Exam#3-v1, 65051 Mktg. Mgmt.

, Spring 2010 Name ______________________________

Key

1. _____ 26. _____ 51. _____ 76. _____

2. _____ 27. _____ 52. _____ 77. _____

3. _____ 28. _____ 53. _____ 78. _____

4. _____ 29. _____ 54. _____ 79. _____

5. _____ 30. _____ 55. _____ 80. _____

6. _____ 31. _____ 56. _____ 81. _____

7. _____ 32. _____ 57. _____ 82. _____

8. _____ 33. _____ 58. _____ 83. _____

9. _____ 34. _____ 59. _____ 84. _____

10. ____ 35. _____ 60. _____ 85. _____

11. ____ 36. _____ 61. _____ 86. _____

12. ____ 37. _____ 62. _____ 87. _____

13. ____ 38. _____ 63. _____ 88. _____

14. ____ 39. _____ 64. _____ 89. _____

15. ____ 40. _____ 65. _____ 90. _____

16. ____ 41. _____ 66. _____ 91. _____

17. ____ 42. _____ 67. _____ 92. _____

18. ____ 43. _____ 68. _____ 93. _____

19. ____ 44. _____ 69. _____ 94. _____

20. ____ 45. _____ 70. _____ 95. _____

21. ____ 46. _____ 71. _____ 96. _____

22. ____ 47. _____ 72. _____ 97. _____

23. ____ 48. _____ 73. _____ 98. _____

24. ____ 49. _____ 74. _____ 99. _____

25. ____ 50. _____ 75. _____ 100. ____

Exam#3, Mktg. Mgmt. 65051, Spring 2011 Name __________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the
statement or answers the question.

1) What are the two ways that a company can obtain new products?
A) line extension and brand management
B) service development and product extension
C) internal development and merger
D) new-product development and acquisition
E) market mix modification and research and development
2) The creation of a successful new product depends on a company's
understanding of its ________ and its ability to deliver ________ to
customers.
A) competitors, distributors, and employees; new styles
B) product, marketing mix, and marketing strategy; functional features
C) customers, competitors, and markets; superior value
D) product life cycle, legal responsibilities, and social responsibilities;
innovations
E) customers, brands, products; product images

3) The purpose of idea generation is to create a ________ of ideas. The

purpose of succeeding stages is to ________ that number.
A) small number; increase
B) large number; increase
C) limited number; sustain
D) large number; reduce
E) small number; reduce

4) GrayBerry Gifts has just brainstormed a large number of ideas for adding
new products and services after visiting several buying fairs. The owners
will begin the first idea-reducing stage, called ________, to arrive at a
realistic number to adopt.
A) concept testing
B) concept development
C) idea screening
D) idea generation
E) business analysis

5) A detailed version of a new idea stated in meaningful customer terms is

called a ________.
A) product concept
B) product movement
C) product idea
D) product image
E) product proposal

6) The first part of the marketing strategy statement describes the target
market; the planned product positioning; and goals for sales, profits, and
________.
A) competition
B) secondary market
C) life-cycle duration
D) competition's anticipated reaction
E) market share

7) Once managers of The Grecian Urn have decided on their product concept
and marketing strategy, they can evaluate the business attractiveness of the
proposal in the ________ stage of the new-product development process.
A) business feasibility
B) product acceptance
C) business analysis
D) feasibility study
E) concept testing

8) Although test marketing costs can be high, they are often small when
compared with ________.
A) the costs of a major mistake
B) research and development costs
C) stockholders' confidence
D) management's approval and acceptance
E) the final results

9) Product costs set a(n) ________ to a product's price.

A) demand curve
B) floor
C) break-even cost
D) experience curve
E) ceiling

10) The company designs what it considers to be a good product, totals the
expenses of making the product, and sets a price that adds a standard mark-
up to the cost of the product. This approach to pricing is called ________
pricing.
A) variable B) value-based C) skimming D) fixed cost
E) cost-plus

11) Break-even pricing, or a variation called ________, is when the firm

tries to determine the price at which it will break even or make the profit
it is seeking.
A) value-based pricing
B) customer-based pricing
C) target return pricing
D) competition-based pricing
E) fixed cost

12) If demand hardly changes with a small change in price, we say the demand
is ________.
A) variable
B) market penetrating
C) at break-even pricing
D) inelastic
E) value-based

13) Which of the following would NOT support a market-skimming policy for a
new product?
A) Enough buyers must want the products at that price.
B) The cost of producing a smaller volume is not so high that it negates the
advantage of charging more per unit.
C) Competitors can enter the market easily.
D) Competitors are not able to undercut the high price.
E) The product's quality and image must support its higher price.

14) All of the following conditions support market-penetration pricing

EXCEPT which one?
A) The low price must help keep out the competition.
B) The market must be highly price sensitive.
C) A low price will produce more market growth.
D) Production and distribution costs must fall as sales volume increases.
E) The product's quality and image must support the price.

