Question 1

There are several methods for assessing market potential. Which of these methods do business marketers prefer?

Accepted Answer

Business marketers typically prefer the market-buildup method for assessing market potential. This approach involves estimating the total market demand by combining data from various sources, such as demographic data, industry reports, and economic indicators. The resulting estimate can then be used to determine the potential size of the target market and inform decisions about product development, pricing, and marketing strategies. Other methods mentioned, such as the purchase-profitability index and brand-development index, are typically used in consumer marketing rather than business marketing. The multiple-factor index and market-test index are also used in business marketing, but are less commonly used for assessing market potential.

Question 2

A national shoe brand wishes to use financial analysis to find profitable strategies beyond sales building. To calculate return on net worth they must understand that financial leverage is equal (=) to

Accepted Answer

Financial leverage is the ratio that measures the extent to which a company uses debt or borrowed funds to finance its operations. It is calculated by dividing the total assets by net worth. Option B represents this calculation, making it the correct choice. Option A represents return on equity, option C represents asset turnover ratio, and option D and E represent profit margin ratios.

Question 3

If a marketing researcher chooses to use word associations, the researcher is using ________.

Accepted Answer

Word associations are a type of open-end question where respondents are asked to provide the first word or phrase that comes to their mind when they are presented with a particular stimulus.

Question 4

According to the financial model of return on net worth, return on assets times (×) financial leverage equals (=)

Accepted Answer

Return on net worth is calculated as return on assets multiplied by financial leverage. It measures the profitability of the company's investments made through the use of borrowed funds. Therefore, the correct answer is E.

Question 5

A ________ can be used to track period-to-period fluctuations in each ratio (e.g., marketing expense-to-sales ratio) used assist in annual-plan control.

Accepted Answer

Control charts are specifically designed to track data over time in a visual format, making them the best choice for tracking period-to-period fluctuations in each ratio. The other options (time chart, Likert scale, profitability chart, Gantt chart) are not as well-suited for this purpose.

Question 6

Marisol is reviewing how to re-figure a variety of expenses and costs associated with a recent marketing effort. Her first task is to identify the direct costs associated with that effort. Which of the following would be the best example of a direct cost associated with a marketing effort?

Accepted Answer

Sales commissions are a direct cost associated with a marketing effort because they are directly tied to the sales generated from that effort. Rent, top management salaries, interest on debt, and taxes would be considered indirect costs.

Question 7

If a company's profit and loss statement showed that sales for the month were $60 000 and cost of goods sold were $39 000, what would be the gross margin?

Accepted Answer

Gross margin is the difference between sales and cost of goods sold. 
Gross margin = Sales - Cost of goods sold 
Gross margin = $60,000 - $39,000 = $21,000

Question 8

Annual-plan control requires making sure that the company is not overspending to achieve sales goals. The key ratio to watch is the

Accepted Answer

The marketing expense-to-sales ratio is the key ratio to watch in annual-plan control as it helps in determining whether the company is overspending to achieve its sales goals. This ratio compares the marketing expenses incurred by the company with the sales generated from those expenses. Ideally, the ratio should be low indicating that the company is achieving its sales goals without overspending on marketing.

Question 9

Pieter Rabinovich, a marketing exec at Michelin, is comparing the current level of market demand for snow tires to the potential demand level. A high market penetration index will suggest to Pieter that

Accepted Answer

A high market penetration index indicates that a large portion of the potential market has already been captured, suggesting that attracting additional customers may be more challenging and costly.

Question 10

A manager observes that his last month's salaries were $9300, rent was $3000, and supplies used by the company were $3500. Considering that his company's gross margin was $21 000, what would be his net profit for the period?

Accepted Answer

The net profit is calculated by subtracting all expenses from the gross margin. So, $21,000 (gross margin) - $9,300 (salaries) - $3,000 (rent) - $3,500 (supplies) = $5,200.

Question 11

________ for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

Accepted Answer

Market demand refers to the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

Question 12

A Canadian candy manufacturer has seen market share for their most popular chocolate bar fluctuate. A useful way for it to analyze market share movements is in terms of four components where overall market share equals (=) customer penetration times (×) customer loyalty times (×) customer selectivity times (×)

Accepted Answer

Customer selectivity refers to the ability of a brand to attract customers who are willing to pay a premium price, which is captured by price selectivity.

Question 13

Advocates of this approach to marketing-profitability analysis argue that all costs must ultimately be imputed in order to determine true profitability.

Accepted Answer

The approach being described is known as full-cost analysis, which includes all costs, even indirect and overhead costs, in calculating true profitability.

Question 14

Which of the following would be considered to be a direct cost?

Accepted Answer

Direct costs are costs that can be specifically attributed to a particular product or project. Sales commissions are a cost that can be directly attributed to the sale of a particular product or service. The other choices are indirect costs that cannot be directly traced to a specific product or project.

Question 15

A marketing manager, during an annual planning meeting, would like to have the department's staff examine the set of consumers who have interest, income, and access to the company's offers. The staff will need to examine information about the ________ in order to do what it has been asked to do.

Accepted Answer

The available market consists of consumers who have interest, income, and access to a company's offers, which aligns with the criteria the marketing manager wants the staff to examine.

Question 16

If Dell computer was seen as having a 120 percent market share and a close competitor was seen as having 90 percent market share, the market share analysis (measurement) would be expressed as

Accepted Answer

The term "relative market share" is used to describe a company's market share in comparison to its closest competitor. It is calculated by dividing the company's market share by the market share of the closest competitor. In this case, Dell's relative market share would be 133% (120%/90%).

Question 17

A marketing research firm intends to ask consumers a question that reads "Do you intend to buy a automobile within the next six months?" Consumers could respond in several ways including no chance, slight possibility, fair possibility, good possibility, high possibility, and certain. Which of the following terms most accurately categorizes the type of scale that the marketing researcher will want to use to aid their forecasting?

Accepted Answer

The question being asked pertains to the probability of making a purchase, therefore a purchase probability scale would be the most appropriate type of scale to use.

Question 18

Which of the following components of a method (formula) that can analyze market share movements represents the size of the average customer purchase from the company?

Accepted Answer

The answer of Which of the following components of a...

Question 19

Jason is examining a recent breakdown of his company's West Coast market. The terms in the report are somewhat confusing since there was no attached vocabulary key to assist the uninformed reader. Jason is looking for the set of consumers who are currently buying his company's products. Which of the following terms will assist him in finding the right column for his data query?

Accepted Answer

The term "penetrated market" refers to the segment of consumers who are already purchasing the company's products, which is exactly what Jason is looking for.

Question 20

Net profits divided by net sales equals (=)

Accepted Answer

Net profits divided by net sales equals profit margin, which measures the percentage of each dollar of sales that results in net income.

Quiz 4: Conducting Marketing Research