MALAWI ASSEMBLIES OF GOD UNIVERSITY

FACULTY OF COMMERCE AND MANAGEMENT

DEPARTMENT OF MANAGEMENT STUDIES

END SEMESTER EXAMINATION

CCC 2203: FUNDAMENTALS OF MARKETING

Date: December, 2017 Time allowed: 3 hours

General Instructions

1. There are 14 pages in this paper. Please check!

2. This paper has four sections, A, B, C and D. Please check!
3. Follow the instructions for each section.
4. Fill in your details on the answer book provided.
5. Write your name on the top of each page of the answer sheets provided.
6. Write on both sides of the answer sheets.
7. Do not tear any paper from the answer book or question paper.

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SECTION A: MULTIPLE CHOICE
SECTION INSTRUCTIONS
THIS SECTION CARRIES 30 MARKS
EACH QUESTION CARRIES ONE MARK
ANSWER ALL QUESTIONS IN THIS SECTION
INDICATE YOUR ANSWER BY INDICATING A, B, C, OR D

1. If actual performance exceeds the expected performance of the product, then the customer is
___________________.
A. Satisfied.
B. Dissatisfied.
C. Delighted.
D. Neutral.

2. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy
enough of the organization’s products.
A. Production.
B. Selling.
C. Marketing.
D. Holistic marketing.

3. Chimney Sweeps employs people to clean fireplaces and chimneys in homes and apartments. The
firm is primarily the marketer of which one of the following?
A. An image.
B. A service.
C. A good.
D. An idea.

4. In marketing, anticipation of demand involves ______________.

A. Doing a consumer research.
B. Stimulating demand.
C. Balancing inventory to consumer demand.
D. None of the above.

5. __________________ is the act of trading a desired product or service to receive something of

value in return.
A. Product.
B. Exchange.
C. Production.
D. Anticipation.

6. Which of the following marketing concepts is suitable for a life insurance company?
A. Production concept.
B. Product concept.
C. Selling concept.
D. Social concept.

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7. Organisations that follow the product concept assume that ______________.
A. Consumers prefer products that are widely available.
B. Consumers prefer products that offer high performance.
C. Consumers prefer products that are inexpensive.
D. Consumers prefer product they are familiar with.

8. According to the production concept, consumers will favor products that are ________ and
________.
A. Satisfying; quality focus.
B. Advertised; affordable.
C. In high demand; hard to find.
D. Available; affordable.

9. In planning its market offering, the marketer needs to address five product levels. These
levels include all of the following except ________.
A. Symbolic benefit.
B. Product usage.
C. Tangible product.
D. Core benefit.

10. The consumer usually purchases ________ frequently, immediately, and with a minimum of
effort.
A. Specialty goods.
B. Shopping goods.
C. “Must haves” goods.
D. Convenience goods.

11. Products such as insurance, cemetery plots, and smoke detectors, are examples of ________
that are products that the consumer does not know about or does not normally think of
buying.
A. Specialty goods.
B. Unsought goods.
C. Heterogeneous shopping goods.
D. None of the above.

12. Industrial-goods can be classified in terms of how they enter the production process and their
relative costliness. We can distinguish three groups of industrial goods: ________, capital
items, and suppliers and business services.
A. Service components.
B. Pieces and parts.
C. Specialty goods.
D. Materials and parts.
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13. Capital items are long-lasting goods that facilitate developing or managing the finished
product. They include installations and ________.
A. Component materials.
B. Operating supplies.
C. Equipment.
D. None of the above.

14. A ________ is the set of all products and items a particular seller offers for sale.
A. Product line.
B. Product mix.
C. Product system.
D. Product class.

15. A consumer products firm manufacturers and sells over 200 different sizes and varieties of
jams and jellies. We can say that this manufacturer’s product mix has a ________ of
products in this category.
A. Width.
B. Depth.
C. Length.
D. Continuity.

16. A marketing manager has decided that the firm’s newest product should also carry with it a service
component—the home installation. When pricing out the product, the marketing manager realizes that
the service component should carry a higher margin than the basis hardware product. In terms of sales
and profits, the marketing manager is capitalizing on the ________ of the home installation to
increase the overall margin of his products.
A. Services.
B. Convenience.
C. Staple.
D. Specialty.

