Question 1

Production flexibility should help a supplier support its business customers with:
A) just-in-time delivery
B) EDI.
C) rapid response replenishment of inventories.
D) computerized reorder capabilities.
E) Any of these.

Accepted Answer

Production flexibility can help a supplier support its business customers in a variety of ways, including Just-In-Time delivery, EDI, rapid response replenishment of inventories, and computerized reorder capabilities. Therefore, option E is the correct choice as it encompasses all the options.

Question 2

Regarding marketing cost analysis:
A) there is only one right way to allocate functional costs.
B) traditional accounting analysis doesn't analyze the purpose of marketing costs.
C) marketing costs usually should be allocated to general overhead.
D) functional accounts and natural accounts usually have the same names.
E) All of these are true.

Accepted Answer

Traditional accounting analysis focuses on assigning costs to specific departments or functions, but it doesn't consider the purpose of those costs. Marketing costs are often difficult to allocate to specific products or departments and should be analyzed based on their purpose and contribution to overall business objectives.

Question 3

Overseas production:
A) generally makes distribution more complicated.
B) may be very economical.
C) sometimes brings concerns about nationalism to the forefront.
D) can apply to services as well as physical goods.
E) All of these.

Accepted Answer

Overseas production can make distribution more complicated, but it can also be very economical. It can bring concerns about nationalism to the forefront, as seen in debates about outsourcing jobs. Additionally, overseas production can apply to services as well as physical goods. Therefore, all of the given choices are correct.

Question 4

Marketing cost analysis:
A) just uses the same "natural" accounting categories commonly used for financial analysis.
B) allocates costs to products or customers to focus on the purpose for which marketing money is spent.
C) is not very accurate, since it is almost impossible to link marketing costs to specific sales.
D) is done more frequently than analysis of manufacturing costs.
E) None of these is true.

Accepted Answer

Marketing cost analysis allocates costs to products or customers to focus on the purpose for which marketing money is spent. This helps in identifying which products or customers are generating the most return on investment and where marketing money can be optimized. It is a specific method of analysis that goes beyond the traditional accounting categories used for general financial analysis.

Question 5

Firms that use mass customization
A) may target either business customers or final consumers.
B) may be able to take advantage of the Internet for orders.
C) may be able to give their customers more or better choices.
D) are likely to have higher costs than do firms who produce more standardized products, but may earn better profit margins.
E) All of these

Accepted Answer

Firms that use mass customization have the ability to target both business customers and final consumers, take advantage of the Internet for orders, and give their customers more or better choices. While they may have higher costs than firms who produce more standardized products, they may earn better profit margins through offering customized choices to their customers.

Question 6

Which of the following is a part of the functional account category of a factory?
A) Salaries
B) Supplies
C) Raw materials
D) Advertising
E) Maintenance

Accepted Answer

Maintenance is a part of the functional account category of a factory as it is necessary for the upkeep and repair of equipment and facilities to ensure the smooth and efficient operation of the factory. Salaries, supplies, raw materials, and advertising are not considered a part of this category.

Question 7

Service firms are finding ways to reduce the cost of some of their production work with _____, using telecommunications to move service operations to places where there are pools of skilled workers.
A) skill transfer
B) task transfer
C) knowledge transfer
D) turnkey projects
E) mobile environments

Accepted Answer

The question is discussing the concept of moving service operations to places where there are pools of skilled workers, which suggests that the focus is on transferring specific tasks rather than overall skills or knowledge. Therefore, option B, task transfer, is the most appropriate choice. The other options may also be relevant in different contexts, but they do not address the specific situation described in the question.

Question 8

ConnectSys is a California-based manufacturer of computer networking equipment for home and small business users. When people call the company's toll-free customer support telephone number, they are connected to a customer service representative in India. ConnectSys uses this arrangement because the wages for customer service representatives are lower in India than in the United States. This is an example of:
A) A virtual corporation.
B) Exporting telecommunications.
C) An indirect distribution channel.
D) A task transfer service.
E) None of these.

