Deck 6: The Marketing Program

Question 1

Which sales force compensation system is best suited to situations where salespeople are responsible for pre- and post-sale service and sales managers want maximum control over selling expenses?

A) straight commission
B) a combination approach
C) direct compensation
D) geographic allocation
E) straight salary

Answer 1

E

Question 2

In the Mercedes dealer network, individual dealers are given the sole right to sell Mercedes vehicles within a defined geographic area. What type of distribution does Mercedes employ?

A) exclusive distribution
B) intensive distribution
C) selective distribution
D) limited distribution
E) prestige-based distribution

Answer 2

A

Question 3

The AIDA model stands for attention, interest, desire, and action.

Answer 3

True

Question 4

To be successful, firms must move potential customers beyond mere interest in the product. Good promotion will stimulate __________ by convincing potential customers of the product's superiority and its ability to satisfy specific needs.

A) dedication
B) investigation
C) attention
D) action
E) desire

Question 5

Overall, what is the major disadvantage associated with the use of public relations and publicity?

A) It is normally very expensive.
B) The amount of negative publicity always outweighs the good.
C) Few, if any, customers pay attention to public relations messages.
D) Most people find it to be less credible than advertising.
E) The firm has limited control over how the message will be delivered or interpreted.

Question 6

The goal of __________ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.

A) price skimming
B) odd pricing
C) penetration pricing
D) first-mover pricing
E) market acceptance pricing

Question 7

The distribution system used for Juicy Fruit gum would be selective distribution.

Question 8

Even when prices go up, demand for gasoline does not go down too significantly because people still need to drive. This makes gasoline a highly elastic product.

Question 9

Procter & Gamble's introduction of a national chain of car washes would be a new product line for the company.

Question 10

Personal selling is the most precise form of communication because it assures companies that they are in direct contact with an excellent prospect.

Question 11

Walmart has threatened to cut off business from a supplier if it does not lower its prices. This is an example of legitimate power.​

Question 12

In the context of IMC strategy, what is the difference between public relations and publicity?

A) Public relations deals with positive information; publicity deals with controlling negative information.
B) Publicity deals with many stakeholders; public relations deals only with customers.
C) Publicity is normally done via an in-house staff; public relations is typically outsourced to a specialist.
D) Publicity is more narrowly defined and focused on gaining media attention.
E) There is no difference between public relations and publicity.

Question 13

Instead of cutting prices, it is often a better idea for a firm to find ways to build value into the product and justify the current price.

Question 14

Hallmark is a good example of a company that uses __________ distribution as a means of offering two or more lines of the same merchandise through two or more channels

A) direct
B) secondary
C) split
D) dual
E) complementary

Question 15

Why are firms so obsessed with the pricing element of the marketing mix?

A) Because pricing is the most difficult element of the marketing mix to change.
B) Because it is considered to be one of the few ways to differentiate a product in commoditized and mature markets.
C) Because pricing is the only marketing element that matters to customers.
D) Because pricing is the best part of the marketing mix in which to make an educated guess about the most appropriate strategy.
E) Because pricing is directly responsible for demand.

Question 16

A buying allowance is a type of consumer sales promotion.​

Question 17

Firestone carefully watches the automotive market to ascertain the demand for cars, SUVs, and trucks. Firestone does this because the demand for its products is dependent on the demand for automobiles. This situation describes __________.

A) synergistic demand
B) shopping demand
C) derived demand
D) product line demand
E) price elasticity

Question 18

The product mix consists of a group of closely related ​product items.

Question 19

Today, though cutting expenses is still a main factor, the desire of many firms to focus on core competencies is a driving force behind the increase in:

A) category management.
B) channel integration.
C) referent power.
D) product differentiation.
E) outsourcing.

Question 20

A feature article is a few pages of typewritten copy typically fewer than 300 words used to draw attention to a company event, product, or person affiliated with the firm.

Question 21

Which of the following statements about integrated marketing communications (IMC) is FALSE?

A) IMC refers to the strategic, coordinated use of promotion to create one consistent message.
B) IMC takes a 360-degree view of the customer.
C) The role of mass television advertising is growing more important to IMC strategy.
D) IMC reduces costs and increases efficiency because it can reduce or eliminate redundancies and waste.
E) The key to IMC is consistency and uniformity of message across all elements of promotion.

Question 22

Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?

A) When customers have few product choices.
B) When products are highly differentiated.
C) When the product is a real or a perceived necessity.
D) When the total expenditure is high.
E) When the product is considered to be "worth it".

Question 23

Which of the following statements best describes the term "slotting allowances"?

