Chapter 1: Defining Marketing for the 21st Century

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Chapter 1: Defining Marketing for the 21st Century

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. Good marketing is no accident, but a result of careful planning and ________.

a. execution

b. selling

c. strategies

d. tactics

e. research

Answer: a Page: 4 Level of difficulty: Medium

2. Marketing is both an “art” and a “science”—there is constant tension between the formulated side of marketing and the ________ side.

a. creative

b. selling

c. management

d. forecasting

e. behavior

Answer: a Page: 4 Level of difficulty: Easy

3. The most formal definition of marketing is ________.

a. meeting needs profitably

b. identifying and meeting human and social needs

c. the 4Ps (Product, Price, Place, Promotion)

d. an organizational function and a set of processes for creating, communicating, and delivering, value to customers, and for managing customer relationships in ways that benefit the organization and its stake holders.

e. improving the quality of life for consumers

Answer: d Page: 6 Level of difficulty: Medium

4. Marketing management is ________.

a. managing the marketing process

b. monitoring the profitability of the companies products and services

c. selecting target markets

d. developing marketing strategies to move the company forward

e. the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

Answer: e Page: 6 Level of difficulty: Easy

5. A transaction involves ________.

a. at least two parties

b. each party has something that might be of value to the other party

c. each party is capable of communication and delivery

d. each party is free to accept or reject the exchange offer

e. all of the above

Answer: e Pages: 6–7 Level of difficulty: Medium

________ goods constitute the bulk of most countries’ production and marketing efforts.

f. Durable

g. Impulse

h. Physical

i. Service

j. Event

Answer: c Page: 8 Level of difficulty: Medium

6. ________ can be produced and marketed as a product.

a. Information

b. Celebrities

c. Durable goods

d. Organizations

e. Properties

Answer: a Page: 9 Level of difficulty: Medium

7. Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the store, ________.”

a. we make profits

b. we challenge competitors

c. we implement ads

d. we sell hope

e. we sell quality

Answer: d Page: 9 Level of difficulty: Easy

8. A ________ is someone seeking a response (attention, a purchase, a vote, a donation) from another party, called the ________.

a. salesperson, customer

b. fund raiser, contributor

c. politician, voter

d. marketer, prospect

e. celebrity, audience

Answer: d Page: 10 Level of difficulty: Hard

9. In ________—consumers may share a strong need that cannot be satisfied by an existing product.

a. negative demand

b. latent demand

c. declining demand

d. irregular demand

e. non-existent demand

Answer: b Page: 10 Level of difficulty: Medium

10. In ________—more customers would like to buy the product than can be satisfied.

a. latent demand

b. irregular demand

c. overfull demand

d. excessive

e. negative demand

Answer: c Page: 10 Level of difficulty: Medium

11. Marketers often use the term ________ to cover various groupings of customers.

a. people

b. buying power

c. demographic segment

d. social class position

e. market

Answer: e Page: 10 Level of difficulty: Hard

12. Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image in markets called ________.

a. business markets

b. global markets

c. consumer markets

d. nonprofit and governmental markets

e. service markets

Answer: c Page: 11 Level of difficulty: Medium

13. In business markets, advertising can play a role, but a stronger role may be played by the sales force, ________, and the company’s reputation for reliability and quality.

a. brand image

b. distribution

c. promotion

d. price

e. performance

Answer: d Page: 11 Level of difficulty: Hard

14. Global marketers must decide ________.

a. which countries to enter

b. how to enter each country (as an exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer)

c. how to adapt their product and service features to each country

d. how to price their products in different countries

e. all of the above

Answer: e Pages: 11–12 Level of difficulty: Medium

15. Mohan Sawhney has proposed the concept of ________ to describe a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

a. metamarket

b. vertical integration

c. horizontal integration

d. betamarket

e. synchronized marketing

Answer: a Page: 12 Level of difficulty: Hard

16. The ________ promises to lead to more accurate levels of production, more targeted communications, and more relevant pricing.

a. Age of Globalization

b. Age of Deregulation

c. Industrial Age

d. Information Age

e. Production Age

Answer: d Page: 13 Level of difficulty: Medium

17. Many countries have ________ industries to create greater competition and growth opportunities.

a. open-market

b. deregulated

c. regulated

d. scientifically segmented

e. created mass market

Answer: b Page: 13 Level of difficulty: Medium

18. Customers are showing greater price sensitivity in their search for ________.

a. the right product

b. the right service

c. the right store

d. value

e. relationships

Answer: d Page: 14 Level of difficulty: Medium

19. Rising promotion costs and shrinking profit margins are the result of ________.

a. changing technology

b. globalization

c. deregulation

d. privatization

e. heightened competition

Answer: e Page: 14 Level of difficulty: Hard

20. Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries—this is called ________.

a. globalization

b. customization

c. industry convergence

d. heightened competition

e. acquisition

Answer: c Page: 14 Level of difficulty: Medium

In response to giant retailers and category killers, entrepreneurial retailers are building entertainment into stores with coffee bars, lectures, demonstrations, and performances. They are marketing a(n) ________ rather than a product assortment.

4 experience

f. customer value

g. customer delight

h. total service solution

i. intangible benefit(s)

Answer: a Page: 15 Level of difficulty: Medium

21. In response to threats from such companies as AOL, Amazon, Yahoo, eBay, E’TRADE, and dozens of others, established manufacturers and retailers became “brick-and-click” oriented by adding online services to their existing offerings. This process became known as ________.

a. reintermediation

b. disintermediation

c. e-commerce

d. e-collaboration

e. new market synchronization

Answer: a Page: 15 Level of difficulty: Hard

22. Many brick-and-click competitors became stronger contenders in the marketplace than the pure-click firms because they had a larger pool of resources to work with and ________.

a. better prices

b. greater value

c. well-established brand names

d. one-on-one communications

e. direct selling capability

Answer: c Page: 15 Level of difficulty: Medium

23. The ________ is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots.

a. marketing concept

b. selling concept

c. production concept

d. product concept

e. holistic marketing concept

Answer: b Page: 15 Level of difficulty: Medium

24. The ________ concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

a. product

b. marketing

c. production

d. selling

e. holistic marketing

Answer: a Page: 15 Level of difficulty: Easy

25. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.

a. production

b. selling

c. marketing

d. product

e. holistic marketing

Answer: b Page: 15 Level of difficulty: Medium

26. Several scholars have found that companies who embrace the marketing concept achieve superior performance. This was first demonstrated for companies practicing a ________—understanding and meeting customers’ expressed needs.

a. reactive market orientation

b. proactive marketing orientation

c. total market orientation

d. impulsive market orientation

e. holistic market orientation

Answer: a Page: 16 Level of difficulty: Medium

27. According to Theodore Levitt, who drew a perceptive contrast between the selling and marketing concepts, ________ is preoccupied with the need to convert products into cash.

a. marketing

b. selling

c. direct marketing

d. holistic marketing

e. service marketing

Answer: b Page: 16 Level of difficulty: Medium

28. In the course of converting to a marketing orientation, a company faces three hurdles—________.

a. organized resistance, slow learning, and fast forgetting

b. management, customer reaction, competitive response

c. decreased profits, increased R&D, additional distribution

d. forecasted demand, increased sales expense, increased inventory costs

e. customer focus, profitability, slow learning

Answer: a Page: 16 Level of difficulty: Hard

29. Companies that practice both a reactive and proactive marketing orientation are implementing a ________ and are likely to be the most successful.

a. total market orientation

b. external focus

c. customer focus

d. competitive, customer focus

e. confrontation process

Answer: a Page: 16 Level of difficulty: Medium

30. Marketers argue for a ________ in which all functions work together to respond to, serve, and satisfy the customer.

a. cross-functional team orientation

b. collaboration model

c. customer orientation

d. management-driven organization

e. total quality model

Answer: c Page: 16 Level of difficulty: Medium

31. ________ can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breadth and interdependencies of their effects.