Accepted Answer

This is an example of a task transfer service, where a company outsources a specific task (in this case, customer service) to a location where it can be completed at a lower cost, such as India.

Question 9

Starbucks ran a full-page ad in THE WALL STREET JOURNAL proclaiming that its baristas can make more than 87,000 possible combinations of an espresso coffee drink. This is an example of:
A) Combined target market approach.
B) Mass customization.
C) Task transfer.
D) Diversification strategy.
E) Single target market approach.

Accepted Answer

The ad is promoting Starbucks' ability to customize orders, which is an example of mass customization.

Question 10

Which of the following statements about mass customization is true?
A) Anderson's windows, which an architect can order in just about any combination of size, 3 Hardware, and style, is a good example of mass customization for business markets.
B) Mass customization avoids the need for working capital.
C) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets.
D) The mass-customization approach applies only to services, and they often must be custom produced anyway.
E) Mass customization reduces production costs but it's less likely to meet a customer's needs.

Accepted Answer

Anderson's windows are a good example of mass customization for business markets as they can be ordered in various combinations of size, hardware, and style to meet the specific needs of the architect or the customer. Option B is incorrect as mass customization may require additional working capital to accommodate for customization. Option C is incorrect as mass customization requires a firm to shift from a homogeneous market to a more heterogeneous one. Option D is incorrect as mass customization can be applied to both products and services. Option E is incorrect as the whole purpose of mass customization is to meet the specific needs of the customer, therefore it is more likely to meet their needs.

Question 11

In serving individuals within target segments, _____ tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices.
A) mass marketing
B) standardization
C) traditional manufacturing
D) outsourcing
E) mass customization

Accepted Answer

Mass customization attempts to give customers more or better choices while still remaining cost-effective. Mass marketing does not focus on individual target segments, but rather on a broad audience. Standardization and traditional manufacturing do not prioritize customization for individual customers. Outsourcing may help reduce costs, but it does not inherently allow for greater customization for individual customers.

Question 12

When an American accounting firm sends some of its tax work to India to take advantage of lower wages, this is called _____.
A) skill transfer
B) task transfer
C) knowledge transfer
D) tax movement
E) source relaying

Accepted Answer

This is known as task transfer or outsourcing. The firm is transferring the specific task of tax work to another location with lower wages in order to reduce costs.

Question 13

Which of the following statements about mass customization is true?
A) Mass customization means that a firm is targeting the mass market but that it tries to customize the design of a product so it is different from what a competitor offers.
B) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets.
C) The mass-customization approach applies only to services, and they often must be custom produced anyway.
D) ChemStation's industrial detergents, which a business customer can order to fit any special cleaning need, is a good example of mass customization.
E) None of these is true.

Accepted Answer

Option D is true as it gives an example of mass customization - ChemStation's industrial detergents, which can be customized to fit any special cleaning need of a business customer. Option A is not entirely true as it suggests that the firm is targeting the mass market, whereas mass customization usually involves targeting a niche market. Option B is incorrect as mass customization involves breaking down larger markets into smaller, more homogeneous segments. Option C is also incorrect as mass customization can apply to both goods and services.

Question 14

At Dell's Web site, a student can order a laptop computer with the exact memory capability and software that she wants, and have it shipped to her dorm room within 48 hours. This is an example of:
A) Combined target market approach.
B) Task transfer.
C) Mass customization.
D) Diversification strategy.
E) Single target market approach.

Accepted Answer

This is an example of mass customization, where Dell is able to customize the laptop according to the specific requirements of the student and still deliver it within a short period of time.

Question 15

A major purpose of marketing cost analysis is to:
A) determine which costs are fixed and which are variable.
B) avoid the pitfalls of the full-cost approach to allocating costs.
C) divide costs into natural accounts.
D) show the marketing manager where costs occur in relation to serving particular customers.
E) avoid the pitfalls of the contribution-margin approach to allocating costs.

