University of Southern California

Marshall School of Business

BUAD 307 Marketing Fundamentals

Lars Perner, Ph.D., Instructor Fall, 2010

RELEVANT FINAL EXAM

QUESTIONS FROM PAST EXAMS
Below are questions from prior exams addressing issues covered on this semester’s midterm.
Every effort to remove questions that cover material not covered this semester have been
made, but occasional items may have “slipped through the cracks.”

This is intended as an illustration of the types of questions that have appeared in the past.
To prepare for the exam, you should understand the issues addressed rather than attempting
to memorize past exam questions. Attempting to “study” from these past questions is
strongly discouraged. Therefore, a key will not be provided. You may come to my office to
discuss any specific questions of interest, but please do not ask me to e-mail answers to
specific questions!

Multiple choice

REMINDER: This exam is intended to separate those students who have studied the material
from those who have not. If an answer seems too absurd to be true to someone who has
studied the material, it probably is. However, those who have chosen not to study may be
impressed by the fancy buzz even if they occur in the wrong places.

1. Healthnut Heaven is a manufacturer of healthy snacks. The firm has asked thirty
people to taste its newest concoction, an all natural power bar made from soy,
Brussels sprouts, and antioxidant berries. The respondents are asked to rate this
new bar on a scale from 0 (“extremely unpleasant taste”) to 7 (“truly
delicious”). This research effort represents:
a. A focus group.
b. An experiment.
c. Scanner data.
d. Projective research methods.
e. None of the above.
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2. Emily E. Etheridge Earth Enterprises (EEEEE) manufactures solar panels for home
rooftops. These are used to generate electricity so that the need to buy
electricity from power companies will be reduced. Home solar panels are
currently in the growth phase of the product life cycle. Based on this
information, EEEEE:
a. Needs to overcome a major chicken-and-egg problem.
b. Will likely have to compete intensely on price.
c. Will almost certainly face a decline stage soon.
d. Both (b) and (c).
e. None of the above.

3. Conditional branching:
a. Is used to implement shopping cart analysis.
b. Accounts for network economies in online surveys.
c. Moves an online survey respondent to the next relevant question.
d. Results from the “Wheel of Retailing.”
e. None of the above.

4. The “S”-shaped curve of advertising effectiveness:

a. Explains why fear appeals work.
b. Suggests that it is most important to focus on the “affect” element of
consumer attitudes.
c. Suggests that celebrities should be used in advertising.
d. Implies the relationship between advertising spending and advertising
impact is non-linear.
e. None of the above.

5. “Sticky” prices:
a. Explain the promotion signal.
b. Reflect internal reference prices of consumers.
c. Involve a delay in reflecting changes in the costs of production in prices.
d. Suggest that the demand for glue will be highly elastic.
e. None of the above.
 3

6. In the diffusion of hybrid corn:

a. Network economies were a major factor.
b. Farmers tended to be concerned about the effects of co-branding.
c. A major chicken-and-egg problem was evident.
d. Brand extension had to take place before these seeds could be used.
e. None of the above.

7. Wendy’s is interested in how different fast food chains are perceived by

customers relative to each other. Which of the following would be most useful
in assessing this issue?
a. Classical conditioning.
b. Scanner data.
c. Click-stream analysis.
d. Perceptual maps.
e. The “Merge-Purge” process.

8. Brooks Brothers is considering the design of an advertisement for its new line of
premium men’s business suits. The marketing department would like to find out
whether a clean shaven model, a model with a beard, or a model with a
moustache would be most effective. Which of the following research methods
would be most appropriate?
a. Focus groups.
b. Online surveys.
c. In-depth interviews.
d. Physiological methods.
e. Experimentation.

9. Anne likes to tower over her sorority sisters and will therefore only consider
shoes with heels of at least three inches—no matter how stylish and comfortable
a pair with shorter heels may be. For her most recent formal, Anne bought a
pair of shoes with especially high heels despite her friends’ protestations that
the dark orange color would clash horribly with her pink dress. Anne:
a. Appears to be engaged in a low involvement decision.
b. Appears to be using compensatory decision making.
c. Is likely under the influence of subliminal messages in TV advertising.
d. Both (a) and (b).
e. None of the above.
 4

10. A property development firm is interested in consumers’ thoughts and feelings

about fireplaces in homes. It is expected that home buyers often will not be
consciously aware of some of their feelings and perceptions about these. Of the
following, which would be the most appropriate research method?
a. Focus groups.
b. Online surveys.
c. Projective techniques.
d. Scanner data.
e. Experimentation.

11. A straight A student at the A. Gary Anderson Graduate School of Management at

UCLA would be more likely than a C- student at the Marshall School of Business
to1:
a. Fail the ethics section on the CPA Exam.
b. Write incoherent answers to essay and short answer exam questions.
c. Gossip and surf the Internet during class.
d. All of the above.
e. None of the above.

12. Bellogg’s—a manufacturer of cereal and other breakfast foods—is interested in

finding out whether a box with a big picture of its mascot, Leon the Lion, will
sell better than a box with a smaller picture and more nutritional information.
Of the following, which research method would be most appropriate?
a. Focus groups.
b. Online surveys.
c. Experimentation.
d. Physiological measures.
e. Phone interviews.

13. The U.S. retail market:

a. Tends to experience the “Wheel of Retailing.”
b. Has seen growth in the high-price, high-service side of the market.
c. Has seen growth in the low-price, low-service side of the market.
d. Both (a) and (c).
e. All of the above.

1
The answer to this question is intended to be “d.”
 5

14. In advertising, the model of “encoding,” “noise,” and “decoding:”

a. Requires very strong methods of encryption.
b. Suggests that consumers should wear ear plugs.
c. Demonstrates some of the difficulties that marketers face in getting
their message through to consumers.
d. Makes it difficult for consumers to practice non-compensatory decision
making under conditions of low involvement.
e. Proves that marketers must use subliminal advertising to be effective.

15. Dumping manure on accounting professors’ driveways—no matter how boring

their classes may be:
a. Is inconsiderate and morally wrong.

16. Perceptual maps:

a. Must have exactly two dimensions.
b. Can be created using consumer ratings of the relative similarity of
different brands or product categories.
c. Can be used only at the brand level and not at the product category
level.
d. Both (a) and (b).
e. None of the above.

17. In the distribution process, intermediaries such as retailers and wholesalers:

a. Tend to reduce costs through specialization of labor.
b. Should be limited as much as possible since these tend to create
discrepancies between what manufacturers create and what customers
want.
c. Should always have two levels in between the manufacturer and the
customer.
d. Cannot be used for product categories where manufacturers use the
“penetration” approach to pricing.
e. None of the above.
f. None of the above.
 6

18. Badley B. Bruin Burgers (BBBB) is a fast food chain. Due to the atrocious taste of
the food, extremely high levels of trans fats, and frequent incidence of food
poisoning among its customers, BBBB has a very poor reputation even in
Westwood Village. Prices are therefore very low. BBBB:
a. Will likely experience a significant “stuck-in-the-middle” problem.
b. Ought to use the “skimming” approach to pricing.
c. Will likely benefit from high levels of trialability in securing customers.
d. All of the above.
e. None of the above.

19. Within the context of market research:

a. Different types of research issues require the use of different types of
methods, so no one method is best suited for all types of questions.
b. Generally, “binary” (“yes/no”) questions should be used rather than
continuum questions.
c. Confounds occur only in surveys.
d. To determine whether coupons would be more effective than advertising
in increasing the sales of Mr. Goodbar, focus groups should be used.
e. Both (a) and (b).

20. Tammy Trojan is interested in adding new offerings to her line of women’s
executive power shoes and is looking to do research on issues affecting customer
choice in this category. She is not sure that respondents will consciously know
about all the factors that influence their choice. Of the following, which of
research method would be most appropriate for this purpose?
a. Focus groups.
b. Online surveys.
c. Paper-and-pencil surveys.
d. Projective research methods.
e. Phone interviews.

