Question 1

The use of sales call reports by a sales manager to assess customers' attitudes toward a new product is an example of adaptation.

Accepted Answer

This is an example of feedback, as the sales call reports are used to gather information on customer reactions and attitudes towards a product, which is then analyzed to make decisions or adjustments. Adaptation refers to changing strategies or products to better fit the market or customer needs, not the process of gathering feedback.

Question 2

The objectives of marketing, such as reducing lost sales, may conflict with a finance department objective of minimizing the investment in inventory.

Accepted Answer

Marketing objectives often focus on maximizing sales and customer satisfaction, which can lead to a desire for higher inventory levels to ensure product availability. In contrast, finance departments typically aim to minimize costs, including the investment in inventory, to improve cash flow and reduce holding costs. This difference in priorities can lead to conflicts between the two departments.

Question 3

By clearly defining a company's line of business, a large firm places restrictions on potential acquisitions that the firm may seek.

Accepted Answer

By clearly defining its line of business, a large firm sets boundaries on the types of businesses it considers relevant for its operations and strategic goals, thereby limiting the scope of potential acquisitions to those that align with its defined business areas.

Question 4

A conglomerate has a very clear definition of its line of business.

Accepted Answer

A conglomerate is a large corporation that operates in various unrelated or diverse industries, rather than specializing in one market, product, or sector.

Question 5

When a wholesaler decides to become a general merchandise wholesaler, rather than a specialty wholesaler, it is revising its line of business.

Accepted Answer

A wholesaler transitioning from a specialty focus to a general merchandise approach is indeed revising its line of business, as it shifts from offering products within a specific category to a broader range of merchandise.

Question 6

A company's overall objective of increasing sales by 9 percent can be translated into marketing objectives such as increasing the average purchase by customers by 5 percent and increasing the number of loyal customers (who purchase goods 12 times a year or more) by 10 percent.

Accepted Answer

Marketing objectives like increasing the average purchase by customers and the number of loyal customers directly support the overall objective of increasing sales, as they focus on both expanding the customer base and encouraging existing customers to spend more, contributing to the overall sales growth target.

Question 7

Because of a firm's corporate culture, product managers may have to avoid risky ventures and concentrate on products that have higher potential in the short term.

Accepted Answer

Corporate culture can significantly influence decision-making processes within a firm, including the tendency to prioritize short-term gains over potentially riskier, long-term ventures. This can lead managers to focus on products that promise immediate returns rather than those that are more innovative but uncertain.

Question 8

A target market cannot consist of the mass market.

Accepted Answer

A target market is a specific group of consumers that a company aims to reach with its marketing efforts. The mass market, on the other hand, is the entire population of potential customers. Therefore, a target market cannot consist of the mass market.

Question 9

A firm's differential advantage of being a low-cost provider may be appealing to one target market (economical consumers who are concerned primarily with price) but undesirable to another target market (status-conscious consumers who are concerned with customer service and store atmosphere).

Accepted Answer

Different target markets have varying preferences and priorities, so a low-cost strategy that appeals to price-sensitive consumers may not attract those who value premium service and exclusivity, indicating that a firm's differential advantage can be perceived differently across market segments.

Question 10

A retailer with a strong differential advantage can attract customers from greater distances than a retailer with a "me-too" philosophy.

Accepted Answer

A retailer with a strong differential advantage offers unique products, services, or shopping experiences that are not available elsewhere, making it more appealing for customers to travel further distances compared to a retailer that simply mimics others without distinct offerings.

Question 11

A functional marketing organization is the best form of organization for a firm seeking to develop staff specialists.

Accepted Answer

A functional marketing organization groups employees based on their marketing activities, allowing for specialization and development of deep expertise in specific areas, making it ideal for developing staff specialists.

Question 12

A firm realizes that both domestic and international consumers are important segments, with each requiring a separate marketing plan. The most appropriate marketing organization for this firm is functional.

Accepted Answer

The most appropriate marketing organization for a firm that recognizes the need for separate marketing plans for domestic and international consumers is a global or international marketing organization, not a functional organization. This structure allows for specialization and focus on the distinct needs of each market segment.

Question 13

A travel magazine has five regional sales offices for advertising throughout the United States. Its sales organization is organized in a product-oriented format.

Accepted Answer

The sales organization is described as having regional sales offices, which indicates a geographic organizational structure, not a product-oriented one.

Question 14

A disadvantage of all marketing organizations except functional is the need for separate marketing staffs for each decentralized organizational unit.

Accepted Answer

In decentralized organizational structures, each unit may require its own marketing team to address specific needs, unlike a functional structure where a centralized team serves the entire organization.

Question 15

A dry cleaner charges a 10 percent premium over traditional market rates on the basis of its high traffic and convenient location near a major train station, its same-day service, and its providing simple tailoring services for free (such as replacing missing or cracked buttons on shirts) on all cleaning services. The firm's total marketing program is well integrated.

Accepted Answer

The dry cleaner's strategy of charging a premium for added value services (convenience, same-day service, free simple tailoring) and its integration into a total marketing program exemplifies a well-integrated marketing strategy focused on providing additional value to justify higher prices.

Question 16

Contingency plans help a firm plan for controllable factors.

Accepted Answer

Contingency plans are designed to prepare for unforeseen or uncontrollable events, not for factors that can be controlled.

Question 17

A tire manufacturer needs a contingency plan to reflect a possible product recall.

Accepted Answer

A contingency plan is essential for a tire manufacturer to prepare for unexpected events such as a product recall, ensuring they can respond effectively to protect their customers and reputation.

Question 18

An appliance manufacturer that imports significant quantities of merchandise from a foreign country needs a contingency plan in the event the value of the U.S. dollar drops relative to the country where the appliances are imported from.

Accepted Answer

A drop in the value of the U.S. dollar relative to the currency of the country from which the appliances are imported would make imports more expensive, impacting the cost structure of the manufacturer. A contingency plan would help mitigate these financial risks.

Question 19

While a real-estate firm specializing in housing for senior citizens can define its target market as retired adults over 75 years old that live within a 25-mile radius of its facilities, it cannot control the number of retired adults or their purchase behavior.

Accepted Answer

The firm can target a specific demographic but cannot control external factors such as the population size of retired adults or their individual decisions to purchase.

Question 20

When a patent for a drug product expires, the competitive structure for the drug changes from monopolistic competition to pure competition.

Accepted Answer

When a patent for a drug product expires, it allows generic versions to enter the market, but the competitive structure typically changes from a monopoly (or monopolistic competition if there are already some alternatives) to more of a monopolistic competition rather than pure competition, due to brand loyalty, perceived quality differences, and other non-price factors.

Quiz 2: The Environment in Which Marketing Operates