17. What are the two ways that a company can obtain new products?
A. Line extension and brand management.
B. Internal development and brand management.
C. New-product development and acquisition.
D. Market mix modification and research and development.

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18. Product improvements, product modifications, and original products can all be classified as
________.
A. Pioneer products.
B. New products.
C. Product ideas.
D. Test products.

19. ________ is the product life cycle period when sales fall off and profits drop.
A. Introduction.
B. Growth.
C. Maturity.
D. Decline.

20. Over the past 100 years or so, Binney and Smith's Crayola crayons have become a household
staple in more than 80 countries around the world. Crayola crayons are in the ________ stage
of the PLC.
A. Introduction.
B. Growth.
C. Maturity.
D. Decline.

21. Service industries are everywhere. They include government, ___________, business sector,
manufacturing sector, and the retail sector.
A. Private nonprofit.
B. Insurance salespeople.
C. Seasonal workers.
D. Temporary workers.

22. Which of the following would be an example of a “pure service”?

A. Insurance.
B. Airlines.
C. Car dealer.
D. Copier company.

23. Some services require that the client be present to conduct the service An example of such
a service is a ________.
A. Vending machines.
B. Medical operation.
C. Car repair.
D. Tax service.

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24. Services have four distinctive characteristics that greatly affect the design of marketing
programs. Which of the following is not one of these characteristics?
A. Intangibility.
B. Homogeneity.
C. Variability.
D. Perishability.

25. Unlike physical goods, services are produced and ________ simultaneously.
A. Launched.
B. Consumed.
C. Created.
D. Maximized.

26. One of the special features of services marketing is the provider-client interaction. This is
defined as when the client is also ________ as the service is produced.
A. Prominent.
B. Product.
C. Present.
D. Paying.

27. Holistic marketing for services requires external, ________, and internal marketing.
A. Exceptional.
B. Consistent.
C. Interactive.
D. Influential.

28. Excellent service companies know that ________ employee attitudes will promote stronger
customer loyalty.
A. Cooperative.
B. Positive.
C. Neutral.
D. Negative.

29. Which of the following statements best explains why idea screening may be the most
important step of new product development?
A. Some potentially profitable ideas may be ill perceived by the idea screeners.
B. Some ideas that will become market disasters may be originally viewed favorably by the idea
screeners.
C. It gives research and development team members an opportunity to gather consumer
feedback.
D. It saves the company money in product development costs by giving the green light to only
the product ideas that are likely to be profitable.

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30. Marketing communications are the means by which firms attempt to ________, persuade,
and remind consumers about the product and brands that they sell.
A. Reach.
B. Inform.
C. Attract.
D. Interest.

31. The marketing communications mix consists of six major modes of communications. Which
of the following is not one of these modes?
A. Personal selling.
B. Direct marketing.
C. Sales promotions.
D. Penetration pricing.

32. In the communication model two elements represent the major parties in the communication
process. These two parties are called ________ and ________.
A. Sender/subject.
B. Sender/receiver.
C. Beginner/receiver.
D. Receiver/starter.

33. If we say that services cannot be seen before purchasing—that is a customer must experience
other clues to the service quality besides the tangible aspect, we are saying that a service is
_________.
A. Intangible.
B. Inseparable.
C. Perishable.
D. Variable.

34. When restaurants and theme parks add summer workers, they are attempting to manage supply and
demand for their services by ________.
A. Complementary services.
B. Nonpeak demand.
C. Using part-time employees.
D. Increasing enrollment.

35. Many consumers use price as an indicator of ________. Image pricing is especially effective
with ego-sensitive products such as perfumes and expensive cars.
A. Quality.
B. Ability.
C. Capability.
D. Size.

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36. If demand hardly changes with a small change in price, then demand is ________.
A. Equal.
B. Marginal.
C. Inelastic.
D. Elastic.

37. A company’s costs take two forms. ________ are costs that do not vary with production or
sales revenue.
A. Variable.
B. Fixed.
C. Adjusted.
D. Attributed.

38. ________ consists of the sum of the fixed and variable costs for any given level of
production.
A. Total costs.
B. Manufacturing costs.
C. Delivery costs.
D. Marketing costs.

39. In ________ pricing, the company decides how to price its products to different customers in
different locations and countries.
A. Specialty.
B. Geographical.
C. Offset.
D. Regional.