21. For which of the following product categories would the “skimming” method of
pricing be most likely to effective?
a. Food products.
b. Classic jewelry.
c. Gaming consoles.
d. Carpets.
e. Antiques.
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22. Extreme Auto Audio advertises that they only charge $345 for a Jensen auto
stereo system with a manufacturer’s suggested retail price of $765. This
situation:
a. Appears to involve the practice of “skimming.”
b. Presents an external reference price.
c. Involves market-based pricing.
d. Both (a) and (c).
e. None of the above.

23. Which of the following are problems associated with the “penetration” method
of pricing?
a. Competitors will be attracted by high margins made in the beginning.
b. The manufacturer’s cost of production may not reflect the value to the
customer.
c. Most customers will find the products sold overly expensive.
d. Each segment will not end up paying the highest price it is willing to
pay.
e. Both (b) and (c).

24. The case of “the Pentagon Declares War on Rush Limbaugh:”

a. Shows how confounds in research can result in misleading results.
b. Involves both experimentation and observation.
c. Illustrates the need for conditional branching.
d. Both (a) and (b).
e. None of the above.

25. A means-end chain:

a. Is used to implement subliminal advertising under conditions of high
involvement.
b. Is similar to a perceptual map, but must involve at least five dimensions.
c. Is used to understand consumer motivations for buying products.
d. Both (a) and (c).
e. None of the above.
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26. In general:
a. Income appears to be the most powerful segmentation variable available
to predict the likelihood that an individual will buy a product.
b. The method of pricing that will most likely result in profit maximization
is adding a constant percentage to the cost of manufacturing the
product.
c. During the introductory phase of the product life cycle, the most
important promotional objective is generally awareness.
d. Both (a) and (b).
e. Both (a) and (c).

27. The “Merge-Purge” process:

a. Shows how inefficient firms are often taken over by more efficient ones
through the forces of the free market.
b. Is based mostly on segmentation by demographics.
c. Involves the identification of different sources of lists of customers with
a potential interest in the product offered.
d. Is intended to implement repositioning through psychographic
segmentation, replacing undesirable beliefs with ones more favorable to
the product.
e. Requires the use of the Elaboration Likelihood Model.

28. Some bars and restaurants feature “happy hours” where customers who come
before a certain time receive discounts on food and/or beverages. This practice
involves:
a. Price maintenance.
b. Internal reference prices.
c. Implicit price discrimination.
d. “Sticky” prices.
e. None of the above.

29. In measuring advertising effectiveness, which of the following would be most

appropriate?
a. The multi-attribute model of attitudes.
b. Comparing sales before and after the advertising campaign.
c. Scanner data.
d. Focus groups.
e. Online surveys.
 9

30. The case of “The Pentagon Declares War on Rush Limbaugh,” involving an audience
survey of the U.S. Armed Forces Radio Network:
a. Showed that closed-ended questions tend to have very low response rates.
b. Demonstrated that market research results can be misleading.
c. Showed that focus groups will give more precise results than surveys.
d. Both (a) and (c).
e. None of the above.

31. The “stuck-in-the-middle” problem:

a. Is experienced primarily by truck drivers trying to make deliveries in densely
populated areas.
b. Is experienced mostly in online surveys.
c. Involves a firm that has to compete both “above” and “below.”
d. Always results in a “chicken-and-egg” problem.
e. None of the above.

32. Which of the following phenomena were most important in the diffusion of ATM
machines?
a. Collusion.
b. The “mere exposure” effect.
c. Observability.
d. Message framing.
e. Two-sided appeals.

33. The “S”-shaped curve of advertising effectiveness suggests that:

a. Extremely high levels of advertising are likely to be most cost effective.
b. Comparative advertising is unlikely to be effective.
c. Once awareness has been achieved, there is no need for additional advertising.
d. A small amount of advertising is likely to be too little to do any good.
e. None of the above.

34. Which of the following represents a confound?

a. Consumers tend to pay little attention to advertising, so a great deal of
repetition is needed for advertising to be effective.
b. Sales of soft drinks are higher when soft drinks are advertised heavily, but
heavy advertising tends to occur during the summer months when more soft
drinks are consumed.
c. A new online auction site is likely to experience a “chicken-and-egg” problem.
d. Several sources are needed in order to perform the “merge-purge” process.
e. Surveys involve a great deal of random error.

35. A significant obstacle to problem recognition among many students at UCLA is that:
a. They do not know the meaning of the word “ignorant.”

36. The “skimming” approach to pricing would be most useful for which of the following
products/services?
a. Milk and dairy.
b. High speed video gaming consoles.
c. Garbage collection.
d. Subscriptions to magazines that require a very large circulation to be
profitable.
e. Generic prescription medications.
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37. Within the context of segmentation:

a. Income is a very strong predictor of consumer purchases, but gender is not.
b. Segmentation by benefit desired is used to implement psychographic
segmentation.
c. Psychographic segmentation involves both demographics and life-style.
d. Family life-cycle stage does not, in practice, appear to predict any behaviors.
e. Humor appeal in advertising seems only to be effective for females and not for
males.

38. Which of the following is/are definitely illegal in the United States?
a. Implicit price discrimination between consumers.
b. Sticky prices.
c. Predation.
d. Both (a) and (b).
e. All of the above.

39. A straight A student at the A. Gary Anderson Graduate School of Management at UCLA
contends that “cost plus” is the most appropriate way to price goods. This:
a. Is correct.
b. Is correct, but only if one adjusts for the effects of the S-shaped curve of
advertising effectiveness.
c. Is not correct since “cost plus” does not consider customer value and
competition.
d. Is correct for high involvement, but not for low involvement, goods.
e. Is a meaningless statement since “skimming” and “penetration” pricing are
both defined in terms of the mere exposure effect.

40. A group of waiters is interested in finding out which color jacket—blue, brown, or
green—results in the highest tips on the average. Which of the following research
methods would be most effective?
a. Focus groups.
b. Mail surveys.
c. Online surveys.
d. Experimentation.
e. Scanner data.
 11

41. Trash for Tots is a publisher of romance novels for young children. Currently, young
children’s romance novels are in the introductory stage of the Product Life Cycle.
Which of the following would be the most important promotional objective at this
point?
a. Brand differentiation.
b. Preference.
c. Awareness.
d. Collusion.
e. Network economies.

42. Which of the following would be benefits of relocating UCLA to Bakersfield?

a. Reduced costs of real estate to the State of California.
b. A reduced number of individuals in the Los Angeles area holding a prejudice
against the USC community.
c. The likelihood that the real estate vacated in Westwood would be put to more
productive use, thus boosting the California economy and income tax receipts.
d. All of the above.
e. None of the above.

43. “Category Killer” retail chains:

a. Usually emphasize guns and ammunition in their assortment.
b. Tend to offer only a few choices in each product category.
c. Are based on high margins and low sales volumes.
d. Both (a) and (b).
e. None of the above.

44. A discontinuous innovation:

a. Cannot be marketed through advertising and must spread entirely through
word-of-mouth.
b. Will generally not serve any significant consumer need.
c. Generally requires more marketing efforts than does a continuous innovation.
d. Cannot be marketed since a significant chicken-and-egg problem will make the
introduction of the innovation infeasible.
e. Both (b) and (d).
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45. In distribution:
a. The costs are usually lower the fewer intermediaries are involved.
b. There is usually an optimal number of intermediaries that depends on the type
of product sold.
c. Parallel distribution is used to combat diversion.
d. Full service retailers usually get upset when discounters are allowed to charge
prices as high as those the full service retailers charge since the full service
retailers feel that the discounters have not earned such large margins.
e. Both (a) and (d).

46. Tricia Trojan would like to send out catalogs with USC memorabilia to USC alumni,
purchasers of Trojan Football season tickets, current USC students, and subscribers to
Educational Excellence Review. To accomplish this, Tracia would most likely need to
use:
a. Segmentation by benefit desired.
b. Internal search.
c. The “Merge-Purge” process.
d. Repositioning.
e. Projective techniques.

