1

.
Question
:
Which of the following is NOT a criterion used in forming segments?
Student
Answer:




Instructor
E!lanation
:
"om!etiti#e !osition is a reason for selecting a mar$et% not for segmenting it. The fi#e
criteria to &e used in forming segments include: '1( !otential for increased !rofit) '*(
similarit+ of needs of !otential &u+ers within a segment) ',( difference of needs of &u+ers
among segments) '-( !otential of a mar$eting action to reach a segment) and '.( sim!licit+
and cost of assigning !otential &u+ers to segments.


*
.
Question
:
The restrictions !laced on !otential solutions to !ro&lem sol#ing include limitations on time and mone+
a#aila&le. These restrictions are determined &+ the !ro&lem and are called
Student
Answer:




Instructor
E!lanation
:
Tet term definition/constraints


,
.
Question
:
A 0000000000 is a framewor$ to relate the mar$et segments of !otential &u+ers to !roducts offered or
!otential mar$eting actions &+ an organi1ation.
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/mar$et3!roduct grid


-
.
Question
:
The 4uantit+ consumed or !atronage/store #isits/during a s!ecific !eriod is called
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/usage rate


.
.
Question
:
There are fi#e ste!s in#ol#ed in segmenting and targeting a mar$et. What should a mar$eter do once he or she
has selected a target mar$et and grou!ed !roducts to &e sold into categories?
Student
Answer:




Instructor
E!lanation
:
The ste!s in segmenting and targeting mar$ets include: '1( grou! !otential &u+ers into
segments) '*( grou! !roducts to &e sold into categories) ',( de#elo! a mar$et3!roduct grid
and estimate si1e of mar$ets) '-( select target mar$ets) and '.( ta$e mar$eting actions to
reach target mar$ets.


5
.
Question
:
6etermining the si1e of s!ecific mar$ets using a mar$et3!roduct grid is hel!ful in determining which target
mar$et segments to select and
Student
Answer:




Instructor
E!lanation
:
E#en 7guesstimates7 of the si1e of s!ecific mar$ets using a mar$et3!roduct grid are hel!ful
in determining which target mar$et segments to select and which !roduct grou!ings to
offer.


8
.
Question
:
9ar$et segmentation in#ol#es aggregating !ros!ecti#e &u+ers into grou!s that ha#e common needs and will
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/mar$et segmentation


:
.
Question
:
Which of the following is a criterion used for selecting a target segment?
Student
Answer:




Instructor
E!lanation
:
There are fi#e criteria used for selecting a target segment/mar$et si1e% e!ected growth%
com!etiti#e !osition% cost of reaching the segment 'alternati#e 7e7(% and com!ati&ilit+ with
the organi1ation;s o&<ecti#es and resources. There are also fi#e criteria to use in forming
the segments% which are often confused with those used to select segments. To form
segments the criteria include !otential for increased !rofit% similarit+ of needs of !otential
&u+ers within a segment% difference of needs of &u+ers among segments% !otential of a
mar$eting action to reach a segment% sim!licit+ and cost of assigning !otential &u+ers to
segments.


=
.
Question
:
The $e+ to successful !roduct differentiation and mar$et segmentation strategies is finding the ideal &alance
&etween satisf+ing a customer;s indi#idual wants and achie#ing organi1ational 0000000000% the increased
customer #alue achie#ed through !erforming organi1ational functions li$e mar$eting or manufacturing more
efficientl+.
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/s+nerg+


1>
.
Question
:
A disad#antage of a'an( 0000000000 is that the mar$eting research firm needs to recruit new mem&ers
continuall+ to re!lace those who dro! out.
Student
Answer:




Instructor
E!lanation
:
One disad#antage of !anels is that the mar$eting research firm needs to recruit new
mem&ers continuall+ to re!lace those who dro! out. These new recruits must match the
characteristics of those the+ re!lace to $ee! the !anel re!resentati#e of the mar$et!lace.


11Question
A general rule of thum& among mar$eting researchers is to use 0000000000 first and then collect 000000000.
. :
Student
Answer:




Instructor
E!lanation
:
Secondar+ data are less e!ensi#e and less time consuming. ?urthermore% a greater le#el
of detail is often a#aila&le through secondar+ data% es!eciall+ @.S. "ensus Aureau data.


1*
.
Question
:
Bed "ar!et Aa&+C% a children;s accessor+ and to+ store% uses @.S. "ensus information to determine the
num&er of families with children under age . in its mar$et area. It is using 0000000000 research.
Student
Answer:




Instructor
E!lanation
:
Secondar+ data are facts and figures that ha#e alread+ &een recorded &efore the !ro<ect
such as the @.S. "ensus data that is &eing used.


1,
.
Question
:
Aest ?oods "om!an+ is considering e!anding &e+ond the regional mar$et segments now ser#ed &+ its
Dellmann;s ma+onnaise. One criterion management wants to use to e#aluate !otential new geogra!hic
mar$et segments is whether new e4ui!ment must &e &ought to ser#e each new segment. This is an eam!le
of which criterion used to select target mar$et segments?
Student
Answer:




Instructor
E!lanation
:
New e4ui!ment to reach a new mar$et segment relates to Aest ?oods "om!an+;s
resources.


1-
.
Question
:
When Erocter F Gam&le introduced "rest% the first fluoride tooth!aste% it was intended for use &+ children
and was therefore gi#en a child3a!!ealing &u&&legum fla#or. Sometime later% the same &asic formula was
gi#en a fresh% mint+ fla#or to a!!eal to adults. What is this mar$eting strateg+ called?
Student
Answer:




Instructor
E!lanation
:
Eroduct differentiation in#ol#es a firm;s using different mar$eting mi acti#ities% such as
!roduct features and ad#ertising% to hel! consumers !ercei#e the !roduct as &eing different
and &etter than com!eting !roducts. In the case of "rest% the change of fla#or 'a !roduct
feature( hel!ed consumers to !ercei#e the !roduct as different as and &etter than
com!eting !roducts.


1.
.
Question
:
Besearch and media firm Houth "ulture !u&lished Watch maga1ine% a teen !u&lication gi#en out free to high
school students. Dowe#er% the !u&lication was una&le to deli#er res!onse rates to cou!ons or sam!le offers
that its ad#ertisers e!ected. Houth "ulture handed out sur#e+s to learn how students felt a&out the
!u&lication. The results from the sur#e+ indicated that teen &o+s and girls demanded #er+ different things
from the !u&lication. This feed&ac$ was the gleaned from 0000000000 data.
Student
Answer:





Instructor
E!lanation
:
Questionnaire data are the facts and figures o&tained &+ as$ing !eo!le a&out their
attitudes% awareness% intentions% and &eha#iors. In this case% the teens were as$ed a&out
their o!inions concerning Watch maga1ine.


15
.
Question
:
Which of the following forecasting techni4ues would &e most accurate for estimating sales re#enues from
industrial shi!!ers for the Eort of Ios AngelesJIong Aeach for net +ear?
Student
Answer:





Instructor
E!lanation
:
Dere the mar$et is small enough and the !lanning !eriod long and formal enough that
&u+ers should $now with considera&le certaint+ a&out future contracting. The other
alternati#es are less !ractical.


18
.
Question
:
MyTwinn makes dolls that look like young girls. For $119 they will make a doll that looks just
like a photograph. So, if you send in the money and a photo of your young niece, she could
hae a doll that is her twin! This is an e"ample of#
Student
Answer:

mass customi$ation.

synergy.

target marketing.

how the %&'(& rule is implemented.

repositioning.
Instructor
E!lanation
:
)ationale# Mass customi$ation is tailoring goods or serices to the tastes of indiidual
customers at high olumes for a relatiely low cost.


1:
.
Question
:
Safewa+ dis!la+s the thousands of items it sells in its su!ermar$et aisles containing related items or !roduct
grou!ings. Eam!les would &e the !et food aisle or the !a!er !roduct aisle. Wh+ would Safewa+ dis!la+
!roduct grou!ings in this manner?
Student
Answer:




Instructor
E!lanation?inding a means of grou!ing the !roducts a firm sells into meaningful categories is as
: im!ortant as grou!ing customers into segments. If the firm has onl+ one !roduct or
ser#ice% this isn;t a !ro&lem. Aut when it has do1ens or hundreds% these must &e grou!ed in
some wa+ so &u+ers can relate to them. In the case of su!ermar$ets% it is &+ aisles with
similar !roducts% which hel!s customers 4uic$l+ find the !roduct the+ want.


1=
.
Question
:
Safewa+ dis!la+s the thousands of items it sells in its su!ermar$et aisles containing related items or !roduct
grou!ings. Eam!les would &e the !et food aisle or the !a!er !roduct aisle. Wh+ would Safewa+ dis!la+
!roduct grou!ings in this manner?
Student
Answer:




Instructor
E!lanation
:
?inding a means of grou!ing the !roducts a firm sells into meaningful categories is as
im!ortant as grou!ing customers into segments. If the firm has onl+ one !roduct or
ser#ice% this isn;t a !ro&lem. Aut when it has do1ens or hundreds% these must &e grou!ed in
some wa+ so &u+ers can relate to them. In the case of su!ermar$ets% it is &+ aisles with
similar !roducts% which hel!s customers 4uic$l+ find the !roduct the+ want.


*>
.
Question
:
9agna#o sells its target mar$ets man+ different t+!es of TKs from flat screens to a *>7 com&ination
TKJ6K6. The larger sets can &e outfitted with surround sound at a higher !rice than the small set. The small
set is much less e!ensi#e and allows the #iewer to watch a 6K6 without etra e4ui!ment. 9agna#o is
using which t+!e of segmentation #aria&le in this eam!le?
Student
Answer:




Instructor
E!lanation
:
@nderstanding what &enefits are im!ortant to different customers '&eha#ioral
segmentation( is a useful wa+ to segment mar$ets &ecause it can lead directl+ to s!ecific
mar$eting actions% such as a new !roduct% an ad cam!aign% or a distri&ution s+stem.
9agna#o uses &eha#ioral segmentation to guide the t+!es of TKs it sells since different
consumers ha#e different &enefits the+ see$ in a TK set.


*1
.
Question
:
Nielsen 9edia Besearch collects national TK ratings &+ using a 7!eo!le meter.7 This &o is attached to TK
sets% K"Bs% ca&le &oes% and satellite dishes in o#er 1-%>>> homes across the countr+. It has a remote that
o!erates the meter when a #iewer &egins and finishes watching a TK !rogram and transmits the #iewing
information to Nielsen 9edia Besearch. Nielsen 9edia Besearch is collecting 0000000000 in this wa+.
Student
Answer:





Instructor
E!lanation
:
Watching% either mechanicall+ or in !erson% how !eo!le actuall+ &eha#e is the wa+
mar$eting researchers collect o&ser#ational data/the techni4ue Nielsen 9edia Besearch
uses.


**
.
Question
:
*hich of the following data are collected from consumers to deelop a perceptual map for a
particular product+
Student
Answer:
a listing of all prospectie ,rands and products

managerial judgments a,out how consumers perceie products

ratings of an ideal ,rand-s attri,utes

rank order of the ratings of a e"isting ,rand.s preference relatie to its competitors

all of the a,oe
Instructor
E!lanation
:
)ationale# To deelop a perceptual map, three types of data are needed# identification of
important attri,utes/ judgments of e"isting ,rands with respect to these important attri,utes/
and ratings of an ideal ,rand-s attri,utes.


*,
.
Question
:
Todd 0arris and 1ssociates, a 2ew 3ork sales promotion agency, discoered from analysis of its
files that one4fifth of its clients accounted for more than three45uarters of its fees and
commissions. This is an e"ample of what classic concept+
Student
Answer:
the law of inerse proportions

the %&'(& rule

the surial of the fittest

the law of eminent domain

the primogeniture rule
Instructor
E!lanation
:
)ationale# The %&'(& rule is a concept that suggests %& percent of a firm-s sales are o,tained
from (& percent of its customers.


*-
.
Question
:
Which of the following statements re!resents a !ossi&le measure of success in the 7define the !ro&lem7 stage
of the mar$eting research !rocess?
Student
Answer:




Instructor
E!lanation
:
9easures of success are criteria or standards used in e#aluating !ro!osed solutions to the
!ro&lem. Dours s!ent !la+ing with To+ A and To+ A is the measure of success for
determining which to+ to !roduce.


*.
.
Question
:
One mar$eting action that can &e ta$en to sell a single !roduct or ser#ice to multi!le mar$et segments is
Student
Answer:





Instructor
E!lanation
:
When an organi1ation !roduces onl+ a single !roduct or ser#ice and attem!ts to sell it to
two or more mar$et segments% it a#oids the etra costs of de#elo!ing% and !roducing
additional #ersions of the !roduct% which often entail etremel+ high research%
engineering% and manufacturing e!enses. In this case% the incremental costs of ta$ing the
!roduct into new mar$et segments are t+!icall+ those of a se!arate !romotional cam!aign
or a new channel of distri&ution.


*5
.
Question
:
6enningtons Superstore, which speciali$es in plus4si$e fashions for women, wanted to see if it
should add a line of plus si$e junior wear. The following statement reflects which step in the
marketing research process+ 7To see which is more effectie, offering products for this market
in our current stores or opening separate stores targeted directly to the teenage market, let.s
distri,ute 5uestionnaires to current shoppers and solicit their opinions, set up some focus
groups with plus si$e teens, and locate any releant secondary research.8
Student
Answer:
9efine the pro,lem.

9eelop the research plan.

:ollect releant information.

9eelop findings and recommendations.

Take marketing actions.
Instructor
E!lanation
:
)ationale# Step ; in the fie4step marketing research process is to collect enough releant
information to make a rational, informed marketing decision. <n this case, the information will
,e collected using sureys, focus groups and releant secondary research.


