of $500,000, what price should it charge?
• $35.00
• $32.50
• $21.00
• $21.00

Which of the following is true of the 2.5% of the population identified as innovators?
• they are highly brand loyal
• the are reluctant to try new products
• they have relatively longer purchase decision times
• they have relatively low perceptions of risk

When a consumer considers very high marks on some product features to “make up for” lower marks on other product features, he is said to be using what kind of decision rule?
• prototypicality rule
• noncompensatory rule
• compensatory rule
• average mean rule

Which of the following best illustrates an application of classical conditioning in marketing?
• a coupon for $1.00 off a box of cereal
• an ad that stresses the durability and high gas mileage of a car
• a 10% reduction in the price of milk
• a print ad showing the product in an attractive scene with cute kids and cuddly puppies

The strategic consideration of physical distribution implies that
• transporting, storing, and product-handling have insignificant effects on total costs
• the best distribution system is the lowest cost one
• a firm should seek to minimize the total cost of transporting, storing, and product-handling—for a given level of customer service.
• transportation, ordering, handling, and storage are significant cost factors; but, they have no effect on customer service

Fundamental assumptions of the information processing model of consumer behavior are that consumer
• processing capacity is limited but storage capacity is unlimited
• processing capacity is unlimited but storage capacity is limited
• both processing capacity and storage capacity are limited
• both processing capacity and storage capacity are unlimited

Consumers of a product are likely to be more price sensitive if the product
• has many substitutes
• has few substitutes
• is considered a necessity
• has a low price relative to a product with which it must be used (e. g., floor mats for a new car)

Which of the following is considered a drawback of brand licensing for most companies?
• timing of distribution channel development
• trademark protection issues
• lack of extra revenues derived from an existing brand
• lack of manufacturing control

The most appropriate promotion strategy for a product in the maturity stage of the product life cycle is
• to stress key competitive differences
• reminder communication
• no promotions
• to inform and educate

A firm typically begins international marketing by
• exporting directly
• forming a joint venture with a foreign firm
• establishing an international division
• configuring itself as a global organization

Which of the following best illustrates internal marketing?
• McDonald's trains employees to serve customers well
• IBM prepares to launch a new product
• Kodak determines prices for a new line of cameras
• Sony selects retailers for a new cordless telephone line

In addition to selling his products, Ralph Kramden, life insurance salesman, wants to build rapport and develop a long-term relationship with his customers. The best tool for these objectives is
• advertising
• personal selling
• public relations
• sales promotions

The marketing department has received a request for conducting a study of consumers’ regional telephone calling plans. The marketer’s first step should be to
• select a sampling methodology
• select a sampling methodology
• get more information about the objectives of the research
• review relevant secondary data available within the organization

A company is designing a new car that it wants to sell to various socioeconomic segments. For marketing research designed to describe what features consumers want, the best type of sample would be
• nonprobability sample of the market
• stratified random sample of the market
• convenience sample of the market
• a random sample of the market

An estimate of the maximum amount of sales available to all the firms in an industry during a given period under a given level of industry marketing effort is the
• total market potential
• company sales potential
• company market share
• latent consumer demand

The best description of the marketing concept is that firms achieve success by
• using promotion to persuade consumers to buy the firm’s products
• designing the most innovative and highest quality products
• determining what consumers want and need and offering that
• keeping labor, materials, and manufacturing costs as low as possible, with the resulting lowest price

In a market of stable size, marketing strategy that focuses on increasing market share is based on the belief that increasing market share
• is the only path to growth
• will cause ROI to increase
• will result in more precise targeting
• will increase consumer satisfaction

A company uses contingency plans in order to
• address a deviation in marketing performance from expectation
• identify consumer wants and needs
• make its initial decisions about how to allocate marketing efforts
• motivate sales people to engage in non-selling activities

Marketing research indicates your firm is operating in a range of price inelasticity, which means
• if you increase the price, revenues will drop.
• if you decrease the price, revenues will increase.
• if you increase the price, revenues will increase
• if you increase the price, revenues will not change.

In a market with many producers and many buyers but no intermediaries, the introduction of the first intermediary channel member should
• reduce the cost to the consumer and increase the level of customer service
• increase the cost to the consumer but increase the level of customer service
• reduce the cost to the consumer but decrease the level of customer service
• increase the cost to the consumer and decrease the level of customer service

Which of the following conditions would argue against a multiple-segmentation strategy?
• significant economies of scale in production
• significant differences in consumers’ product benefit desires
• significant differences in consumers’ media habits
• significant differences in competitors’ marketing strategies

Let’s Travel has 200 local affiliate offices nationwide. When the company headquarters began to advertise in the major travel magazines and opened a website to sell its services directly, what response should be expected from the local affiliates.
• strong support for the additional promotion
• strong objection to the horizontal competition
• indifference
• marketing research to determine consumer response

The difference between what consumers would pay for a Brand X product versus a standard or average product is a good measure of
• Brand X’s profit margin
• Brand X’s brand equity
• Brand X’s price leadership
• Brand X’s perceived quality

Joe is considering opening a restaurant. He has estimated his annual costs for labor will be $100,000; his annual rent, equipment, and other fixed costs will be $120,000. He also estimates his food costs will average 40% of the selling price. Finally, he estimates that the average expenditure will be $15 per person. If he plans to be open 6 days per week, how many customers will he need per day to break even?
• more than 500
• fewer than 500, but more than 100
• fewer than 100, but more than 75
• fewer than 75, but more than 50
• fewer than 50

One reason that idea screening is a critical stage in the new product development process is that
• product development costs rise dramatically in later stages, so the company wants only to develop only those ideas with a high chance of success
• competitors can quickly steal ideas, so the company wants only those ideas that can be protected with patents
• international competition and markets demand that all ideas be culturally sensitive
• the federal government carefully monitors each company’s product idea screening process to be sure no national security matters are at risk

General Motors decides to produce a new sports car to compete with European brands in the high income segment, which dictates that the GM offering have a high price. This illustrates
• positioning
• supply and demand
• cost-based pricing
• oligopolistic price setting

Answer the following questions: When General Motors designs spec...