A) The amount of shelf space that a retailer grants to a specific brand or product.
B) The amount of product from a specific manufacturer that a wholesaler agrees to carry.
C) A fee, paid by manufacturers to retailers, to get a product placed on retail shelves.
D) A fee, paid by retailers to wholesalers, to get them to carry the retailer's private label brand.
E) The amount of product from a specific manufacturer that a retailer agrees to carry.

Question 24

What is a disadvantage of cost-plus pricing?

A) It focuses more on volume.
B) It is not very intuitive
C) It is harder to determine how many units need to be sold to break even.
D) It's difficult to determine the correct markup percentage
E) It ignores the feasibility of selling the product.

Question 25

The most basic benefit of marketing channels is __________ where channels reduce the number of contacts necessary to exchange products.

A) contraction
B) time efficiency
C) contact efficiency
D) contact creation
E) accumulation

Question 26

A __________ is an organized system of marketing institutions through which products, resources, information, funds, and/or product ownership flow from the point of production to the final user.

A) marketing network
B) distribution hub
C) supply chain
D) marketing channel
E) product network

Question 27

Which of the following sales promotion methods would you recommend to a packaged goods marketer who wants to stimulate trial of a new product?

A) a contest or sweepstake
B) a coupon
C) a free sample of the product
D) a rebate
E) a point-of-purchase display

Question 28

Which of the following IS NOT an important benefit of offering a large product portfolio?

A) package differentiation
B) economies of scale
C) sales and distribution efficiency
D) standardization
E) equivalent quality beliefs

Question 29

To compete in the fast-growing hybrid segment, Honda introduced the Civic Hybrid with unique styling and great fuel economy. The Civic Hybrid was based on the traditional Honda Civic. Which product development strategy has Honda implemented?

A) repositioning
B) new product line
C) product innovation
D) product improvement
E) product line extension

Question 30

__________ refers to the strategic combination of the four basic marketing mix elements.

A) The marketing plan
B) The marketing program
C) Strategic control
D) The strategic mix
E) Implementation

Question 31

Because service capacity is perishable and service demand is highly time dependent, service firms employ yield management strategies in an effort to:

A) control costs.
B) control demand through effective advertising strategies.
C) establish fair guidelines for overbooking capacity.
D) shift customer demand to other firms that can handle the excess business.
E) balance price and revenue considerations with their need to fill unused capacity.

Question 32

Assume Kia has developed a new product idea to launch a midsize pickup. Currently, Kia is developing a prototype and working on projected costs, revenues, and profit potential. Kia is currently at what stage of the new product development process?

A) idea generation
B) development
C) screening and evaluation
D) test marketing
E) commercialization

Question 33

Which of the following describes disintermediation?

A) How one channel intermediary is able to control the entire marketing chain
B) What happens when the risk of legal action is threatened in the supply chain
C) When customers deal directly with manufacturers and bypass traditional channel intermediaries
D) When customers decide to switch brands because their main choice is no longer available
E) Eliminating the functions of marketing intermediaries in the supply chain

Question 34

Many products, such as candy, soft drinks, and gum, are sold via intensive distribution. However, this strategy has a major drawback. What is it?

A) It maximizes profit margin rather than sales volume.
B) It encourages customers to shop around for the lowest price.
C) It promotes a very high degree of brand switching.
D) The manufacturer must give up a good degree of control over pricing and product display.
E) It gives customers fewer opportunities to find the product.

Question 35

Mallory is passionate about collecting antiques. She is so passionate she spends every weekend scouring antique stores for the perfect item. For Mallory, antiques are which of the following?

A) ​Shopping products
B) ​Unsought products
C) ​Specialty products
D) ​Convenience products
E) ​Accessory products

Question 36

Why would a firm offer a deep assortment of products in its product portfolio?

A) To attract a wide range of customers and market segments.
B) To capitalize on the firm's reputation.
C) To diversify its risk.
D) To maximize differentiation across its product lines.
E) To create synergies in the marketing department.

Question 37

Why would a firm offer a wide variety of products in its product portfolio?

A) To attract a wide range of customers and market segments.
B) To capitalize on the firm's reputation.
C) To diversify its risk.
D) To maximize differentiation across its product lines.
E) To create synergies in the marketing department.

Question 38

In business markets, __________ is used to quote prices in terms of reductions or increases based on transportation costs or the actual physical distance between the buyer and the seller.

A) transfer pricing
B) countertrade
C) geographic pricing
D) logistics pricing
E) GPS pricing

Question 39

In today's economy, personal selling has evolved to take on elements of customer service and marketing research. Why is this the case?