Accepted Answer

The major purpose of marketing cost analysis is to show the marketing manager where costs occur in relation to serving particular customers. This helps in identifying the most cost-effective ways of serving customers and making necessary changes to improve profitability. Option A is incorrect as determining fixed and variable costs is a part of cost classification. Option B and E deal with different approaches to cost allocation and are not the major purposes of marketing cost analysis. Option C refers to dividing costs into different categories for reporting purposes and is also not related to the major purpose of marketing cost analysis.

Question 16

At the Comfort Inn Web site, a customer can create an account with his preferences for a smoking or non-smoking room, the type of pillows he likes, early or late check-in and check-out, and his room location. The hotel keeps track of this information and uses it whenever this customer reserves a room in the future. This is an example of:
A) Combined target market approach.
B) Diversification.
C) Task transfer.
D) Mass customization.
E) Single target market approach.

Accepted Answer

This is an example of mass customization, as the hotel is using customer data to personalize their experience and meet their individual preferences.

Question 17

Which of the following statements about mass customization is True?
A) There has been a widespread shift to mass customization by thousands of companies.
B) The biggest successes in mass customization have all been in consumer markets as opposed to business markets.
C) If a company is to succeed with a mass customization strategy, it must be able to find a low-cost way to produce the products.
D) All of these.
E) None of these.

Accepted Answer

While mass customization has become a popular concept, not all companies have shifted to this strategy. The biggest successes in mass customization have not been limited to consumer markets, as there are examples of successful implementation in both consumer and business markets. However, finding a low-cost way to produce customized products is important for the success of a mass customization strategy.

Question 18

A widespread shift to mass customization has not occurred because firms found that
A) production costs were still high.
B) the Internet offered a low-cost way to get a lot of orders.
C) mass production is always better.
D) economies of scale provides a better alternative.
E) technology introduces a new set of problems.

Accepted Answer

Mass customization often results in higher production costs compared to mass production, which can deter firms from fully adopting this approach.

Question 19

With the mass customization approach, a firm
A) tailors the principles of mass production to meet the unique needs of individual customers in its target market.
B) tries to justify high prices by customizing its offering for everyone in a mass market.
C) gives up segmenting to go after the mass market.
D) All of these.
E) None of these.

Accepted Answer

With the mass customization approach, the firm tailors the principles of mass production to meet the unique needs of individual customers in its target market. This involves offering a variety of options that can be combined to create a customized product or service that meets the specific needs and preferences of the customer.

Question 20

____ involves tailoring the principles of mass production to meet the unique needs of individual customers.
A) Personal selling
B) Mass customization
C) Traditional manufacturing
D) Standardization
E) Outsourcing

Accepted Answer

Mass customization involves using the principles of mass production to create customized products or services for individual customers. This allows for greater customer satisfaction and can help companies stand out in a crowded market.

Quiz 19: Managing Marketings Link With Other Functional Areas

Production flexibility should help a supplier support its business customers with:

Regarding marketing cost analysis:

Overseas production:

Marketing cost analysis:

Firms that use mass customization

Which of the following is a part of the functional account category of a factory?

Service firms are finding ways to reduce the cost of some of their production work with _____, using telecommunications to move service operations to places where there are pools of skilled workers.

Starbucks ran a full-page ad in THE WALL STREET JOURNAL proclaiming that its baristas can make more than 87,000 possible combinations of an espresso coffee drink. This is an example of:

Which of the following statements about mass customization is true?

In serving individuals within target segments, _____ tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices.

When an American accounting firm sends some of its tax work to India to take advantage of lower wages, this is called _____.

Which of the following statements about mass customization is true?

At Dell's Web site, a student can order a laptop computer with the exact memory capability and software that she wants, and have it shipped to her dorm room within 48 hours. This is an example of:

A major purpose of marketing cost analysis is to:

Which of the following statements about mass customization is True?

A widespread shift to mass customization has not occurred because firms found that

With the mass customization approach, a firm

____ involves tailoring the principles of mass production to meet the unique needs of individual customers.