47. Procter & Gamble would like to know whether they get a better return on investment
by running an advertisement for Tide or by paying retailers for favorable display space.
The most appropriate research method to address this problem is:
a. Focus groups.
b. Mail surveys.
c. Online surveys.
d. Scanner data.
e. Experimentation.

48. Conditional branching:

a. Is a method for reducing problems associated with diversion.
b. Is used by consumers making high-involvement non-compensatory decisions
under conditions of mere exposure.
c. Is a method used to reduce the effects of framing.
d. Is used to make focus groups more efficient.
e. None of the above.

49. Tammy Trojan will not consider any brand of nail polish—no matter how chip resistant,
quick drying, or how shiny—that does not come in a cardinal red shade. Tammy:
a. Is using framing as a way to prime her choices.
b. Is engaging in non-compensatory decision making.
c. Is engaging in compensatory decision making.
d. Appears to be using collaborative filtering.
e. Is using a merge-purge process.
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50. Wal-Mart likes to display signs showing something like “Was $5.17; Now $4.49” to show
that they have cut prices. This is an example of:
a. Collusion.
b. An internal reference price.
c. An external reference price.
d. The “Wheel of Retailing.”
e. Segmentation by benefit desired.

51. Wal-Mart:
a. Is a category killer.
b. Is not likely to experience a significant “stuck-in-the-middle” problem.
c. Is highly dependent on micro-payments.
d. Both (a) and (c).
e. None of the above.

52. Perceptual maps:

a. Are used to produce conditional branching.
b. Can be useful in assessing how consumers view a brand relative to other
brands.
c. Show how to implement parallel distribution structures.
d. Both (a) and (c).
e. All of the above.

53. It is generally legal for a manufacturer to offer Wal-Mart a 15% lower price than that
charged to Francine’s Pharmacy:
a. If Wal-Mart promises to sell at a lower retail price than Francine does so that
Wal-Mart will not make excessive profits.
b. If Francine does not complain.
c. If the manufacturer can prove that it saves at least this much through lower
costs of serving Wal-Mart.
d. Under all circumstances, since the U.S. maintains a free market.
e. Only if Francine agrees to the practice.

54. Research on pricing suggests that:

a. Consumers tend to select frequently purchased items quickly and do not appear
to look much at prices of competing brands.
b. Sales of a brand tend to increase significantly when the brand is put on sale.
c. “Odd” prices (e.g., those ending in .95 or .99) tend to increase sales by more
than 40% relative to sales of the same item priced at whole dollar amounts.
d. Both (a) and (b).
e. All of the above.

55. Collaborative filtering:

a. Is the process whereby consumers share information through “wiki” type
systems.
b. Is a process to obtain chemical purity in the distribution process.
c. Identifies additional items that an online repeat customer might find of
interest.
d. Reduces the amount of “junk” mail that consumers receive.
e. None of the above.
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56. The “Wheel of Retailing” suggests that:

a. It is more efficient to deliver most items directly from the factory to the
consumer.
b. The longer a retail chain has been in business, the lower the prices it will tend
to offer.
c. Retailers often start as low-price, low-service operations.
d. Most retail chains tend to alternate between offering high or low prices.
e. Cost-plus pricing is more effective.

57. Customer value involves:

a. Getting the lowest price possible on a product in a given category.
b. Eliminating intermediaries in distribution.
c. The ratio of benefits received to sacrifices made.
d. All of the above.
e. None of the above.

58. Research on consumer attitudes suggests that:

a. So long as factual information is provided, it is relatively easy to change
people’s current beliefs.
b. Trying to add a belief not inconsistent with consumers’ existing beliefs is likely
to be more effective than trying to change currently held beliefs.
c. A two-sided appeal is likely to be more credible than a one-sided one.
d. Both (a) and (c).
e. Both (b) and (c).

59. Under the conceptualization of prices that we discussed, which are ways that USC can
increase its prices?
a. Increasing the “sticker” price of tuition.
b. No longer including free bicycle parking in standard fees and tuition paid.
c. Charging for the use of restrooms.
d. Both (a) and (c).
e. All of the above.

60. For the last several months, Tracy Trojan has been paying approximately $3.15 per
gallon every five days when she fills up her car. Today, she comes by a gas station
charging $3.55. “What an incredible rip-off! I bet the owners went to UCLA! The
psychopaths should be ashamed of themselves!” Tracy’s exclaims. Tracy’s indignation
is likely based on:
a. The mere exposure effect.
b. An internal reference price.
c. An external reference price.
d. Predation.
e. None of the above.

61. Which of the following is/are generally illegal in the United States?
a. Selling below one’s cost of production.
b. Getting together with competitors to agree not to sell below a certain price.
c. Using comparative advertising.
d. Both (a) and (b).
e. Both (b) and (c).
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62. Which of the following was the most significant obstacle to the diffusion of credit cards?
a. Lack of observability.
b. A “chicken-and-egg” problem.
c. Excessive network economies.
d. The “S”-shaped curve of advertising effectiveness.
e. Mere exposure.

63. Brand extensions:

a. May save a firm both money and time in establishing a new product in the
market.
b. Tend to be more effective if the new and original products are congruent.
c. Receive their effectiveness mostly from network economies.
d. Both (a) and (b).
e. Both (b) and (c).

64. During the “maturity” phase of the product life cycle:

a. Profits are likely to be higher than they were during the growth stage.
b. The most important promotional objective for market leader brands is likely to
be awareness.
c. A firm should invest aggressively in growth.
d. Competition is likely to be greater than it is during the growth phase.
e. None of the above.

65. A disadvantage of open-ended survey questions, relative to closed-ended questions, is

that:
a. Respondents tend to give misleading responses.
b. A smaller percentage of respondents will actually answer the question.
c. These cannot be used in online surveys.
d. Both (a) and (b).
e. Both (b) and (c).

66. A problem with online research is that:

a. This type of research is much more vulnerable to confounds than are paper-
and-pencil surveys.
b. It is not possible to do surveys online.
c. Participants tend not to read instructions.
d. Both (a) and (b).
e. Both (b) and (c).

67. Joe wants to buy a new car. He evaluates a number of different cars by weighing gas
mileage at 30%, reliability at 20%, safety at 30%, and performance at 20%. Joe is using:
a. Confounded internal search.
b. Non-compensatory decision making.
c. Compensatory decision making.
d. Conditional branching.
e. Projective techniques.
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68. The “merge-purge” process:

a. Is used to avoid the “stuck-in-the-middle” problem.
b. Adds together different lists of customers with their mailing address and
removes the duplicates.
c. Create two-sided appeals.
d. Both (a) and (b).
e. None of the above.

69. An effective way to teach bad children a lesson is:

a. To make them spend time in a military boarding school in North Dakota with a
mandatory year-round four mile run at 6:30 a.m.

70. A manufacturer of men’s shoes would like to determine how much time men spend in
the store shopping of shoes and how likely they are to bring along others for advice on
what to buy. Which of the following methods would be most useful for addressing this
question?
a. Focus groups.
b. Surveys.
c. Experiments.
d. Observation.
e. Projective techniques.

71. Based on the conceptualization of price that we discussed in class, which of the
following are ways in which USC could increase the price charged to its students for
education?
a. Increasing tuition rates.
b. No longer offering free skateboard parking in classrooms to students.
c. No longer accepting payment by credit card.
d. Both (a) and (b).
e. All of the above.

72. Which of the following would be most likely to experience a “stuck-in-the-middle”

problem?
a. Prada (upscale clothing and accessories).
b. 99 Cents Only Stores.
c. Southwest Airlines.
d. Sizzler Restaurants.
e. Wal-Mart.
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73. Which of the following represents the best example of a “category killer?”
a. 7-Eleven.
b. Staples.
c. Wal-Mart.
d. Nordstrom’s.
e. The USC Bookstore.

