Question 1

If demand is irregular, a firm's production flexibility is likely to influence the severity of stock-out problems in the channel of distribution.

Accepted Answer

If a firm has production flexibility, it can adjust its production levels to match the fluctuating demand, which can help prevent stock-out problems in the channel of distribution. However, if a firm does not have production flexibility, it may struggle to keep up with sudden spikes in demand and may experience more severe stock-out problems.

Question 2

When finances are tight, it's sensible to look for strategy alternatives that get a better return on money that is already invested.

Accepted Answer

When money is limited, it's wise to explore options that provide a higher return on investment.

Question 3

Forecasting the amount of cash that will be available after paying expenses is straightforward because it's always equal to the firm's "bottom line"-the net profit figure shown on the operating statement.

Accepted Answer

Forecasting the amount of cash that will be available after paying expenses is not always straightforward because there are many factors that can affect cash flow, such as changes in accounts receivable, inventory levels, and capital expenditures. Net profit on the operating statement is not necessarily equal to the amount of cash available after paying expenses, as it does not take into account non-cash expenses like depreciation and changes in working capital.

Question 4

Promotion spending is wasted if a new marketing mix is more successful than expected and demand quickly outstrips supply.

Accepted Answer

If demand quickly outstrips supply due to unexpected success of a new marketing mix, then promotion spending becomes unnecessary as the product is already selling well without additional promotion.

Question 5

A company with a profitable strategy has its own internal source of funds.

Accepted Answer

The answer of A company with a profitable strategy has...

Question 6

Production capacity is the ability to produce a certain quantity and quality of specific goods or services.

Accepted Answer

Production capacity refers to the ability to produce a certain quantity and quality of specific goods or services, so the statement is true.

Question 7

While excess capacity can be costly, it can be a part of a sensible plan for preventing lost sales if demand suddenly picks up.

Accepted Answer

Excess capacity can be used to meet sudden spikes in demand, preventing lost sales and revenue. While it may come with a cost, it can be a part of a sensible plan for managing capacity and ensuring customer satisfaction.

Question 8

Problems of matching supply and demand often occur when a marketing plan calls for a regional roll out rather than a national roll out.

Accepted Answer

The answer of Problems of matching supply and demand often...

Question 9

When a marketing strategy increases profit contribution without increasing capital invested, the firm's return on investment also increases.

Accepted Answer

When profit contribution increases without increasing capital invested, the return on investment (ROI) increases because the capital invested remains the same, while the profit contribution increases. This means that the ratio of profit to capital invested has increased, resulting in a higher ROI.

Question 10

A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses.

Accepted Answer

The answer of A cash flow statement is a financial...

Question 11

Apple is a good example of a company that uses its own internal funds to research, develop, and bring to market new products like the iPad, iPhone, and iPod.

Accepted Answer

Apple is known for its vertically integrated approach where it uses its own resources and funds to research, develop, and bring to market new products. This has been the company's strategy since its early days and has contributed to its success in the technology industry.

Question 12

Kikkoman is a good example of a company that took advantage of both production capacity and production flexibility to introduce a new line of specialized condiments to appeal to additional market segments.

Accepted Answer

Kikkoman expanded their product line with new, specialized condiments to appeal to different market segments, indicating they utilized both production capacity and production flexibility to do so.

Question 13

Problems of matching supply and demand often occur when a marketing plan calls for quick expansion into many different types of channels.

Accepted Answer

When a marketing plan calls for quick expansion into many different types of channels, it can be difficult to accurately forecast and match supply and demand in each channel, leading to potential problems such as overstocking or stockouts.

Question 14

Capital requirements are likely to be less when intermediaries take on much of the responsibility for promotion in the channel.

Accepted Answer

Intermediaries such as wholesalers, retailers, and distributors can help promote and sell a company's product, reducing the need for the company to spend as much on advertising and other promotional activities. This can lower the capital requirements for the company.

Question 15

Problems of matching supply and demand for a new product often occur when a marketing plan calls for quick expansion into many different types of channels at the same time.

Accepted Answer

When trying to quickly expand into many different channels for a new product, it can be difficult to accurately predict and meet demand, leading to supply and demand mismatches.

Question 16

Paying for growth by reinvesting cash generated from operations is usually less expensive than borrowing money because no interest expense is involved.

Accepted Answer

When a company reinvests cash generated from operations, they do not have to pay interest on borrowed money. Therefore, it is usually less expensive than borrowing money, which involves paying interest expense.

Question 17

When Frito-Lay introduced Tostitos Gold, demand quickly outstripped supply resulting in lost sales and wasted promotion spending.

Accepted Answer

The statement suggests that there was high demand for Tostitos Gold, but the supply could not keep up, resulting in lost sales and wasted promotion spending.

Question 18

Concerns about production capacity apply to physical goods but they are not relevant when the product is a service.

Accepted Answer

While concerns about production capacity may not apply in the same way to services as they do to physical goods, there are still limitations on the amount of service that can be provided at any given time. For example, a restaurant may have limited seating and staff, which can impact the number of customers they can serve at a given time. In addition, there may be limitations on the availability of resources needed to provide the service, such as a shortage of skilled workers or limited access to technology or equipment. Therefore, production capacity concerns can still apply to services, albeit in a different way than they do to physical goods.

Question 19

Excess capacity can be a safety net if demand suddenly picks up.

Accepted Answer

Excess capacity provides a cushion for businesses if demand suddenly increases, allowing them to meet the demand without having to immediately invest in new resources or facilities.

Question 20

Indirect distribution usually requires less investment capital than direct approaches.

Accepted Answer

Indirect distribution involves partnering with intermediaries such as wholesalers, retailers or distributors who already have an established network, thus reducing the need for a large investment in infrastructure and personnel. Direct distribution, on the other hand, requires a significant investment in logistics, distribution centers, and personnel.

Quiz 19: Managing Marketings Link With Other Functional Areas