a. Niche marketing

b. Holistic marketing

c. Relationship marketing

d. Supply-chain marketing

e. Demand-centered marketing

Answer: b Page: 17 Level of difficulty: Medium

32. ________ marketing has the aim of building mutually satisfying long-term relations with key parties such as customers, suppliers, distributors, and other marketing partners in order to earn and retain their business.

a. Holistic

b. Demand-based

c. Direct

d. Relationship

e. Synthetic

Answer: d Pages: 17–18 Level of difficulty: Easy

33. Companies who form a ________ collect information on each customer’s past transactions, demographics, psychographics, and media and distribution preferences.

a. sales network

b. holistic union

c. marketing network

d. supply-chain network

e. integrated network

Answer: c Page: 18 Level of difficulty: Hard

34. The ability of a company to deal with customers one at a time has become practical as a result of advances in ________, computers, the Internet, and database marketing software.

a. improved communication flow

b. information technology

c. just-in-time manufacturing

d. factory customization

e. customer-centered strategies

Answer: d Page: 18 Level of difficulty: Hard

35. One traditional depiction of marketing activities is in terms of the marketing mix or four Ps. The four Ps are characterized as being ________.

a. product, positioning, place, and price

b. product, production, price, and place

c. promotion, place, positioning, and price

d. place, promotion, production, and positioning

e. product, price, promotion, and place

Answer: e Page: 19 Level of difficulty: Easy

36. The four Ps represent the sellers’ view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs. The four Cs are ________.

a. customer focus, cost, convenience, and communication

b. customer solution, customer cost, convenience, and communication

c. convenience, control, competition, and cost

d. competition, cost, convenience, and communication

e. category control, cost, concept development, and competition

Answer: b Pages: 19–20 Level of difficulty: Medium

37. Holistic marketing incorporates ________, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management.

a. profit objectives

b. share of customer

c. internal marketing

d. the marketing mix

e. strategic planning

Answer: c Page: 20 Level of difficulty: Hard

38. Marketing is not a department so much as a ________.

a. company orientation

b. philosophy

c. function

d. branch of management

e. branch of economics

Answer: a Page: 20 Level of difficulty: Medium

39. Holistic marketing incorporates ________ and understanding broader concerns and the ethical, environmental, legal, and social context of marketing activities and programs.

a. safe product design

b. cultural marketing

c. social responsibility marketing

d. cross-functional teams

e. direct sales policies

Answer: c Page: 20 Level of difficulty: Medium

40. The ________ holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

a. customer-centered business

b. focused business model

c. societal marketing concept

d. ethically responsible marketing manager

e. production-centered business

Answer: c Page: 22 Level of difficulty: Medium

41. Companies see ________ as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage.

a. cause-related marketing

b. brand marketing

c. equity marketing

d. direct marketing

e. recognition marketing

Answer: a Page: 23 Level of difficulty: Medium

42. When a customer has a(n) ________ need he/she wants a car whose operating cost, not its initial price, is low.

a. stated

b. real

c. unstated

d. delight

e. secret

Answer: b Page: 24 Level of difficulty: Hard

43. When a customer has a(n) ________ need the customer wants to be seen by friends as a savvy consumer.

a. real

b. unstated

c. delight

d. secret

e. stated

Answer: d Page: 24 Level of difficulty: Hard

44. During market segmentation analysis, the marketer identifies which segments present the greatest opportunity. These segments are called ________.

a. target markets

b. primary markets

c. tertiary markets

d. demographic markets

e. focused markets

Answer: a Page: 24 Level of difficulty: Medium

45. For each target market, the firm develops a ________. The offering is positioned in the minds of the target buyers as delivering some central benefit(s).

a. value offering

b. niche offering

c. market offering

d. segment offering

e. social offering

Answer: c Page: 24 Level of difficulty: Medium

46. ________ reflects the perceived tangible and intangible benefits and costs to customers.

a. Loyalty

b. Satisfaction

c. Value

d. Expectations

e. Comparison shopping

Answer: c Page: 25 Level of difficulty: Medium

47. If a marketer decides to use warehouses, transportation companies, banks, and insurance companies to facilitate transactions with potential buyers, the marketer is using what is called a ________.

a. service channel

b. distribution channel

c. brand channel

d. relationship channel

e. intermediary channel

Answer: a Page: 26 Level of difficulty: Medium

48. ________ includes all the actual and potential rival offerings and substitutes that a buyer might consider.

a. Competition

b. The product offering

c. A value proposition

d. The supply chain

e. The marketing environment

Answer: a Page: 26 Level of difficulty: Easy

49. The ________ includes the immediate actors involved in producing, distributing, and promoting the offering. The main actors are the company, suppliers, distributors, dealers, and the target customers.

a. operations environment

b. management environment

c. strategic environment

d. task environment

e. tactical environment

Answer: d Page: 26 Level of difficulty: Medium

50. The ________ process consists of analyzing marketing opportunities; selecting target markets; designing marketing strategies; developing marketing programs; and managing the marketing effort.

a. marketing planning

b. strategic planning

c. market research

d. opportunity analysis

e. share of customer

Answer: a Page: 27 Level of difficulty: Medium

51. David Packard of Hewlett-Packard once said, “Marketing is far too important to leave to ________.”

a. the advertising boys

b. uninformed managers

c. novices

d. the CEO

e. the marketing department

Answer: e Page: 27 Level of difficulty: Medium

52. Some companies are now switching from being solely product-centered (with product managers and product divisions to manage them) to being more ________ centered.

a. competency

b. strategy

c. marketing

d. customer-segment

e. sales

Answer: d Page: 27 Level of difficulty: Hard

53. Companies are recognizing that much of their market value comes from ________, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital.

a. variable assets

b. the value proposition

c. intangible assets

d. tangible assets

e. customer preferences

Answer: c Page: 28 Level of difficulty: Easy

54. ________ can increasingly be conducted electronically, with buyer and seller seeing each other on their computer screens in real time.

a. Public relations

b. E-commerce

c. Advertising

d. Personal selling

e. Mass marketing

Answer: d Page: 28 Level of difficulty: Medium

55. Top management is going beyond sales revenue alone to examine the marketing scorecard to interpret what is happening to ________.

a. market share

b. customer loss rate

c. customer satisfaction

d. product quality

e. all of the above

Answer: e Page: 29 Level of difficulty: Medium

56. At the heart of any marketing program is the ________—the firm’s tangible offering to the market.

a. service offer

b. product

c. sales support team

d. packaging

e. auxiliary offer

Answer: b Page: 30 Level of difficulty: Medium

57. ________ activities are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the brands they sell.

a. Consumer behavior

b. Market segmentation

c. Marketing research

d. Marketing communication

e. New product development

Answer: d Page: 30 Level of activity: Medium

58. Marketing evaluation and ________ processes are necessary to understand the efficiency and effectiveness of marketing activities and how both could be improved.

a. control

b. analysis

c. measurement

d. feedback

e. consumer behavior

Answer: a Page: 30 Level of difficulty: Medium

Chapter 3:

Gathering Information and Scanning the Environment

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. The major responsibility for identifying significant marketplace changes falls to the ________.

a. U.S. Department of Labor

b. company’s marketers

c. American Marketing Association

d. industry lobby groups found in Washington, D.C.

e. marketing research industry

Answer: b Page: 72 Level of difficulty: Easy

2. Marketers have extensive information about how consumption patterns vary across countries. On a per capita basis within Western Europe, the ________ smoke the most cigarettes.

a. Swiss

b. Greeks

c. Irish

d. Austrians

e. French

Answer: d Page: 72 Level of difficulty: Hard

3. All of the following questions EXCEPT ________, would be considered to be forms of information needs probes.

a. What decisions do you regularly make?

b. What information do you need to make decisions?

c. What data analysis programs would you want?

d. What magazines and trade reports would you like to see on a regular basis?

e. What products would be most closely matched to consumer needs?