15) Consumers use price less to judge the quality of a product when they
________.
A) lack skills to use the product
B) are shopping for a specialty item
C) lack information
D) cannot physically examine the product
E) have experience with the product

16) ________ prices are the prices that a buyer carries in his or her mind
and refers to when looking at a given product.
A) Psychological B) Dynamic C) Promotional D) Geographical
E) Reference

17) A company faces fixed costs of $100,000 and variable costs of

$8.00/unit. They plan to directly sell their product to the market for
$12.00. How many units must they produce and sell to break even?
A) 25,000
B) 40,000
C) 50,000
D) 20,000
E) not enough information to calculate

18) When Pepsi came out with Pepsi Blue and priced it at half price to
attract buyers, Pepsi was using ________.
A) marketing-skimming pricing
B) new-product pricing
C) market-penetration pricing
D) discount pricing
E) promotional allowances

19) Johnson Boats wants to introduce a new model of boat into mature markets
in highly developed countries with the goal of quickly gaining mass-market
share. As a consultant, you should recommend a ________ pricing strategy.
A) captive-product
B) zone
C) market-penetration
D) discount
E) market-skimming

20) Market-skimming pricing would likely be most effective in selling

________.
A) an electronic device for which research and development must be recouped
B) any convenience item
C) shampoo and bath soap
D) most items at EDLP retailers such as Wal-Mart
E) anything easily copied by competitors

21) When suppliers, distributors, and customers partner with each other to
improve the performance of the entire system, they are participating in a
________.
A) supply chain
B) supply and demand chain
C) channel of distribution
D) value delivery network
E) demand chain

22) Channel members add value by bridging the major gaps of ________ that
separate goods and services from those who would use them.
A) place, time, and need
B) place, need, and distribution
C) time, place, and form
D) time, place, and possession
E) place, possession, and form

23) To a producer of goods, a greater number of channel levels means

________ and greater channel complexity.
A) more potential ideas
B) higher taxes
C) fewer channel members
D) less control
E) less distance between producer and end consumer

24) ________ conflict, which occurs between different levels of the same
channel, is more common than ________ conflict, which occurs among firms at
the same level of the channel.
A) Horizontal; vertical
B) Wholesaler; retailer
C) Corporate; franchise
D) Vertical; horizontal
E) Contractual; corporate

25) Which of the following are the three major types of vertical marketing
systems?
A) corporate, contractual, and chain
B) contractual, corporate, and independent
C) administered, independent, and franchised
D) corporate, contractual, and task
E) corporate, contractual, and administered

26) As marketing manager for Globe Imports and Exports, you want to start
reaping the benefits of a multichannel distribution system. You will likely
enjoy all of the following EXCEPT which one?
A) expanded market coverage
B) opportunities to tailor products and services to the needs of diverse
segments
C) selling at a higher gross margin
D) expanded sales
E) A and C

27) When a company is identifying its major channel alternatives, it should

consider its choices in terms of types, number, and ________ of
intermediaries.
A) size
B) capacity
C) power
D) responsibilities
E) none of the above

28) Proud Pets, a producer of clothing and accessories for pets, has
recently partnered with a regional chain of pet stores. Which of the
following would Proud Pets be LEAST likely to expect from its new channel
member?
A) negotiating on its products' prices
B) assembling and packaging its products for final sale
C) identifying raw materials and other productive inputs
D) promoting its products through advertising
E) distributing relevant marketing research information

29) Steve's Physco Skates sells its products to Wal-Mart, who then sells
them to the consumer. This is an example of a(n) ________.
A) retailer channel
B) direct marketing channel
C) corporate vertical marketing system
D) producer channel
E) indirect marketing channel

30) When two Burger King restaurants have a disagreement over who should be
able to sell in quantity at a discount to local athletic teams, they are in
a ________ conflict.
A) multi-channel
B) vertical
C) functional
D) disintermediation
E) horizontal

31) Which of the following is an example of a multichannel distribution

system?
A) Starbuck's location inside of book stores
B) Wal-Mart locating to several countries
C) a hotel providing guest privileges at a health spa across the street
D) J. C. Penney's catalog and retail store sales
E) Avon's door-to-door distribution

32) When Netflix began delivering DVDs directly to customers through the
mail instead of using a brick-and-mortar system, Netflix was following the
trend of ________.
A) exclusive distribution
B) disintermediation
C) selective distribution
D) indirect marketing
E) a franchise system

33) Which product(s) will most likely be intensively distributed?

