Marketing Management MKTG 3832
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Chapter 5 Develoning a Global Vision MULTIPLE CHOICE 2 Basketball is played nearly everywhere in the world and is an easily understood sport The National 5 Basketball Association NBA nals reached more than 600 million televisions in 195 countries From this information you should be able to infer that the NBA is a developing international selling schemes b implementing standard international marketing c implementing global marketing standardization d supplementing its foreign vision e practicing global marketing ANS E Global marketing targets markets throughout the world PTS 1 REF 63 OBJ 051 KEY CBampE Model International Perspective MSC BLOOMS Level III Application TOP AACSB Re ective Thinking All of the following statements about global marketing are true EXCEPT a Marketing to target markets throughout the world has become imperative for business b Often a US rm s toughest domestic competition comes from foreign companies c Marketing managers must develop a global vision not only to recognize and react to intemational marketing opportunities but also to remain competitive at home d Adopting a global vision can be lucrative for a company and global marketing can offset weak domestic performance e Foreign competitors have not gained signi cant market share in the United States ANS E Many US businesses have lost signi cant market share to imported products PTS 1 REF 6364 OBJ 051 KEY CBampE Model International Perspective MSC BLOOMS Level IV Analysis TOP AACSB Re ective Thinking H I Heinz the ketchup company gets over half of its revenue from international sales This shows that US citizens are using less ketchup their market share should increase Heinz needs to abandon the US market sales need to be increased domestically adopting a global vision can pay off ANS E Adopting a global vision can be very lucrative to a company EFF057 PTS 1 REF 6364 OBJ 051 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective CBampE Model Strategy MSC BLOOMS Level III Application 10 U An is a company that is heavily engaged in global trade and moves its resources goods services and skills across national boundaries a intemational facilitator global trader multinational corporation exporting company intemational merchant b c d e Amultinational corporation is a company that is heavily engaged in international trade beyond exporting and importing PTS 1 REF 65 OB 052 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level I Knowledge Which of the following statements about multinational rms is true a Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy Multinationals are de ned as companies heavily engaged in exporting and importing c All multinationals must enter the fourth stage of globalization before they are fully intemationalized d Multinationals often develop their global businesses in stages e The ve stages of globalization closely mirror the ve stages of the product life cycle 57 ANS D Multinationals can go through up to four stages in their quest to globalize their business Generally only hightech firms ever reach the fourth stage Multinationals are companies that heavily engage in intemational trade beyond exporting and importing PTS 1 REF 65 OBJ 052 KEY CBampE Model International Perspective MSC BLOOMS Level VI Evaluation TOP AACSB Re ective Thinking Otis Elevators has entered into a strategic alliance with a company in France from which it gets its elevator door systems It has a similar agreement with a manufacturer in Japan that provides it with special motor drives A manufacturer in Spain has worked closely with Otis to create small geared parts necessary for the manufacture of elevators The component parts are assembled at its plant in the United States Otis elevators can be found in buildings all over the world Otis Elevators is an example of an a cultural marketer b global trader c multinational corporation d exporting company e global enterprise ANS C Otis Elevators is heavily engaged in intemational trade beyond exporting and importing PTS 1 REF 65 OB 052 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy 2 0quot 00 MSC BLOOMS Level III Application With a a firm produces standardized products to be sold the same way all over the world a traditional marketing strategy b global marketing standardization approach c product extension approac d culturally based marketing strategy e synergistic approach to marketing ANS B Global marketing standardization is the production of uniform products that can be sold the same way all over the world PTS 1 REF 67 OB 052 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level I Knowledge A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT Culture political structure and actions its marketing mix natural resources demographic makeup EFF057 ANS C The marketing mix is the keystone of a company s intemal environment PTS 1 REF 67 OB 053 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level IV Analysis A soft drink manufacturer thinking of investing in a bottling plant in the Czech Republic should know the nation is proud of the fact it is among the world s biggest beer drinkers Czechs consume an average of onehalf liter of beer a day for every man woman and child in the country The environment of this country could very easily prevent the soft drink bottling company from succeeding a demographic b economic c cultural d political e technological ANS C Culture in uences product preferences PTS 1 REF 67 OBJ 053 TOP AACSB Diversity KEY CBampE Model International Perspective l CBampE Model Customer MSC BLOOMS Level III Application 31 U 00 American rms should never try to do business in Europe in August because they will nd that everyone has gone on vacation Today all European countries have laws requiring companies to provide employees with vacations of at least four to five weeks This would be an important part of the European environment that any multinational firm doing business there needs to be aware of a cultural b political c economic d technological e natural ANS A Holidays and vacation time are determined by cultures PTS 1 REF 6768 OBJ 053 TOP AACSB Diversity KEY CBampE Model International Perspective l CBampE Model Customer MSC BLOOMS Level III Application A US executive had no idea that Germans tend to be very riskaverse When the executive arrived at a meeting in Berlin he simply stressed the price of his rm s products without emphasizing their bottomline bene ts promoting the company s strong service support or guaranteeing their effectiveness As a result the multimillion dollar deal failed The US executive overlooked the importance of which environmental factor Culture Demographics Natural resources Economic development Political structure EDP057 ANS A Central to any society is its cultureia