Answer: e Page: 73 Level of difficulty: Medium

4. ________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

a. A marketing information system

b. A marketing research system

c. A marketing intelligence system

d. A promotional campaign

e. A marketing database

Answer: a Page: 73 Level of difficulty: Medium

5. The company’s marketing information system should be a cross between what managers think they need, what managers really need, and ________.

a. what the marketing research department is able to do

b. what consumers are willing to share

c. what the competition is doing

d. what is acceptable industry practice

e. what is economically feasible

Answer: e Page: 73 Level of difficulty: Medium

6. Marketing managers rely on internal reports. By analyzing this information, they can spot ________.

a. micro-markets

b. opportunities and problems

c. macro-markets

d. competitive strategies

e. consumer demographic units

Answer: b Page: 73 Level of difficulty: Easy

7. The heart of the internal records system is the ________.

a. database

b. asset acquisition process

c. order-to-payment cycle

d. service consideration

e. information liquidity ratio

Answer: c Page: 73 Level of difficulty: Hard

8. When a marketer “mines” his or her company’s database, fresh insights can be gained into neglected customer segments, ________, and other useful information.

a. recent customer trends

b. long-term competitive trends

c. possible new inventions

d. possible new technologies

e. new primary data possibilities

Answer: a Page: 74 Level of difficulty: Medium

9. The internal records system supplies results data, but the marketing intelligence system supplies ________ data.

a. concurrent

b. secondary

c. research

d. happenings

e. premium

Answer: d Page: 74 Level of difficulty: Medium

10. A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.

a. marketing research system

b. marketing information system

c. product management system

d. marketing intelligence system

e. vertical system

Answer: d Page: 74 Level of difficulty: Medium

11. A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using ________ to improve the quality of its marketing intelligence.

a. sales force surrogates

b. intermediaries

c. external networks

d. advisory panels

e. customer feedback systems

Answer: c Pages: 74–75 Level of difficulty: Hard

12. All of the following would be considered to be steps to improve the quality of marketing intelligence in a company EXCEPT ________.

a. a company can train and motivate the sales force to spot and report new developments

b. a company can use guerrilla tactics such as going through a competitor’s trash

c. a company can motivate intermediaries to pass along important information

d. a company can network externally

e. a company can purchase information from outside suppliers

Answer: b Pages: 74–76 Level of difficulty: Easy

13. The 2000 U.S. census provides an in-depth look at the population swings, demographic groups, regional migrations, and changing family structure of 281+ million people. Which of the following steps to improve the quality of company marketing intelligence system would be most closely associated the above illustration?

a. A company can purchase information from outside suppliers.

b. A company can take advantage of government data sources.

c. A company can use online customer feedback systems to collect data.

d. A company can network externally.

e. A company can use its sales force to collect and report data.

Answer: b Page: 76 Level of difficulty: Easy

14. There are four main ways that marketers can find relevant online information on competitors’ products and weaknesses, and summary comments and overall performance rating of a product, service, or supplier. ________ is(are) a type of site that is concentrated in financial services and high-tech products that require professional knowledge.

a. Independent customer goods and service reviews

b. Distributor or sales agent feedback sites

c. Combo-sites offering customer reviews and expert opinions

d. Customer complaint sites

e. Shopping bot service sites

Answer: c Page: 77 Level of difficulty: Hard

15. A ________ is “unpredictable, short-lived, and without social, economic, and political significance.”

a. fad

b. fashion

c. trend

d. megatrend

e. style

Answer: a Page: 77 Level of difficulty: Medium

16. A ________ is a direction or sequence of events that has some momentum and durability; the shape of the future is revealed and many opportunities are provided.

a. fad

b. fashion

c. trend

d. megatrend

e. style

Answer: c Page: 77 Level of difficulty: Hard

17. ________ have been described as “large social, economic, political and technological changes [that] are slow to form, and once in place, they influence us for some time—between seven and ten years, or longer.

a. Fads

b. Fashions

c. Trends

d. Megatrends

e. Styles

Answer: d Page: 77 Level of difficulty: Medium

18. Which of the following minority groups in the United States has been associated with one of the ten megatrends shaping the consumer landscape?

a. African Americans

b. Asian Americans

c. European Americans

d. Hispanic Americans

e. Middle Eastern Americans

Answer: d Page: 78 Level of difficulty: Medium

19. The beginning of the new century brought a series of new challenges. All of the following would be considered to be among those challenges EXCEPT ________.

a. a deterioration of innovative ideas

b. steep decline of the stock market

c. increasing unemployment

d. corporate scandals

e. the rise of terrorism

Answer: a Page: 78 Level of difficulty: Medium

20. With the rapidly changing global picture, the firm must monitor six major forces. All of the following would be among those forces EXCEPT ________.

a. demographic

b. economic

c. social-cultural

d. natural

e. promotional

Answer: e Page: 78 Level of difficulty: Easy

21. The main demographic force that marketers monitor is(are) ________.

a. suppliers

b. competitors

c. communication (such as advertising)

d. government reports dealing with birth rates

e. population

Answer: e Page: 79 Level of difficulty: Easy

22. The population explosion has been a source of major concern. Unchecked population growth and consumption could eventually result in all of the following EXCEPT ________.

a. insufficient food supply

b. depletion of key minerals

c. overcrowding

d. restrictions on competition

e. pollution

Answer: d Page: 79 Level of difficulty: Easy

23. One impact of explosive population growth is illustrated by the case of China. The Chinese government passed regulations limiting families to one child. One consequence of these regulations is that ________.

a. the children are so fussed over and spoiled that they become “little emperors”

b. school enrollments are dropping

c. the fledgling automotive business in China will not have customers in a few years

d. open rebellion is being preached

e. “child-oriented businesses” have few customers

Answer: a Page: 80 Level of difficulty: Medium

24. A significant fact about population growth and population shifts is that in 2004 or 2005, ________.

a. the youth market will exceed that of the adult market

b. people over the age of 60 will outnumber those under five years of age

c. baby boomers will be eclipsed by Gen X young adults

d. most age group segments will be about equal

e. Gen Y young adults will surpass the baby boomers as the largest age segment

Answer: b Page: 80 Level of difficulty: Hard

25. Which of the following age groups is thought to control three-quarters of the country’s wealth?

a. 0–20 age segment

b. 60+ age segment

c. 20–30 age segment

d. 30–40 age segment

e. 40+ age segment

Answer: e Page: 81 Level of difficulty: Hard

26. At one time the United States was called a “melting pot” society because of the number of different cultures that were integrated into the U.S. culture. Today, the United States is described as a ________ society because many ethnic groups are maintaining their ethnic differences, neighborhoods, and cultures.

a. “boiling pot”

b. “salad bowl”

c. “banana split”

d. “doubled up”

e. “non-communicative”

Answer: b Page: 81 Level of difficulty: Medium

27. According to the 2000 census, the U.S. population of 276.2 million was 72 percent white and ________ percent African American. The remainder consisted of Hispanic Americans and other minorities.

a. 20

b. 18

c. 15

d. 13

e. 11

Answer: d Page: 81 Level of difficulty: Hard

28. Diversity goes beyond ethnic and racial markets. More than ________ million Americans have disabilities, and they constitute a market for home delivery companies (and others).

a. 50

b. 40

c. 30

d. 20

e. 10

Answer: a Page: 83 Level of difficulty: Hard

29. Which of the following countries is known for having 99 percent of its population literate?

a. England

b. Germany

c. France

d. United States

e. Japan

Answer: e Page: 83 Level of difficulty: Medium

30. The ________ household consists of a husband, wife, and children (and sometimes grandparents).

a. “traditional”

b. “extended”

c. “diversity”

d. “modern”

e. “revised”

Answer: a Page: 83 Level of difficulty: Medium

31. Married couple households—the dominant cohort since the formulation of the United States—has slipped from nearly 80 percent in the 1950s to around ________ percent today.

a. 70

b. 60

c. 50

d. 40

e. 35

Answer: c Page: 83 Level of difficulty: Hard

32. The twenty-first century saw ________ markets grow more rapidly again due to a higher birth rate, a lower death rate, and rapid growth from foreign immigration.

a. suburban

b. urban

c. rural

d. coastal

e. secondary

Answer: b Page: 84 Level of difficulty: Medium

33. The movement by population to the ________ has lessened the demand for warm clothing and home heating equipment and increased demand for air conditioning.

a. Grainbelt

b. Pacific Northwest

c. Sunbelt

d. Mid-Coastal areas

e. Heartland

Answer: c Page: 84 Level of difficulty: Easy

34. Marketers look at where consumers are gathering. Almost one in ________ people over the age of five (120 million) moved at least one time between 1995 and 2000, according to a Census 2000 brief.

a. two

b. three

c. four

d. five

e. ten

Answer: a Page: 85 Level of difficulty: Hard

35. In which of the following economies would we expect to find few opportunities for marketers?

a. Industrializing economies.

b. Land-locked economies.

c. Raw-material-exporting economies.

d. Industrial economies.

e. Subsistence economies.