*8
.
Question
:
"ustom ?oot o!erates si retail locations. At first glance% none loo$ an+ different from an+ &asic old3
fashioned shoe store% &ut the onl+ &oots on hand are dis!la+ models. There;s no in#entor+ for sale% and
customers go home em!t+3handed/at least initiall+. "ustomers &rowse the store% miing and matching
design com!onents such as st+le% color% and leather t+!e. A&out 1>> dis!la+ &oots !ro#ide st+le guidelines.
Once customers choose a &oot st+le% then can then select materials% colors% and tetures. "ustom ?oot
guarantees the &oots will &e read+ within three wee$s. This is an eam!le of
Student
Answer:





Instructor
E!lanation
:
9ass customi1ation is tailoring goods or ser#ices to the tastes of indi#idual customers on a
high #olume scale.


*:
.
Question
:
Motts 1pplesauce used an adertising campaign to change the way consumers thought a,out
applesauce from a dinnertime side dish to a replacement for cooking oil in ,aking. The
adertising message was that using applesauce in ,aking cuts calories and also makes the
resulting ,aked good healthier. Motts was using a ========== strategy.
Student
Answer:
perceptual mapping

product positioning

product differentiation

repositioning

psychographics
Instructor
E!lanation
:
)ationale# )epositioning is changing a product.s image in consumers. minds. <n this case,
e"panding the use of the product from a dinner time side dish to a ,aking ingredient.


*=
.
Question
:
0eelys sneakers come with an im,edded, detacha,le wheel in the shoe-s heel. <n the sneaker
,usiness, 0eelys is practicing ========== positioning.
Student
Answer:

head4to4head

parallel market

distinction

repositioning

differentiation
Instructor
E!lanation
:
)ationale# 0ead4to4head positioning inoles competing directly with competitors on similar
product attri,utes in the same target market. 9ifferentiation positioning inoles seeking a
smaller market niche that is less competitie in which to locate a ,rand, and there,y reduce or
aoid canni,ali$ation.


,>
.
Question
:
Bee&o$ ma$es shoes with 69L ?oam cushioning. The Eremier Trinit+ 2?S shoe is made for street runners
who want comfort% su!!ort% and flei&ilit+. The Trail Ehi&ition shoe is made with dura&le cushioning and
ri!3resistant mesh for trail runners. This strateg+ is an eam!le of
Student
Answer:




Instructor
E!lanation
:
9ar$et segmentation lin$s mar$et needs to an organi1ation;s mar$eting !rogram/s!ecific
mar$eting mi actions to satisf+ those needs. Bee&o$ targets the s!ecific needs of
!articular t+!es of runners with its different t+!es of shoes '!roducts(.


,1
.
Question
:
9arine 9idland Aan$ sent mar$et researchers with sur#e+s door3to3door in the neigh&orhoods of their
&ranch &an$s to as$ !eo!le with sa#ings accounts wh+ the+ did not ha#e their chec$ing accounts and credit
cards with 9arine 9idland. These researchers were using 0000000000 to collect data.
Student
Answer:





Instructor
E!lanation
:
a single researcher who as$s 4uestions of one res!ondent conducts indi#idual inter#iews.
9arine 9idland collected information a&out &eha#ior &+ discussing the to!ic with its
customers in indi#idual inter#iews.


,*
.
Question
:
*hich of the following is a typical marketing o,jectie+
Student
Answer:
<ncrease sales reenue and profit for 9iet :oke.

9iscoer whether consumers that ,uy 6ampers are aware of gender4specific disposa,les.

Find out why the new line of plus4si$e clothing is not selling well.

9etermine whether to offer a new > improed ersion of an e"isting product.

1ll of the a,oe are typical marketing o,jecties.
Instructor
E!lanation
:
)ationale# ?,jecties are specific, measura,le goals the decision maker seeks to achiee in
soling a pro,lem. Typical marketing o,jecties are increasing sales and profits, discoering
what consumers are aware of and want, and finding out why a product isn-t selling well.


,,
.
Question
:
*hen a marketing student oerheard the following comments, she knew the person who was
talking was planning to use a ==========. 7*e.re increasing T@ adertising, adding some
sales representaties, and adding ; new product models. 1ll those things are positie. Aut on
the negatie side, we.re going to increase prices across the ,oard ,y (& percent. So on
,alance, < think sales will increase ne"t year ,y B percent.8
Student
Answer:

lost4horse forecast

technological forecast

trend e"trapolation

delphi forecast

surey of ,uyers. intentions forecast
Instructor
E!lanation
:
)ationale# 1 lost4horse forecast, when used to forecast sales, starts with the last known alue
and makes adjustments from that to arrie at the final forecast.


,-
.
Question
:
1 reha,ilitation center wants to target women in their (&s who hae receied some permanent
disa,ility as the result of a skiing accident. <n terms of the criteria used for selecting a target
segment, this market would#
Student
Answer:
hae no e"pected growth.

not ,e compati,le with the company.s current resources.

,e ery small.

,e readily accessi,le to the firm.s marketing programs.

,e accurately descri,ed ,y all of the a,oe.
Instructor
E!lanation
:
)ationale# The market would grow as people continue skiingCalthough it may ,e slow growth.
This market would use the reha,ilitation serices that the company now proides. Aecause it
would ,e so small, it would not ,e readily accessi,le ,y marketing programs.


,.
.
Question
:
Besearchers at ?isher3Erice get children to !la+ at its state3licensed nurser+ school in East Aurora% New Hor$
and watch the children use% and a&use% its to+s. When the researchers choose a measure of success to hel!
them decide whether to mar$et old or new to+ designs% the+ are in which stage of the fi#e3ste! mar$eting
research a!!roach?
Student
Answer:




Instructor
E!lanation
:
Ste! one in the mar$eting research a!!roach is to define the !ro&lem% in this case%
choosing a measure of success to hel! determine whether to mar$et old or new to+
designs.


1
.
Question
:
The *>>> "ensus indicates that the American !o!ulation is growing older% &ecoming more
ethnicall+ di#erse% and increasingl+ mo#ing toward western and Sun Aelt states. 9ar$eters
must o&ser#e how these 0000000000 forces are affecting the mar$eting en#ironment.
Student
Answer:




Instructor
E!lanation
:
Rationale: 6emogra!hic #aria&les are social forces.


*
.
Question
:
Hou are the director of mar$eting for Iittleton Dos!ital. Hou are doing an en#ironmental
scan to hel! create a fi#e3+ear mar$eting !lan for the hos!ital. Which of the following
en#ironmental trends should +ou consider the most im!ortant?
Student
Answer:





Instructor
E!lanation
:
The mature mar$et% those households headed &+ !ersons .> +ears of age and o#er%
re!resents the fastest growing segment in America. The+ are concerned with !ersonal
health. In addition% the need for healthcare ser#ices among this grou! is li$el+ to grow in
+ears to come.


,
.
Question
:
Which of the following is an eam!le of green mar$eting?
Student
Answer:
The Anheuser3Ausch "or!oration added green colors to its la&els
,9 created a new fertili1er for trees.


Aoise "ascade% Iowe;s and Dome 6e!ot ha#e discontinued the sale of wood
!roducts from the world;s endangered forests.
Ie#i3Strauss mar$ets !re3washed <eans.
Moe;s Iawn Ser#ice is offering a s!ecial s!ring !romotion.
Instructor
E!lanation
:
Green mar$eting includes mar$eting efforts to !roduce% !romote% and reclaim
en#ironmentall+ sensiti#e !roducts.


-
.
Question
:
Au+ing a &oo$ at www.ama1on.com to gi#e as a &irthda+ !resent is an eam!le of a'n(
0000000000 transaction.
Student
Answer:

electronic commerce
Internet relationshi!
&ric$s3and3mortar
electronic !artnering
etranet
Instructor
E!lanation
:
An+ acti#it+ that uses electronic communications% such as a !urchase at Ama1on.com% is
called electronic commerce.


.
.
Question
:
The 0000000000 for Iucent Technologies is 7to !ro#ide customers with the world;s &est and
most inno#ati#e communications s+stems% !roducts% technologies and customer su!!ort% and
to deli#er su!erior% sustained shareowner #alue.7
Student
Answer:




Instructor
E!lanation
:
A mission is a statement of the organi1ation;s sco!e. This statement often identifies its
customers% mar$ets% !roducts% technolog+% and #alues.


5
.
Question
:
Ma+ Aloom;s Eet Assure% a national !et health3care !ro#ider networ$ &ased in 6o#er% N.M.%
recentl+ too$ ad#antage of a ri#al;s nai#etN. When a West "oast !ro#ider of catastro!hic !et
co#erage 7!re3announced7 the addition of a wellness com!onent 'Eet Assure;s s!ecialt+( in
an inter#iew with a tin+ communit+ newswee$l+% si months !rior to launching it% Aloom
was notified immediatel+ through a We&3&ased news monitoring ser#ice. This not onl+ ga#e
him time to add catastro!hic &enefits to one of his own wellness !roducts% it also got his
offering to mar$et first. Ma+ Aloom relied on 0000000000 to $ee! him a&reast of his
com!etitors; acti#ities.
Student
Answer:




Instructor
E!lanation
:
Economic es!ionage is the clandestine collection of trade secrets or !ro!rietar+
information a&out a com!an+;s com!etitors. Es!ionage acti#ities include illegal
tres!assing% theft% fraud% misre!resentation% wireta!!ing% the search of a com!etitor;s trash%
and #iolations of written and im!licit em!lo+ment agreements with non3com!ete clauses.
In this case% Eet Assure found out a&out its com!etitors acti#ities &+ reading a news stor+
in a local !a!er. This is not illegal and thus the &eha#ior is not economic es!ionage.


8
.
Question
:
The 6aniels "ollege of Ausiness at the @ni#ersit+ of 6en#er offers an outstanding &usiness
school education. "ali !a+s the tuition to attend 6aniels and earns her 9AA with a
concentration in Su!!l+ "hain 9anagement. @!on graduating% she is offered a high3!a+ing%
fulfilling !osition. Was this a mar$eting echange?
Student
Answer:




Instructor
E!lanation
:
9ar$eters see$ to disco#er and satisf+ the needs and wants of customers. The $e+ to
achie#ing these o&<ecti#es is echange33the trade of things of #alue &etween &u+er and
seller so that each &enefits from the echange. In this instance% "ali is the customer and
6aniels is the mar$eter. An echange occurs: "ali !a+s tuition and earns her degree%
leading to a fulfilling career and the school recei#es tuition used to !a+ o!erating e!enses
so that it ma+ continue to o!erate.



:Question More maga1ine is a !u&lication designed to a!!eal to women o#er the age of ->. 6emand
. : for such maga1ines is an eam!le of how 0000000000 forces im!act the mar$eting
en#ironment.
Student
Answer:




Instructor
E!lanation
:
Social forces include changing demogra!hics% such as age and gender/in this case an
aging female !o!ulation.


=
.
Question
:
Emil+ had an ecellent +ear as a saleswoman in *>>.. She earned O=8%>>>. She !aid O18%>>> for
7necessities7 such as mortgage% food% and clothing. She was gi#en a si3wee$ all e!enses !aid
#acation &+ the com!an+ for her sales !erformance that had a #alue of O=%>>>. Der state and federal
income taes totaled O*-%>>>. What was her discretionar+ income?
Student
Answer:





Instructor
E!lanation
:
Rationale: 6iscretionar+ income is the mone+ that remains after !a+ing for taes and necessities.
Therefore% O=8%>>>Pgross income less 18%>>> for necessities less *-%>>> for taes e4uals O.5%>>>
for discretionar+ income


1>
.
Question
:
In the 1=:>s% !oor 4ualit+ and Ma!anese im!orts dro#e the Darle+36a#idson motorc+cle
com!an+ to &rin$ of &an$ru!tc+. The com!an+;s share of the @.S. su!er3hea#+3weight
mar$et/motorc+cles with engine ca!acit+ of :.> cu&ic centimeters or more/colla!sed
from more than -> !ercent in the mid 1=8>s to *, !ercent in 1=:,. Dowe#er% &+ 1=:=%
Darle+36a#idson controlled some 5. !ercent of the @.S. mar$et) and &oth in the @.S. and
o#erseas mar$ets% the com!an+ won;t &e a&le to meet demand for +ears. ?rom a mar$eting
!ers!ecti#e% what was the li$el+ first ste! in Darle+36a#idson;s resurgence?
Student
Answer:



im!ro#ing the 4ualit+ of their !roduct and communicating this to motorc+cle
&u+ers
Instructor
E!lanation
:
Rationale: Erior to ma$ing changes in either !roduct or mar$eting strateg+% the firm would ha#e
needed to ascertain its internal strengths and wea$nesses and its eternal threats and o!!ortunities.
Such an anal+sis would show that the Darle+36a#idson motorc+cle com!an+ had !ro&lems in
!roduct 4ualit+% !erformance% and mar$eting strategies. Its !rimar+ strength was &rand lo+alt+ and
&rand recognition. O!!ortunities eisted for Darle+36a#idson in &oth domestic and foreign
mar$ets. A ma<or threat came from im!orted motorc+cles


11
.
Question
:
The interest rate has &een #er+ low o#er the last few +ears% with home mortgages a#aila&le
from .Q to 5..Q. As a result% consumers are a&le to refinance their homes and use the
etra mone+ o&tained to !a+ down credit card or other de&t% !urchase items% andJor reduce
the amount of their mortgage. 0000000000 forces such as the low le#el of interest rates can
affect mar$eting &+ !ro#iding funds for consumers to use in the !urchase of goods and
ser#ices.
Student
Answer:

economic
regulator+
com!etiti#e
!s+chogra!hic
legalJregulator+
Instructor
E!lanation
:
Economic forces% such as macroeconomic changes in the econom+% affect mar$eting &+
!ro#iding funds for consumers to use in the !urchase of goods and ser#ices. These funds
are called dis!osa&le income


1*
.
Question
:
Which of the following actions would &est illustrate a di#ersification strateg+ for 9c6onaldRs 'the
fast food restaurant(?
Student
Answer:




Instructor
E!lanation
Rationale: The 9c6onald;s to+s sold through To+s B @s stores mainl+ in#ol#ed selling new
!roducts 'to+s( to new 'to+( customers% a di#ersification strateg+. E#en though man+ of these
: !eo!le ma+ ha#e eaten at a 9c6onald;s restaurant% the com!an+ lea#es the restaurant &usiness and
goes into the to+ mar$eting &usiness% which is a new &usiness for 9c6onald;s.