common set of values shared by its citizens These values determine what is socially expected PTS 1 REF 6768 OBJ 053 TOP AACSB Diversity KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level III Application A multinational company that makes a laborintensive product would be interested in the makeup of countries Factors such as median age gender and literacy rates would determine the success of its global expansion a demographic b lifestyle c natural d cultural e economic ANS A Demographics include age and educational levels as well as ethnicity and gender PTS 1 REF 7374 OBJ 053 KEY CBampE Model International Perspective MSC BLOOMS Level III Application TOP AACSB Re ective Thinking 59 Zambia is internationally recognized as the world s second leading producer of cobalt which is used to make highspeed and hightemperature cutting tools and dyes A company that wanted to manufacture tools for shaping steel would be most attracted to which element of the Zambian environment a Culture b Legal c Economic d Technological e Natural resources ANS E The text concentrates on the importance of petroleum to global marketing but other minerals are of equal or greater value to some companies PTS 1 REF 74 OBJ 053 KEY CBampE Model International Perspective MSC BLOOMS Level III Application TOP AACSB Re ective Thinking Which method of entering the global marketplace would be LEAST risky a Exporting b Licensing c Contract manufacturing d Joint ventures e Direct investment ANS A See Exhibit 53 PTS 1 REF 75 OB 054 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level VI Evaluation Which method of entering the global marketplace would be most risky a Licensmg b Direct investment c Contract manufacturing d Joint ventures e Exporting ANS B See Exhibit 53 PTS 1 REF 75 OB 054 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level VI Evaluation When Krispy Kreme decided to expand its operation internationally it chose to first make its doughnuts available in Canada to minimize its risk In accordance with the policy of risk minimization the company sold the right to manufacture and sell its doughnuts to Canadians In other words Krispy Kreme used a contract manufacturing b direct investment c importing d astrategic alliance e licensing ANS E Krispy Kreme used franchising which is a form of licensing Franchising offers only slightly more risk than exporting PTS 1 REF 76 OB 054 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level III Application 82 Belgian Beer brewer InBev bought AnheuserBusch for 52 billion This is an example of an a export b joint venture c franchise d licensed agreement e direct foreign investment ANS E Active ownership of a foreign company or of overseas manufacturing or marketing facilities is direct foreign investment InBev has invested in the United States through its purchase of AnheuserBusch PTS 1 REF 76 OB 054 TOP AACSB Re ective Thinking KEY CBampE Model International Perspective l CBampE Model Strategy MSC BLOOMS Level III Application 10 All of the following statements about the use of the Intemet in global marketing are true EXCEPT a Opening an ecommerce site on the Internet immediately puts a company in the intemational marketplace b The new Intemet economy is being restrained by the old brickandmortar rules regulations and habits c Software has been developed to ease currency conversions by allowing customers to pay for products in the currency of their choice d FedEX is a global shipper that helps solve intemational ecommerce distribution e Language barriers are limiting the potential of the Internet in international marketing ANS E Sophisticated language translation software can make any site accessible to persons around the world PTS 1 REF 80 OB 056 TOP AACSB Technology KEY CBampE Model International Perspective l CBampE Model Online Computer MSC BLOOMS Level VI Evaluation Chapter 6 C0nsumer Decision Making MULTIPLE CHOICE l The processes consumers use when making purchase decisions are called a consumer behavior b marketing c consumerism N L d perceptual mapping e database mining ANS Consumer behavior describes how consumers make purchase decisions PTS 1 REF 83 KEY CBampE Model Customer OB 061 TOP AACSB Re ective Thinking MSC BLOOMS Level I Knowledge Which step in the consumer decisionmaking process is a result of an imbalance between actual and desired states a Evaluation of alternatives b Want recognition c Purchase d Need recognition e Postpurchase behavior ANS D Need recognition is the result of an imbalance between actual and desired states PTS 1 REF39 84 OB 062 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge Rod saw a television commercial for a Honda S2000 and wants to testdrive one The commercial is an example of an st1mulus a intema b external c primary d secondary e nonpersonal ANS B External stimuli are in uences from an outside source such as a television commercial PTS 1 REF 84 OB 062 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application After a need or want is recognized a consumer may search for information about the various alternatives available to satisfy it This occurs during which part of the consumer decisionmaking process a Evaluation of alternatives b Information searc c Cognitive dissonance d Consideration stage e Product identi cation ANS B After recognizing a need or want consumers search for information about the various alternatives available to satisfy it PTS 1 REF 85 OB 062 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level II Comprehension ll LN 15 The steps of the consumer decisionmaking process in order are a need 39 39 39 quot 39 39 purchase decision postpurchase behavior b need positioning stimulus response reactions evaluation of alternatives purchase decision postpurchase behavior c need positioning alternative aggregation and divestment purchase decision postpurchase evaluation d information search need positioning evaluation of alternatives product trial purchase decision postpurchase satisfaction e need recognition information search evaluation of alternatives purchase and postpurchase behavior ANS E See Exhibit 61 PTS 1 REF 85 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level II Comprehension While looking at the DVDs at Target Tee tried to remember the name of the action movie starring Harrison Ford as an archeologist so he could buy the DVD Which step of the consumer decisionmaking process is this a Antecedent search b Need recognition c External information search d Alternative evaluation e Intemal information search ANS E After a need or want is recognized a consumer may be motivated to search for information In this case the information was already stored in his memory PTS 1 REF 85 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Which of the following products would most likely require the purchaser to use only