Answer: e Page: 86 Level of difficulty: Easy

36. According to information presented in the text, which of the following countries is surprisingly a very good market for Lamborghini automobiles (costing more than $150,000) because of the number of wealthy families that can afford expensive cars.

a. Greece

b. Switzerland

c. Holland

d. Russia

e. Portugal

Answer: e Page: 86 Level of difficulty: Hard

37. Over the past three decades in the United States, the rich have grown richer and the middle class has ________.

a. stayed about the same

b. shrunk

c. increased slightly

d. matched the rich in terms of relative growth

e. been ignored because of problems with the poorer classes

Answer: b Page: 86 Level of difficulty: Medium

38. ________ shapes the beliefs, values, and norms that largely define the tastes and preferences.

a. Marketing

b. The mass media

c. Government

d. Production innovation and engineering

e. Society

Answer: e Page: 87 Level of difficulty: Medium

39. If a consumer lives the lifestyle of a “pleasure seeker” or goes on a “self-realization” quest, he or she is expressing what is called ________.

a. views of others

b. views of society

c. views of themselves

d. views of organizations

e. views of the universe

Answer: c Pages: 87–88 Level of difficulty: Easy

40. According to the information found in the social-cultural environment, with respect to views of others, ________ are considered to be things that allow people who are alone to feel they are not (e.g., television, home video games, and chat rooms on the Internet).

a. social surrogates

b. subliminal fantasies

c. relationship avoidance

d. primary products

e. secondary products

Answer: a Page: 88 Level of difficulty: Medium

41. Today, corporations need to make sure that they are good corporate citizens and that their consumer messages are honest. Such a view would be consistent with which of the following views?

a. Views of others.

b. Views of organizations.

c. Views of themselves.

d. Views of the universe.

e. Views of society.

Answer: b Page: 88 Level of difficulty: Easy

42. People vary in their attitudes toward their society. ________ usually live more frugally, drive smaller cars, and wear simpler clothing.

a. Makers

b. Escapers

c. Seekers

d. Changers

e. Developers

Answer: d Page: 88 Level of difficulty: Hard

43. People vary in their attitudes toward society and react accordingly. ________ are a major market for movies, music, surfing, and camping.

a. Makers

b. Preservers

c. Escapers

d. Changers

e. Developers

Answer: c Page: 88 Level of difficulty: Easy

44. All of the following have been cited by the text as being among Americans’ core values EXCEPT ________.

a. they believe in work

b. they believe in getting married

c. they believe in giving to charity

d. they believe in being honest

e. they believe in sexual permissiveness

Answer: e Page: 88 Level of difficulty: Easy

45. Which of the following would be the best illustration of a secondary belief or value?

a. Belief in work.

b. Belief in giving to charity.

c. Belief in getting married.

d. Belief in getting married early.

e. Belief in being honest.

Answer: d Page: 88 Level of difficulty: Medium

46. Which of the following is by far the most popular American leisure activity in that it is preferred by 59 percent of adults who participate in such activities?

a. Gardening.

b. Walking for exercise.

c. Swimming.

d. Photography.

e. Jogging or running.

Answer: b Page: 89 Level of difficulty: Medium

47. Each society contains ________, groups with shared values emerging from their special life experiences or circumstances.

a. demographic segments

b. cliques

c. consumer bundles

d. subcultures

e. behavioral niches

Answer: d Page: 89 Level of difficulty: Medium

48. Which of the following would be the best illustration of a subculture?

a. A softball team.

b. A university alumni association.

c. Teenagers.

d. A Boy Scout troop.

e. Frequent flyers.

Answer: c Page: 89 Level of difficulty: Medium

49. All of the following EXCEPT ________ have been found to influence young people today and cause a shift of secondary cores values for this group.

a. U2’s Bono.

b. Elvis Presley.

c. The NBA’s LeBron James.

d. Golf’s Tiger Woods.

e. Skateboarder Tony Hawk.

Answer: b Page: 89 Level of difficulty: Easy

50. Although core values are fairly persistent, cultural swings do take place. ________ caused such a swing in the 1960s.

a. Ford Motor Company

b. George McGovern

c. G.I. Joe action characters

d. The infomercial

e. The Beatles

Answer: e Page: 89 Level of difficulty: Medium

51. Marketers need to be aware of threats and opportunities associated with four trends in the natural environment. All of the following are among those trends EXCEPT ________.

a. the shortage of raw materials

b. the increased cost of energy

c. near 90 percent corporate support for “green causes”

d. increased pollution levels

e. the changing role of governments

Answer: c Page: 90 Level of difficulty: Easy

52. With respect to the shortage of raw materials, air and water are classified as ________ resources. However, as we know, problems are beginning to plague both our air and water quality.

a. infinite

b. near finite

c. finite renewable

d. finite nonrenewable

e. absolute

Answer: a Page: 90 Level of difficulty: Medium

53. One finite nonrenewable resource, ________, has created serious problems for the world economy. Because of anticipated shortages, investment and commodity markets have had wild swings.

a. water

b. air

c. sugar

d. coffee

e. oil

Answer: e Page: 90 Level of difficulty: Easy

54. From a branding perspective, “green marketing” programs have not been entirely successful. ________ has been cited as one of the obstacles that must be overcome for “green marketing” programs to be more successful.

a. Overexposure and lack of credibility

b. High cost

c. Poor promotions

d. Resistance by the youth segment in the marketplace

e. Lack of support by governmental agencies and concerns

Answer: a Page: 91 Level of difficulty: Hard

55. Which of the following countries is noted for their “green movement” and support within its government for environmental quality enhancement?

a. Mexico

b. China

c. Germany

d. England

e. Italy

Answer: c Page: 91 Level of difficulty: Medium

56. The marketer should monitor the following trends in technology, EXCEPT ________, if progress is to be made in business.

a. the pace of change

b. the difficulties found in sharing information

c. the opportunities for innovation

d. varying R&D budgets

e. increased regulation

Answer: b Page: 92 Level of difficulty: Hard

57. According to some industry analysts and inventors, ________ will eventually eclipse the PC as our most important technological device.

a. iPod

b. HDTV

c. holographic television

d. the mobile phone

e. solar-powered car

Answer: d Page: 92 Level of difficulty: Medium

58. All of the following will most likely be among the advantages for a society that embraces telecommuting as an employment/communication alternative EXCEPT ________.

a. reduction of auto pollution

b. bringing the family closer together

c. increased bonuses and compensation perks

d. creating more home-centered shopping

e. entertainment centered on the home environment

Answer: c Page: 92 Level of difficulty: Medium

59. ________ legislation has as its purposes to protect companies from unfair competition, to protect consumers from unfair business practices, and to protect the interests of society from unbridled business behavior.

a. Business

b. Consumer

c. Bi-partisan

d. Activist

e. Global

Answer: a Page: 94 Level of difficulty: Easy

60. An important force affecting business is the ________—a movement of citizens and government organized to strengthen the rights and powers of buyers in relation to sellers.

a. lobbyist movement

b. consumerist movement

c. environmental movement

d. self-rights movement

e. ethical reform movement

Answer: b Page: 95 Level of difficulty: Medium

Chapter 21: Tapping into Global Markets

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. Red Bull has gained ________ of the worldwide energy drink market by skillfully connecting with global youth.

a. 70 percent

b. 80 percent

c. 60 percent

d. 50 percent

e. 90 percent

Answer: a Page: 667 Level of difficulty: Medium

2. Red Bull built buzz about the product through its ________.

a. “buzz marketing program”

b. “in program”

c. “marketing program”

d. “seeding program”

e. “advertising campaign”