40. A ________ is offered by a manufacturer to trade-channel members if they will perform

certain functions, such as selling, storing, and record keeping.
A. Functional discount.
B. Quantity discount.
C. Actual discount.
D. Cash discount.

41. ________ occurs when a company sells a product or service at two or more prices that do not
reflect a proportional difference in costs.
A. Psychological pricing.
B. Loss-leader pricing.
C. Product-form pricing.
D. Price discrimination.

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42. Supermarkets such as Shoprite often drop the price on well-known brands to stimulate store
traffic. This is known as ________.
A. Loss-leader pricing.
B. Special-event pricing.
C. Cost- profit pricing.
D. Retail- demand pricing.

43. Companies frequently adjust their basic price to accommodate differences in customers,
products, locations, and so forth. Examples of these differentiated prices include all of the
following except ________.
A. New product pricing.
B. Customer-segment pricing.
C. Product form pricing.
D. Channel pricing.

44. To maximize market share, a firm may use _____________ pricing as a strategy for pricing
its new products.
A. Market-penetration.
B. Market-skimming.
C. Value pricing.
D. Demand pricing.

45. The most elementary pricing method is to add a standard ________ to the product’s cost.
A. Target margin.
B. Target price.
C. Markup.
D. Margin.

46. MH Ltd is introducing a new product to the market; in fact, MH Ltd is the first to offer this
new product to the marketplace. In developing the pricing strategy, it was decided that the
price of the product should be at the maximum the market would bear. This is an example of
______________ strategy
A. Product differentiation pricing.
B. Product-quality leadership.
C. Market-skimming pricing.
D. Market-penetration pricing.

47. Timange Instruments builds a large plant to produce a great quantity of products, hoping that
as prices decline, sales volume increases and thus costs decline. This market-penetration
pricing is dependent upon three conditions existing in the marketplace. Which one of the
following is not one of these conditions?
A. Low price discourages competition from entering the market.
B. Production and distribution costs actually fall with increases in production.
C. Low prices do not increase consumer demand but increases retailer competition.
D. The market is stimulated by lower prices and is highly price sensitive.
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48. KTT Dairy Ltd increased the price of one litter of milk by K5.00. Consumers noticed this
increase and immediately switched to other suppliers. This means that _____________.
A. Customers are most sensitive to products that are bought frequently.
B. Customers are less sensitive to products that are disposable.
C. Customers are most sensitive to food products that are perishable.
D. Customers are most sensitive to grocery products that are organic.

49. When the insurance industry recently announced a heavy price increase in the cost of term
life insurance, sales of this type of insurance did not decrease. This means that __________.
A. Customers are less sensitive to service products.
B. Insurance sales reps are able to sell their products.
C. Insurance demand is unitary.
D. Consumers are price insensitive.

50. Given that the variable costs are MK10 per unit, fixed costs are MK300, 000, and expected
sales are 50,000units. What is the cost per unit?
A. MK16.00.
B. MK6.00.
C. MK20.00.
D. MK10.00.

51. The formula for the break-even calculation is ________.

A. (Price – variable costs)÷fixed costs.
B. (variable costs – price)÷fixed costs.
C. Fixed costs÷(price – variable costs).
D. Fixed costs÷(variable costs – price).

52. Florida hotels discount the cost of their hotel rooms during the hot summer months. On the
other hand, during the winter months, the price of these rooms increases. This is an example
of _____________ discounts.
A. Seasonal.
B. Functional.
C. Quantity.
D. Allowance.

53. ____________ is composed of individuals and households who buy goods and services for
personal consumption.
A. The target market.
B. A market segment.
C. The consumer market.
D. The ethnographic market.

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54. According to the stimulus-response model of buyer behavior, the place where consumers
process marketing stimuli prior to making a purchase decision is called the __________.
A. Consumer’s value chain.
B. Consumer’s black box.
C. Consumer’s cognitive schema.
D. Consumer’s thoughts-emotions network.

55. Groups which have a direct influence and to which a person belongs are called
_____________.
A. Membership groups.
B. Facilitative groups.
C. Bonding groups.
D. Social groups.

56. As a form of a reference group, the _______________ are ones to which the individual
wishes to belong.
A. Secondary groups.
B. Facilitative groups.
C. Primary groups.
D. Aspirational groups.