A) It is less expensive to deliver service and conduct research with the sales staff.
B) It is more time efficient because salespeople are already interacting with customers.
C) Personal selling focuses more on developing customer relationships than on generating transactions.
D) It allows salespeople to earn higher commissions for doing more work.
E) Personal selling has become the most important element of the promotional mix.

Question 40

The Club is a local hair salon and day spa that caters to an upper-middle class clientele. Although price competition in the local area has been increasing, the owners of The Club have decided to focus their marketing efforts on quality, service, and value, and to resist the temptation to compete on price. In pursuing this non-price strategy, managers of The Club are ascribing to which of the following assumptions?

A) Customers see all salons as being about the same.
B) The market for salon services is very price sensitive.
C) Customers of The Club are so loyal that price competition is not necessary.
D) It is difficult for competitors to copy The Club's differentiating characteristics.
E) The managers are ascribing to all of these assumptions.

Question 41

Although the product is at the heart of the marketing program, it is important to remember that product offerings in and of themselves have little value to customers. An offering's real value comes from:

A) its superiority to competing products.
B) its ability to further the image of the organization.
C) its value (good quality at a low price).
D) its ability to deliver benefits that solve a customer's problems.
E) its easy of use and convenience.

Question 42

Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.

A) penetration pricing
B) market equity pricing
C) prestige pricing
D) relational pricing
E) value-based pricing

Question 43

A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a single time is called a:

A) merchandise credit.
B) buying allowance.
C) selling incentive.
D) push money allowance.
E) cooperative incentive.

Question 44

__________ is defined as a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other product offerings.

A) Quality
B) Value
C) Price
D) Breakeven cost
E) Opportunity cost

Question 45

Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow down deliveries and postpone product availability to these resellers. What type of power is Acme wielding in the channel?

A) legitimate power
B) coercive power
C) referent power
D) reward power
E) logistical power

Question 46

Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?

A) Because firms want to make a profit, not just break even.
B) Because customer expectations are far more important in setting prices.
C) Because prices should be based on demand, not costs.
D) Because different firms have different cost structures.
E) Because competitor's prices are far more important in setting prices.

Question 47

The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:

A) reduces the number of perceived substitutes for a product.
B) makes the product more expensive than its competitors.
C) increases the quality of the product, making it worth the expense.
D) reduces the time and effort required to obtain the product.
E) increases the just noticeable differences among competing products.

Question 48

A car repair shop provides which of the following types of products?

A) ​Convenience products
B) ​Specialty products
C) ​Shopping products
D) Raw materials
E) ​Unsought products

Question 49

Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?

A) Because services depend on people for their delivery.
B) Because services cannot be managed due to their intangibility.
C) Because services are extremely time-and-place dependent.
D) Because service marketers cut corners to reduce expenses.
E) Because service marketers make unrealistic promises to customers.

Question 50

What is the most appropriate type of distribution to use when customers need the opportunity to comparison shop, or when after-sale services are important?

A) exclusive distribution
B) service-based distribution
C) intensive distribution
D) comparative distribution
E) selective distribution

Question 51

Which member of the marketing channel has the primary responsibility of fulfilling the channel's main functions?

A) manufacturers
B) wholesalers
C) retailers
D) customers
E) it does not matter

Question 52

The phrase "Unused service capacity is lost forever" refers to which major challenge associated with the marketing of services?

A) client-based relationships
B) limited standardization
C) simultaneous production and consumption
D) perishability
E) heterogeneity

Question 53

Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."

A) reference pricing
B) EDLP
C) odd pricing
D) value-based pricing
E) sale pricing

Question 54

The Ritz-Carlton Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Ritz-Carlton sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?

A) exclusive pricing
B) image pricing
C) psychological pricing
D) prestige pricing
E) service-based pricing

Question 55

In launching its new line of power tools, Black and Decker spent a considerable amount of time and resources to educate, motivate, and compensate members of its supply chain. By investing heavily in these types of promotions, Black and Decker hopes its __________ strategy will lead to a more effective product launch.

A) pull
B) AIDA
C) institutional
D) push
E) placement

Question 56

Ensuring the availability of products in the right place in the right quantities at the right time in a cost efficient manner is the main focus of:

A) physical distribution.
B) marketing networks.
C) supply chain management.
D) channel management.
E) network management.

Question 57

Price elasticity is defined as:

A) a situation where prices routinely move up and down in a short period of time.
B) customers' responsiveness or sensitivity to changes in price.
C) the impact on a product's demand when customers are in unique buying situations.
D) the relative ease with which prices can be changed.
E) price flexibility-a pricing strategy used by startup firms.

Question 58

Most firms today compete in mature markets characterized by commoditization. In these cases, the __________ typically becomes incapable of differentiating the product offering from those of the competition.