74. Which of the following are ways in which graduates of USC can show their appreciation?
a. Making contributions to the university specifically designated for marketing
faculty salaries.
b. Recommending USC to their brainy friends while encouraging those less
intellectually able to attend UCLA.
c. Writing online reviews praising the quality of faculty at the Marshall School of
Business.
d. Remembering USC generously in their wills.
e. All of the above.

75. Becky is an avid hunter. Although she would like to have a pink pickup truck, she will
only consider trucks that come equipped with a gun-rack. Becky:
a. Is making her decision based on collaborative filtering.
b. Is experiencing a “chicken-and-egg” problem.
c. Appears to be using compensatory decision making.
d. Appears to be using non-compensatory decision making.
e. None of the above.

76. Dachshund’s Delight is a brand of dog food specifically optimized for the tastes and
nutritional needs of Dachshunds. The manufacturer would like to determine if there
should be any changes in the way in which the brand’s promotional budget is split
between advertising, in-store displays, and coupons. Which of the following research
methods would be most appropriate for this purpose?
a. Focus groups.
b. Physiological measures.
c. Projective techniques.
d. Scanner data.
e. Questionnaires.

77. Which of the following would be most likely to experience a chicken-and-egg problem?
a. McDonald’s introducing a new chicken sandwich on its breakfast menu.
b. An online service that allows students to download tutorials on various subjects
posted by other students so that students can help others in their areas of
strength and receive help in return in areas in which they are having difficulty.
c. Efforts by Netflix to offer more newly released movies.
d. A new gasoline station opening up in a community.
e. An attempt by Von’s to offer customers a 50 cent discount on a dozen eggs if
they also buy a rotisserie chicken.
 18

78. A straight A student at UCLA would be more likely than a C- student at the Marshall
School of Business to:
a. Use the term “etc.” and/or profanity in papers, presentations, and exam
answers.
b. Gossip and/or surf the Internet during class.
c. Ditch classes with impunity.
d. Both (a) and (c).
e. All of the above.

79. In general:
a. Segmenting customer groups by income tends to reliably predict the likelihood
that the different segments will buy high priced items.
b. Costs of distribution can usually be reduced greatly by selling directly to the
customer through the Internet rather than going through retailers.
c. “Diversion” result when a manufacturer charges different prices in different
geographic regions.
d. Both (a) and (b).
e. None of the above.

80. Hip Hop Health Nuts, a musical group, has recently released a new exercise music CD
entitled Fanatical Fitness Fun. Lyrics of the songs extol the virtues of Brussels sprouts
and the evils of high fat foods and couch potatoism. Since the group’s fans appear to
be too zealous to be overly price sensitive, it has been decided to price the CD at
$129.99. Which of the following factors would favor Internet sale of this product?
a. The value-bulk ratio.
b. The need for customization.
c. Reduced labor costs from not having to go through retailers.
d. Both (a) and (c).
e. All of the above.

81. A cereal manufacturer would like to determine which of two package designs—one with
a great deal of nutritional information versus another one featuring a picture of a happy
family eating breakfast together—would result in the most sales. Which of the following
research methods would likely be most effective?
a. Focus groups.
b. Experiments.
c. Scanner data.
d. Physiological measures.
e. Online surveys.

82. Assuming that nothing else can be sold in the same transaction or to the same customer
on a later occasion, which of the following would be least suitable for selling online?
a. Computer software.
b. Inkjet printer cartridges.
c. A best selling hardcover novel.
d. Replacement batteries for laptop computers.
e. A Microsoft Zune MP3 player.
 19

83. In class, we discussed the research showing that the more toys a child has, the higher
his or her IQ score is likely to be. In analyzing this finding:
a. We can safely conclude that having access to more toys will cause a child to
become more intelligent on the average, but not in every case.
b. It becomes clear that the researcher probably should have done this study using
scanner data.
c. One cold reasonably suspect that the result may, at least in part, have come
about because of a confound.
d. Both (b) and (c).
e. None of the above.

84. The use of humor appeal in advertising:

a. Is a great way to reduce consumer resistance to arguments in favor of buying
the product.
b. May result in viewers, readers, or listeners remembering the humor but not the
product.
c. Is intended to promote the “encoding” process through the use of a two-sided
appeal.
d. Both (b) and (c).
e. All of the above.

85. In direct marketing, the “merge-purge” process:

a. Comes about when more efficient companies take over inefficient ones that are
about to go out of business.
b. Involves an attempt by firms to get their customers to buy online rather than
buying from their “brick-and-mortar” stores.
c. Involves combining different lists of consumers from different sources and
removing the duplicates.
d. Results from the process of the “Wheel of Retailing.”
e. Both (a) and (d).

86. In market research, scanner data:

a. Is used mostly in assessing opportunities for the repositioning of existing
brands.
b. Is available only for grocery products.
c. Is usually the preferred method for assessing what consumers believe about a
brand.
d. Both (a) and (c).
e. None of the above.

87. A tax on chocolate:

a. Would probably represent an unconstitutional deprivation of substantive due
process.

88. In the market research process:

a. Focus groups are usually the most effective method to use.
b. A benefit of online surveys is that these are especially effective in preventing
confounds.
c. Experiments are usually more difficult to administer than surveys.
d. Both (a) and (b).
e. Both (b) and (c).
 20

89. Parallel distribution structures:

a. Are an effective way to provide customers with trialability.
b. Are well suited for all products that are not perpendicular.
c. Represent an effective way to implement category management.
d. Tend to be illegal in most states.
e. None of the above.

90. The Central Advertising Agency is interested in assessing the effectiveness of a thirty
second advertising spot. Two areas of concern are (1) how much attention viewers
seem to give to the ad and (2) where on the screen the viewer looks at various times
during the ad. Of the following research methods, which would be most suited for this
purpose?
a. Conditional branching.
b. Focus groups.
c. Physiological measures.
d. Projective techniques.
e. Scanner data.

91. A “chicken-and-egg” problem:

a. Usually results because a new innovation is not readily observable.
b. Can usually be effectively addressed by the use of projective research
techniques.
c. Can sometimes be overcome if an appropriate “jump starting” technique can
be found and implemented.
d. Both (a) and (b).
e. Both (a) and (c).

92. In the diffusion of hybrid corn, which of the following was the most important factor?
a. The “chicken-and-egg” problem.
b. Trialability.
c. Network economies.
d. Co-branding.
e. Predatory pricing.

93. Conditional branching:

a. Is a method of minimizing the costs of distribution through optimal location of
retailers.
b. Can be used in online surveys.
c. Is used in scanner data research.
d. Both (b) and (c).
e. None of the above.

94. In order to minimize costs of distribution:

a. Intermediaries (such as wholesalers and retailers) should generally be
eliminated since this will reduce costs.
b. The appropriate channel length (number of intermediaries involved) will
depend on the product category.
c. The manufacturer should attempt to sell its products directly to customers over
the Internet.
d. Both (a) and (c).
e. None of the above.
 21

95. Click-stream analysis:

a. Is used to measure the likelihood that a particular customer will shop online or
in a retail store.
b. Is used to implement collaborative filtering.
c. Involves the sequence in which web site visitors reached different pages.
d. Is an example of M-commerce.
e. Is generally not cost effective due to difficulties in collecting “micro”
payments.

96. The “S”-shaped curve of advertising effectiveness:

a. Is intended to measure the effect of “noise” in the advertising communications
process.
b. Tends to result from conditional branching.
c. Tends to result from network economies.
d. Both (a) and (c).
e. None of the above.

97. Which of the following are problems that can reduce the usefulness and/or reliability of
survey questions?
a. “Leading” questions.
b. “Two-in-one” questions.
c. The use of binary as opposed to continuum scales.
d. Both (a) and (b).
e. All of the above.

98. Nike is considering coming out with a new line of shoes under the label River of Michael
Jordan. Supposedly, these shoes will allow the wearer to talk on water. (The fine print
points out, however, that the water must be frozen for this feat to be possible). In
marketing this product, Nike will most likely experience:
a. A significant “chicken-and-egg” problem.
b. A “stuck-in-the-middle” problem.
c. A need to price on a “cost plus” basis.
d. Both (a) and (b).
e. None of the above.