an intemal information search a A doctor for a recently detected illness b A new washer and dryer c A formal dance d A favorite restaurant you love to patronize regularly e Choosing a movie to see at the theater ANS D Intemal information search is used with information stored in one s memory A favorite restaurant would be in a consumer s memory PTS 1 REF 85 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application An external information search is especially important when there is a great deal of past experience there are high costs associated with making an incorrect decision the cost of gathering information is high buying frequently purchased lowcost items 9 57 37 N 24 e there is little risk of making an incorrect decision ANS B If a consumer perceives a purchase to involve high risk nancial social etc an external search will lower the risk by providing more information PTS 1 REF 8586 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level IV Analysis Bethany is in the market for a new cell phone She tweets to her followers on Twitter Hey looking for some info about good cell phone deals Any advice Bethany is using an information source to help her make her decision a experiential b marketingcontrolled c intemal d unbiased e nonmarketingcontrolled ANS E Nonmarketingcontrolled information sources do not originate with marketers promoting the product PTS 1 REF 86 KEY CBampE Model Strategy OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application David is shopping for tires for his Audi He looks in the yellow pages of the local phone book and calls Costco Sam s Club Sears and a local car repair shop In his decisionmaking process David is using a marketingcontrolled information sources b demographic information sources c nonmarketingcontrolled information sources d secondary data sources e intemal search sources ANS A Marketingcontrolled information sources are product information sources that originate with marketers promoting the product PTS 1 REF 8687 KEY CBampE Model Strategy OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Warren loves to go to the beach on his vacation but hates to have to worry about the possibility of hurricanes As Warren looked for where he should go on vacation this summer he consulted a publication called SmartMoney and learned the islands of Aruba Bonaire and Curacao are not in the hurricane belt Now he will only consider these island resorts as possible vacation destinations This group of resort islands is called Warren s a involvement set b evaluative set c evolved set d evoked set e intuitive set ANS D An evoked set is the set of brands a consumer recalls and would consider as possible purchase choices W 5 PTS 1 REF 8788 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Which of the following items is MOST likely to be a fully planned purchase a a pair of jeans b a bottle of soda pop c a motorcycle d a ashlight e All of the above ANS C When a person is buying an expensive or complex item such as a motorcycle it is often a fully planned purchase based on a lot of information PTS 1 REF 89 KEY CBampE Model Customer OB 062 TOP AACSB Re ective Thinking MSC BLOOMS Level II Comprehension Andrea just purchased a trip to Jamaica as a present to her husband for their tenth wedding anniversary Andrea is anxious about the trip afraid Bill will not like her choice of location and worried she spent too much money Andrea is experiencing a selective dissatisfaction b temporal distortion c perceptual disharmony d cognitive dissonance e selfactualization involvement ANS D Cognitive dissonance is the term for postpurchase tension and anxiety 89 OBJ PTS 1 REF 063 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application Feeding her family healthy foods is important to Terri She makes a point of buying organic products as often as possible As she goes through the grocery store she remembers that she needs milk so she heads over to the dairy case intending to purchase the organic variety She notices that a carton of organic milk is priced at 489 however the storebrand milk is on sale for 99 cents She hesitates for a moment then selects the cheaper store brand telling herself that she just can t pass up such a good bargain As Terri wonders if she made the right purchase decision she is experiencing a attribute remorse b cognitive dissonance c evaluation distortion d consumer cognition e perceptual disharmony ANS B Cognitive dissonance is an inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions PTS 1 REF39 89 OB 063 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application 41 4 LN 54 Which of the following activities is most likely to be an example of routine response behavior The purchase of a threeweek vacation cruise A homeowner s purchase of a new grill for 600 The rsttime purchase of a copy machine for a home office The purchase of toilet paper The purchase of an infant car seat EFF057 AN Only the toilet paper is an example of routine response behavior as it is a frequently purchased lowcost good and requires little search and decision time PTS 1 REF 90 KEY CBampE Model Customer OB 064 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application Mario usually purchases Old Spice deodorant Unfortunately the drug store is sold out of Old Spice today so lVIario will have to choose a brand that s in stockIn making his decision Mario will engage in consumer decision making a limited b extended c habitual d classical e routine ANS A Mario is familiar with deodorant and what it does but he is unfamiliar with the speci c brands he has to choose from PTS 1 REF 9091 KEY CBampE Model Customer OB 064 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application Alanna is looking into purchasing a scooter as gas prices continue to rise She needs a reasonably priced comfortable and safe scooter with room to store her books She is not familiar with scooters and this is a major purchase for her The purchase will probably involve a lowinvolvement problem solving b lowinvolvement decision making c extensive decision making d limited decision making e dedicated cognitive behavior ANS C Customers practice extensive decision making when purchasing an unfamiliar and expensive or infrequently used product PTS 1 REF 91 OB 064 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level 111 Application Marketing managers often use instore promotions to stimulate sales of a technical products b highinvolvement products c highpriced products O W d industrial products e lowinvolvement products ANS E Because a lowinvolvement product has low potential risk for the consumer it is easier to in uence the consumer at the point of purchase Marketing managers can use attentiongetting devices to induce trial purchases PTS 1 REF 93 OB 064 TOP AACSB Re ective Thinking KEY CBampE Model Strategy 39 