Question 1

The acquisition of Blacksmith is called a "transformational acquisition" for what reason?
A)It made Prestige an even larger niche marketer of minor brands.
B)It addressed stockholder concerns about a lack of focus.
C)It eliminated a competitor.
D)It provided more product line depth to a core business.
E)It evened out a sales pattern that had been dependent on the cough,cold,and flu season.

Accepted Answer

For the company,it was a meaningful step in its long-term strategy of an increasing presence in the OTC healthcare arena.

Question 2

One benefit that Prestige probably does not enjoy is an extreme economy of scale in its advertising.

Accepted Answer

The answer of One benefit that Prestige probably does not...

Question 3

Venerable brands such as Luden's (cough drops originally formulated over a century ago)and Efferdent (virtually synonymous with denture adhesive since the days of early television)give Prestige what important attribute?
A)brand equity
B)a major position in both segments
C)two brand marks
D)household words
E)manufacturing brands to go with its private brands

Accepted Answer

These brand names are familiar to consumers and indicate quality,hence brand equity,which refers to the value of a brand name.

Question 4

Which of the following factors was least likely to have influenced Apple's decision to release a (RED)-branded iPod Nano?
A)social consensus
B)the number of people to be affected
C)the Foreign Corrupt Practices Act
D)Apple's level of ethical development
E)Apple's code of ethics

Accepted Answer

The FCPA is a law that prohibits U.S.corporations from making illegal payments to public officials of foreign governments to obtain business tights or to enhance their business dealings in those countries.While it is an important consideration in international ethics,it has little to do with this particular example.

Question 5

Which of the following expenses does Prestige most likely not eliminate by its reliance on acquisition over new product development?
A)R&D
B)testmarketing
C)commercialization
D)business analysis
E)none of the above

Accepted Answer

Given that Prestige calculates what brands it buys before and after acquisition,it would engage in a process analogous to a business analysis,that is,an assessment of the demand,cost,sales,and profitability of an acquired product.

Question 6

Before developing a line of (RED)products,Motorola first had to consider whether doing so aligned with the moral principles by which the company operates.This exemplifies ethical decision making.

Accepted Answer

Ethical decision making involves considering the ethical implications and consequences of actions before making a decision. In this case, Motorola considered whether developing a line of (RED) products aligned with their moral principles before proceeding. This demonstrates ethical decision making.

Question 7

When companies like Motorola,Converse,and Gap participate in cause-marketing events like Product (RED),they are primarily demonstrating _______________ responsibility,a component in the pyramid of corporate social responsibility.
A)economic
B)legal
C)ethical
D)philanthropic
E)charitable

Accepted Answer

Philanthropic responsibilities require that a company be a good corporate citizen,contribute resources to the community,and improve the quality of life for others.

Question 8

Efferdent,PediaCare,and the other products Prestige picked up from its Blacksmith acquisition should be more correctly seen as __________ rather than __________.
A)product mixes/brands
B)product lines/product items
C)product item/product lines
D)product items/brands
E)product mixes/product lines

Accepted Answer

Each of these brands will include the various product items that are categorized under a product line.

Question 9

Given some redundancy in its product mix,Prestige is not immune from cannibalization.

Accepted Answer

Since there is redundancy in Prestige's product mix, it is possible that some of their products may compete with each other and result in cannibalization.

Question 10

A company that is operating at the __________________ level of morality might consider the question,"Even though it is legal and will increase company profits,is it right for us to make more money off the (RED)fundraiser than the charity itself does?"
A)preconventional
B)conventional
C)postconventional
D)existential
E)None of the above

Accepted Answer

Postconventional morality represents the morality of the mature adult.At this level,people are concerned about how they see and judge themselves over the long run.

Question 11

One aspect of expanding a portfolio through acquisition is a new product mix.Compoz and Momentum brands have a product depth of 1.What term best describes them?
A)unsought products
B)noncore brands
C)convenience products
D)product lines
E)all of the above

Accepted Answer

Each item is a product line.Since both are HTC brands,they are considered core brands unless Prestige decides to sell these brands in the future.