1,
.
Question
:
The consumer !roducts industr+ is one with se#eral large com!etitors% soaring raw
materials !rices% and strong demands from !owerful retailers for lower !rices. As a result
"olgate3Ealmoli#e "o. and @nile#er Grou!% the ma$ers of !roducts such as "olgate
tooth!aste and Aen F Merr+;s ice cream &oth reduced their earnings forecasts. Het Eroctor
F Gam&le% another consumer !roducts com!an+ did not. At E F G inno#ation is a $e+
attri&ute% allowing the com!an+ to u!date all *>> of their &rands and to in#ent new
!roducts such as "rest Whitestri!s that consumers cra#e. E F G has also used their
mar$eting $now3how to de#elo! uni4ue !roduct !lacements on tele#ision shows that
highlight its &rands. A SWOT anal+sis for E F G of this information would indicate that
the industr+ situation is a 0000000000 while the in#ention ta$ing !lace at E F G is a
0000000000.
Student
Answer:




Instructor
E!lanation
:
A threat is an eternal factor such as soaring raw materials !rices and strong demands
from !owerful retailers for lower !rices) a strength is an internal attri&ute such as
inno#ation and mar$eting $now how that can &e used to im!ro#e the com!an+.


1-
.
Question
:
Ia#a."om is an Internet com!an+ that hel!s other organi1ations !ut conce!ts that the+
ho!e will let them dominate the mar$et in their industr+ into action. In its !romotion% it
states% 7We ignore the rules% and we let no o&stacle stand in +our com!an+;s wa+33no
matter how &old or im!ossi&le +our idea ma+ seem.7 The com!an+ is com!osed of
eighteen &right +oung Internet e!erts. The+ wor$ in one large room% which also contains
dart&oards% a !ool ta&le% and a meditation center. If +ou were to wal$ into the office% it
would &e net to im!ossi&le to tell the com!an+ owners from its lowest ran$ing em!lo+ee.
This is a descri!tion of the Internet com!an+;s:
Student
Answer:




Instructor
E!lanation
:
A cor!orate culture is a set of #alues% ideas% and attitudes that is learned and shared among
the mem&ers of an organi1ation


1.
.
Question
:
George Simmer the "EO of 9en;s Wearhouse is $nown to the !u&lic as the &earded
com!an+ !itchman who sells suits and s!ort coats on TK declaring% 7I Guarantee itC7 De
also sa+s that to &e successful% 7Hou;#e got to ha#e a com!an+ that starts with trust and
fairness.7 De aims to $ee! his em!lo+ees ha!!+ and lo+al. Dis !hiloso!h+ sets the
Student
Answer
:






15
.
Question
:
Se#eral +ears ago% Alac$ F 6ec$er !urchased General Electric;s small a!!liances !roduct
line. General Electric did not $now what to do with the line. Alac$ F 6ec$er !urchased
the line &ecause it needed the cash infusion from a !roduct line that had a dominant mar$et
share. Since !eo!le re!lace small a!!liances infre4uentl+ and &ecause man+ are handed
down from !arent to child% the industr+ is a slow3growth one. ?rom this information and
+our $nowledge a&out the A"G !ortfolio anal+sis% +ou should $now this small a!!liance
line would &e classified as a:
Student
Answer:





Instructor
E!lanation
:
Rationale: "ash cows hold a large share of a slow3growth mar$et.


18
.
Question
:
One reason some !eo!le don;t li$e to &u+ clothing from Internet retailers is the ina&ilit+ to $now if
the clothes will fit once the+ ha#e arri#ed. ImageTwin has de#elo!ed a scanning s+stem with
which it has gathered the measurements of indi#iduals of all different si1es. All of the information
has &een fed into a data&ase. Now% when +ou &u+ something at IandsEnd.com% +ou can see a ,6
image of what the item should loo$ li$e on +our &od+. This is an eam!le of 0000000000 forces of
the mar$eting en#ironment.
Student
Answer:




Instructor
E!lanation
:
Rationale: This is an eam!le of an inno#ation de#elo!ed through engineering.


1:
.
Question
:
Source Eerrier S.A.% the su!!lier of Eerrier &ottled water% eercised 0000000000 when it
recalled 15> million &ottles of water after traces of a toic chemical were found in 1,
&ottles. The recall cost the com!an+ O,. million and O-> million more was lost in sales.
E#en though the chemical was not harmful to humans% the !resident of the com!an+
&elie#ed it was his dut+ to remo#e 7the least dou&t% as minimal as it might &e% to weigh on
the image of the 4ualit+ and !urit+ of our !roduct.7
Student
Answer:
a cor!orate #alue consciousness
mission s+nerg+
transactional mar$eting
target mar$eting
sta$eholder res!onsi&ilit+
Instructor
E!lanation
:
Sta$eholder res!onsi&ilit+ is the #iew that an organi1ation has an o&ligation to those
constituencies% which can affect achie#ement of its o&<ecti#es. Source Eerrier was
!rotecting its customers.


1=
.
Question
:
When Eastman 2oda$ "om!an+ concerns itself with dis!osal of its film !ac$ages in
national !ar$s &+ !romoting the slogan 7Ta$e onl+ !ictures% lea#e onl+ foot!rints%7 it is
acting in accordance with
Student
Answer:




Instructor
E!lanation
:
Societal mar$eting is the #iew that organi1ations should satisf+ the needs of consumers in
a wa+ that !ro#ides for societ+;s well3&eing. 2oda$ is encouraging national !ar$ #isitors
to dis!ose of film !ac$ages !ro!erl+% thus !rotecting the !ar$s and societ+;s greater well3
&eing.


*>
.
Question
:
Su!erior DomeWor$s Beferral Networ$ !rofiles home ser#ice com!anies for homeowners
loo$ing for a contractor or hand+man. To assure the com!anies the+ wor$ with are relia&le%
the+ chec$ licenses and insurance co#erage% their record with the Aetter Ausiness Aureau%
and three trade references. The firm also has to agree to a 0000000000% which includes
maintaining !rofessionalism and guaranteeing the 4ualit+ of wor$.
Student
Answer:
statement of cultural #alues
statement of moral reser#ations
rule of engagement
code of ethics
mar$eting guide
Instructor
E!lanation
:
A code of ethics is a formal statement of ethical !rinci!les and rules of conduct. In this
case conduct includes maintaining !rofessionalism and guaranteeing the 4ualit+ of wor$.


*1
.
Question
:
Erocter and Gam&le "o. manufactures consumer !roducts such as "rest tooth!aste and the Swiffer
mo!. Aut E F G does not see itself as a tooth!aste or mo! com!an+. Instead it sees itself as
sol#ing consumer !ro&lems with inno#ati#e new !roducts. E F G grew mar$et share in 8>Q of its
&usinesses &ecause:
Student
Answer:




Instructor
E!lanation
:
Rationale: E F G uses a &road &usiness function of sol#ing consumer !ro&lems with inno#ati#e
new !roducts to increase its mar$et share. In the last three +ears E F G has u!dated all of its *>>
&rands and created whole new !roduct categories that ha#e added O*>> &illion in sales.


**
.
Question
:
Which of the following statements a&out sustaina&le de#elo!ment is true?
Student
Answer:
A com!an+ that alwa+s ma$es its furniture from rare tro!ical woods is
!racticing sustaina&le de#elo!ment.
Onl+ large international com!anies can achie#e sustaina&le de#elo!ment.
A com!an+ that has a *> !ercent rate of growth !ractices sustaina&le
de#elo!ment e#en if it o!erates two illegal landfills.
"onsumers don;t care whether a com!an+ !ractices sustaina&le de#elo!ment.


A com!an+ that uses child la&orers to manufacturer its !roducts in order to
sta+ num&er one in its industr+ does not !ractice sustaina&le de#elo!ment.
Instructor
E!lanation
:
Sustaina&le de#elo!ment in#ol#es conducting &usiness in a wa+ that !rotects the natural
en#ironment while ma$ing economic !rogress. Sustaina&le de#elo!ment is not limited to
an+ !articular si1e organi1ation. "onsumers are more li$el+ to &u+ from a com!an+ that
has !ro#a&le sustaina&le de#elo!ment than one that does not.


*,
.
Question
:
L&o #ideo game consoles were de#elo!ed through a <oint #enture &etween 9icrosoft and the
WW? 'World Wrestling ?ederation( and first mar$eted in the fall of *>>1. "om!laints a&out the
#ideo game &egan immediatel+ after its introduction. These com!laints ranged from missing !arts
to incorrect !rogramming. It would seem o&#ious that the manufacturer of L&o #ideo game
consoles should ado!t 0000000000 goals.
Student
Answer:




Instructor
E!lanation
:
Rationale: The manufacturer needs 4ualit+ goals &ecause it had missing !arts and incorrect
!rogramming. If 4ualit+ was !resent% there would not &e com!laints li$e these


*-
.
Question
:
In *>>>% the Donda 9otor "om!an+ un#eiled the h+&rid #ersion of the Donda "i#ic.
While the h+&rid #ehicles are #er+ fuel efficient% the+ are also #er+ e!ensi#e to !urchase.
?rom the introduction +ear *>>>% h+&rid #ehicles sales ha#e increased o#er .8> !ercent
with a com!ound annual growth rate of ::.5Q. In *>>,% sales of the "i#ic o#ertoo$ the
To+ota Erius ma$ing it the num&er one h+&rid car in the @.S. ?or +ears Donda e!erienced
tremendous success with their Accords/in fact% Donda cars are re!eatedl+ the to! selling
automo&iles in the @.S. Where would the Donda "i#ic 'h+&rid #ersion( and the Donda
Accord fall in the A"G !roduct !ortfolio matri?
Student
Answer:

The h+&rid "i#ic would &e a classified as a star% and the Accord would &e
classified a cash cow.
The h+&rid "i#ic would &e considered a cash cow% and the Accord would &e
classified as a star.


6ue to the o#erwhelming success of Donda cars% &oth the Accords% and the
h+&rid "i#ics would &e classified as cash cows.
The "i#ic would &e a !ro&lem child% and the Accord would &e a cash cow.
The "i#ic would &e considered a dog% and the Accord would &e classified as a
star.
Instructor
E!lanation
:
The A"G matri is &ased u!on mar$et growth rate and mar$et share. The h+&rid mar$et is
a high growth mar$et with little com!etition. Onl+ To+ota is a com!etitor with the Erius.
The Donda "i#ic h+&rid% is a new com!etitor in this high3growth mar$et% and has slightl+
o#er half of the mar$et share of this mar$et. The #ehicle will re4uire large in<ections of
cash from other !roducts in the Donda line to maintain or increase mar$et share. The
Donda Accord auto is well esta&lished in slower3growth mar$ets and control a significant
!ercentage of mar$et share. Thus% the Accord will &e a cash cow for Donda% and the
re#enues generated from the sale of these cars will &e used to finance the cash3intensi#e
mar$eting of the new h+&rid "i#ic% a star in the A"G matri.


*.
.
Question
:
6uring the "hristmas season% man+ catalog retailers offer &u+ers !rice reductions%
cou!ons% two3for3one &u+ing o!!ortunities andJor free deli#er+. This is &ecause these
catalog retailers o!erate in:
Student
Answer:

!ure com!etition
cross3mar$et com!etition
an oligo!ol+
mono!olistic com!etition
a mono!ol+
Instructor
E!lanation
:
In mono!olistic com!etition the man+ sellers com!ete with su&stituta&le !roducts.
"ou!ons and sales are fre4uentl+ used mar$eting tactics in an attem!t to increase sales


*5
.
Question
:
0000000000 ser#e as guidelines on how to act rightl+ and <ustl+ when faced with moral
dilemmas.
Student
Answer
:
Iaws
Ethics
"ase studies
9entors
Om&udsmen


*8
.
Question
:
A 0000000000 is a !lan that integrates the elements of the mar$eting mi to !ro#ide
goods% ser#ices% or ideas to the !ros!ecti#e &u+ers.
Student
Answer
:






*:
.
Question
:
Which of the following statement &est defines needs and wants?
Student
Answer:

Needs occur when a !erson feels !h+siologicall+ de!ri#ed of something% and
wants are determined &+ a !erson;s $nowledge% culture% or !ersonalit+.
Wants are a su&set of needs.
Wants occur when a !erson feels !h+siologicall+ de!ri#ed of something% and
needs are determined &+ a !erson;s $nowledge% culture% or !ersonalit+.
Needs affect mar$eting% &ut wants do not.
A+ definition% wants are more sociall+ res!onsi&le than needs.
Instructor
E!lanation
E#en though not e#er+one;s needs are the same% needs occur when a !erson feels
!h+siologicall+ de!ri#ed of something such as clothes% food% or shelter. A want is a felt
: need that is sha!ed &+ a !erson;s $nowledge% culture% or indi#idual !ersonalit+.