MSC BLOOMS Level II Comprehens1on Danny and Ron are coworkers in an office When they have a conversation about work they stand about 23 feet from each other as they chat The amount of personal space people expect to have when interacting with a coworker is an example of which cultural component a customs b laws c myths d values e artifacts ANS A Personal space is a cultural custom 4 PTS 1 REF 94 KEY CBampE Model Customer OB 065 TOP AACSB Diversity MSC BLOOMS Level IV Analysis A group in society such as family friends or a professional organization that in uences an individual s purchasing behavior is called an a reference group b conformist group c opinion group d social group e in uential group This is the de nition of reference group PTS 1 REF 98 KEY CBampE Model Customer OB 066 TOP AACSB Re ective Thinking MSC BLOOMS Level I Knowledge On any given day a person may be subjected to over 2500 advertising messages but may only be aware of 11 to 20 of them This is called selective distortion selective learning sporadic reinforcement intermittent selectivity selective exposure EDP057 ANS E Consumers use selective exposure to decide which stimuli to select attend to and which to ignore PTS 1 REF 104 OB 068 TOP AACSB Re ective Thinking O 00 121 KEY CBampE Model Customer MSC BLOOMS Level II Comprehension When consumers change or distort information that con icts with their feelings or beliefs it is called selective distortion selective dissonance intermittent reinforcement selective retention selective exposure EDP057 ANS A This is the definition of selective distortion PTS 1 REF 105 KEY CBampE Model Customer OB 068 TOP AACSB Re ective Thinking MSC BLOOMS Level I Knowledge Cassandra an accounting major read an article stating that accounting graduates are receiving the highest starting salary offers for business majors The article also stated that marketing majors start with lower salaries but surpass all other majors salaries within ten years A week later Cassandra doesn t remember reading this last part of the article just the rst part This is an example of a selective distortion b selective exposure c intermittent reinforcement d selective socialization e selective retention ANS E Selective retention is the process whereby a consumer remembers only information that supports personal feelings or beliefs PTS 1 REF 105 KEY CBampE Model Customer OB 068 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Afew years ago tea was a product with relatively little growth and was considered to be a product for the old and the middleaged Then tea manufacturers started promoting the health bene ts of tea Since the introduction of the research on how tea provides the body with useful antioxidants tea consumption has increased by more than 25 percent and it appears its market share will continue to grow especially among young women in their twenties This is an illustration of how promotion can a change the importance of beliefs about product attributes b change beliefs about product attributes c add new beliefs about product attributes d reinforce current beliefs about product attributes e discover consumer needs about product attributes ANS C The companies are attempting to changed consumers attitudes by creating new beliefs about an attribute not considered previously PTS 1 REF 108 OBJ 068 KEY CBampE Model Customer 1 CBampE Model Strategy MSC BLOOMS Level III Application TOP AACSB Re ective Thinking Chanter 7 Business Marketing MULTIPLE CHOICE 1 W 5 is the marketing of goods and services to individuals and organizations for purposes other than personal consumption a Secondary marketing b Interactive marketing c Business marketing d Highlevel marketing e Industrial marketing ANS C This is the definition of business marketing PTS 1 111 REF OB 071 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level I Knowledge Business marketing does NOT include goods and services that a become part of another product b are used to manufacture other products c are used for personal consumption d facilitate the normal operations of an organization e are acquired for resale ANS C Intended use is the key factor in the classi cation of a business versus a personal good Use for personal consumption classi es the good or service as a consumer product PTS 1 REF 111 OB 071 TOP AACSB Re ective Thinking KEY CBampE Model Product MSC BLOOMS Level IV Analysis Which of the following is the best example of a sale that could only take place in the business market a A professor is purchasing a Mac to use at home b A music store owner is ordering the newest Elvis Ultimate Live collection DVD for her mother c A teen is purchasing ringtones to use on her phone d A librarian is purchasing new books for the school s library e All of these are examples of business sales ANS D When a product is bought for use in a business it is a business product All other choices re ect purchases for personal use which would be part of the consumer market 111 OB 071 TOP AACSB Re ective Thinking PTS 1 REF KEY CBampE Model Product MSC BLOOMS Level III Application is a measure of a Web site s effectiveness and is calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit a Effective reach b Effective frequency 0quot N N 0 c Gross rating points d Interactiver1ess e Stickiness ANS E By measuring the stickiness factor of a Web site before and after a design or function change the marketer can quickly determine whether visitors embraced the change PTS 1 REF 113 KEY CBampE Model Strategy OB 072 TOP AACSB Re ective Thinking MSC BLOOMS Level I Knowledge Sometimes a is created for the purpose of sharing resources This was why the Donnelly Corporation a company that designs manufactures and markets automotive parts joined with Applied Films Laboratory Inc to manufacture and supply the world market with coated glass for liquid crystal displays LCDs a shared capital contract b global partner development strategy c strategic alliance d cobranding effort e market cooperative ANS C A strategic alliance is a cooperative agreement between business firms PTS 1 REF 115 KEY CBampE Model Strategy OB 073 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a pro t They achieve this goal by using purchased goods and services to make other goods to become part of other goods or to facilitate the daily operations of the organization This group is called the segment of the business market a institution b reseller c wholesaler d producer e government This describes the producer segment of business customers PTS REF 117118 1 OB 074 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge r1 A Caterpillar Inc a of l 391 uses completed drivetrains enginestransmissions axles drivetrain components electronic controls hydraulic and electrohydraulic components and systems cooling systems and undercarriage track systems produced