A) Guess blue jeans
B) Nike running shoes
C) BMW cars
D) Olympus digital cameras
E) Coca-Cola

34) Why is it important for manufacturers to be sensitive to the needs of

their dealers?
A) Poorly performing dealers will be replaced.
B) Dealer support is essential to creating value for the customer.
C) Manufacturers cannot break commitments to channel members.
D) Dealers have few legal rights.
E) Dealers fail to provide value to the entire channel system.
35) In recent years, ________ has(have) been growing fast. This includes
selling to final consumers through direct mail, catalogs, telephone, and the
Internet.
A) specialty stores
B) shopping centers
C) nonstore retailing
D) e-commerce
E) superstores

36) Until retailers ________ and ________ their markets, they cannot make
consistent decisions about product assortment, services, pricing,
advertising, store décor, or any of the other decisions that must support
their positions.
A) define; profile
B) divest; eliminate
C) target; compete with
D) limit; serve
E) compete with; position

37) In-store demonstrations, displays, contests, and visiting celebrities

are all examples of ________.
A) sales promotions
B) direct marketing
C) agent promotions
D) advertising
E) public relations

38) According to the ________ concept, new retailing forms often begin as
low-margin, low-price, low-status operations to challenge established
retailers, then become successful, and eventually take the place of the
established retailers they had challenged.
A) broker
B) agent
C) product life cycle
D) warehousing
E) wheel-of-retailing

39) ________ includes all activities involved in selling goods and services
to those buying for resale or business use.
A) Wholesaling
B) Franchising
C) Retailing
D) Disintermediation
E) Discounting

40) Which wholesaler's channel function is demonstrated when a wholesaler's

sales force helps a manufacturer reach many small customers at a low cost?
A) bulk-breaking
B) warehousing
C) selling and promoting
D) rackjobbing
E) buying and assortment building
41) ________ are the largest group of wholesalers. The group can be divided
into the two broad types of full-service and limited-service.
A) Agents
B) Merchant wholesalers
C) Specialty wholesalers
D) Brokers
E) Manufacturer sellers

42) ________ and ________ do not take title to goods, and they perform only
a few channel functions.
A) Independent wholesalers; off-price retailers
B) Full-service wholesalers; limited-service wholesalers
C) Branches; office
D) Power centers; independent wholesalers
E) Brokers; agents

43) At Neiman Marcus, a first-class department store, customers shop for

specialty products and have come to expect assistance in every phase of the
shopping process. Neiman Marcus is a ________.
A) limited-service retailer
B) self-service retailer
C) full-service retailer
D) specialty store
E) power center

44) 7-Eleven, Stop-N-Go, and Circle K, small stores that traditionally have
had a primary market of young, blue-collar men, are examples of ________.
A) category killers
B) department stores
C) convenience stores
D) supermarkets
E) specialty stores

45) McDonald's, Subway, and Pizza Hut are all examples of a ________.
A) power center
B) voluntary chain
C) full-service retailer
D) franchise
E) retailer cooperative

46) In the battle for "share of stomachs," some supermarkets are cutting
costs and attempting to compete more effectively with food discounters,
while others are moving upscale, providing improved store environments and
higher-quality food offerings. These two different strategies represent
differences in ________.
A) retail convergence
B) place decisions
C) positioning
D) wholesaling
E) retail technology

47) Big and Tall Men's Shop carries goods in larger sizes; this allows the
store to ________ other stores.
A) affect the store atmosphere of
B) cluster with
C) differentiate itself from
D) franchise with
E) converge with

48) Home Depot offers "how-to" classes for do-it-yourselfers, featuring

instructions on how to complete home improvement projects using products
sold at its stores. This is an example of how Home Depot has differentiated
itself through its ________.
A) services mix
B) segmentation
C) atmosphere
D) targeting
E) product assortment

49) You own an independent store in your neighborhood. You still like to
offer fresh seafood in your meat display case. Which type of wholesaler
might best serve you?
A) agents and brokers
B) cash-and-carry wholesaler
C) mail-order wholesaler
D) rack jobber
E) drop shipper

50) Tara Keegan owns Live Well, a small chain of health stores offering a
variety of natural health products and related services. In order to
implement integrated marketing communications, Tara has hired a marketing
communications director, whose job it will be to ensure that each ________
will deliver a consistent and positive message about the company.
A) media vehicle
B) public relations message
C) advertisement
D) brand contact
E) logo

51) Mariah Goldberg, a marketing manager for a manufacturer of children's

toys, is looking for ways to reach potential customers who typically avoid
salespeople and advertisements. Which of the following would be the most
economical promotional tool for Mariah to use?
A) public relations
B) direct marketing
C) brand contacts
D) personal selling
E) sales promotions

52) Clean and Clear, a large producer of all-natural hair care and beauty
products, is most likely to use which of the promotion mix strategies to
gain increased shelf space in stores and to gain increased customer sales?
A) continuity B) pulse C) pull D) push and pull E) push