*=
.
Question
:
Generation L consumers are
Student
Answer:
!eo!le that li$e to rel+ on others
somewhat !rone to etra#agance
!oorl+ educated
self3reliant and entre!reneurial
not generall+ su!!orti#e of racial and seual di#ersit+
Instructor
E!lanation
:
Generation L includes the 1. !ercent of the @.S. !o!ulation &orn &etween 1=5. and 1=85.
The+ are generall+ self3reliant% entre!reneurial% su!!orti#e of racial and seual di#ersit+%
and &etter educated than an+ !re#ious generation. The+ are not !rone to etra#agance.


,>
.
Question
:
The Aoston "onsulting Grou! 'A"G( uses an a!!roach to 0000000000 that anal+1es a
firm;s &usiness units 'called strategic &usiness units% or SA@s( as though the+ were a
collection of se!arate in#estments.
Student
Answer
:
&usiness !ortfolio anal+sis
mar$eting strategic !lanning
mar$et segmentation
stoc$ mar$et in#estment


,1
.
Question
:
The Iemon Tree is a high3fashion &outi4ue selling to!3of3the3line women;s clothing and
accessories. The $e+s to its success include $nowing the customers; changing tastes and
!ro#iding something different from other retailers. In addition% &ecause of the high #alue
of the merchandise% The Iemon Tree;s management is e!loring the use of com!uteri1ed
in#entor+ controls and sales order !rocessing. ?rom this descri!tion% one can infer that the
en#ironmental categor+ of least im!ortance to The Iemon Tree is:
Student
Answer:
economic
regulator+
technological
com!etiti#e
social
Instructor
E!lanation
:
Onl+ regulator+ issues are not mentioned in the 4uestion


,*
.
Question
:
A mar$eting manager;s controlla&le factors/!roduct% !rice% !romotion% and !lace/are the
com!an+;s:
Student
Answer
:






,,
.
Question
:
Aecause there are few sellers% !rice com!etition among firms is not desira&le in which
form of com!etition?
Student
Answer:
Eure com!etition
"ross3mar$et com!etition
9ono!olistic com!etition
9ono!ol+
Oligo!ol+
Instructor
E!lanation
:
Since there are few sellers in an oligo!ol+% !rice com!etition among firms is not desira&le
&ecause it leads to reduced re#enues for all !roducers.


,-
.
Question
:
0000000000 is a trade &etween a &u+er and a seller of things of #alue so that each is &etter
off after the trade than &efore.
Student
Answer
:







,.
.
Question
:
The four utilities are
Student
Answer
:







1
.
Question
:
The North American Industr+ "lassification S+stem 'NAI"S( !ro#ides common industr+ definitions to
facilitate the measurement of economic acti#it+ for the mem&ers of the
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/North American Industr+ "lassification S+stem


*
.
Question
:
A filtering of a consumer;s e!osure% com!rehension% and retention is called
Student
Answer:




Instructor
E!lanation
:
Aecause the a#erage consumer o!erates in a com!le en#ironment% the human &rain attem!ts to organi1e and
inter!ret information with a !rocess called selecti#e !erce!tion% a filtering of e!osure% com!rehension% and
retention


,
.
Question
:
At which stage in the &u+ing decision !rocess would a firm #isit !otential su!!liers to assess their financial
status?
Student
Answer:




Instructor
E!lanation
:
?igure 53, shows that in the alternati#e e#aluation stage !urchasing and engineering !ersonnel #isit with
su!!liers and assess facilities% ca!acit+% 4ualit+ control% and financial status.


-
.
Question
:
0000000000 is the mar$eting of goods and ser#ices to com!anies% go#ernments% or not3for3!rofit organi1ations
for use in the creation of goods and ser#ices that the+ can !roduce and mar$et to others.
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/&usiness mar$eting


.
.
Question
:
The ========== is a group of persons within an organi$ation who participate in the
,uying process and share common goals, risks, and knowledge important to a purchase
decision.
Student
Answer
:






5
.
Question
:
Which of the following statements a&out &rand lo+alt+ is true?
Student
Answer:




Instructor
E!lanation
:
Iearning relates to ha&it formation/the &asis of routine !ro&lem sol#ing. ?urther% there is
a close lin$ &etween ha&its and &rand lo+alt+. Arand lo+alt+ results from the !ositi#e
reinforcement of !re#ious actions. So% a consumer reduces ris$ and sa#es time &+
consistentl+ !urchasing the same &rand


8
.
Question
:
Online trading communities that &ring together &u+ers and su!!liers are called
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/e3mar$et!laces


:
.
Question
:
"ustomer grou!s li#ing in man+ countries or regions of the world that ha#e similar needs or see$ similar
features and &enefits from !roducts or ser#ices are called 0000000000 consumers
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/glo&al consumers


=
.
Question
:
Which of the following statements a&out glo&al &rands is true?
Student
Answer:




Instructor
E!lanation
:
A glo&al &rand is a &rand mar$eted under the same name in multi!le countries with similar and centrall+
coordinated mar$eting !rograms. Glo&al &rands ha#e the same !roduct formulation or ser#ice conce!t%
deli#er the same &enefits to consumers% and use consistent ad#ertising across multi!le countries and cultures.
Glo&al &rands are sometimes tailored to s!ecific cultures or countries.


1>
.
Question
:
*hich of the following is true of the organi$ational purchase decision stage+
Student
Answer:




Instructor
E!lanation
:
Dnlike the short purchase stage in a consumer purchase, the period from supplier
selection to order placement to product deliery can take seeral weeks or een
months. Een after ,ids for components and assem,lies are su,mitted, further
negotiation concerning price, performance, and deliery terms is likely. Two or more
suppliers of the same item might ,e awarded. Suppliers who are not chosen are
informed why their ,ids were not selected


11
.
Question
:
Aeth gi#es 9egan O. allowance a wee$. Then 9egan is ta$en sho!!ing to select what she wants to &u+. If
the item desired costs more than O.% 9egan;s mother suggests she sa#e her mone+ until she has enough sa#ed
to !a+ for the desired item. When 9egan !urchases the item% she is allowed to ma$e her own selection% !a+
for it herself% and engage in interaction necessar+ with the sales cler$. In this wa+% 9egan;s mother
encourages the de#elo!ment of
Student
Answer:




Instructor
E!lanation
:
"onsumer sociali1ation is the !rocess &+ which !eo!le ac4uire the s$ills% $nowledge% and attitudes necessar+
to function as consumers


1*
.
Question
:
To alla+ consumer concern that as!irin use causes an u!set stomach% Aa+er "or!oration successfull+
!romoted the gentleness of its Etra Strength Aa+er Elus as!irin. Aa+er is tr+ing to change the attitude
toward as!irin &+
Student
Answer:





Instructor
E!lanation
:
Aa+er !romoted the gentleness of its as!irin to alla+ consumer concern that using as!irin causes an u!set
stomach. Aa+er was tr+ing to change &eliefs a&out the etent to which a &rand has a s!ecific attri&ute


1,
.
Question
:
:oncert Staging :ompany proides the stage, the roof system, and lighting and sound
for outdoor concerts and theaters. <t is typically hired ,y the organi$ation sponsoring
the eent. *hen the economy slows down, consumers are more likely to sae their
money for a rainy day than ,uy a concert or theater ticket. The num,er of concert
and theater eents determines how many times the company gets to proide its
serices. 9emand for the serices proided ,y :oncert Staging :ompany is
========== demand.
Student
Answer:





Instructor
E!lanation
:
The demand for its serices is drien ,y the sales of tickets to concert'theater
attendees.


1-
.
Question
:
Aoth Donda and To+ota ha#e !lants in the @.S. that use American la&or. This eam!le is an illustration of
Donda and To+ota !racticing
Student
Answer:




Instructor
E!lanation
:
6irect in#estment entails a domestic firm actuall+ in#esting in and owning a foreign su&sidiar+ or di#ision.
Donda and To+ota are domestic firms 'to Ma!an( that own a foreign '@.S.( su&sidiar+ or di#ision


1.
.
Question
:
The uniersity has changed and updated its logo and now finds that it needs to order
new stationery and ,usiness cards for departments and staff of the uniersity. This
purchase would ,e a#
Student
Answer:





Instructor
E!lanation
:
<n the modified re,uy situation, mem,ers of the organi$ation.s ,uying center seek to
change some element of the purchase44product, the price, deliery schedule, or
supplier. *hile the purchase may resem,le a straight re,uy, the changes in the
purchase are usually sufficient to re5uire additional people ,e included in the ,uying
center. This would ,e a modified ,ecause the uniersity is purchasing the same
5uality paper, the only change ,eing the new logo/ undou,tedly seeral people would
hae to approe the look of the new stationery.


15
.
Question
:
"oca3"ola% Wrigle+;s gum% and Ie#i;s <eans sell #irtuall+ the same !roduct in countries around the world.
These are eam!les of which t+!e of international !roduct strateg+?
Student
Answer:





Instructor
E!lanation
:
The !roduct strateg+ of selling #irtuall+ the same !roduct in other countries is called !roduct etension
strateg+. As a general rule% !roduct etension seems to wor$ &est when the consumer mar$et target for the
!roduct is ali$e across countries and cultures/that is% consumers share the same desires% needs% and uses for
the !roduct.


18
.
Question
:
Serologicals is a company that e"tracts anti,odies from ,lood plasma. Those
anti,odies are used ,y Serologicals. customers to make drugs to treat ra,ies, to
immuni$e against hepatitis and to deal with ,lood )h incompati,ility ,etween a
pregnant woman and her un,orn child. <t markets its products to international
markets the same way that it markets them in the D.S. Serologicals is an e"ample of
aFnG ========== firm.
Student
Answer:




Instructor
E!lanation
:

<nternational firms engage in trade and marketing in different countries as
an e"tension of the marketing strategy in its home country.


1:
.
Question
:
9c6onald;s does not sell &eef ham&urgers in its restaurants in India &ecause the cow is considered sacred &+
almost :.Q of the !o!ulation. Instead% 9c6onald;s sells the 9ahara<a 9ac made with chic$en. 9c6onald;s
res!ects Indian 0000000000 &+ not selling &eef in India.
Student
Answer:





Instructor
E!lanation
:
A countr+;s #alues are !ersonall+ or sociall+ !refera&le modes of conduct or states of eistence that are
enduring. This would include the #alue that cows are considered sacred &+ most of the !o!ulation


1=
.
Question
:
When the mar$eting student said% 7It;s reall+ hard for me to get to class on time without a car%7 she was
entering which stage of the consumer decision !rocess?
Student
Answer:




Instructor
E!lanation
:
Ero&lem recognition% the initial ste! in the !urchase decision% is !ercei#ing a difference &etween a !erson;s
ideal and actual situations &ig enough to trigger a decision. The student;s !ro&lem is that she would &e
una&le to get to class on time without a car.


*>
.
Question
:
Which of the following statements re!resents an organi1ational &u+ing decision?
Student
Answer:




Instructor
E!lanation
:
Organi1ational &u+ers are those manufacturers% wholesalers% retailers% and go#ernment agencies that &u+
goods and ser#ices for their own use or for resale. Organi1ational &u+ers include all &u+ers in a nation
ece!t ultimate consumers. Onl+ the owner of a fried chic$en restaurant is an organi1ational &u+er) the other
&u+ers are ultimate consumers.


*1
.
Question
:
Tricon was the restaurant di#ision of Ee!si"o until it was s!un off se#eral +ears ago. Since then Tricon has
o!ened 5%>>> 2?" restaurants a&road. It has 1.: in Indonesia and more than .>> restaurants in "hina. All
are locall+ owned% and the owner !a+s a fee to Tricon. Tricon is engaged in
Student
Answer:




Instructor
E!lanation
:
Tricon has gi#en the local restaurant owners the &enefit of its !atents% trade secrets% etc.% and the owners !a+
Tricon a licensing fee.


**
.
Question
:
1n ad for :onesco.s life insurance asks the 5uestion, 70ow do you plan on supporting
your family after you pass away+8 The ad shows a tom,stone with a sign that offers
the face of the stone as ad space. The ad is intended to appeal to which of the needs
in the hierarchy of needs+
Student
Answer:




Instructor
Safety needs inole self4preseration and physical well ,eing. 6roiding security for
E!lanation
:
one.s family would help to satisfy that need


*,
.
Question
:
9ars% America;s second3&iggest cand+ com!an+% &egan doing &usiness in Bussia in the late 1=:>s. The
Snic$ers &ar is one of the to! selling candies in Bussia and is mar$eted in much the same wa+ as it is in the
@nited States. 9ars is most li$el+ a'n( 0000000000 firm
Student
Answer:





Instructor
E!lanation
:
International firms engage in trade and mar$eting in different countries as an etension of the mar$eting
strateg+ in its home countr+.


*-
.
Question
:
Hou want to &u+ some dr+ &rea$fast cereal% and +ou are in the mood for unsweetened fla$es. The store +ou
go to has three cereals of this t+!e: Eost Toasties% 2ellogg;s "orn ?la$es% and General 9ills; Wheaties. Hou
are familiar with and li$e each of these cereals% so +ou decide to choose 2ellogg;s "orn ?la$es. "ollecti#el+%
what is this grou! of cereal &rands called?
Student
Answer:




Instructor
E!lanation
:
A consideration set is the grou! of &rand that a consumer would consider acce!ta&le from among all the
&rands in the !roduct class of which he or she is aware. In this case% the consumer is familiar with and
considers acce!ta&le the three cereal &rands from Eost% 2ellogg;s% and General 9ills that constitute the
consideration set.