by other organizations in its manufacturing process Caterpillar is an example of an a fabricator b installer c original equipment manufacturer d product provider 0 0quot 9 e component network ANS C An original equipment manufacturer OEM is an organization that buys business goods and incorporates them into the products it produces and sells PTS 1 118 REF OB 074 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level 111 Application The US government is not a business market segment the world s largest single customer an organization accounting for over 50 percent of the US gross national product mainly a military equipment purchaser using one centralized purchasing office for the entire government EFF057 ANS B The US federal government is the world s largest customer The other alternatives do not apply because various branches of the government have separate purchasing departments and billions of dollars are spent on food clothing desks and other standard supply items not just military hardware PTS 1 REF 118 KEY CBampE Model Customer OB 074 TOP AACSB Re ective Thinking MSC BLOOMS Level IV Analysis What would a US company that manufactures the lighted signs used in amusement parks at outdoor sports arenas for restaurant promotion and by state departments of transportation on the sides of roads use to facilitate its market segmentation and targeting if it wanted data that were readily available and usa e a A large amount of marketing research including scanner data and focus groups b Other competing firms as a strategic alliance referral service c Government bidding processes d The North American Industry Classi cation System e Derived demand ANS D NAICS codes enhance a company s marketing efforts PTS 1 REF 119 KEY CBampE Model Research OB 075 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application Imagine that you are the research director of a major industrial marketing firm You need to select an NAICS code that de nes the most homogeneous group of companies in a particular group of highly competitive companies Which of the following codes might you use a b 532 c 19 d 7 e 999 ANS A The more digits in a code the more homogeneous the group will be The alternatives presented in this question are to illustrate the point that more digits results in a more homogeneous grouping They may or may not be actual NAICS codes PTS 1 REF 119 KEY CBampE ModelResearch OB 075 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Managers can use the NAICS data to create a more focused mission statement eliminate risk classify consumer behavior identify potential new customers determine purchase motives EDP057 ANS D NAICS data can be converted to market potential estimates market share estimates and sales forecasts It can also be used for identifying potential new customers PTS 1 REF 119 KEY CBampE Model Research OB 075 TOP AACSB Re ective Thinking MSC BLOOMS Level II Comprehension As the demand for VCR players has fallen so has the demand for blank VHS tapes because the demand for VHS tapes is an example of an demand a joint b inelastic c elastic d uctuating e derived ANS E The demand for VHS tapes is driven by the consumer demand for VCR players therefore the tapes have a derived demand PTS 1 REF 119120 KEY CBampE Model Customer OB 076 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application When demand for a product is an increase or decrease in the price of the product will not signi cantly affect demand for the product a responsive b elastic c inelastic d derived e bundled This is the definition of inelastic demand 120 PTS 1 REF OB 076 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge 56 I if is the bestselling brand of peanut butter in the country The manufacturer purchases large quantities of peanuts every year to manufacturer its product This order size is an example of and would give I if an advantage over other buyers of peanuts a purchase volume b joint demand c uctuating demand d sales volume e multiplier effect ANS A Business customers buy in much larger quantities than consumers PTS 1 REF 120 KEY CBampE Model Customer OBJ 076 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application occurs when a deli decides to buy its office supplies from a company that regularly buys sandwiches for its employees a Reciprocity b Joint demand c Elastic demand d Derived demand e Bidding conformity ANS A Reciprocity is the normal business practice of using customers as suppliers of goods or services PTS 1 REF 121 KEY CBampE Model Strategy OBJ 076 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application Which of the following statements does NOT describe the business market a Business buying decisions are usually made independently by a purchasing agent while consumer buying decisions are made jointly b Business customers tend to be more geographically concentrated and customers in consumer markets tend to be more geographically dispersed c The channel of distribution is more often direct for business markets than for consumer markets d Purchasing by businesses is a more formal process than it is in consumer markets e Business marketers tend to have far fewer customers than consumer marketers ANS A Business buying decisions usually involve more people than a consumer purchase Review Learning Outcome 6 PTS 1 121 REF OBJ 076 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level IV Analysis is the primary promotional method for the sale of all business products a Direct mail b Advertising c Personal selling d Public relations e Trade promotions ANS C 00 W Business sales tend to be large in dollar amounts and quantities and may require negotiation thus they may rely heavily on the salesperson s ability to communicate and work with the customer PTS 1 REF39 122 OB 076 TOP AACSB Re ective Thinking KEY CBampE Model Promotion MSC BLOOMS Level II Comprehension PAS Systems has developed an unobtrusive ashlightalcohol detector The ashlight readings are inadmissible in court but are used by police officers to decide whether to hold someone for a sobriety test Each one costs 600 The manufacturer assembles a breathalyzer from one supplier with a slightly modified ashlight case from another supplier to make the new product The breathalyzer and the ashlight case are examples of a major equipment b component parts c processed materials d integrated parts e accessory equipment ANS B Component parts are either nished items ready for assembly or products that need very little processing before becoming part of some other product PTS 1 REF39 123 KEY CBampE Model Product OB 077 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application A dentist hired a janitorial service to clean her office every evening The janitorial service provided the dentist with a OEMs processed services business services accessory services