53) When Proctor & Gamble developed the Mr. Clean Magic Eraser, the company
needed to explain how the product cleans grime from walls without removing
paint. What type of campaign was most likely used by Proctor & Gamble for
the Mr. Clean Magic Eraser?
A) developmental advertising
B) informative advertising
C) persuasive advertising
D) reminder advertising
E) comparative advertising

54) Suave ran ads featuring a woman with beautiful hair questioning "Suave
or Matrix? Can You Tell?" This is an example of ________.
A) buzz marketing
B) reminder advertising
C) informative advertising
D) secondary advertising
E) comparative advertising

55) Chris Stemen, the owner of an independent gift store, is developing an

advertising budget. Chris has totaled his company's revenues and deducted
operating expenses and capital outlays. He intends to use a percentage of
the remaining funds for advertising. Which budget setting method is Chris
using?
A) integrated method
B) objective-and-task method
C) percentage-of-sales method
D) competitive-parity method
E) affordable method

56) An ad for a new convection oven shows a busy professional woman serving
dinner to her family. The convection oven is seen in the background, and the
headline reads, "The latest development in time travel." This is an example
of what type of execution style?
A) slice of life
B) testimonial evidence
C) mood or image
D) fantasy
E) scientific evidence

57) When Taco Bell uses a Chihuahua, a small dog, to represent its product,
which type of execution style is being used?
A) personality symbol
B) mood or image
C) musical
D) technical expertise
E) fantasy

58) Apple recently ran ads featuring real people who had switched from
Microsoft Windows-based PCs to Macs. When companies use people, actors, or
sports celebrities as product endorsers, what kind of execution style is
being used?
A) musical
B) fantasy
C) scientific evidence
D) lifestyle
E) testimonial evidence
59) You receive a report that says the 68% of your target market had been
exposed to your ad campaign during a given period of time. This is an
example of ________.
A) reach
B) qualitative value
C) frequency
D) impact
E) engagement

60) Which of the following strategic channel decisions is NOT compatible

with the objective to minimize costs?
A) The channel should be direct.
B) Distribution should be exclusive.
C) A full-service wholesaler (intermediary) should be used.
D) Only a single channel should be used.
E) All the above are incompatible with the objective to minimize costs.

61) You are looking to advertise your new product, and you want good mass-
marketing coverage and low cost per exposure. You should choose ________ as
your advertising media.
A) outdoor B) direct mail C) television D) radio E)
newspaper

62) Which of the following strategic channel decisions is compatible with

the objective to maximize channel goodwill?
A) The channel should be indirect.
B) Distribution should be exclusive.
C) A limited-service intermediary should be used.
D) Cooperation with channel members should be minimal.
E) They are all compatible with the stated objective.

63) Which airline (remember the tape?) became, for a short time at least,
the largest Chivas Regal scotch distributor in Texas?
A) Continental B) American C) United D) Southwest

64) Referencing the pricing-related tape that we viewed, which of the

following was NOT mentioned as a factor affecting price?
A) availability of substitutes
B) competition
C) available resources
D) the stage of the PLC
E) They all affect price according to the DVD.

65) A group of entrepreneurs decided to open a cupcake specialty shop in

Acorn Alley. Rent will cost them $1100 per month and an allowance for
advertising will need to be set aside at $100 per month. Initially, they
are planning to sell all styles at the same price of $3.00 apiece. Each
cupcake will require $0.20 for flower, $0.10 for sugar, $0.10 for icing and
$0.10 for other miscellaneous ingredients. What are the variable costs per
cupcake?
A) $0.50
B) $0.40
C) $0.30
D) $0.20
E) Variable costs are not identifiable with the given information.

66) A group of entrepreneurs decided to open a cupcake specialty shop in

Acorn Alley. Rent will cost them $1100 per month and an allowance for
advertising will need to be set aside at $100 per month. Initially, they
are planning to sell all styles at the same price of $3.00 apiece. Each
cupcake will require $0.20 for flower, $0.10 for sugar, $0.10 for icing and
$0.10 for other miscellaneous ingredients. What is the break-even point?
A) $480 B) $400 C) 480 cupcakes D) $600

Exam#3, Mktg. Mgmt. 65051, Spring 2011

1) D

2) C

3) D

4) C

5) A

6) E

7) C

8) A

9) B

10) E

11) C

12) D

13) C

14) E

15) E

16) E

17) A

18) C

19) C

20) A

21) D

22) D
23) D

24) D

25) E

26) C

27) D

28) C

29) E

30) E

31) D

32) B

33) E

34) B

35) C

36) A

37) A

38) E

39) A

40) C

41) B

42) E

43) C

44) C

45) D

46) C

47) C

48) A

49) B

50) D

51) A
52) D

53) B

54) E

55) E

56) A

57) A

58) E

59) A

60) A

61) C

62) B

63) D

64) E

65) A

66) C