99. Faced with difficulty in attracting qualified students and faculty—and the threat of an
avalanche of malpractice lawsuits—an intellectually impoverished public college in
Westwood Village is considering replacing its medical school with a Department of
Oinkology. This department would focus on the raising of pink farm animals. The
college would like to determine the percentage of California high school students who
would consider studying oinkology at the college. Of the following research methods,
which would be best suitable for this purpose?
a. Focus groups.
b. In-depth interviews.
c. Surveys.
d. Experimentation.
e. Scanner data.
 22

100. The “skimming” approach to pricing:

a. Takes advantage of differences in the price sensitivity of different customer
segments.
b. Is more likely than penetration pricing to attract competition.
c. Is based on a “cost-plus” approach to pricing.
d. Both (a) and (b).
e. All of the above.

101. Within the context of diffusion of innovation, network economies:

a. Reflect the phenomenon that web sites that are highly reliable and hosted on
fast servers are likely to be more popular.
b. Suggest that there are significant advantages to keeping certain high tech
products exclusive so that they are owned by a small number of potential
customers who will pay high prices.
c. Reflect the reality that some innovations become more valuable to all who
adopt them the more other individuals have adopted the innovation.
d. Are contingent on the use of the “penetration” approach to pricing.
e. None of the above.

102. In direct mail, the “merge-purge” process:

a. Comes about when more efficient companies take over inefficient ones that are
about to go out of business.
b. Involves an attempt by firms to get their customers to buy online rather than
buying from their “brick-and-mortar” stores.
c. Involves combining different lists of consumers from different sources and
removing the duplicates.
d. Results from the process of the “Wheel of Retailing.”
e. Both (a) and (d).

103. A “chicken-and-egg” problem:

a. Usually results because a new innovation is not readily observable.
b. Can usually be effectively addressed by the use of projective research
techniques.
c. Can sometimes be overcome if an appropriate “jump starting” technique can
be found and implemented.
d. Both (a) and (b).
e. Both (a) and (c).
104. Repositioning:
a. Is generally not possible to accomplish.
b. May require the investment of a great deal of money in advertising.
c. Should be done only through television advertising.
d. Both (a) and (c).
e. All of the above.

105. Of the following, a perceptual map would likely be most useful for efforts at:
a. Overcoming a chicken-and-egg problem.
b. Implementing an undifferentiated marketing strategy.
c. Repositioning.
d. Explicit price discrimination.
e. Segmentation by demographics.
 23

106. Which of the following firms would be least likely to face “stuck-in-the-middle”
problem?
a. American Airlines.
b. Denny’s.
c. 99¢ Only Stores.
d. Target.
e. Ralph’s Supermarkets.

107. The penetration pricing approach:

a. Is usually difficult to practice due to problems of conditional branching.
b. Is likely to result in more sales early on than would the “skimming” approach.
c. Is less likely to encourage the entry of competitors into the market.
d. Both (a) and (b).
e. Both (b) and (c).

108. A manufacturer of a new tooth whitening kit would like to determine if a blonde,
brunette, or redhead model would result in the most sales. Of the following, which
method would be most appropriate?
a. Focus group.
b. Mail surveys.
c. Phone surveys.
d. Experimentation.
e. In-depth interviews.

109. Campbell’s Soup has hired a number of people to come to a laboratory and taste a new
flavor of soup and then rate on a sheet how good or bad this soup tastes. This can best
be described a:
a. Observation.
b. Experimentation.
c. A survey.
d. Physiological measures.
e. Scanner data.

110. Which of the following best represents a discontinuous innovation?

a. Black nail polish.
b. Low fat ice cream.
c. Hybrid car technology.
d. GPS auto navigation technology.
e. The Apple iPhone.

111. A disadvantage, or disadvantages, of online surveys include:

a. A tendency of many participants not to read instructions.
b. That it is impossible to use conditional branching.
c. That is process is very slow.
d. Both (a) and (b).
e. Both (b) and (c).
 24

112. The distribution of products:

a. Should generally go through the same number of intermediaries regardless of
the product category.
b. Is usually much less expensive if products are shipped directly to end customers
rather than being sent through intermediaries.
c. Has been made unnecessary by the rise of the “category killers.”
d. Is usually made possible by the “Wheel of Retailing.”
e. None of the above.

113. Procter & Gamble would like to find out how large an impact it has when a competing
brand issues a coupon for cents off its brand of laundry detergent. Of the following,
which research method would be most appropriate to use for this purpose?
a. Conditional branching.
b. Observation.
c. Focus groups.
d. Scanner data.
e. Questionnaires.

114. Which of the following products would it make least sense to sell online if there is no
opportunity to sell any other products at the same time?
a. A pair of pearl earrings.
b. A typewriter.
c. A current bestselling hardcover novel .
d. A ticket to the upcoming Rowdy Redneck Revival country music concert.
e. An iPod.

115. Which of the following is/are definitely almost always illegal in the United States?
a. Implicit price discrimination.
b. Sticky prices.
c. Predation.
d. Both (a) and (b).
e. All of the above.

116. “Category Killer” retail chains:

a. Usually emphasize guns and ammunition in their assortment.
b. Tend to offer only a few choices in each product category.
c. Are often able to buy certain merchandise from manufacturers at very low
prices in return for committing to buy large quantities well ahead of the time
they are needed.
d. Both (a) and (b).
e. None of the above.

117. The ultimate purpose of life is to:

a. Maximize the present value of total profit.

118. In research, a confound:

a. Can usually be effectively avoided by the use of conditional branching.
b. Typically results because many individuals in focus groups fail to read
instructions.
c. May be present when two variables that seem to correlate are both caused by a
third variable.
d. Will only occur in secondary research.
e. None of the above.
 25

119. In terms of trends of in the retail sector:

a. There has been an increase in the shares of the market held by both in the high
service-high price and low service-low price retailers.
b. In order to succeed today, retailers must provide both low prices and high
levels of service.
c. The “Wheel of Retailing” suggests that many retail chains will enter the market
with low prices and low service and gradually add more services, resulting in
higher prices over time.
d. Both (a) and (c)
e. Both (b) and (c).

120. A dynamically continuous innovation:

a. Tends to involve new technology, but is used much the same way by end
customers as are its predecessor products.
b. Tends to require fewer marketing efforts/investments than do discontinuous
innovations.
c. Is usually delivered in the form of a store brand.
d. Both (a) and (b).
e. None of the above.

121. Scanner data would be least useful for which of the following research questions?
a. How large an impact does advertising have on the sales of Del Monte canned
peas?
b. What beliefs do consumers hold about Tide laundry detergent?
c. Is it more effective to spend money on coupons or on getting special display
space in the retail store?
d. What percentage of consumers will switch brands of coffee when Folgers issues
a coupon?
e. How large an impact does household size (the number of people living in the
household) have on the likelihood that a coupon will be used when cereal is
bought?

122. A newspaper publisher would like to know whether readers would like a new gossip
column with juicy “scoops” on the private lives of celebrities as opposed to a a series of
thoughtful articles on the World economy. Which of the following methods would be
most suitable?
a. Focus groups.
b. Scanner data.
c. Projective methods.
d. Online surveys.
e. Observation.

123. Which of the following are correct statements about the tradeoffs between different
types of research methods?
a. Experimentation is generally more cumbersome to do than the use of surveys.
b. Focus groups usually allow the researcher to obtain more precise results that
can be better generalized than do surveys.
c. Although observation takes more time to do than surveys, observation is a more
effective tool in understanding consumer attitudes.
d. Both (a) and (c).
e. None of the above.
 26

124.Currently, in the United States, electric cars are most likely to face which of the
following?
a. A “stuck-in-the-middle” problem.
b. “Sticky” prices.
c. A “promotion signal.”
d. A “chicken-and-egg” problem.
e. Price maintenance.