service supplies ANS C Business services are functions performed by outside providers supow PTS 1 REF39 123 KEY CBampE Model Product OB 077 TOP AACSB Re ective Thinking MSC BLOOMS Level 111 Application The is the set of all persons in an organization who become involved in the purchasing process a buying center b stakeholder committee c ad hoc purchasing staff d board of directors e comptroller s staff ANS A This is the definition of a buying center PTS 1 REF39 124 OB 078 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge 95 The buying center 10 10 2 00 will be composed of the same decision makers as long as the purchasing process lasts is typically on the formal organizational chart under the VP for operations requires all purchasing participants to be employed by the purchasing department refers to all those organizational members who become involved in the purchasing process e regularly generates formal announcements of who is in the buying center 30 57 37 ANS D The buying center is not a formal wellde ned group It is simply all the people who become involved in the purchasing process within the company no matter what their department or position PTS 1 REF 124 KEY CBampE Model Customer OB 078 TOP AACSB Re ective Thinking MSC BLOOMS Level II Comprehension You have started raising your first litter of AKCregistered Chihuahuas You want to sell your puppies to Pets and People the locally owned and operated pet store How do you nd the buyer a Look at the formal organization chart of the company b Get a copy of Pets and People s phone directory where all buying center members are listed c Contact the store and probe to see who is in charge of buying d Locate the decider at Pets and People e Wait for Pets and People to call you when they hear about your new breeding program ANS C There is no formal buying center structure It changes from decision to decision as well as at different stages of the decisionmaking process PTS 1 REF 125 KEY CBampE Model Customer OB 078 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application The three most important evaluative criteria for businesstobusiness purchases are quality price and a competitive offers b service c reliability d assurance e existing relationships ANS B Quality is the most important criterion followed by service and price PTS 1 125 REF OB 078 TOP AACSB Re ective Thinking KEY CBampE Model Customer 39 MSC BLOOMS Level II Comprehens1on A university is considering the purchase of a Webbased course delivery system due to increased demand for online courses and degrees Since the school has not offered online courses before what type of buying situation does this represent for the school a Value engineering task b Modi ed rebuy c Straight rebuy d New buy e Derived rebuy 114 ANS D A new buy is a situation requiring the purchase of a product for the rst time PTS 1 REF39 126 OB 078 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application Which of the following is the best example of a modified rebuy situation a The purchase of a replacement hamster as the class mascot b Bidding on a new high school multipurpose gymnasium to replace one built in 1963 c The purchase of three largescreen computer monitors to replace smaller monitors d The annual purchase of calendar refills for the desks of all company executives e The monthly updating of computer virus protection ANS C When a previously purchased item needs to be reordered but with changes or additions it is a modified rebuy situation PTS 1 REF39 126 OB 078 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level VI Evaluation Chapter 8 Segmenting and Targeting Markets MULTIPLE CHOICE 1 W A is a group of people or organizations that has wants and needs that can be satisfied by particular product categories has the ability to purchase these products and is willing to exchange resources for the products fum buyer market consumer target EDP057 ANS C This is the definition of a market PTS 1 REF39 129 OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge A market is people or organizations that have a the ability willingness and power to buy b a medium of exchange and products they desire c needs and wants and an ability and willingness to buy d unmet needs or wants and products or services that satisfy those unmet needs or wants e communication financial and capital resources ANS C A market is de ned as having four imperative characteristics people or organizations needs and wants ability to buy and willingness to buy PTS 1 REF39 129 OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge 5 9 A group of middle school students stop by a bicycle store The store has just received a new shipment of highend racing bicycles The bicycles range in price from 1200 to 3000 All of the students want one of these new bikes but none has the means to buy one Is this group of consumers a potential market for the expensive bikes Yes they are a potential market since they are all about the same age No they do not have the ability to purchase at this time No to qualify as a market they must need the product Yes they are a market because this product could satisfy their consumer wants and desires e Yes they are a market because this group shares relatively similar product needs and purchasing characteristics 9 57 37 ANS B A market is a group of people or organizations that has wants and needs that can be satis ed by particular product categories has the ability to purchase these products and is willing to exchange resources for the products There is no suggestion of ability to purchase in this case PTS 1 129 REF OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level 111 Application is the process of dividing a market into meaningful groups that are relatively similar and identifiable a Perceptual mapping b Positioning c Micromarketing d Market sampling e Market segmentation ANS E This is the de nition of market segmentation PTS 1 REF39 130 OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level I Knowledge The purpose of market segmentation is to a reduce the market down to a size the firm can handle b divide the market into equal size and pro t regions for sales territories c group a large number of markets together enabling a company to serve them simultaneously develop a generalized de nition of the market as a whole enable the marketer to tailor marketing mixes to meet the needs of one or more speci c groups ANS E The purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix 9 0 PTS 1 130 REF OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level II Comprehension 9 Home Cookin Catering would like to improve customer satisfaction and increase repeat business When you ask the owners to describe a typical customer they say it is impossible and explain that with corporate functions family affairs and fundraisers they do not