Answer: d Page: 667 Level of difficulty: Medium

3. A global industry is defined as ________.

a. an industry in which the strategic positions of competitors are fundamentally affected by their overall global positions

b. an industry that operates in more than one country and captures R&D, marketing, and other financial advantages in its costs and reputation.

c. an industry that operates in more than one country and has a strategic position in many countries

d. a firm that operates in more than one country and has a sales and marketing staff in those countries

e. an industry that has strategic positions in many countries but is not affected by competition

Answer: a Page: 668 Level of difficulty: Medium

4. A global firm is one that ________.

a. where the strategic positions of competitors are fundamentally affected by their overall global positions

b. operates in more than one country and captures R&D, marketing, and other financial advantages in its costs and reputation

c. operates in more than one country and has a sales and marketing staff in those countries

d. operates in more than one country and has a sales and marketing staff in those countries developing

e. has strategic positions in many countries but is not affected by competition researching

Answer: b Page: 668 Level of difficulty: Medium

5. International trade in 2003 accounted for over ________ of U.S. GDP up from 11 percent in 1970.

a. one-third

b. one-eighth

c. one-half

d. one-quarter

e. 18 percent

Answer: d Page: 668 Level of difficulty: Easy

6. Global firms plan, operate, and ________ their activities on a worldwide basis.

a. produce

b. coordinate

c. distribute

d. price

e. service

Answer: b Page: 668 Level of difficulty: Easy

7. The major decisions in international marketing include which of the following steps?

a. Deciding whether to go abroad.

b. Deciding which markets to enter.

c. Deciding how to enter the market.

d. Deciding on the marketing program.

e. All of the above.

Answer: e Page: 669 Level of difficulty: Medium

8. The internationalization process has four stages. These stages are ________.

a. no regular export activities

b. export via independent representatives (agents)

c. establishment of one or more sales subsidiaries

d. establishment of production facilities abroad

e. all are part of the internationalization process

Answer: e Page: 670 Level of difficulty: Medium

9. Most firms work with an ________ and enter a nearby or similar country.

a. independent agent

b. contractual export department

c. import/export department

d. franchisee

e. management contract

Answer: a Page: 670 Level of difficulty: Easy

10. A “waterfall” approach to international marketing is defined as ________.

a. countries that are gradually entered sequentially

b. countries in which the demand for the product is greatest is entered first

c. countries in which the demand for the product is greatest is entered last

d. countries in which the supply of raw material is greatest is entered first

e. countries are entered based upon ease of entry

Answer: a Page: 671 Level of difficulty: Medium

11. A “sprinkler” approach to international marketing is defined as ________.

a. countries that are entered when timing is right

b. countries that are gradually entered sequentially

c. countries in which the supply of raw material is greatest is entered first

d. countries in which the demand for the product is greatest is entered first

e. many countries are entered simultaneously within a limited period of time

Answer: e Page: 671 Level of difficulty: Medium

12. The developed nations and the prosperous parts of developing nations account for less than ________ of the world’s population.

a. 10 percent

b. 15 percent

c. 20 percent

d. 25 percent

e. 30 percent

Answer: b Page: 671 Level of difficulty: Easy

13. Marketers must change their conventional marketing to sell their products to developing countries. One of the changes that marketers can make is to ________.

a. reduce the price of the product but increase the packaging size

b. reduce the size but keep the pricing the same

c. reduce the price of the product

d. reduce the size and price of the packaging

e. increase the price and the packaging size because these countries have never seen the product before

Answer: d Page: 671 Level of difficulty: Medium

14. Factors that influence the “attractiveness” of a country to enter include which of the following?

a. product, geography, income and population, political climate, and other factors

b. product, geography, income, climate, and source of income

c. population, incomes, competition, and political climate

d. incomes, profit potentials, competition, and climate

e. incomes, families, competition, and cultural differences

Answer: a Page: 671 Level of difficulty: Medium

15. Regional economic integration is defined as ________.

a. agreements between individual firms for the sake of commerce

b. trading agreements between individual countries

c. trading agreements between individual firms

d. trading agreements between countries and firms

e. trading agreements between blocs of countries

Answer: e Page: 673 Level of difficulty: Easy

16. The European Union founded in 1957 added ________ in May 2004 bringing its total membership to 25 countries.

a. 10 countries

b. 5 countries

c. 20 countries

d. 6 countries

e. 4 countries

Answer: a Page: 673 Level of difficulty: Easy

17. NAFTA established a free trade zone between what three countries?

a. Canada, Mexico, and South America

b. Canada, Mexico, and Peru

c. Mexico, South America, and the United States

d. Canada, Mexico, and the United States

e. Canada, Mexico, and Japan

Answer: d Page: 673 Level of difficulty: Medium

18. MERCOSUL is a free trade zone linking which of the following South American countries?

a. Mexico, Japan, Brazil, and Paraguay

b. Mexico, Brazil, and Paraguay

c. Brazil, Argentina, and Paraguay

d. Canada, Brazil, and Paraguay

e. Brazil, Argentina, Paraguay, and Uruguay

Answer: e Page: 673 Level of difficulty: Medium

19. The five modes of entry into foreign markets generally flow by increasing commitment, risk, control, and profit potential as follows ________.

a. indirect exporting, direct exporting, licensing, joint ventures, and direct investment

b. direct investment, joint ventures, licensing, direct exporting, and indirect exporting.

c. direct investment, joint ventures, and licensing

d. direct investment, joint ventures, licensing, and indirect exporting

e. none of the above

Answer: a Page: 674 Level of difficulty: Hard

20. In choosing which countries to invest in, companies sometimes choose psychic proximity to their own country. Psychic proximity can best be defined as ________.

a. countries close to the “host” country in which the company feels comfortable with the language, laws, and culture

b. countries that “mimic” the host country in terms of language and culture

c. countries that the host country’s management team have visited

d. countries close to the “host” country in which the company feels that they can infiltrate quickly and profitable

e. countries close to the “host” country in which the company can easily transport their products

Answer: a Page: 674 Level of difficulty: Medium

21. The normal way to get involved in an international market is through exporting. Occasional exporting is defined as ________.

a. when the company carries on exporting activities on the behalf of others

b. when the company makes a commitment to expand into particular markets

c. when the company works through independent agents

d. when the company hires domestic-based agents to negotiate foreign purchases

e. a passive level of involvement in which the company exports its products from time to time

Answer: e Page: 674 Level of difficulty: Medium

22. Active exporting takes place when the company ________ to expand into a particular market.

a. forms a “skunk” group

b. forms an export department

c. hires an agent

d. makes an effort

e. makes a commitment

Answer: e Page: 674 Level of difficulty: Easy

23. Domestic-based export merchants ________.

a. buy the manufacturer’s products and then sell them abroad

b. buy the manufacturer’s products then sell them in the host country

c. buy the manufacturer’s products then fine agents and customers in foreign countries

d. seek and negotiate foreign purchases

e. carry on exporting activities on behalf of several producers

Answer: a Page: 674 Level of difficulty: Hard

24. Domestic based export agents perform a valuable service for the companies seeking to enter foreign markets. The primary function of these agents is to ________.

a. carry on exporting activities on behalf of several producers

b. buy the manufacturer’s products and then sell them abroad

c. buy the manufacturer’s products then sell them in the host country

d. seek and negotiate foreign purchases and are paid a commission on those sales

e. export products to foreign countries

Answer: d Page: 674 Level of difficulty: Medium

25. Company’s prefer to enter a country that ranks high on market attractiveness, low in market risks and ________.

a. in which it would possesses a competitive advantage

b. turn a quick profit

c. able to dominate its foreign competitors through superior product design and performance

d. gain a dominate market share within one year of exporting

e. increase its foreign market share by 50 percent in one year

Answer: a Page: 674 Level of difficulty: Medium

26. Indirect export has two advantages for the firm. First in involves less investment for the firm and secondly it ________.