125.Whereas _________________ was/were a major issue in the diffusion of hybrid

corn, ______________ was/were a major issue in the diffusion of fax machines.
a. The “chicken-and-egg” problem; observability.
b. Network economies; observability.
c. Observability; trialability.
d. Trialability; network economies.
e. The “chicken-and-egg” problem; trialability.

126. Parallel distribution structures:

a. Usually result in very impressive viral marketing results.
b. Can be used in the distribution of commodities, but tend to be ineffective in
selling differentiated products.
c. Are very difficult to implement in the maturity phase of the product life cycle,
but much better suited for the growth phase.
d. Both (b) and (c).
e. None of the above.

127. During the introduction phase of the Product Life Cycle:

a. It is especially important to stress product differentiation in advertising.
b. Firms should attempt to practice the “selling concept.”
c. Conditional branching in research is likely to be very ineffective.
d. Both (a) and (b).
e. None of the above.
128. Aside from possible ethical problems this practice may entail, serial killing:
a. Is a waste of time.

129. Comparative advertising:

a. Tends to “backfire” in the U.S. since most consumers find this approach very
distasteful.
b. Tends to be somewhat effective despite the reality that it is resented by many
consumers who find it distasteful.
c. Tends to be effective in marketing to men, but not in marketing to women.
d. Works well if used to compare prices of different retail chains, but is generally
not effective in comparing different branded products.
e. None of the above.

130. The Elaboration Likelihood Model suggests that celebrity endorsements:

a. Will usually be effective for low involvement products.
b. May be effective for high involvement products, but only if the celebrity is
“congruent,” or compatible, with the product advertised.
c. Will be effective for low income consumers, but will be ineffective for high
income consumers.
d. Both (b) and (c).
e. None of the above.
 27

131. In the United States, it is usually illegal to:

a. Charge a price lower than one’s cost of production.
b. Charging individuals different prices from those charged to firms.
c. Engage in implicit price discrimination.
d. Both (a) and (c).
e. All of the above.

132. A manufacturer of vitamin supplements would like to determine if women are more
likely to buy calcium supplements in pink, as opposed to blue, containers. This vitamin
supplement is not yet available in the market. Of the following, which research method
would be most appropriate?
a. Focus groups.
b. Questionnaires.
c. Experimentation.
d. Scanner data.
e. Projective research (techniques).

133. Selling products on the Internet:

a. Will usually save the seller a great deal of money compared to traditional
distribution methods, thus raising profitability dramatically.
b. Is more likely to be appropriate for a niche product as opposed to one
demanded by a large percentage of consumers.
c. Tends to be highly cost effective in the U.S., but is usually considerably more
expensive than traditional distribution methods in most other countries.
d. Both (b) and (c).
e. None of the above.

134. Within the context of online surveys, conditional branching:

a. Helps Internet firms reduce gardening costs by implanting chips into around
buildings which ensure that the trees’ branches grow only in desired directions.
b. Is used mainly to reduce the confusion experienced by individuals participating
in research.
c. Allows subsequent questions to be based on answers given to earlier questions.
d. Will tend to increase the number of questions asked of each respondent by
about 50%, but will usually provide at least three times as much useful
information.
e. None of the above.

135. Badley B. Bruin sells “surprise boxes” for $20.00 plus shipping through an online auction
site. He writes that the boxes “might contain something valuable,” but in truth, the
boxes are usually filled with his trash. Badley uses a synonym (an assumed or
“fictitious” name) to hide his identity and is mostly interested in duping unsuspecting
customers at an elite educational institution in Southern California. Which of the
following economic factors would tend to favor the use of this method?
a. Low value-bulk ratio.
b. Geographic dispersal of customers.
c. The desire to preserve value by reducing the time spent in the distribution
channel.
d. Both (a) and (b).
e. None of the above.
 28

136. The “Wheel of Retailing:”

a. Reflects the reality that more and more things today are delivered directly to
customers rather than going through traditional retail stores.
b. Is a phenomenon whereby most stores or chains of stores start off at the low-
price/low-service end of the continuum and gradually add more services and
raise prices over time.
c. Represents an effective way to avoid diversion of goods in the distribution
channel.
d. Both (a) and (c).
e. None of the above.

137. Parallel distribution structures:

a. Are used mostly to distribute skis and water-skis.
b. Come about when manufacturers operate factory outlet stores in addition to
going through regular channels.
c. Occur when manufacturers sell directly to some large retail chains in addition
to selling to smaller retailers through wholesalers.
d. Both (b) and (c).
e. None of the above.

138. Scanner data:

a. Involves records of items purchased by consumers in retail stores.
b. Sometimes includes information about which brands were on sale when a product
was purchased.
c. Generally does not provide useful information.
d. Both (a) and (b).
e. Both (b) and (c).

139. Since more space will be available in the new student union building here at USC, there
will be space for more restaurants. The Food Services Committee has received
promising bids from In ‘N’ Out Burger, Taco Bell, and Yoshinoya Bowl. In order to get
contracts worked out in time, no other options will be considered. Of the following,
which of the following research methods would be most appropriate to determine which
one of these three options would be preferred by students? 2
a. Scanner data.
b. Questionnaires.
c. Experimentation.
d. Focus groups.
e. Projective research.

2
This situation is described for purposes of this exam question only. The negotiations discussed are not
actually taking place.
 29

140. The promotion signal involves:

a. The tendency of supermarkets to advertise heavily and announce weekly
specials on the public address system in the stores.
b. The tendency of many shoppers to automatically choose a product that is on
sale without examining the size of the sale (i.e., the actual amount of money
saved).
c. The tendency of many shoppers to refuse to use coupons.
d. The fact that consumers tend to “tune out” advertising in stores because they
want to focus on the task of shopping.
e. None of the above.

141. “Category killers:”

a. Tend to focus on one broad category (e.g., electronics, office supplies, or
sporting equipment).
b. Tend to place very large orders early on in return for large price breaks.
c. Tend to offer much higher standards of customer service than do most other
retailers.
d. Both (a) and (b).
e. Both (a) and (c).

142. A short answer on this exam written by an “F minus” student is more likely than one
written by an “A” student to:
a. Carefully discuss the issues involved.
b. Make sense.
c. Include the term “etc.”
d. All of the above.
e. None of the above.

143. Scanner data:

a. Is usually available only for grocery products.
b. Tends to be especially useful in getting a complete picture of consumer
attitudes.
c. Is only available for goods bought online.
d. Is the best method available for experimentation.
e. None of the above.

144. When a firm does not use penetration or skimming pricing strategies, of the following,
the best approach to pricing is:
a. Adding a fixed percentage (e.g., 25%) to the cost of manufacturing the
product).
b. Dividing twice the cost of manufacturing the product by the square root of the
average of the three most important competitor’s costs of production.
c. Setting prices according to the value of the product perceived by the customer.
d. Pricing at 92.5% of competitors’ average prices.
e. Based on a consultation with an astrologer.
 30

145. According to the conceptualization of price we considered in class, which of the

following approaches can be used to lower the price paid by customers for Microsoft
Office, assuming no changes other than these?
a. Reducing the “sticker” price.
b. Including an additional software piece in the package.
c. Offering ninety days of online support at no additional charge.
d. All of the above.
e. None of the above.

146. Chez le Cochon3 is a new very fancy restaurant despite the limited cleaning performed
on the premises, a pervasive odor, and walls that are all painted pink. Chez le Cochon
specializes in very high calorie food. Diners are told that good table manners are
completely optional. The management would like to do some research on what
motivates people to eat large portions of highly fatty foods but is afraid that most
consumers in the target segment would ordinarily tend not to tell the truth about their
motives. Which of the following research methods would be most suitable in this
situation?
a. Focus groups.
b. Surveys.
c. Scanner data.
d. Projective techniques.
e. Experimentation.