*.Question
Through re!etition in ad#ertising% messages such as 7Ad#il is a headache remed+7 attem!t to lin$ a &rand
'Ad#il( and an idea 'headache remed+( &+ showing someone using the &rand and finding relief. This ad
. :
ma$es use of what t+!e of learning?
Student
Answer:





Instructor
E!lanation
:
"ogniti#e learning in#ol#es ma$ing the connections &etween two or more ideas 'Ad#il and headache
remed+( or sim!l+ o&ser#ing the outcomes of others; &eha#ior and ad<usting +our own accordingl+


*5
.
Question
:
The "hinese tetile industr+ issued a statement recentl+ o!!osing a @.S. go#ernment agenc+;s acce!tance of
an industr+ a!!eal to limit im!orts of "hinese fa&ric !roducts. In other words% the @.S. go#ernment will limit
the amount of "hinese fa&ric that can &e im!orted into the @.S. This is an eam!le of a
Student
Answer:




Instructor
E!lanation
:
A 4uota is a restriction !laced on the amount of a !roduct allowed to enter or lea#e a countr+


*8
.
Question
:
Organi1ational &u+ing &eha#ior
Student
Answer:




Instructor
E!lanation
:
Organi1ational &u+ing &eha#ior is the decision3ma$ing !rocess that organi1ations use to esta&lish the need
for !roducts and ser#ices and to identif+% e#aluate% and choose among alternati#e &rands and su!!liers. There
are im!ortant similarities and differences &etween consumer and organi1ational &u+ing &eha#ior. The fi#e
stages of the organi1ational &u+ing !rocess also a!!l+ to consumer &u+ing. 9ore indi#iduals are in#ol#ed%
su!!lier ca!a&ilit+ &ecomes more im!ortant% and the !ost!urchase e#aluation &eha#ior is more formali1ed
when organi1ations &u+


*:
.
Question
:
It is time for the Bamire1 famil+ to !lan its annual #acation. The father wants to sta+ home to sa#e mone+.
The !aternal grandmother who li#es with them wants to #isit relati#es in New Hor$. The father as$s his
mother to determine how much a tri! to New Hor$ would cost and if the+ could sta+ with relati#es while the+
were there. The wife and the daughter want to go to the &each. Which sentence AEST descri&es the roles
each famil+ mem&er !la+ed in this decision?
Student
Answer:




Instructor
E!lanation
:
The grandmother acted as an information gatherer% influencer% and user. The father acted as a decision ma$er
and user. The wife and daughter !la+ed the roles of influencers and users.


*=
.
Question
:
A 0000000000 is a situation where !roducts are &ought in a lower3!riced countr+ from a manufacturer;s
authori1ed reseller% shi!!ed to higher3!riced countries% and sold through unauthori1ed retailers &elow the
manufacturer;s suggested retail !rice.
Student
Answer:




Instructor
E!lanation
:
Gra+ 9ar$et definition.


,>
.
Question
:
9ar+ was thrilled to &egin her new <o& after she graduated from college. Which of the following !urchases
that she made the da+ &efore she &egins her new <o& would most li$el+ ha#e the greatest !ercei#ed ris$ for
her?
Student
Answer:




Instructor
E!lanation
:
Eercei#ed ris$ is the aniet+ felt &ecause the consumer cannot antici!ate the outcomes of a !urchase &ut
&elie#es there ma+ &e negati#e conse4uences. Eam!les of negati#e conse4uences include the si1e of the
financial outla+ re4uired to &u+ the !roduct% the ris$ of !h+sical harm% the !erformance of the !roduct% and
the !s+chosocial ris$ that friends won;t a!!ro#e the !urchase. In this case% it ma+ &e that her new cowor$ers
will thin$ she is not dressed correctl+ for the <o&


,1
.
Question
:
Students who wear sweatshirts dis!la+ing the Gree$ letters for fraternities or sororities to which the+ &elong
are demonstrating !ride in a'n( 0000000000 grou!
Student
Answer:




Instructor
E!lanation
:
A mem&ershi! grou! is one to which a !erson actuall+ &elongs% including fraternities and sororities% social
clu&s% and the famil+.


,*
.
Question
:
When a com!an+ has decided to enter the glo&al mar$et!lace% it must select a glo&al mar$et entr+ strateg+
&ased on its !rofit !otential 'lower to higher( and the amount of financial commitment% ris$% and mar$eting
control the firm desires 'least to most(. Eosition 7A7 in ?igure 83, is &est identified as
Student
Answer:





Instructor
E!lanation
:
Iicensing has a moderate amount of !rofit !otential and ris$


,,
.
Question
:
2?" in Ma!an altered the sweetness of its coleslaw to a!!eal to Ma!anese tastes. This is an eam!le of which
t+!e of international !roduct strateg+?
Student
Answer:




Instructor
E!lanation
:
"hanging a !roduct in some wa+ to ma$e it more a!!ro!riate for a countr+;s climate or !references is a
!roduct ada!tation strateg+


,-
.
Question
:
<f you wanted to set up a ,usiness importing am,er from Hatia to the Dnited States,
you would hae to plan on paying the D.S. :ustoms Serice roughly (& percent of the
alue of the product as a#
Student
Answer:




Instructor
E!lanation
:
Tariffs, which are a goernment ta" on goods or serices entering a country, primarily
sere to raise prices on imports.


,.
.
Question
:
*hen an elementary school teacher needed to ,uy poster ,oard for her class, she
remem,ered that she had found some poster ,oard at three stores# her local 99
:ents ?nly store, *algreen-s, and at her Family 9ollar Store. *hat term ,est
descri,es the information search method used ,y the teacher+
Student
Answer:




Instructor
E!lanation
:
*hen a person scans his or her memory for preious e"periences with products or
,rands, he or she is engaged in an internal search.


1
.
Question
:
As !roduct ado!ters% laggards t+!icall+
Student
Answer:





Instructor
E!lanation
:
?igure 113- !ro#ides !rofiles of fi#e categories of !roduct ado!ters. Iaggards ha#e a fear
of de&t and neigh&ors and friends are their information sources.


*
.
Question
:
"onsumer !roducts are defined as
Student
Answer:





Instructor
E!lanation
:
2e+ term definition/consumer !roducts


,
.
Question
:
Eac$aging is
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/!ac$aging


-
.
Question
:
The largest num&ers of !roduct ado!ters with res!ect to the diffusion of inno#ation are found among
Student
Answer:




Instructor
E!lanation
:
Earl+ ma<orit+ ado!ters and late ma<orit+ ado!ters each consist of a&out a third of the total
!o!ulation that will ado!t a new !roduct at some !oint during a !roduct life c+cle.


.
.
Question
:
Eac$ages create customer #alue &+ !ro#iding
Student
Answer:




Instructor
E!lanation
:
9a<or &enefits of !ac$aging are the information con#e+ed to consumers% its functional
&enefits such as !rotection or storage% and the !erce!tion created in the consumers; minds.


5
.
Question
:
The life c+cle of a !roduct de!ends on sales to customers. The sha!es of life c+cle cur#es indicate that most
sales occur after the !roduct has &een on the mar$et for some time. The conce!t that some !eo!le are attracted
to a !roduct earl+ while others &u+ it onl+ after the+ see their friends with the !roduct is called
Student
Answer:




Instructor
E!lanation
:
Tet term definition/diffusion of inno#ation


8
.
Question
:
The terms continuous inno#ation% d+namicall+ continuous inno#ation% and discontinuous inno#ation% are
classifications &ased on
Student
Answer:




Instructor
E!lanation
:
A wa+ to define new !roducts is in terms of their effects on consum!tion. This a!!roach classifies new
!roducts according to the degree of learning re4uired &+ consumers.


:
.
Question
:
Effecti#e mar$eting for a !roduct that is considered to &e a continuous inno#ation de!ends on
Student
Answer:




Instructor
E!lanation
:
Effecti#e mar$eting for a !roduct that is considered to &e a continuous inno#ation de!ends
on generating awareness and not com!letel+ reeducating customers.


=
.
Question
:
Organi1ations attem!t to reduce the inconsistenc+ of ser#ice deli#er+ through
Student
Answer:




Instructor
E!lanation
:
Whether the ser#ice in#ol#es ta assistance at DFB Aloc$ or guest relations at the D+att
Begenc+% organi1ations attem!t to reduce inconsistenc+ through standardi1ation and
training.


1>
.
Question
:
The t+!e of !roduct for which the consumer com!ares se#eral alternati#es on such criteria as !rice% 4ualit+%
or st+le is a'n(
Student
Answer:





Instructor
E!lanation
:
Tet term definition/sho!!ing !roducts


11
.
Question
:
Even though Liquid Paper correction fluid is in the __________ stage of the
product life cycle, Gillette has not deleted it from its line because there is still a
residual core of consumers who use the product.
Student
Answer:




Instructor
E!lanation
:
Rationale !ropping a product from a company"s product
line is called product deletion. #t is one of two choices in
the decline stage of the product life cycle.


1*
.
Question
:
What do a securit+ guard% a !lum&er% and a management consultant ha#e in common?
Student
Answer:




Instructor
E!lanation
:
The securit+ guard is uns$illed la&or% the !lum&er is s$illed la&or% and the management
consultant is !rofessional la&or) all are !eo!le3&ased ser#ices. See also ?igure 1>3*.


1,
.
Question
:
Se#eral +ears ago a new consumer !roduct was de#elo!ed/fro1en iced tea on a stic$. The !roduct was a
failure. What was the most li$el+ reason the !roduct failed?
Student
Answer:




Instructor
E!lanation
:
The reasons wh+ new3!roducts fail are: '1( insignificant !oint of difference) '*(
incom!lete mar$et and !roduct definition &efore !roduct de#elo!ment starts) ',( too little
mar$et attracti#eness) '-( !oor eecution of the mar$eting mi) '.( !oor !roduct 4ualit+)
'5( not satisf+ing customer needs on critical factors) '8( &ad timing) and ':( no economical
access to &u+ers. The mar$et for fro1en iced tea on a stic$ a!!arentl+ was sim!l+ too
small.


1-
.
Question
:
Which of the following is the &est eam!le of a s!ecialt+ !roduct?
Student
Answer:




Instructor
E!lanation
:
A Ieus IS ->> luur+ automo&ile is #er+ e!ensi#e% a#aila&le at onl+ a few selected
dealers% !romoted on the &asis of uni4ueness and status% and is !urchased #er+
infre4uentl+ with etensi#e time and effort regarding the decision !rocess% thus fitting the
definition of a s!ecialt+ !roduct.


1.
.
Question
:
$hich of the following products is the best e%ample of a product that might
e%perience an introduction, a decline, and a reintroduction as part of its
normal product life cycle&
Student
Answer:




Instructor
E!lanation
:
Rationale $omen's and men's clothing are most li(ely to
be fashion products. )ashion products are most li(ely to
e%perience the product life cycle described in the
question.


15
.
Question
:
$hat do a landscaping service, an automated carwash, and a limousine
service have in common&
Student
Answer:




Instructor
E!lanation
:
Rationale *he landscaping service requires truc(s, lawn
mowers, and trimming and pruning equipment. *he
carwash required equipment, as does the limousine
service.


18
.
Question
:
When Thelma got her dri#e3thru order at the fast3food restaurant% she thought the em!lo+ee who too$ her
mone+ and ga#e her order was cold and unfriendl+. The food was good &ut was o#ershadowed &+ the cler$;s
demeanor. E#er+ time she has the o!!ortunit+% she sa+s something derogator+ a&out the restaurant &ecause
she does not distinguish the ser#ice deli#erer 'the em!lo+ee who !re!ared her food and ga#e it to her( from
the ser#ice itself 'the fast3food restaurant(. Thelma is ha#ing a !ro&lem with which uni4ue characteristic of
ser#ices?
Student
Answer:




Instructor
E!lanation
:
The inse!ara&ilit+ of ser#ices means consumers cannot se!arate the ser#ice from the
deli#erer of the ser#ice.


1:
.
Question
:
*o help consumers assess and compare its airline services, )rontier +irlines
uses personable animal characters in its advertising, thus helping to deal with
the __________.
Student
Answer:





Instructor
E!lanation
:
Rationale ,ervices are intangible- that is, they can't be
held, touched, or seen before the purchase decision
process. *o help consumers assess and compare
services, mar(eters try to ma(e them tangible or show
the benefits of the service. )rontier +irlines sells
perishable and intangible transportation from one point
to another and tries to ma(e the service more tangible
with the personable animals shown in their advertising
campaigns.


1=
.
Question
:
Se#eral +ears ago% General 9ills introduced ?ingos% a sweetened cereal fla$e a&out the
si1e of a corn chi!. "onsumers were su!!osed to snac$ on them dr+% &ut the+ didn;t. What
was the most li$el+ reason the !roduct failed?
Student
Answer:




Instructor
E!lanation
:
The reasons wh+ new3!roducts fail are: '1( insignificant !oint of difference) '*(
incom!lete mar$et and !roduct definition &efore !roduct de#elo!ment starts) ',( too little
mar$et attracti#eness) '-( !oor eecution of the mar$eting mi) '.( !oor !roduct 4ualit+)
'5( not satisf+ing customer needs on critical factors) '8( &ad timing) and ':( no economical
access to &u+ers. The !oint of difference was not im!ortant enough to get the consumers
to gi#e u! eating com!eting snac$s such as !otato chi!s% or "heerios from the &o.


*>
.
Question
:
9r. "lean is an anti&acterial cleaning li4uid for home use. The manufacturer of 9r. "lean &elie#ed the
addition of S!ar$ling A!!le3Scented 9r. "lean to the 9r. "lean !roduct line% would &e
Student
Answer:




Instructor
E!lanation
:
The ?T" suggests that the term new &e limited to si months. The !roduct is not a discontinuous inno#ation
&ecause consumers will not ha#e to learn entirel+ new consum!tion !atterns to use the !roduct. As a new3
!roduct item% it would ha#e a new S2@ 'stoc$ $ee!ing unit(.