57. The __________________ is a person within a reference group who, because of special
skills, knowledge, personality, or other characteristics, exerts influence on others.
A. Social role player.
B. Opinion leader.
C. Referent actor.
D. Facilitator.

58. Which of the following is not one of the five stages of the buyer decision process?
A. Brand identification.
B. Need recognition.
C. Information search.
D. Purchase decision.

59. In which stage of the buyer decision process model does Cognitive dissonance occur?
A. Need recognition.
B. Information search.
C. Postpurchase conflict.
D. Evaluation of alternatives.

60. The business marketer normally deals with __________ than the consumer marketer does.
A. Far fewer but far larger buyers.
B. Far greater but smaller buyers.
C. Far greater and larger buyers.
D. Far fewer and smaller buyers.
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SECTION B: TRUE OR FALSE QUESTIONS.
SECTION INSTRUCTIONS:
THIS SECTION CARRIES 10 MARKS
EACH QUESTION CARRIES ONE MARK.
ANSWER ALL QUESTIONS IN THIS SECTION.
INDICATE WHETHER THE SATEMENT IN THIS SECTION IS TRUE OR FALSE BY
INDICATING A FOR TRUE AND B FOR FALSE____________________________________
61. During the sales era (1920s- 1940s) supply exceeded demand.

62. Management of demand involves making it easy for customers to buy products.

63. The marketing concept assumes that if customers are left alone, they will not buy enough
products.

64. Your department holds that achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfaction better than competitors do. Your department
is practicing the selling concept.

65. Amy's law office has developed a new format and wording for wills. The staff believes they offer the
most in quality, performance, and innovative features. Her law office is practicing the production
concept.

66. An experience such as a vacation can be defined as a market offering.

67. Human needs are shaped by culture and individual personality.

68. The production concept and product concept are orientations that are more likely to lead to marketing
myopia than the marketing concept and the societal marketing concept are.

69. The societal marketing concept calls on marketers to balance consumer wants and desires, company
profits, and society's interests.

70. The marketing mix includes production, price, promotion, and packaging; they are known as the four
Ps of marketing.

71. Industrial goods can be classified in terms of how they leave the production system.

72. A “service” is defined as any act or performance that one party can offer to another that is
essentially intangible and does not result in the ownership of anything.

73. A hybrid service consists of unequal parts of goods and services, with services being in the
majority.

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74. An example of a pure service provider might be for example a restaurant.

75. Services have five distinctive characteristics, one of these five being “pure service.”

76. Intangibility with regards to a “service” means that the service cannot be duplicated across
providers.

77. Service companies try to demonstrate their service qualities through physical evidence and
presentation.

78. Inseparability in the context of a “service” means that the service provider and the service
customer/consumer cannot be separated since one effects another.

79. Price is one of the two elements of the marketing mix that produces revenue.

80. Many consumers use price as an indicator of quality and value.

SECTION C: STRUCTURED QUESTIONS

SECTION INSTRUCTIONS:
THIS SECTION CARRIES TWENTY MARKS (20 MARKS)
ANSWER ALL QUESTONS IN THIS SECTION.
MARKS ALLOCATION ARE INDICATED ON EACH QUESTION _____________________

81. Briefly discuss four dimensions of non-profit marketing. (4 Marks)

82. There are five concepts in marketing, briefly discuss four. (4 Marks)

83. List down four major promotion tools. (4 Marks)

84. Briefly explain two basic promotion tools strategies. (4 Marks)

85. Briefly discuss the following strategies. (4 Marks)

SECTION D: ESSAY QUESTIONS

SECTION INSTRUCTIONS:
THIS SECTION CARRIES 60 MARKS.
EACH QUESTION CARRIES 20 MARKS.
ANSWER TWO QUESTIONS IN THIS SECTION.
THE FIRST QUESTION (86) IS COMPULSORY, AND CHOOSE ANY OTHER TWO IN
THIS SECTION________________________________________________________________
86. Explain how the marketing mix should be changed during the various stages of the
product life cycle.

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87. Discuss the sales promotion methods that can be used by a manufacturer of dishwashing
liquid.

88. Using relevant examples, explain the concept of market diffusion.

89. Analyze four advantages of branding and explain how they contribute to competitive
advantage?

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