147. Selling things online:

a. Is usually the most cost effective way to go except when products are very
bulky.
b. Tends to dramatically reduce labor costs.
c. Tended to become cost effective when network economies were reached
around the years 2002-2003.
d. Both (a) and (b).
e. None of the above.

148. A study concludes that because individuals who listen to opera tend to have significantly
higher incomes than those who listen to country, opera listening tends to increase an
individual’s future earnings. Most likely, this study:
a. Is most likely based on observation.
b. Appears to use conditional branching improperly.
c. Involves a confound.
d. Both (b) and (c).
e. None of the above.

3
Cochon means “pig” in French. Loosely translated, the name of the establishment means “The Pig’s
Place.”
 31

149. PsychoSource.com sends catalogs to alumni of a highly disreputable public college in

West Los Angeles touting a series of online seminars teaching children how to commit
violent crimes. The brochure reports that once the customers’ children have completed
four online courses and passed an exam, they will receive—for an additional fee—
“super-psycho certification.” Proud parents can buy an extra large certificate suitable
for framing. This offering involves:
a. Network economies.
b. A likely “chicken-and-egg” problem.
c. Diversion.
d. Price maintenance.
e. None of the above.

150. If McDonald’s were to double its advertising spending:

a. Sales would probably decline because customers would conclude that the
increase in advertising probably resulted from the management’s lack of
confidence.
b. Sales would most likely go up more than 100% due to economies of scale.
c. Sales would probably increase somewhat, but much by less than 100%.
d. Sales would most likely increase by 10% (with then being the square root of
100).
e. None of the above.

151. In the diffusion of credit cards, which of the of the following was the most important
issue?
a. Trialability.
b. Observability.
c. The chicken-and-egg problem.
d. Projection.
e. Classical conditioning.

152. The “Promotion Signal” seems to explain:

a. Why most consumers tend to be very skeptical of advertisements they see.
b. That although a study found that most shoppers in a supermarket did not seem
to carefully check prices, brands that are put on sale tend to experience a
large increase in sales volume.
c. A perception among consumers that products featured on sale tend to be of
low quality.
d. Both (a) and (b).
e. All of the above.

153. During the last two decades, in the U.S. retail market:
a. Growth has occurred mostly among those retail chains which have done a good
job balancing price and service so that customers get decent customer service
at decent prices.
b. Growth has tended to happen both among the high-service, high-cost and low-
service, low-cost chains at higher rates than for those in the middle (offering
the medium-price, medium-service option).
c. The Internet now accounts for some 40% of all sales.
d. Both (a) and (b).
e. Both (b) and (c).
 32

154. Psychographics:
a. Involves comic strips about individuals with anti-social personality disorders.
b. Represent a way to implement segmentation by benefit desired.
c. Involves the use of demographic variables in combination with lifestyle
variables to segment consumers.
d. Has proven to be very ineffective in practice.
e. Both (b) and (d).

155. An important reason for treating others with kindness is that:

a. They may remember this generously in their wills.

156. As a busy and highly successful executive, Tammy Trojan values quick acceleration in a
car. Tammy, however, is also highly environmentally responsible and would consider
sacrificing some performance of a car if it features fuel saving hybrid technology.
Tammy is engaging in:
a. A reversal of the means-end chain.
b. Compensatory decision making.
c. Non-compensatory decision making.
d. Low involvement decision making.
e. Both (c) and (d).

157. For the type of perceptual map based on respondents’ ratings of the relative similarity
of objects (e.g., Coke vs. Pepsi and Perrier vs. Cactus Cooler):
a. The information about the perceived characteristics of the different brands or
product categories may be useful in assessing opportunities to reposition.
b. The computer generated map does not automatically identify what each
dimension represents.
c. Results are useful only for low involvement product categories.
d. Both (a) and (b).
e. Both (b) and (c).

158. In general, segmentation by income:

a. Tends to be more effective than segmentation by benefit desired.
b. Tends to be useful for low involvement goods but not for high involvement
goods.
c. Represents an example of psychographics.
d. Both (a) and (c).
e. None of the above.

159. With respect to segmentation, targeting, and positioning, airlines tend to practice:
a. A concentrated strategy.
b. A differentiated strategy.
c. An undifferentiated strategy.
d. Repositioning toward the middle.
e. Selective distortion.
 33

160. The a priori specification of dimensions approach to perceptual mapping

(multidimensional scaling) is most appropriate to use when:
a. It is known from prior research which attributes of the product in question are
most important.
b. Researchers doubt that consumers can accurately rate alternatives based on
the criteria (dimensions) of interest.
c. The product involved is considered a luxury.
d. Both (b) and (c).
e. All of the above.

161. For segmentation efforts to be useful:

a. Members of each segment defined should differ in some significant way from
members of other segments.
b. Two bases for segmentation—e.g., demographics and psychographics—should
almost always be used.
c. The process must be applied to a high involvement product category.
d. All of the above.
e. None of the above.

162. Segmentation by usage rate:

a. Has generally been found to be ineffective.
b. Requires all firms to target “heavy” users of the product category.
c. Represents a special case of psychographics.
d. Both (b) and (c).
e. None of the above.

163. Administrators of community colleges complain that many of today’s high school seniors
believe that community colleges are for low achieving students and that they offer a
low quality education. Many of these administrators have therefore started campaigns
to persuade students that community colleges in fact offer high quality education for
the first two years of college at much lower costs than four year institutions do. These
efforts represent an attempt to:
a. Segment based on psychographics.
b. Multiply and then divide beliefs.
c. Reposition.
d. Use classical conditioning as a means of attitude change.
e. None of the above.
 34

164. Advertisements featuring the AFLAC duck (who quacks the word “AFLAC” when it
overhears people talk about which company offers insurance that kicks in when
subscribers are unable to work for a period of time) represent:
a. An attempt to increase brand awareness among consumers.
b. A two-sided appeal.
c. Segmentation by benefit desired.
d. A strategy to embrace, rather than fight, the “stuck in the middle” position.
e. None of the above.

165. Which of the following brands is most likely to experience a “stuck-in-the-middle”

problem?
a. Neiman-Marcus (an upscale department store)
b. Wal-Mart (a large chain of discount stores)
c. Amazon.com (an online seller of books and other merchandise)
d. Days Inn (a moderately priced hotel chain)
e. Dollar Stores (a chain of stores selling close-out merchandise at $1.00 per item)

166. Within the context of attitude change strategies:

a. To the extent that two-sided appeals are effective, this effectiveness likely
results from a perception that the message is more credible.
b. “Pairing” a political candidate with the American flag is an example of classical
conditioning.
c. One approach is to attempt to increase the importance of an already held
belief.
d. Both (a) and (c).
e. All of the above.

167. For which of the following purposes would a focus group be most useful?
a. Wal-Mart would like to know what percentage of customers would buy prefer to
have a McDonald’s, as opposed to a Taco Bell, restaurant in stores.
b. General Foods would like to know if they would be better off spending their
money on advertising or on cents off coupons.
c. Von’s would like to know what types of concerns consumers may have about
genetically modified crops.
d. Admissions officials at USC would like to know how many siblings students have
on the average.
e. Determining whether the majority of fraternity members prefer Coke or Pepsi.

168. Humor appeal in advertising is most likely to help accomplish which of the following?
a. Persuasion of the audience based on positive affect.
b. Adding beliefs.
c. Increasing the amount of attention paid by the audience to the advertisement.
d. Inducing fear appeal.
e. Facilitating classical conditioning.

169. The skimming pricing strategy:

a. Tends to work extremely well when targeting high income or high wealth
consumers.
b. Is usually more suitable for products where some segments value having the
latest technology more than other segments do.
c. Can only be used in the dairy industry.
d. Both (a) and (b).
e. None of the above.
 35

170. Parallel distribution structures:

a. Are an effective way to provide customers with trialability.
b. Are well suited for all products that are not perpendicular.
c. Represent an effective way to implement category management.
d. Tend to be illegal in most states.
e. None of the above.