a. involves less paperwork

b. involves less intrusion by the government

c. involves less risk

d. involves less people to manage the process

e. involves less products and product lines

Answer: c Page: 675 Level of difficulty: Medium

27. A company can carry on direct exporting in several ways. These include domestic- based export department or division, overseas sales branch or subsidiary, traveling export sales representatives, and ________.

a. foreign-based distributors or agents

b. marketing departments based in the foreign country

c. export merchants in foreign countries

d. export management companies

e. none of the above

Answer: a Page: 675 Level of difficulty: Medium

28. According to the text, Shaper Image receives more than ________ of its online business form overseas customers.

a. 15 percent

b. 30 percent

c. 25 percent

d. 40 percent

e. 10 percent

Answer: c Page: 675 Level of difficulty: Hard

29. “Going abroad” using the Internet has its challenges. One of the challenges that a global marketer may run up against when using the Web are ________.

a. cultural restrictions

b. language barriers

c. pricing procedures

d. monetary exchanges

e. logistical limitations

Answer: a Page: 675 Level of difficulty: Medium

30. Licensing is a simple way to become involved in international marketing. In licensing, the licensor issues a license to a foreign company to use a process, trademark, patent, or trade secret for a(n) ________.

a. limited period of time

b. fee or royalty

c. exchange of information or propriety information

d. exchange for access to the market place

e. exchange for “their” process, trademark, patent, or secret

Answer: b Page: 676 Level of difficulty: Easy

31. Companies such as Marriott and Hyatt sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for them in foreign countries.

a. contract manufacturing

b. management contracts

c. franchising

d. hotel management licensing

e. none of the above

Answer: b Page: 676 Level of difficulty: Medium

32. In ________, the firm hires local manufacturers to produce the product. This gives the company less control over the manufacturing process and loss of profits of the manufacturing efficiencies.

a. contract manufacturing

b. management contracts

c. licensing

d. franchising

e. none of the above

Answer: a Page: 676 Level of difficulty: Easy

33. A company can enter a foreign market through ________, which is a complete form of licensing in which the company offers a complete brand concept and operating system designed to ensure that the ________ operates according to the requirements of the licensor.

a. contract manufactures/licensor

b. contract management/firm

c. management contracts/firm

d. joint venture/firm

e. franchising/franchisor

Answer: e Page: 676 Level of difficulty: Medium

34. The definition of a joint venture company is one ________.

a. in which foreign inventors join with local investors where they share ownerships and control

b. in which two people or more own the firm jointly

c. where foreign investors join with others to own the firm

d. where ownership by local and distant investors in share ownership of a franchise

e. where ownership is by investors of foreign firms

Answer: a Page: 676 Level of difficulty: Medium

35. A joint venture may be necessary or desirable for economic or political reasons. Additionally, a foreign firm might lack the ________, or managerial resources to undertake the venture alone.

a. resource, competency

b. financial, physical

c. financial, willingness

d. political, financial

e. political, competency

Answer: b Page: 677 Level of difficulty: Medium

36. In an adapted marketing mix, the producers’ ________ the marketing program to each target market.

a. reduce the importance of each element of the marketing program to adjust for cost differential between countries

b. decide on which element of the marketing mix to change/country/target market prior to entering the country

c. adapt the communications message to the host country

d. change only one element of the marketing mix/country

e. adjust

Answer: e Page: 677 Level of difficulty: Medium

37. International companies must decide on how much to adapt their marketing strategy to local conditions. At one extreme are companies that use a globally standardized marketing mix worldwide. A standardized marketing mix includes ________.

a. a concentric strategy which includes the product, integrated marketing communications mix, and distribution strategy

b. standardization of the product, communication, and distribution channels promising lowest costs.

c. changes only to the product keeping distribution channels and marketing communications consistent across countries

d. changing only the distribution channels to accommodate the host country

e. changes only to the product and communication message

Answer: b Page: 677 Level of difficulty: Medium

38. The ultimate form of foreign involvement is direct ownership of foreign-based assembly or manufacturing facilities. One of the advantages of direct ownership can include economies of scale, creating jobs in the host country, developing deeper relations with local suppliers etcetera and the firm ________.

a. retains full control over its investment

b. reviews global outreach projections

c. redefines the business concept

d. reviews the successes from e-commerce

e. receives no disadvantages to direct investment

Answer: a Page: 677 Level of difficulty: Medium

39. Hofstede identifies four cultural dimensions that can differentiate countries. These are individualism versus collectivism, high versus low power distances, masculine versus feminine, and ________.

a. customer relationship management versus power distances

b. strategic management versus marketing management

c. weak versus strong uncertainty avoidance

d. total quality management versus JIT deliveries

e. marketing management versus customer relationships

Answer: c Page: 677 Level of difficulty: Medium

40. Straight extension of the product means ________.

a. introducing the product to the foreign market without any changes to the product.

b. introducing the product to the foreign market without major changes to the product

c. introducing the product to the foreign market with major changes to the product

d. introducing the product to the foreign market with no major marketing program

e. not introducing the product to the foreign market until changes have been made

Answer: a Page: 678 Level of difficulty: Medium

41. An advantage of global marketing is that it can lower marketing costs, has economies of scale in production and distribution, can produce consistency in brand image, has the ability to leverage good ideas quickly and efficiently, and ________.

a. is easier to adapt to foreign countries

b. allows for the same message to be used worldwide

c. allows for individual countries to add their specific needs to the message

d. is easier for corporations to evaluate the marketing message

e. allows for uniformity of marketing practices

Answer: e Page: 678 Level of difficulty: Hard

42. Product adaptation involves ________.

a. altering the product to meet local conditions or preferences

b. altering the product to meet minimum acceptable standards

c. changing the product periodically

d. upgrading the product on a periodic basis

e. changing the product to meet competition

Answer: a Page: 679 Level of difficulty: Medium

43. A firm can successful introduce four versions of its products into a foreign country or a firm may select one of these for inclusion. These versions include ________.

a. customer version, regional version, and city version

b. customer version, country version, and retailer version

c. regional version, country version, city version, and retailer version

d. customer version, regional version, city version, and retailer version

e. regional version, country version, city version, and market versions

Answer: c Pages: 680–681 Level of difficulty: Easy

44. Product invention consists of creating something new. Backward invention is reintroducing earlier product forms that are well adapted to a foreign country’s needs. Forward invention is ________.

a. creating a new product to meet a need in another country

b. creating a new product to meet the need in the host country

c. understanding the differences between host and foreign country markets

d. increasing the control over the development of new products

e. inventing something that yet has a “market”

Answer: a Page: 681 Level of difficulty: Medium

45. Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process called ________.

a. product communications

b. brand communications

c. dual adaptation

d. marketing communications

e. communication adaptation

Answer: e Page: 682 Level of difficulty: Medium

46. Many multinationals are plagued by the gray market problem. The gray market consists of ________.

a. the marketing of products to older consumers

b. branded products diverted from normal distribution channels in the country of product origin

c. branded products diverted from one country to another

d. products being repackaged from the intended country to a diverted country

e. products not having full warranties by the manufacturer

Answer: b Page: 682 Level of difficulty: Medium

47. If a company adapts or changes both the product and the communications, the company engages in a process called ________.

a. straight extension

b. marketing communication

c. product adaptation

d. dual adaptation

e. full adaptation

Answer: d Page: 682 Level of difficulty: Medium

48. The use of media requires international adaptation because media availability varies from country to country. Norway, Belgium, and France do not allow cigarettes and alcohol to be advertised on TB. Austria and Italy regulate TV advertising ________.

a. between the hours of 9 p.m. and 6 a.m.

b. to children

c. for those under the age of majority

d. regarding content and clarity

e. using women in advertising

Answer: b Page: 683 Level of difficulty: Medium

49. A Gucci bag sells for $120 in Italy and $240 in the United States. This is an example of when a firm tries to sell its products abroad. This phenomenon is called a ________.

a. strategic marketing pricing problem

b. market pricing problem

c. tactical pricing problem

d. price escalation problem

e. transfer pricing problem

Answer: d Page: 684 Level of difficulty: Medium

50. A firm that charges a price to another unit in the company sets the ________ price for goods that it ships to its foreign subsidiaries.