Question 12

Bono and Bobby Shriver advocated the idea of sustainability when they founded Product (RED),insisting that it would only be profitable for The Global Fund if it was profitable for the companies partnering with it as well.

Accepted Answer

Bono and Bobby Shriver believed in the concept of "sustainable philanthropy" through the creation of (RED), where partnering companies could improve their product sales while also raising money for The Global Fund. The idea being that if it was profitable for the companies, they would continue to participate and make a sustainable impact on the cause.

Question 13

Since 2004,Gap has released Social Responsibility Reports to combat accusations that it acts unethically.Another way the company might combat these accusations is to develop a moral code,a guideline to help marketing managers and other employees make better decisions.

Accepted Answer

A code of ethics is a guideline to help marketing managers make better decisions.Moral codes are not addressed in the chapter.

Question 14

The third prong of Prestige's corporate strategy involves periodically reassessing which brands are the best long term from a portfolio standpoint and then adjusting the portfolio accordingly.Peter Drucker gave this a name.What is it?
A)product demixing
B)product line attrition
C)organized abandonment
D)periodic audit
E)organized delisting

Accepted Answer

Prestige practices what management sage Peter Drucker calls "organized abandonment," which is based upon a periodic audit of all goods and services that a firm markets and eliminating the poorer performers from the product mix.

Question 15

When developing its line of (RED)clothing,Gap might have introduced a striking red shirt made from 100% recycled materials,naturally dyed,and compostable.When advertising the shirt,Gap might have mentioned these environmentally-friendly features in addition to the fact that a portion of the shirt's proceeds would go to The Global Fund.This is an example of __________________ marketing.
A)grey
B)black
C)red
D)green
E)None of the above

Accepted Answer

Green marketing is the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment.

Quiz 3: Ethics and Social Responsibility

The acquisition of Blacksmith is called a "transformational acquisition" for what reason?

One benefit that Prestige probably does not enjoy is an extreme economy of scale in its advertising.

Venerable brands such as Luden's (cough drops originally formulated over a century ago) and Efferdent (virtually synonymous with denture adhesive since the days of early television) give Prestige what important attribute?

Which of the following factors was least likely to have influenced Apple's decision to release a (RED) -branded iPod Nano?

Which of the following expenses does Prestige most likely not eliminate by its reliance on acquisition over new product development?

Before developing a line of (RED)products,Motorola first had to consider whether doing so aligned with the moral principles by which the company operates.This exemplifies ethical decision making.

When companies like Motorola,Converse,and Gap participate in cause-marketing events like Product (RED) ,they are primarily demonstrating _______________ responsibility,a component in the pyramid of corporate social responsibility.

Efferdent,PediaCare,and the other products Prestige picked up from its Blacksmith acquisition should be more correctly seen as rather than .

Given some redundancy in its product mix,Prestige is not immune from cannibalization.

A company that is operating at the __________________ level of morality might consider the question,"Even though it is legal and will increase company profits,is it right for us to make more money off the (RED) fundraiser than the charity itself does?"

One aspect of expanding a portfolio through acquisition is a new product mix.Compoz and Momentum brands have a product depth of 1.What term best describes them?

Bono and Bobby Shriver advocated the idea of sustainability when they founded Product (RED),insisting that it would only be profitable for The Global Fund if it was profitable for the companies partnering with it as well.

Since 2004,Gap has released Social Responsibility Reports to combat accusations that it acts unethically.Another way the company might combat these accusations is to develop a moral code,a guideline to help marketing managers and other employees make better decisions.

The third prong of Prestige's corporate strategy involves periodically reassessing which brands are the best long term from a portfolio standpoint and then adjusting the portfolio accordingly.Peter Drucker gave this a name.What is it?