have a typical customer You suggest it is time for market segmentation because a it will enable them to build an accurate description of customer needs by group and to design a marketing mix to t each segment b the company needs to reduce the size of the market it serves c the company needs to learn how to group these markets together into one market to serve all of them adequately d it will help develop a generalized de nition of the market as a whole and reveal the optimal marketing mix for this market e this will position the company in the minds of its consumers as compared to its competitors ANS A The purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix PTS 1 REF 130 OB 081 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application 5 According to the criterion of a selected segment must be large enough to warrant developing and maintaining a special marketing mix Serving the speci c needs of this segment must be commercially viable even if the number of potential customers is small a causality accountability responsiveness accessibility substantiality b c d e ANS E Substantiality means segments must be large enough to warrant a separate marketing mix PTS 1 REF 130 OB 083 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge 0quot The marketing manager of Gevalia gourmet coffees wants to target the gay male consumer because he thinks this segment of consumers appreciates and consumes gourmet coffee Even though gay lifestyles are becoming more accepted socially the manager is finding it difficult to determine the market potential for this segment because many gay consumers are not willing to admit their lifestyle publicly Which criterion of a useful segment does this illustrate a Substantiality b Identi ability and measurability c Complexity d Responsiveness e Validity ANS B Segments must be identifiable and their size measurable which might be difficult due to many gay consumers not admitting their lifestyle PTS 1 REF 130 OB 083 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application 21 A research rm has conducted marketing research on the market for metal roo ng for homes The research rm has determined there are thousands of homeowners who want the durability provided by metal roofs These homeowners are generally married and between 25 and 54 years of age They tend to live in suburban neighborhoods and most subscribe to lifestyle magazines If you were interpreting these results you might suggest that the research rm a conduct additional research because it has no idea about the measurability of its segments b examine the research report again to see if it can determine segment accessibility c conduct a followup analysis to determine if the segments it might choose would respond differently than other segments to its marketing strategy d not segment the concrete siding market because the only market for siding is contractors who build the homes e segment the concrete siding market based on the information provided and concentrate its efforts on suburban homeowners between ages 25 and 54 years who read lifestyle magazmes ANS C The only criterion the research rm has not determined is market responsiveness PTS 1 REF 131 OB 083 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level IV Analysis 28 Consumers in Louisiana love hot sauce and Tabasco and Crystal brands are particularly popular there Consumers in Michigan do not like hot food so they purchase very little hot sauce A national chain of grocery stores would likely use segmentation when stocking condiment merchandise a geographic b economic c demographic d bene t e geodemo graphic ANS A Geographic segmentation is the most logical base for segmentation of a product that is used more in one area than another PTS 1 REF 131 OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level 111 Application 35 Colgate manufactures a fruit avored SpongeBob Squarepants toothpaste for kids The agebased variable that distinguishes the market for this product is an example of segmentation a geographic b demographic c psychographic d bene ts e usage rate ANS B A demographic base segments the market SpongeBob Squarepants toothpaste is produced for young children and sold to their parents PTS 1 REF 131 OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level 111 Application 41 4 l 0 U Deal stores sell a wide variety of lowpriced merchandise party supplies cleaning products toys food housewares and health and beauty products for both men and women Many items in the store are priced no higher than one dollar Which type of demographic segmentation is Deal using a Ethnic b Usage rate c Income d Gender e Age ANS C The store sells lowpriced products to appeal to lowincome customers PTS 1 133 REF OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level III Application In Miami several radio stations broadcast in Spanish and play Latin music for the Hispanic people living in South Florida The radio stations are using segmentation a usage rate b ethnic c socioeconomic d geographic e gender ANS B In this case ethnicity would be the demographic variable PTS 1 REF 133134 KEY CBampE Model Strategy OB 084 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Modern Bride is a publication that contains articles and lots of ads for the bridetobe Many young women consult this magazine as they plan their special day The segmentation base used to define the publication s target market is based on variables a geodemo graphic b geographic c family life cycle d lifestyle e psychographic ANS C The publication targets a market segment of consumers in a particular family life cycle stage PTS 1 134 REF OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level III Application Miller Lite s longrunning Great TasteLess Filling advertising campaign was ranked by AdvertisingAge magazine as the 8thbest advertising campaign in history Miller Lite was using segmentation in this ad campaign a geographic b demographics c psychographics d bene t 9 N 0quot e usage rate ANS D Bene t segmentation groups customers into market segments according to the bene ts they seek from the product PTS 1 REF 136137 KEY CBampE Model Strategy OB 084 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application There are many furniture manufacturers Tall Paul s is the only one that makes furniture to meet the needs of people who are over 6 6 tall These people find furniture designed for averagesized people to be cramped and uncomfortable Tall Paul s uses segmentation a geodemo graphic b usagerate c demographic d psychographic e bene t ANS E The consumers are described by the type of bene t they seek PTS 1 REF 136137 KEY CBampE Model Strategy OB 084 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Most airline frequent yer programs reward the most frequent yers with business class upgrades and ight lounge