a. original price

b. transfer price

c. margin price

d. break-even price

e. customer value price

Answer: b Page: 684 Level of difficulty: Medium

51. The cost escalation problem exists for multinationals and varies from country to country; the question is: How to set prices in different countries? Companies have three choices. One is to set a uniform price everywhere, two is to set a market-based price in each country, and three is to ________.

a. set a final “cost plus” price in each country

b. set a cost-based price in each country

c. let the market dictate price/country

d. vary the price/market/country on a daily basis to reflect consumer demand

e. set the transfer price at marginal costs = marginal revenue

Answer: b Page: 684 Level of difficulty: Hard

52. In 2000 Stelco a Canadian steelmaker, successfully fought dumping changes against steelmakers in Brazil and other countries. “Dumping” is defined or occurs when ________.

a. a company charges either less than its costs or less than it charges in its home market

b. the company charges less that its costs but more than it charges in its home market

c. the company’s pricing plans are below current domestic prices

d. a company must increase its prices/product prior to importing the product

e. a company unloads an excess supply of the product at the best possible prices to the consumer

Answer: a Page: 684 Level of difficulty: Easy

53. The “whole channel concept for international marketing” includes the following steps________.

a. seller to seller’s international marketing headquarters to channels between nations to channels within foreign nations to final buyers

b. seller to marketing headquarters to channels within foreign markets to final buyers

c. sellers to channels between nations to final buyers

d. sellers to channels within foreign nations to final buyers

e. sellers to international markets to channels within foreign nations to final buyers

Answer: a Page: 685 Level of difficulty: Hard

54. In an increasingly connected, highly competitive global marketplace, government officials, and marketers are concerned with how attitudes and beliefs about their country affect consumer and business decision-making. ________is(are) the mental associations and beliefs triggered by a country.

a. Corporate ownership of the firm

b. Materials used in manufacturing

c. Brand names and trademarks

d. Country-of-origin perceptions

e. Competitive positions in the marketplace

Answer: d Page: 686 Level of difficulty: Medium

55. A company has several options when its products are competitively priced but their place of origin turns consumers off. The company can consider ________.

a. re-packaging the product to disguise the country of origin

b. co-branding

c. reducing their country of origin mentions in their advertising

d. re-branding the product to disguise the country of origin

e. co-production with a foreign company that has a better name.

Answer: e Page: 687 Level of difficulty: Medium

56. Most brands are adapted to some extent to reflect significant differences in ________, ________, competitive forces, and the legal and political environment.

a. consumer behavior, brand development

b. business mission, brand development

c. strategy and consumer behavior

d. programs and marketing communications

e. political and social mores differences

Answer: a Page: 677 Level of difficulty: Medium

57. Disadvantages to global marketing include differences in consumer needs, wants, and usage patterns for products; difference in consumer response to marketing-mix elements; differences in brand and product development and the competitive environment; and ________.

a. differences in marketing institutions

b. differences in language and consumer expectations

c. differences in product performance

d. differences in management’s reaction to the marketplace

e. none of the above

Answer: a Page: 678 Level of difficulty: Hard

58. Marketers must also adapt sales promotion techniques to different markets. Several European countries have laws preventing or limiting sales promotion tools such as discounts. In Germany, Lands’ End could not advertise its ________.

a. woman’s bathing suits

b. sale price

c. close-out specials

d. end-of-the-season sale

e. money-back guarantee

Answer: e Page: 683 Level of difficulty: Hard

59. Companies can manage their international marketing activities in three ways. These include, through export departments, international divisions, ________.

a. or a global organization

b. or from a fixed corporate headquarters

c. or through a strong marketing department in the “host” country

d. and through local marketing efforts

e. none of the above

Answer: a Page: 688 Level of difficulty: Medium

60. Bartlett and Ghoshal have identified three organizational strategies for international firms. These are: (1) a global strategy treats the world as a single market; (2) a multinational strategy treats the world as a portfolio of national opportunities; and (3) ________.

a. a local strategy standardizes all of the local elements

b. the marketing strategy identifies those elements assigned to a country and uses those elements plus corporate’s contribution in the marketing plan

c. a “glocal” strategy standardizes certain core elements and localizes other elements

d. assumes that there are no “local” or multinational differences in formulating the marketing mix

e. none of the above

Answer: c Pages: 689–690 Level of difficulty: Hard

Chapter 6: Analyzing Consumer Markets

GENERAL CONCEPT QUESTIONS

Multiple Choice

59. Marketers are always looking for emerging trends that suggest new marketing opportunities. One such trend is the “metrosexual.” Which of the following items would the metrosexual most likely have some interest for?

a. An IBM computer.

b. Tickets to WWF wrestling.

c. Saxophone lessons.

d. An all-over body spray by Axe.

e. Cowboy boots made from elephant hide.

Answer: d Page: 173 Level of difficulty: Medium

2. ________ is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.

a. Target marketing

b. Psychographic segmentation

c. Psychology

d. Consumer behavior

f. Product differentiation

Answer: d Page: 173 Level of difficulty: Easy

3. The fundamental determinant of a person’s wants and behavior is the person’s ________.

a. psyche

b. national origin

c. culture

d. peer group

e. family tree

Answer: c Page: 174 Level of difficulty: Medium

4. A child growing up in the United States is exposed to all of the following values EXCEPT ________.

a. achievement and success

b. activity

c. efficiency and practicality

d. the importance of the group in daily life

e. freedom

Answer: d Page: 174 Level of difficulty: Medium

5. Which of the following would be the best illustration of a subculture?

a. A religion.

b. A group of close friends.

c. Your university.

d. A fraternity or sorority.

e. Your occupation.

Answer: a Page: 174 Level of difficulty: Hard

6. With respect to facts about the American consumer, which of the following consumer electronics is owned by the vast majority of consuming households with a 93 percent reporting ownership?

a. A personal computer.

b. TiVo DVR.

c. A cellular phone.

d. A microwave oven.

e. A VCR.

Answer: e Page: 175 Level of difficulty: Hard

7. ________ is defined as being relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests, and behavior.

a. Culture

b. Subculture

c. Social class

d. The family

e. A group

Answer: c Page: 175 Level of difficulty: Medium

8. Social classes show distinct product and brand preferences in all the following

areas EXCEPT ________.

a. clothing

b. home furnishings

c. leisure activities

d. automobiles

e. fast food

Answer: e Page: 176 Level of difficulty: Medium

9. A person’s ________ consist(s) of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior.

a. culture

b. subculture

c. psychographics

d. reference groups

e. demographics

Answer: d Page: 177 Level of difficulty: Medium

10. A(n) ________ group is one whose values or behavior an individual rejects.

a. aspirational

b. disassociative

c. membership

d. primary

e. procreational

Answer: b Page: 177 Level of difficulty: Easy

11. If a direct mail marketer wished to direct promotional efforts toward the family of ________, efforts need to be directed toward parents and siblings of the family members.

a. orientation

b. procreation

c. immediacy

d. intimacy

e. reference

Answer: a Page: 177 Level of difficulty: Medium

12. Expected to account for a quarter of the U.S. population by 2050, ________ are the fastest growing minority.

a. African Americans

b. Asian Americans

c. Hispanic Americans

d. European Americans

e. Arabic Americans

Answer: c Page: 178 Level of difficulty: Easy

13. The dominant cohort, with respect to families, for the next fifty years may very well be the ________ cohort.

a. married-couple household

b. single adults

c. single seniors

d. married seniors

e. married-couples with parents living with them

Answer: b Page: 179 Level of difficulty: Hard

14. Husbands and wives display different decision-making roles in most families. The trend for dominant decision making in families is for ________ to be responsible for most of the decisions.

a. the husband

b. the wife

c. joint decision making (both husband and wife)

d. holistic decision making

e. child-oriented decision making

Answer: c Page: 179 Level of difficulty: Medium

15. The Disney Channel has become the company’s cash cow for its ability to reach the underserved ________ market—8- to 14-year-olds.