*1
.
Question
:
*he General .ills /etty 0roc(er brand of 1riginal ,upreme brownie mi% with
2ershey"s chocolate is branded using which strategy&
Student
Answer:




Instructor
E!lanation
:
Rationale 0o3branding is the pairing of two brand names
of two manufacturers on a single product.


**
.
Question
:
+ few years ago $ho $ants to /e a .illionaire premiered as the first nighttime
game show in a couple of decades. 1nce the show became a hit and televised
several nights a wee(, other networ(s quic(ly created their own version of
what they hoped to be a successful game show format. Greed and *wenty3
1ne are the names of but two of the new shows that were created to compete
with $ho $ants to /e a .illionaire. +t this point in time the nighttime
televised game show entered which stage of its product life cycle&
Student
Answer:





Instructor
E!lanation
:
Rationale *he growth stage is characteri4ed by the
appearance of competitors


*,
.
Question
:
,arah has a bac(ache due to overe%ertion. ,he believes a massage would
loosen her bac( muscles and ma(e her feel better. ,he is concerned because
a massage unli(e a pair of shoes cannot be felt before she buys it. $hich
characteristic of services is she concerned about&
Student
Answer:




Instructor
E!lanation
:
Rationale ,ervices are intangible- that is, they can"t be
held, touched, or seen before the purchase
decision.#nteractive television with video on3demand
capabilities will change how people watch television and
how consumers access the #nternet.


*-
.
Question
:
1pera.com introduced a new $eb browser that can be easily customi4ed to do
what you want it to do5such as suppress all pop3up ads and retrieve
previously visited websites quic(ly. 1pera is spending a lot of money to ma(e
potential consumers aware of the e%istence of a $eb browser that can be
customi4ed. ,ales have been slow to rise over the past year, and profit has
yet to be achieved. #n what stage of the product life cycle is this product
category&
Student
Answer:




Instructor
E!lanation
:
Rationale +t the introduction stage there is very slow
sales growth, little or no profitability, and the (ey
promotional ob6ective is to try to inform consumers of
the product's e%istence.


*.
.
Question
:
Wh+ would the manufacturer of a new all3natural ingredient sham!oo and conditioner !ut free sam!les of the
!roduct in Sunda+ news!a!ers?
Student
Answer:




Instructor
E!lanation
:
?ree sam!les are one of the most !o!ular means to gain consumer trial% and it is logical
that increased consumer trial will lead to increased ado!tion.


*5
.
Question
:
$hen consumers thin( of 2arley3!avidson, the image of a masculine, non3
conformist is the li(ely associated with that brand name. $ith the 7espa
motorscooters, the image is more li(ely to be a brainy environmentalist that
wears polyester and soc(s that don't match. /oth 7espa and 2arley3!avidson
Student
Answer:





Instructor
E!lanation
:
Rationale /rand personality is a set of human
characteristics associated with a brand name.


*8
.
Question
:
The ?edE &rand suggests the !ossi&ilit+ that it is go#ernment sanctioned and fast. This !erce!tion is
im!ortant &ecause of which uni4ue characteristic of ser#ices?
Student
Answer:




Instructor
E!lanation
:
Ser#ices are intangi&le. Therefore% the &rand name or identif+ing logo of the organi1ation
is !articularl+ im!ortant in consumer selection &ecause it is more difficult to descri&e what
is &eing !ro#ided.


*:
.
Question
:
!uring a recent shopping trip to the local *arget store, Pat noticed several
things. )irst, she noticed that the store offered a tremendous variety of
products, including toys, pet foods, clothing for men, women, and children,
health and beauty aids, small household appliances, automotive products, and
more. )urther, Pat noticed *arget offered an array of different products within
each product group. Each product group at *arget is an e%ample of a8n9
__________- all of the product groups together constitute *arget's __________.
Student
Answer:




Instructor
E!lanation
:
Rationale + product line is a group of products that are
closely related, that satisfy a class of needs, are used
together, are distributed through similar outlets, or are
purchased by the same customer group. + product mi%
includes all the product lines offered by a company.


*=
.
Question
:
Erego recentl+ introduced a Easta Aa$e Sauce% which was made so that it was not necessar+ to !recoo$ the
!asta &efore &lending !asta% sauce% meat% and cheese in a casserole. Iegall+% this !roduct would onl+ &e
considered new
Student
Answer:





Instructor
E!lanationThe ?T" suggests that the term 7new7 &e limited to si months after the !roduct enters
: regular distri&ution. In this case% national distri&ution could &e understood to mean
7regular distri&ution.7


,>
.
Question
:
Sara Aurns is the owner of a com!an+ called The S!ice is Bight and was loo$ing for a new3!roduct to go
with her com!an+;s line of food condiments when a customer suggested com&ining s!ices with tea. This is an
eam!le of
Student
Answer:




Instructor
E!lanation
:
Good ideas can originate almost an+where. In the idea generation stage of the new3!roduct
!rocess% ideas can &e o&tained from customers% em!lo+ees% su!!liers% research and
de#elo!ment% and com!etitors.


,1
.
Question
:
$hich of the : P's is a variable that health care providers could employ to
reach their mar(et segments&
Student
Answer:





Instructor
E!lanation
:
Rationale #mage advertising 8promotion9, mobile units
8distribution9, toll3free information lines, speciali4ed
treatment centers 8product9, lu%ury pac(ages 8pricing9,
and no3frills services are all e%amples of mar(eting mi%
changes for a health care provider.


,*
.
Question
:
.ichelin and Goodyear have developed a ;run3flat< tire that can travel up to
=> miles at == .P2 after suffering total air loss. *his is an e%ample of
Student
Answer:




Instructor
E!lanation
:
Rationale .ichelin and Goodyear have added product
features and used high quality product materials to
develop this tire.


,,
.
Question
:
A ,9 researcher wor$ed with uni#ersit+ students to de#elo! the Eost3it
T
?lag Dighlighter. Dis team
e#aluated the technical feasi&ilit+ of the !ro!osed design and whether the idea met the new3!roduct
o&<ecti#es. In which stage of the new3!roduct !rocess was this !roduct?
Student
Answer:




Instructor
E!lanation
:
In the screening and e#aluation stage of the new3!roduct !rocess% there is an internal
a!!roach. In this stage% the firm e#aluates the technical feasi&ilit+ of the !ro!osal and
whether the idea meets the o&<ecti#es defined in the new3!roduct strateg+ de#elo!ment
ste!.


,-
.
Question
:
A new eercise #ideo contends that with one da+ of fasting and one one3hour !eriod of intense
cardio#ascular eercise% the a#erage indi#idual can lose fi#e !ounds a wee$ and &e in !ea$ health within si
months of starting the !rogram. 0000000000 &arriers will doom the new !roduct to failure &ecause the
!roduct;s claims are not consistent with what consumers do and how the+ thin$.
Student
Answer:




Instructor
E!lanation
:
@sage &arriers occur &ecause the !roduct is not com!ati&le with eisting ha&its. Kalue
&arriers occur &ecause the !roduct !ro#ides no incenti#e to change. Es+chological &arriers
result from cultural differences. Bis$ &arriers include !h+sical% economic% or social
&arriers to !roduct acce!tance.


,.
.
Question
:
$hich of the following is the best e%ample of a convenience good&
Student
Answer:




Instructor
E!lanation
:
Rationale *oothpaste is relatively ine%pensive, widely
available, advertised and promoted heavily over the
years since branded substitutes e%ist, and is purchased
frequently with little time and effort, so it is a
convenience good.


1
.
Question
:
6emand3oriented a!!roaches weigh factors underl+ing e!ected 0000000000 more hea#il+ than factors such
as cost% !rofit% and com!etition when selecting a !rice le#el.
Student
Answer:





Instructor
E!lanation
:
6emand3oriented a!!roaches weigh factors underl+ing e!ected customer tastes and
!references.


*
.
Question
:
Target return3on3sales !ricing is
Student
Answer:




Instructor
E!lanation
:
Tet term definition/target return3on3sales !ricing


,
.
Question
:
6emand factors are factors that determine
Student
Answer:




Instructor
E!lanation
:
Tet term definition/demand factors


-
.
Question
:
@sing 0000000000% man+ retailers deli&eratel+ sell !roducts &elow their normal !rices 'and sometimes &elow
cost( to attract attention and induce additional store traffic.
Student
Answer:




Instructor
E!lanation
:
Ioss leader !ricing is deli&eratel+ !ricing a !roduct &elow its customar+ !rice to attract
consumer attention to it. It is ho!ed that customers will &u+ other% higher3margin !roducts
while in the store.


.
.
Question
:
?actors that limit the range of !rices a firm ma+ set are called
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/!ricing constraints


5
.
Question
:
The !ractice of echanging goods and ser#ices for other goods and ser#ices rather than for mone+ is called
Student
Answer:




Instructor
E!lanation
:
Tet term definition/&arter


8
.
Question
:
Three ma<or t+!es of s!ecial ad<ustments to list or 4uoted !rice are
Student
Answer:





Instructor
E!lanation
:
The three ma<or t+!es of s!ecial ad<ustments to list or 4uoted !rice are discounts%
allowances% and geogra!hical ad<ustments.


:
.
Question
:
The ratio of !ercei#ed &enefits to !rice is called
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/#alue


=
.
Question
:
Which of the following is NOT a demand3oriented a!!roach to !ricing?
Student
Answer:




Instructor
E!lanation
:
"ustomar+ !ricing is a com!etition3oriented a!!roach to !ricing.


1>
.
Question
:
Target !ricing is the result of a manufacturer 0000000000 in a !roduct to achie#e the target !rice.
Student
Answer:




Instructor
E!lanation
:
Tet term definition/target !ricing


11
.
Question
:
Foreer Iuilting is a small company that makes 5uilting kits priced at $1(& each.
FThere is no 5uantity discount.G The costs of the materials that go into each kit are
$JB. <t costs $B in la,or to assem,le a kit. The company has monthly e"penses of
$1,&&& for rent and insurance, $(&& for heat and electricity, $B&& for adertising in
5uilting maga$ines, and $J,B&& for the monthly salary of its owner. <f Foreer Iuilting
sells 1B& kits in a gien month, its monthly profit will ,e#
Student
Answer:





Instructor
E!lanation
:
)ationale# 6rofit K total reenue 4 total cost K Funit price " 5uantity soldG 4 Ffi"ed cost
L aria,le costG K $1%,&&& 4 F$M(&& L $N,B&&G K $J,;&&. The aria,le cost is the
la,or and materials for each kit F$B L $JBG times the num,er of kits sold F1B& kitsG or
$B& " 1B& K $N,B&&. The fi"ed costs are $1,&&&, $(&&, $B&&, and $JB&&K$M(&&.
The profit is $J,;&& for the month.


1*
.
Question
:
The A!!le iEhone was introduced as a new !roduct at an initial !rice of O5>>. Eeo!le waited in line
o#ernight so the+ could &e one of the first to own these uni4ue !hones. Which !ricing strateg+ did A!!le use
to hel! recou! its research and de#elo!ment costs for the !hone?
Student
Answer:




Instructor
E!lanation
:
The conditions fa#oring s$imming !ricing are most li$el+ to eist when a new !roduct is
!rotected &+ !atent or co!+right or its uni4ueness is understood and a!!reciated &+
customers as is the case with the iEhone.


1,
.
Question
:
The fashion ,uyer for 2eiman Marcus is in <taly to iew the new collections and to
order for the coming season. <n Milan, she negotiates a good price for a 5uantity of
shoes in a range of si$es and styles, F?A factory. This means that
Student
Answer:




Instructor
E!lanation
:
)ationale# *ith F?A factory FF?A origin pricingG the title to the goods passes to the
,uyer at the point of loading, so 2eiman Marcus ,ecomes responsi,le for picking the
specific mode of transportation, for all the transportation costs, and for su,se5uent
handling of the shoes.


1-
.
Question
:
1 small gasoline station manager o,seres that while gasoline sales hae ,een steady,
the serice side of her ,usiness has fallen off and mechanics are often idle. She
decides to offer a promotion44an oil change for $1& with a coupon mailed to %&&
households in a (4mile radius from her station. The $1& will just coer the costs of
the oil change, and the cost of printing and mailing is $1&&&. She hopes the
promotion will increase regular maintenance serice calls, whose aerage price is $J&
F1erage materials and la,or costs per jo, is $;&.G 0ow many additional maintenance
serice jo,s must result for the promotion to ,reak een+ F9isregard opportunity
costs, goodwill effects, and any additional reenues.G
Student
Answer:




Instructor
E!lanation
:
)ationale# <ncremental 2o. of Oo,s K E"tra Fi"ed :ost ' 6rice 4 D@: K 1&&& ' J& 4 ;&
K 1&& maintenance jo,s


1.
.
Question
:
When Dallmar$ cards introduced a line of O>.== cards 'a&out half the !rice of the !re#iousl+ least e!ensi#e
cards sold &+ Dallmar$(% the greeting card com!an+ was tr+ing to a!!eal to a mass mar$et that was !rice
sensiti#e. Dallmar$ was using a 0000000000 !ricing strateg+.
Student
Answer:




Instructor
E!lanation
:
Eenetration !ricing is the setting of a low initial !rice on a new !roduct 'ine!ensi#e
greeting cards( to a!!eal immediatel+ to the mass mar$et.


15
.
Question
:
Bather than &illing clients &+ the hour% some law+ers and their clients agree on a fied fee &ased on e!ected
costs !lus a !rofit for the law firm. Which !ricing method are the+ using?
Student
Answer:




Instructor
E!lanation
:
The rising cost of legal fees has !rom!ted some law firms to ado!t a cost3!lus !ricing
a!!roach.