privileges Airlines are using these rewards as a means of implementing segmentation a lifestyle b motive c usagerate d demographic e personality ANS C Usagerate segmentation divides a market by consumption so that rms can target their heavy users 137 PTS 1 REF OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Strategy 39 MSC BLOOMS Level III Application What does the 8020 principle propose a Roughly 80 percent of the pro t comes from 20 percent of the sales b Roughly 80 percent of a rm s customers are repeat business c Roughly 50 percent of a rm s customers purchase 80 percent of the sales volume of the product d Roughly 20 percent of a rm s customers purchase 80 percent of the sales volume of the product e Sales are equally divided among heavy medium and light users but they all need slightly different products S D The 8020 principle proposes that a minority of a firm s customers purchase a majority of the volume of the product 0quot 9 0 PTS 1 REF39 137 OB 084 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level I Knowledge The Green Earth a landscaping company finds that the most difficult firms to get business from are the because this group considers numerous and even unfamiliar suppliers solicits bids and carefully analyzes options therefore it requires a higher levels of customer service a actualizers b strivers c satis cers d optimizers e early adopters ANS D Firms that use an optimizer purchasing strategy consider many suppliers and analyze their options carefully PTS 1 REF39 138 OB 085 TOP AACSB Re ective Thinking KEY CBampE Model Customer MSC BLOOMS Level III Application All of the following are steps in the market segmenting process EXCEPT a determining the objectives of the segmentation strategy b pro ling and analyzing segments c designing implementing and maintaining appropriate marketing mixes d selecting a market or product category for study e choosing a basis or bases for segmenting the market ANS A The steps in segmenting a market are 1 select a market or product category for study 2 choose a basis or bases for segmenting the market 3 select segmentation descriptors 4 pro le and analyze segments 5 select target markets and 6 design implement and maintain appropriate marketing mixes PTS 1 139 REF OB 086 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level IV Analysis June LaVista owns a health and tness gym After dividing her customers into four segments based on income range age level of fitness and other selected segmentation descriptors she wrote out a description of each segment s size expected growth frequency of exercise and overall pro t potential Which step in segmenting a market is LaVista engaged in a Pro ling and analyzing her market segments b Positioning her products to her market segments c Targeting promotions to her market segments d Differentiating her market segments e Concentrating her marketing mix on the most pro table marketing segments ANS A The pro ling and analysis of the segments step in segmenting a market involves analyzing the segments size expected growth purchase frequency and so on PTS 1 139 REF OB 086 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level III Application 10 10 10 12 1 6 9 0 When Henry Ford made the Model T he said that consumers can have their car in any color they want as long as it s black This was a case of a Repositioning Reengineering onetoone marketing undifferentiated targeting niche marketing ANS D An undifferentiated targeting strategy views the market as a whole without individual segments and uses a single marketing mix b c d e PTS 1 REF 139141 KEY CBampE Model Strategy OB 087 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application EampV Bridal Studios a wedding consulting business only works with Eastern Asian customers who want to use their cultural heritage in their wedding ceremonies What type of segmentation strategy does the wedding consultant use a Market aggregation b Undifferentiated targeting c Multisegment marketing d Concentrated targeting e Limited demand AN S39 D EampV Bridal Studios concentrates on one segment of the marketiEastem Asians who want a traditional wedding PTS 1 141 REF OB 087 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level III Application Piper Corporation makes aircrafts It produces several different planes for three categories of customer Professional Personal and Trainer What type of targeting strategy is Piper using a Demand positioning b Concentrated c Undifferentiated d Multise ent e Market differentiation ANS39 D Piper has chosen three speci c markets to target which is characteristic of a multisegment targeting strategy PTS 1 REF 141 KEY CBampE Model Strategy OB 087 TOP AACSB Re ective Thinking MSC BLOOMS Level III Application Increasing share of customer means a selling more products to each customer increasing the number of customers winning market share from competitors the sales due to a customer relative to the costs of attaining and retaining that customer b c d e individual customer revenue minus costs to satisfy that customer 121 122 ANS A Share of customer represents how much a customer spends with a business so increasing customer share attempts to sell more products to each customer rather than attempting to gain more customers overall PTS 1 142 REF OB 088 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level II Comprehension The basic goal of onetoone marketing is to a increase the market for the product category to new and current customers b eliminate the use of mass media for promotion and locate a direct communications channel c increase operating costs and locate new customers d reduce the number of company employees and increase overall sales e reduce costs through customer retention and increase revenue through customer loyalty ANS E Loyal customers are less costly to maintain than acquiring new customers PTS 1 142 REF OB 088 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level II Comprehension All of the following have been identi ed as trends that will lead to the continuing growth of onetoone marketing EXCEPT the growing number of customers who do not have time to spend shopping the fact that consumers do not want to be treated like the masses technology that allows the collection of detailed information on customers consumers are loyal to companies and brands that have earned their loyalty and reinforce it at every purchase occasion e mass marketing is no longer appropriate especially for consumer packagedgoods products 9 57 37 ANS E All of these are trends impacting the growth of onetoone marketing except the inappropriateness of mass marketing for consumer packagedgoods products PTS 1 142 REF OB 088 TOP AACSB Re ective Thinking KEY CBampE Model Strategy MSC BLOOMS Level IV Analysis
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