171. The Central Advertising Agency is interested in assessing the effectiveness of a thirty
second advertising spot. Two areas of concern are (1) how much attention viewers
seem to give to the ad and (2) where the viewer looks at various times during the ad.
Of the following research methods, which would be most suited for this purpose?
a. Conditional branching.
b. Focus groups.
c. Physiological measures.
d. Projective techniques.
e. Scanner data.

172. The Greedy Girl Scout Group (GGSG) teaches its members that profit is the most
important thing in life and that women should aim to make at least as high profits as
those made by men. Which of the following lessons would it be correct to teach?
a. The most profitable method of pricing is usually “cost-plus.”
b. The skimming pricing strategy is most likely to be profitable if the Group has a
product that others cannot currently make.
c. Penetration pricing is likely to cause competition to increase greatly.
d. Both (b) and (c).
e. None of the above.

173. Research on advertising has found that:

a. No matter how much money is spent on advertising, it is unlikely that the
advertising will have any effect at all.
b. Spending a small amount of money on advertising is likely to have almost the
same result as spending a very large amount of money.
c. Firms such as Coca Cola would more than triple their sales if they doubled their
advertising budgets.
d. Advertising messages are often misunderstood by readers, listeners or viewers.
e. None of the above.

174. In general:
a. A consumer’s income usually predicts quite accurately how much he or she is
willing to pay for a product.
b. Firms that practice the “skimming” pricing strategy tend to embrace the selling
concept rather than the marketing concept.
c. When the price of a product is increased, the quantity sold will always decline.
d. Both (a) and (b).
e. None of the above.

175. Wal-Mart often puts signs next to products showing the price that was previously
charged and the new, lower price. These signs:
a. Reflect the consumer’s internal reference prices.
b. Represent an example of cost-plus pricing.
c. Represent the use of an external reference price.
d. Both (a) and (b).
e. Both (b) and (c).
 36

176. In the diffusion of hybrid corn, which of the following was the biggest issue?
a. Network economies.
b. Trialability.
c. The chicken-and-egg problem.
d. Lack of relative advantage.
e. Diversion.

177. Within the context of the diffusion of innovation, which of the following products is
most likely to feature network economies?
a. A new color printer featuring low cost inkjet cartridges.
b. An online auction site.
c. A car GPS navigation system with Bluetooth capabilities.
d. A new type of home computer wireless network.
e. A lawn mower.

178. In the United States, it is generally illegal to:

a. Sell a product below its average cost of production.
b. Collude with competitors (agree not to sell below a certain price or agree to
reduce consumer choice or service).
c. Charge different prices to firms which compete against each other unless the
seller can show that the lower price charged the one firm results from lower
costs in serving that customer.
d. All of the above.
e. None of the above.

179. In general:
a. Manufacturers in most product categories can generally save a great deal of
money by selling directly to customers rather than going through retail stores
and other distributors.
b. If it is cheaper to sell a certain product or service online than it is to go
through traditional retail channels, firms that sell online can, in the long run,
expect to make large profits.
c. Conditional branching is necessary in order for the “skimming” pricing strategy
to be successful.
d. Both (b) and (c).
e. None of the above.

180. Scanner data:

a. Is usually only available for grocery products.
b. Is usually the most effective way to determine the influence of consumer
attitudes on purchase patterns.
c. Has most of the same benefits as projective research methods.
d. Both (a) and (b).
e. None of the above.
 37

181. Under which of the following circumstances would conditional branching be most likely
to be useful in market research?
a. The survey has a low response rate.
b. The survey asks about something that many respondents may find
embarrassing.
c. Different questions should be asked to people who have and have not
redeemed a coupon over the last twelve months.
d. The research is done with a paper and pencil survey.
e. It is important that the respondent be able to see a picture of the product.

182. In market research:

a. “Open-ended” questions tend to be more likely to be skipped by respondents
than are “closed ended” questions.
b. One problem associated with focus groups is that the total sample size involved
tends to be limited.
c. If both surveys and focus groups are done, the surveys should usually be done
before the focus groups.
d. Both (a) and (b).
e. Both (a) and (c).

183. A charity is interested in finding out which of the following colors of jackets worn by
solicitors will result in higher donations: Red, blue, green, or pink. Of the following
research methods, which would be most appropriate for addressing this question?
a. Scanner data.
b. Phone surveys.
c. Internet surveys.
d. Experimentation.
e. Focus groups.

184. Exchange rates between most currencies:

a. Tend to be set by the forces of supply and demand for the various currencies.
b. Result because of the disparity between nominal and purchasing power parity
adjusted national income measures.
c. Cause the phenomenon of extra-territoriality.
d. Both (a) and (b).
e. Both (b) and (c).

185. Micro-payments:
a. Involve the idea that costs of doing business online tend to be lower.
b. Consist of small amounts of money.
c. Often result in the loss of a significant percentage of the revenue when
collected through credit cards.
d. Both (a) and (b).
e. Both (b) and (c).

186. Country-of-origin effects:

a. Account for the high cost of shipping a product from one country to another.
b. Are illegal under the Foreign Corrupt Practices Act.
c. Explain the differences between the new and old paid search models.
d. Result from SWOT analysis.
e. None of the above.
 38

187. The International Product Life Cycle:

a. Is used primarily to predict demand for exercise equipment.
b. Is the main component of SWOT analysis.
c. Suggests that certain pieces of capital equipment will be bought by firms in
developed countries and may then be sold off to firms in developing countries
while some useful life of the equipment still exists.
d. Causes many firms to be charged with violating the Foreign Corrupt Practices
Act.
e. None of the above.

188. Leap-frogging:
a. Explains which food items are popular in French cuisine.
b. Could be good news for manufacturers of electric cars.
c. Is illegal within the European Union.
d. Is a novel approach to social media.
e. None of the above.

189. Country of origin effects would most likely have a negative impact on:
a. Italian shoes.
b. French wine.
c. German wine.
d. German automobiles.
e. Japanese electronics.

190. Collaborative filtering:

a. Tends to improve the value-to-bulk ratio of goods sold online.
b. Can be used to identify additional items that a customer may want to buy.
c. Is an effective approach to search engine optimization.
d. Both (a) and (c).
e. None of the above.

191. In selling internationally:

a. Firms may need to make both mandatory and discretionary product
adaptations.
b. Exchange rates tend to be unimportant since the value of some currencies will
go up when others go down.
c. The practice of extra-territoriality makes it illegal to sell products at a lower
price in some countries than in the United States.
d. Both (a) and (b).
e. Both (b) and (c).

192. In order to decide where to buy gasoline on the way home from work, a consumer:
a. Would most likely use internal search.
b. Would most likely use external search.
c. Would most likely not form a behavioral intention.
d. Both (b) and (c).
e. None of the above.
 39

193. Research shows that consumers of women’s power executive shoes tend to agree on
how important each attribute is and how each brand fares on each of these attributes.
A current study shows the following perceptions:

Brand Attribute Brand Evaluation

Importance Beatrice Sylvia Tricia Heloise
Bruin Stanford Trojan Harvard
Overall value Most Very poor Good Excellent Fair
important
Comfort Second most Extremely Fair Excellent Good
important poor
Stylishness Third most Poor Good Excellent Fair
important
Durability Fourth most Fair Good Excellent Fair
important
Versatility Fifth most Poor Fair Excellent Poor
important

Based on this information, it appears that:

a. Beatrice Bruin will get the highest market share.

b. Consumers who use a non- compensatory approach to decision making will be
more likely to choose Tricia Trojan.
c. Consumers who use a compensatory approach to decision making will be more
likely to choose Tricia Trojan.
d. Both (b) and (c).
e. None of the above.
 40

Short Answer.

1. How does scanner data work? For which types of decisions can it be used?

2. Please discuss characteristics of “category killer” retail chains.

3. Please discuss stages of the Product Life Cycle (PLC)

4. In online market research, how does conditional branching work?

5. Please discuss the diffusion of ATM cards, emphasizing important issues in the
diffusion of innovation that relate to this product category