18
.
Question
:
If +ou were to &u+ fi#e dwarf !each trees from the Star$ Aros. fruit trees and landsca!ing catalog in fi#e
se!arate orders% +ou will !a+ O1>:.==% &ut if +ou order its assortment '1 each from fi#e different dwarf !each
trees(% +ou !a+ O:=.==. Star$ Aros. uses
Student
Answer:




Instructor
E!lanation
:
Aundle !ricing is the mar$eting of two or more !roducts in a single !ac$age !rice. Aundle
!ricing is &ased on the idea that consumers #alue the !ac$age more than the indi#idual
items. This is due to &enefits recei#ed from not ha#ing to ma$e se!arate !urchases and
enhanced satisfaction from one item gi#en the !resence of another. This is an eam!le of
&undle !ricing/the mar$eting of the fi#e dwarf trees at a single 7!ac$age7 !rice.


1:
.
Question
:
Southern gardeners hae a preconceied idea on what they will pay for pine ,ark
mulch that they ,uy at their local gardening supply store to keep the weeds down in
their gardens. <f the price ,eing charged is not within a narrow range that they feel is
appropriate, they will make su,stitutions44newspaper, grass clippings or some other
kind of ground coering. *hen pricing pine ,ark mulch, a garden supply retailer
should use#
Student
Answer:





Instructor
E!lanation
:
)ationale# :ustomary pricing is a method of pricing ,ased on a product.s tradition,
standardi$ed channel of distri,ution, or other competitie factors.


1=
.
Question
:
1ce Shoe :ompany sells heel replacement kits for men.s shoes. <t has fi"ed costs of
$1& million and unit aria,le costs of $B per pair. <f the company charges $1B per
pair, how many pairs must it sell to ,reak een+
Student
Answer:




Instructor
E!lanation
:
)ationale# The ,reak4een point is calculated as fi"ed costs diided ,y price minus
unit aria,le costs, or 1&,&&&,&&&'F1B4BG K 1,&&&,&&&.


*>
.
Question
:
The 6recision *riting <nstruments :ompany makes two pen designsCthe :ordoa
design and the Saannah design. These data apply, regardless of which of two pen
designs is ,eing implemented. Materials cost per pen is $M. Ha,or cost per pen is
$B. 6roduction oerhead is $1,&&&,&&&. 1dertising and promotion is $1,&&&,&&&.
Marketing research has estimated the following demand functions for the ne"t year of
sales for the two pen designs where I represents demand in thousands and 6
represents price. For the :ordoa design, I K 1B& 4 (.B6. For the Saannah design,
I K 1NB 4 (.16. *hat are the total costs for sales of B&&,&&& units of the :ordoa
design+
Student
Answer:




Instructor
E!lanation
:
)ationale# The demand function of each design is irreleant. The answer is Total
costs K Fi"ed costs L @aria,le costsK F1,&&&,&&& L1,&&&,&&&G L FB&&,&&& units "
$11'unitG K $N,B&&,&&&


*1
.
Question
:
Hour local instant !hotoco!+ing ser#ice charges 1> cents a co!+ for co!ies u! to a 4uantit+ of *.% = cents a
co!+ for *5 to 1>> co!ies% and : cents a co!+ for 1>1 co!ies or more. What $ind of ad<ustment to list or
4uoted !rices is the !hotoco!+ing ser#ice using?
Student
Answer:




Instructor
E!lanation
:
Quantit+ discounts are reductions in unit costs for a larger order. The 4uestion !ro#ides an
eam!le of 4uantit+ discounts.


**
.
Question
:
*hich of the following statements a,out geographical adjustments to price is correct+
Student
Answer
:







*,
.
Question
:
1 radio adertisement features a female ,uyer who is ery enthusiastic a,out the
pricing policies of the Saturn automo,ile dealers. <n the testimonial4type
adertisement, the car ,uyer laments a,out the difficulty she e"perienced with other
car dealers in haggling oer a final price for an auto. <n comparison, the ,uyer touts
the ease with which she arried at a final price for her new Saturn automo,ile44she
simply entered the show room, asked for the price of the car she preferred, and the
sales person 5uoted her the selling price. 2o matter which Saturn dealer she isited,
the ,uyer For any other ,uyer for that matterG would ,e 5uoted the same price for the
same automo,ile. The adertisement represents Saturn.s ========== policy.
Student
Answer:




Instructor
E!lanation
:
)ationale# The idea is simple# no matter which Saturn dealer a customer might isit, a
gien model of Saturn car is priced the same.


*-
.
Question
:
1ssume it costs Hady Marion Seafood, <nc. $;& to catch, process, free$e, package, and
ship B4pound packages of 1laskan salmon. <t uses a M& percent markup on its salmon
products and charges customers $J% for a postage4paid acuum4sealed package.
*hat type of pricing does Hady Marion Seafood use+
Student
Answer:




Instructor
E!lanation
:
)ationale# Standard markup pricing adds a fi"ed percentage to the cost of all items in
a specific product class FB4pound packages of salmonG.


*.
.
Question
:
Se#eral com!anies !roduce late glo#es that are used in a #ariet+ of different industries. If one of the glo#e
manufacturers decreases its !rice &+ <ust a few !ercentage !oints% it will result in a significant increase in
4uantit+ demanded. The demand for late glo#es is
Student
Answer:




Instructor
E!lanation
:
Elastic demand eists when a slight decrease in !rice results in a relati#el+ large increase
in demand% or units sold.


*5
.
Question
:
1mpro4Mag is a small company that makes materials for safely controlling ha$ardous
spills of all kinds. <t sells these items as a neutrali$ing kit that priced at $1(& each.
FThere is no 5uantity discount.G The costs of the materials that go into each kit are
$JB. <t costs $B in la,or to assem,le a kit. The company has monthly e"penses of
$1,&&& for rent and insurance, $(&& for heat and electricity, $B&& for adertising in
trade journals, and $;,B&& for the monthly salary of its owner. 1mpro4Mag.s aerage
reenue per unit is#
Student
Answer:




Instructor
E!lanation
)ationale# 1erage reenue is the aerage amount of money receied for selling one
unit of the product, or simply the price of this unit44in this case, $1(&.
:


*8
.
Question
:
1 company that manages apartments decides to ,uy 1B new dishwashers at a list
price of $BB& each as replacements for old dishwashers in a small apartment comple"
it owns. Aecause the company is ,uying more than 1& dishwashers, it is eligi,le for a
$1B& per unit 5uantity discount. Financing charges total $(& per unit. The company
gets $1& per dishwasher for the 1B dishwashers traded in. *hat is the actual price
the company will pay for each dishwasher+
Student
Answer:




Instructor
E!lanation
:
)ationale# Dsing the price e5uation. 6rice K Hist price 4 9iscounts and allowances L
E"tra FeesK $BB& 4 F$1B& 5uantity discount L $1& trade inG L $(& financingK BB& 4
F1B& L 1&G L (&K $J1&


*:
.
Question
:
1 new car dealer can offer a su,stantial reduction in the list price of a new Ford pickup
truck ,y offering you a ========== of $;,&&& for your 19%% :amaro.
Student
Answer:




Instructor
E!lanation
:
)ationale# This is a description of a situation inoling a trade4in allowance.


*=Question
If the "EO of the "loro "om!an+ were to sa+% 7We want to control 5> !ercent of the &leach mar$et within
. :
the net fi#e +ears%7 he would ha#e set a 0000000000 !ricing o&<ecti#e.
Student
Answer:




Instructor
E!lanation
:
The "EO has set a numerical target for the !ercentage of the total &leach mar$et%
including his own sales% which is one definition of mar$et share.


,>
.
Question
:
6atty ?.)ourke hired an attorney to represent her in a court case inoling an auto
accident. The attorney charged ?.)ourke a fee for his serices. Terry Thomas needed
a haircut44the local stylist charged him $1( for her serices. 1aron Mathison mowed
his neigh,or.s lawn/ in e"change, the neigh,or roto4tilled Mathison.s garden. The
attorney fees paid ,y ?.)ourke, the $1( charged ,y the hair stylist, and e"change of
lawn mowing for garden tilling are e"amples of#
Student
Answer:





Instructor
E!lanation
:
)ationale# <n the marketing realm, price is the money, goods, or serices e"changed
,etween two or more parties for the ownership or use of a good or serice. Oust as a
customer pays a specific monetary price for physical product like a loaf of ,read or a
,o" of cereal, the price of a haircut serice might ,e $1(. The price of getting one.s
garden roto4tilled might take the form of ,arter44where in e"change for one serice or
product no money changes hands, ,ut the parties e"change serices or goods.


,1
.
Question
:
An ad cam!aign &+ Sua#e sham!oo as$ed tele#ision #iewers to identif+ the hair that was sham!ooed and
conditioned with Sua#e !roducts and the hair on which e!ensi#e salon hair3care !roducts were used. The
idea of the ad was that a !erson could not tell &+ loo$ing that a woman was using the much chea!er Sua#e
&rand. A+ ma$ing !rice its selling !oint% Sua#e is most li$el+ using
Student
Answer:




Instructor
E!lanation
:
The !romotional cam!aign for Sua#e im!lies that its !rices are significantl+ &elow those
of e4ual !roducts on the mar$et% a &elow3mar$et !ricing strateg+.


,*
.
Question
:
A manufacturing com!an+ that introduces a !roduct must $now or antici!ate what s!ecific !rice its
0000000000 currentl+ charge or will charge in the future.
Student
Answer:




Instructor
E!lanation
:
A firm must $now or antici!ate what s!ecific !rice its !resent and !otential com!etitors
are charging now or will charge.


,,
.
Question
:
0allmark was the official supplier of flowers at the last *inter ?lympics. <t was the
first time that it has participated in the ?lympics. 0allmark presented each ?lympic
winner with a special ,ou5uet of roses designed to resem,le the ?lympic torch.
:onsumers can ,uy a smaller ersion of this same ,ou5uet at the 0allmark we,site
for $NJ.9B. The ?lympic ,ou5uet that consumers can ,uy contains two do$en yellow
roses, yet you can ,uy two do$en yellow roses for less than $;B at most
supermarkets. <f 0allmark is treating the ?lympic ,ou5uet as an innoatie product,
then it is using which demand4oriented approach to pricing
Student
Answer:




Instructor
E!lanation
)ationale# Skimming pricing is appropriate when there are enough prospectie
customers who are willing to ,uy the product immediately at the high price, the high
initial price will not attract competitors, and customers interpret the high price as
:
signifying high 5uality Fplaying off the prestige associated with the ?lympicsG.


,-
.
Question
:
1t a price of $; each, S0P6E maga$ine sells 1.(B million copies of its maga$ine
targeted to young women seeking a healthier lifestyle. <f the price per issue is
increased to $;.(B each, only 1 million copies will ,e sold. Fi"ed costs are $1 million
and unit aria,le costs are $&.B& per maga$ine. :alculate the marginal reenue for
S0P6E maga$ine at the higher price.
Student
Answer:




Instructor
E!lanation
:
)ationale# Marginal reenue is the addition to reenue ,y selling one more unit.
Aecause each additional unit sold ,rings in $;.(B more, the marginal reenue is $;.(B
per unit, which is also the aerage reenue per unit and price per unit for this
pro,lem.


,.
.
Question
:
The prices for all furniture sold at 1merican Furniture *arehouse end in $9. 1merican
Furniture *arehouse uses#
Student
Answer:





Instructor
E!lanation
:
)ationale# ?dd4een pricing inoles setting prices a few dollars or cents under an
een num,er.


1Question
Indirect channels for consumer goods
. :
Student
Answer:




Instructor
E!lanation
:
Tet term definition/indirect channels


*
.
Question
:
The three &asic functions !erformed &+ intermediaries are
Student
Answer:




Instructor
E!lanation
:
Intermediaries ma$e !ossi&le the flow of !roducts from !roducers to &u+ers &+ !erforming
three &asic functions. The+ are: '1( transactional33&u+ing% selling% and ris$ ta$ing) '*(
logistical/assorting% storing% sorting% trans!orting) and ',( facilitating33ma$ing goods and
ser#ices more attracti#e to &u+ers through financing% grading% and mar$eting information
and research.


,
.
Question
:
Which of the following is an eam!le of nonstore retailing?
Student
Answer:




Instructor
E!lanation
:
Nonstore retailing occurs outside a retail outlet% such as through automatic #ending% direct
mail% catalogs% tele#ision home sho!!ing% online retailing% telemar$eting% and direct
selling.


-
.
Question
:
When a retailer owns a manufacturing o!eration% it is called
Student
Answer:




Instructor
E!lanation
:
Tet term definition/&ac$ward integration


.
.
Question
:
When a channel mem&er &+!asses another mem&er and sells or &u+s !roduct direct% this !ractice is &est
termed
Student
Answer:





Instructor
E!lanation
:
2e+ term definition/disintermediation


5
.
Question
:
A'n( 00000 is an+ intermediar+ with legal authorit+ to act on &ehalf of the manufacturer.
Student
Answer:




Instructor
E!lanation
:
?igure 1,31 states that an agent or &ro$er is an+ intermediar+ with legal authorit+ to act on
&ehalf of the manufacturer.


8
.
Question
:
The 0000000000 descri&es how new retail outlets enter the mar$et.
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/wheel of retailing


:
.
Question
:
The !ur!ose of a #ertical mar$eting s+stem is to
Student
Answer:




Instructor
E!lanation
:
Kertical mar$eting s+stems are !rofessionall+ managed and centrall+ coordinated
mar$eting channels designed to achie#e channel economies and maimum mar$eting
im!act.


=
.
Question
:
Which of the following statements a&out cor!orate chains is true?
Student
Answer:




Instructor
E!lanation
:
"or!orate chains are multi!le outlets under common ownershi!% use centrali1ed decision3
ma$ing% and are a&le to negotiate with su!!liers for good ser#ice or #olume discounts.
"onsumers &enefit &ecause there are multi!le outlets with similar merchandise and
consistent management !olicies.