A) extended product
B) core product
C) supplemental products
D) experiential products
E) tangible products

Question 59

In terms of marketing channel functions, which of the following statements describes the concept of discrepancy of quantity?

A) Manufacturers make one or a few product(s)-customers need variety and assortment.
B) Channels must make products available in convenient locations.
C) Channels add value to products by standardizing the exchange process.
D) Channels must provide for the storage of products for future purchase and use.
E) Manufacturers produce large quantities; customers usually want only one item.

Question 60

Despite conventional thinking, __________ accounts for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products in grocery stores and mass-merchandise retailers.

A) personal selling
B) advertising
C) public relations
D) sales promotion
E) publicity

Question 61

Which of the following statements best represents the universal goal of all sales promotion activities?

A) To increase sales volume in the long term.
B) To stimulate customer interest and attention.
C) To induce product trial and purchase.
D) To enhance the image of the firm.
E) To gain the attention of members of the supply chain.

Question 62

In most marketing channels for consumer products, the balance of power has shifted to __________ due to their size and buying power.

A) consumers
B) mass merchandise retailers
C) wholesalers
D) brokers and distributors
E) manufacturers

Question 63

Identify and discuss reasons why firms become so infatuated with pricing.

Question 64

In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices?

Question 65

______________ are finished parts that become part of a larger finished product.

A) ​Accessory equipment
B) ​Process materials
C) ​Component parts
D) ​Maintence, repair, and operating products
E) ​Raw materials

Question 66

Discuss the benefits associated with offering a large portfolio of products. What are some of the key issues involved in managing the product portfolio?

Question 67

Discuss the issues associated with the increasing fragmentation of mass media audiences. How are advertisers and media companies coping with the issue?

Question 68

Which of the following statements is TRUE with respect to the relationship between price and revenue?

A) When business is good, a price increase will increase revenue.
B) When business is bad, a price increase will increase revenue.
C) Price cuts must be offset by an increase in sales volume to keep the same level of revenue.
D) In highly differentiated markets, price cuts will capture greater market share.
E) In highly commoditized markets, price cuts will increase revenue.

Question 69

Explain why distribution and supply chain management are critical to achieving a sustainable competitive advantage and true differentiation in the marketplace.

Question 70

Why is the demand for most services-such as popular restaurants-extremely time-and-place dependent?

A) Because popular services typically lack sufficient capacity.
B) Because services cannot be stored for future use.
C) Because customers must be present for service to be delivered.
D) Because service customers are typically unsure of their needs.
E) Because competing services force customers to make tradeoffs between quality and time.

Question 71

In terms of the AIDA model, mass communication elements such as advertising and public relations tend to be very effective at:

A) stimulating awareness of and interest in a product.
B) explaining highly complex and technical products.
C) stimulating immediate purchase of a product.
D) marketing high priced products.
E) closing the sale.

Question 72

The creation of an extended enterprise in the supply chain depends heavily on the ability of channel members to integrate their operations. Which of the following IS NOT a key factor in successful supply chain integration?

A) trust
B) interdependence
C) cooperation
D) mutual benefit
E) coercive power

Question 73

When firms use a(n) __________ strategy, they focus their promotional efforts toward stimulating demand among final customers, who then exert pressure on the supply chain to carry the product.

A) pressurization
B) IMC
C) pull
D) guerilla
E) push

Question 74

Which of the following is perhaps the main advantage associated with the use of advertising?

A) It takes little time to develop an advertising campaign.
B) The total dollar layout in advertising is usually low.
C) It is an extremely cost efficient way to reach a large number of people.
D) It can quickly convey a large amount of technical information.
E) It can be quite memorable.

Question 75

Compare and contrast the traditional use of power in a marketing channel versus today's notion of integrated and collaborative supply chains. Do the five traditional power bases still play a role in today's era of collaboration? Explain.

Question 76

Discuss the role of sales promotion in consumer markets. In your answer, identify several types of consumer sales promotion activities and how they might be used in an overall IMC program.

Question 77

Discuss the four types of consumer products and explain how marketing strategy changes across these product types. Be sure to use examples.

Question 78

__________ is paid personal communication that attempts to inform customers about products and persuade them to purchase those products.

A) Personal selling
B) Sales promotion
C) Publicity
D) Public relations
E) Advertising

Question 79

Identify and discuss the three major structural options for distribution. In your answer, identify the major advantages and disadvantages of each option.

Question 80

Discuss the steps involved in the AIDA model of outlining promotional goals. How does IMC strategy shift from one step to the next in the model? How does the importance of various promotional elements vary across the steps?