1>
.
Question
:
One in#entor+ management a!!roach assigns a manager with the res!onsi&ilit+ for selecting all !roducts that
consumers in a mar$et segment might #iew as su&stitutes for each other% with the o&<ecti#e of maimi1ing
sales and !rofits for that set of !roducts. This is called
Student
Answer:




Instructor
E!lanation
:
2e+ term definition/categor+ management


11
.
Question
:
A regional &a$er+ ma$es organic &reads and muffins. It feels the choice of distri&ution channel is critical to
the !roduct;s success% es!eciall+ since it wants to ha#e the !roduct distri&uted nationall+. Dowe#er% it will
ta$e some time &efore sales ta$e off% and it wants to ma$e sure the mar$eting !rogram is consistent
e#er+where. It should use
Student
Answer:




Instructor
E!lanationSelling agents re!resent a single !roducer and are res!onsi&le for the entire mar$eting
: function of that !roducer. Selling agents are often used in the food industr+% and truc$
<o&&ers often handle &a$er+ items.


1*
.
Question
:
Which of the following statements descri&es the $e+ difference &etween merchant wholesalers and agents
and &ro$ers?
Student
Answer:




Instructor
E!lanation
:
@nli$e merchant wholesalers% agents and &ro$ers do not ta$e title to merchandise and
t+!icall+ !ro#ide fewer channel functions.


1,
.
Question
:
IA9 has long &een !ercei#ed as the leader in com!uter technolog+. As such% for man+ +ears IA9
com!uters were a#aila&le onl+ from selected% authori1ed IA9 retailers. "urrentl+% IA9 has
changed its distri&ution strateg+. "onsumers can now !urchase IA9 com!uters at se#eral well3
$nown de!artment and discount stores% including Wal39art and 239art% located throughout the
countr+. Initiall+% IA9 em!lo+ed 0000000000 distri&ution and made its !roducts a#aila&le onl+
through a single retail outlet in s!ecific locations. "urrentl+% as com!uters ha#e &ecome more of a
sho!!ing good% IA9 is using 0000000000 distri&ution% as it see$s to &roaden the degree of its
distri&ution and ma$e its com!uters a#aila&le in se#eral retail outlets in s!ecific areas
Student
Answer:




Instructor
E!lanation
:
Rationale: 9ar$eters see$ to achie#e the &est co#erage of their target mar$ets &+ selecting the
t+!e and densit+ of intermediaries used at the retail le#el. Eclusi#e distri&ution in#ol#es the use
of one s!ecific retailer in a certain geogra!hic region as the sole outlet for a !roduct. Such a
distri&ution strateg+ ma+ &e used to create or maintain an image of mar$et leadershi! or cutting3
edge !roduct de#elo!ment. Selecti#e distri&ution means that a mar$eter chooses a select few retail
esta&lishments in s!ecific geogra!hic locations to distri&ute sho!!ing goods.


1-
.
Question
:
9an+ organi1ations ha#e reali1ed that customer ser#ice is a $e+ element of su!!l+ chain
management. ?irms the world o#er ha#e disco#ered that customer ser#ice is closel+ related to
customer satisfaction and the sale of goods and ser#ices. The logistics manager who see$s to
!ro#ide clients with com!lete customer ser#ice must satisf+ those clients in terms of:
Student
Answer:




Instructor
E!lanation
:
Rationale: "ustomer ser#ice in a su!!l+ chain setting includes de!enda&ilit+% communication%
time and con#enience


1.
.
Question
:
Oay stops at the shopping mall to purchase a new pair of jeans from the 9iesel store.
0e is the ultimate consumer in a pipeline from the producer through intermediaries
including the clothing store. This pipeline is actually a
Student
Answer:




Instructor
E!lanation
:
Rationale: 9ar$eting channels can &e com!ared with a !i!eline through which water flows from
a source to terminus. 9ar$eting channels ma$e !ossi&le the flow of goods from a !roducer%
through intermediaries% to a &u+er.


15
.
Question
:
9achineTools.com sells grinders% &oring mills% and engine lathes. The we&site lists goods from o#er 8>>
machiner+ manufacturers% *%.>> distri&utors of new e4ui!ment% and 5.> dealers of used in#entor+ for sale on
the we&site. 9achineTools.com relies on a well3esta&lished channel of manufacturers% distri&utors% and
machiner+ dealers to !ro#ide the merchandise that is sold through this
Student
Answer:




Instructor
E!lanation
:
Electronic mar$eting channels em!lo+ the Internet to ma$e goods and ser#ices a#aila&le
for consum!tion or use &+ consumers or industrial &u+ers.


18
.
Question
:
A drug store that sells !harmaceuticals% &eaut+ aids% camera e4ui!ment% non!erisha&le grocer+
items% and automo&ile motor oil is an eam!le of a retailer using
Student
Answer:




Instructor
E!lanation
:
Rationale: Scram&led merchandising is offering se#eral unrelated !roduct lines in a single store%
the situation here.


1:
.
Question
:
?reightfinder.com and loads.truc$.net are &oth Internet com!anies that are called Ugo3&etweens.V
If a truc$er needs to find a load for a !articular trade lane% he or she can #isit one of these sites% list
their !rice and a#aila&le truc$ s!ace% and find a com!an+ that needs a shi!ment mo#ed. Since the
!ur!ose of these we&sites it to !ut &u+er and sellers together so that a sale can &e made% these two
we&sites can &e categori1ed as
Student
Answer:





Instructor
E!lanation
:
Rationale: Aro$ers are inde!endent firms or indi#iduals whose !rinci!al function is to &ring
&u+ers and sellers together to ma$e sales.


1=
.
Question
:
6ominion is a "anadian su!ermar$et. Becentl+% it &egan its Aa&+ "lu& !rogram% which mails
mem&ers a O*> gift certificate when the+ !urchase a certain dollar amount of infant !roducts.
6ominion is offering a
Student
Answer
:






*>
.
Question
:
Eharmaceutical com!anies sell to hos!itals and clinics directl+. The+ mar$et their !roducts to large
retail chains that distri&ute the medicines to their stores across the nation. The+ also sell to drug
wholesalers that sell to the remaining inde!endent drugstores in the @.S. What method of
distri&ution is used &+ !harmaceutical com!anies?
Student
Answer:





Instructor
E!lanation
:
Rationale: 6ual distri&ution is an arrangement where&+ a firm reaches different &u+ers &+
em!lo+ing two or more different t+!es of channels for the same !roduct.



*1
.
Question
:
"arla;s "ards uses 0000000000 to sell and mar$et the entire line of greeting cards. The+ design !romotional
!lans% set !rices% determine distri&ution !olicies% and ma$e recommendations to "arla on !roduct strateg+.
Student
Answer:




Instructor
E!lanation
:
Selling agents re!resent a single !roducer and are res!onsi&le for the entire mar$eting
function of that !roducer.


**
.
Question
:
Dosier+% to+s% and health and &eaut+ items are sold &+ 0000000000.
Student
Answer:




Instructor
E!lanation
:
Bac$ <o&&ers are wholesalers who furnish the rac$s or shel#es that dis!la+ merchandise in
retail stores% !erform all channel functions% and sell on consignment to retailers. Bac$
<o&&ers sell familiar !roducts% such as hosier+% to+s% housewares% and health and &eaut+
items.


*,
.
Question
:
Mohn 6eere manufactures and distri&utes industrial and farm e4ui!ment. These t+!es e4ui!ment
are considered to &e s!ecialt+ !roducts. Which t+!e of mar$et co#erage does the com!an+ use?
Student
Answer:




Instructor
E!lanation
:
Rationale: Eclusi#e distri&ution is t+!icall+ chosen for s!ecialt+ !roducts or ser#ices.


*-
.
Question
:
Mohnson "ontrols can recei#e an order for automo&ile seats from ?ord and deli#er the order - hours later%
&eginning with raw materials and ending with deli#er+ of the finished seats to ?ord. As used &+ Mohnson
"ontrols% logistics
Student
Answer:





Instructor
E!lanation
:
Iogistics in#ol#es those acti#ities that focus on getting the right amount of the right !roduct to the right
!lace at the right time 'time and !lace utilit+( at the lowest !ossi&le cost/in this case% for ?ord.


*.
.
Question
:
Betailers li$e Williams3Sonoma and The 6isco#er+ Store that sell at retail stores% through their catalogs% and
at their online we&site are eam!les of 0000000000 retailers.
Student
Answer:




Instructor
E!lanation
:
9ultichannel retailers utili1e and integrate a com&ination of traditional store formats and
nonstore formats% li$e the two chains in the eam!le.


*5
.
Question
:
"ustomers currentl+ lin$ to "isco;s we&site to configure% !rice% and order its networ$ing e4ui!ment. "isco
then sends orders &ac$ out across the Internet to !roducers and assem&lers including "elestica% ?letronics%
Ma&il% and Solectron. Eroducts are &uilt and tested to "isco standards% sometimes with !rocedures run
remotel+ &+ "isco. 9ost are then dro!3shi!!ed to &u+ers% untouched &+ human hands on "isco;s !a+roll. The
indi#iduals who monitor these transactions and ma$e sure each is !erformed in a cost3effecti#e and timel+
fashion are engaged in
Student
Answer:





Instructor
E!lanation
:
Su!!l+ chain management is the integration and organi1ation of information and logistics
acti#ities across firms in a su!!l+ chain for the !ur!ose of creating and deli#ering goods
and ser#ices that !ro#ide #alue to consumers.


*8
.
Question
:
Iighting3One is a national 00000000000 that allows its inde!endent mem&ers% retailers of lighting
fitures% to concentrate their &u+ing !ower and to !lan colla&orati#e !romotional and !ricing
acti#ities.
Student
Answer:




Instructor
E!lanation
:
Rationale: A contractual s+stem in#ol#es inde!endentl+ owned stores that &and together to act
li$e a chain% the situation here with Iighting3One


*:
.
Question
:
Wal39art can o&tain coo!eration from manufacturers in terms of !roduct s!ecifications% !rice le#els% and
!romotional su!!ort% gi#en its !osition as the world;s largest retailer. Which t+!e of #ertical mar$eting
s+stem does Wal39art re!resent?
Student
Answer:




Instructor
E!lanation
:
Wal39art can achie#e coordination of !roduction and distri&ution &ecause of its si1e and
influence rather than through ownershi!.


*=
.
Question
:
The mar$eting managers at Omaha Stea$s used airlines; data&ases to mail a s!ecial offer to fre4uent fl+ers.
Eight wee$s after shi!!ing the stea$s to the fre4uent fl+ers who !laced orders as a result of the initial offer%
the com!an+;s sales!eo!le followed u! &+ tele!honing customers to as$ for new orders. This is an eam!le
of which t+!es of nonstore retailing?
Student
Answer:





Instructor
E!lanation
:
Omaha Stea$s used direct mail to gain new customers throughout North America. It
enclosed a catalog with the order and followed u! &+ telemar$eting to retain the customers
now in their data&ase.


,>
.
Question
:
A retail store carries a &road selection of small $itchen a!!liances. It has an informed staff and will
e#en gift wra! +our !urchases free of charge. It does not% howe#er% ha#e a sho! for re!airs should
+our a!!liances need maintenance. This store offers:
Student
Answer:




Instructor
E!lanation
:
Rationale: A limited ser#ice retailer !ro#ides some ser#ices such as credit% merchandise return%
and gift wra!!ing% &ut not all ser#ices such as maintenance in this eam!le


,1
.
Question
:
The ?o Entertainment Grou! counts among its assets a thri#ing TK !roduction unit% a Doll+wood mo#ie
studio% ,, TK stations% a half3do1en national ca&le networ$s% and *1 regional s!orts networ$s. Since most of
the shows !roduced at its TK !roduction unit and man+ of the mo#ies made at its studio are made <ust for
tele#ising on its ca&le networ$s% ?o Entertainment Grou! is an eam!le of a'n(
Student
Answer:





Instructor
E!lanation
:
A cor!orate #ertical mar$eting s+stem com&ines successi#e stages of !roduction and
distri&ution under a single ownershi!.


,*
.
Question
:
2raft distri&utes Star&uc$s coffee in @.S. su!ermar$ets and internationall+ using a 0000000000.
Student
Answer:




Instructor
E!lanation
:
A strategic channel alliance occurs when one firm;s mar$eting channel is used to sell
another firm;s !roducts. An alliance &etween 2raft ?oods and Star&uc$s is a case in !oint.


,,
.
Question
:
The $e+ goal for retailers in the accelerated de#elo!ment !hase of the retail life c+cle is to
Student
Answer:





Instructor
E!lanation
:
The $e+ goal for a retailer in the accelerated de#elo!ment !hase of the retail life c+cle is to
esta&lish a dominant !osition in the fight for mar$et share &ecause of the intense
com!etition.


,-
.
Question
:
Accelerated de#elo!ment in the retail life c+cle is similar to which stage in the !roduct life c+cle?
Student
Answer:




Instructor
E!lanation
:
Accelerated de#elo!ment and the growth stage are &oth the second stage of their
res!ecti#e life c+cles where &oth mar$et share and !rofit achie#e their greatest growth
rate.


,.
.
Question
:
The largest in#entor+ of wedding dresses in the Southeast can &e found at Iow;s Aridal and ?ormal in
Arin$le+% Ar$ansas. ?rom 6ecem&er *5 to Manuar+ 15% a !ros!ecti#e &ride sho!!ing at Iow;s can find gowns
once !riced at O5%>>> for O*%===% O:>> gowns for O->>% and man+ others These !ricing decisions are $nows
as
Student
Answer:





Instructor
E!lanation
:
9ar$downs occur when the item does not sell at the original !rice% and a !rice ad<ustment
is necessar+/the situation descri&ed here.