a. teen

b. twixt

c. mid-

d. tween

e. young adult

Answer: d Page: 179 Level of difficulty: Medium

16. People choose products that reflect and communicate their role and actual or desired ________ in society.

a. group

b. status

c. attitudes

d. beliefs

e. feelings

Answer: b Page: 180 Level of difficulty: Medium

17. Consumption may be shaped by ________ (such as marriage, childbirth, or divorce).

a. the psychological life cycle

b. the product life cycle

c. the life/death life cycle

d. post-puberty cycles

e. critical life events or transitions

Answer: e Page: 181 Level of difficulty: Medium

18. Product choice is greatly affected by economic circumstances. All of the following would be among those circumstances EXCEPT ________.

a. spendable income

b. savings and assets

c. debts

d. occupation

e. borrowing power

Answer: d Page: 182 Level of difficulty: Easy

19. ________ is a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli.

a. Image

b. Personality

c. Beliefs

d. Heredity

e. Culture

Answer: b Page: 182 Level of difficulty: Medium

20. When the Marlboro Man was depicted in advertising as a rugged outdoor, tough cowboy type, this was done to establish what is called a ________.

a. trademark

b. brand name

c. brand personality

d. psychological approach to advertising

e. brand reference

Answer: c Page: 182 Level of difficulty: Medium

21. ________ portrays the “whole person” interacting with his or her environment.

a. Attitude

b. Reference group

c. Lifestyle

d. Culture

e. Subculture

Answer: c Page: 183 Level of difficulty: Medium

22. Consumers today are experiencing a time famine because of their busy lifestyles. One way to avoid the difficulties of time famine, which is of particular interest to marketers, is ________.

a. to set fewer goals

b. to multitask

c. to give in to personal burdens

d. to report frustration to management

e. to develop a callous attitude toward marketers

Answer: b Page: 183 Level of difficulty: Hard

23. With respect to understanding consumer behavior, there are four key psychological processes. All of the following would be among those processes EXCEPT ________.

a. motivation

b. perception

c. learning

d. self-reliance

e. memory

Answer: d Page: 184 Level of difficulty: Easy

24. A ________ when it is aroused to a sufficient level of intensity.

a. need becomes a motive

b. motive becomes a need

c. desire becomes a reality

d. unfulfilled demand becomes a crisis

e. personal demand exceeds the ability to rationally reject

Answer: a Page: 184 Level of difficulty: Hard

25. ________ assumed that the psychological forces shaping people’s behavior are largely unconscious, and that a person cannot fully understand his or her own motivations.

a. Abraham Maslow

b. Frederick Herzberg

c. Sigmund Freud

d. John Cacioppo

e. Karl Marx

Answer: c Page: 184 Level of difficulty: Medium

26. Frederick Herzberg developed a ________ that distinguishes

dissatisfiers and satisfiers.

a. trait-role theory

b. psychological constraint theory

c. probability scale

d. leadership model

e. two-factor theory

Answer: e Page: 185 Level of difficulty: Medium

27. At the top of Maslow’s hierarchy of needs (shown as a pyramid in the text) are ________ needs.

a. esteem

b. self-actualization

c. social

d. safety

e. physiological

Answer: b Page: 185 Level of difficulty: Medium

28. It has been estimated that the average person is exposed to over ________ ads or brand communications a day.

a. 1,500

b. 1,300

c. 1,000

d. 800

e. 500

Answer: a Page: 186 Level of difficulty: Hard

29. ________ is the tendency to interpret information in a way that will fit our preconceptions.

a. Selective retention

b. Cognitive dissonance

c. Selective distortion

d. Subliminal perception

e. Discrimination

Answer: c Page: 186 Level of difficulty: Medium

30. A cigarette ad has a picture of a young man laying on his back and dreamily looking at clouds in the sky. Though not readily obvious to the casual reader, there is a message in the clouds that says “r-e-l-a-x.” This would be an example of which of the following?

a. Selective distortion

b. Cognitive dissonance

c. Selective retention

d. Subliminal perception

e. Short-term memory

Answer: d Page: 187 Level of difficulty: Hard

31. A ________ is a strong internal stimulus impelling action.

a. cue

b. drive

c. reinforcement

d. discrimination

e. belief

Answer: b Page: 187 Level of difficulty: Medium

32. ________ teaches marketers that they can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement

a. Demand theory

b. Learning theory

c. Economic theory

d. Psychological theory

e. Demographic theory

Answer: b Page: 187 Level of difficulty: Medium

33. As Rita scans the yellow pages section of her phone book looking for a florist, she sees several others products and services advertised. Though interesting on first glance, she quickly returns to her primary task of finding a florist. The items that distracted her from her search were most likely stored in which of the following types of memory?

a. Short-term memory

b. Long-term memory

c. Middle memory

d. Subconscious memory

e. Subliminal memory

Answer: a Page: 187 Level of difficulty: Medium

34. Brand associations consist of all the brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand ________.

a. stimulus

b. link

c. connection

d. personality

e. node

Answer: e Page: 188 Level of difficulty: Hard

35. In general, the more attention placed on the meaning of information during ________, the stronger the resulting associations in memory will be.

a. encoding

b. decoding

c. classification

d. retrieval

e. memorization

Answer: a Page: 189 Level of difficulty: Medium

36. Repeated exposures to information provide greater opportunity for processing and thus the potential for ________.

a. more profits

b. more sales

c. stronger associations

d. increased brand personality

e. more one-to-one relationships

Answer: c Page: 190 Level of difficulty: Medium

37. Cognitive psychologists believe that memory is ________, so that once information becomes stored in memory, its strength of association decays very slowly.

a. very limited

b. somewhat limited

c. fluid

d. often reflective

e. extremely durable

Answer: e Page: 191 Level of difficulty: Medium

38. The five-stage model of the consumer buying process includes all of the following stages EXCEPT ________.

a. problem recognition

b. information search

c. social interaction

d. purchase decision

e. influencer

Answer: c Page: 191 Level of difficulty: Easy

39. The buying process starts when the buyer recognizes a _________.

a. product

b. an advertisement for the product

c. a salesperson from a previous visit

d. problem or need

e. an internal cue

Answer: d Page: 191 Level of difficulty: Medium

40. Which of the following is considered to be a more advanced form of information search wherein the person might phone friends or go online to secure information about a product or service?

a. Heightened attention

b. Short-term memory processing

c. Subliminal processing of information

d. Long-term memory processing

e. Active information search

Answer: e Pages: 191–192 Level of difficulty: Hard

41. Of key interest to marketers are the major informational sources to which the consumer will turn and the relative importance of each. Which of the following would be considered to be an experiential information source?

a. Consumer-rating organizations.

b. The mass media.

c. Acquaintances.

d. Web sites.

e. Using the product itself.

Answer: e Page: 192 Level of difficulty: Medium

42. Which of the following is considered to be biggest single source of consumer information from a commercial source (over 40 percent of car buyers use this source to gather information)?

a. The U.S. Chamber of Commerce

b. J.D. Power & Associates

c. Consumer Reports

d. The Better Business Bureau

e. Underwriter’s Laboratory

Answer: c Page: 192 Level of difficulty: Medium

43. Brands that meet consumers’ initial buying criteria are called the ________.

a. total set

b. awareness set

c. consideration set

d. choice set

e. decision set

Answer: c Page: 192 Level of difficulty: Easy

44. With respect to consumer decision making, the ________ is the set of strong contenders from which one will be chosen as a supplier of a good or service.

a. total set

b. awareness set

c. consideration set

d. choice set

e. decision set

Answer: d Page: 192 Level of difficulty: Medium

45. A(n) ________ is a descriptive thought that a person holds about something.

a. attitude

b. belief

c. desire

d. feeling

e. emotion

Answer: b Page: 193 Level of difficulty: Medium

46. A(n) ________ puts people into a frame of mind: liking or disliking an object, moving toward or away from it.

a. attitude

b. belief

c. feeling

d. position

e. stance

Answer: a Page: 194 Level of difficulty: Medium

47. The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their ________.

a. needs

b. wants

c. desires

d. brand beliefs

e. consuming attitudes

Answer: d Page: 194 Level of difficulty: Medium

48. All of the following would be considered to be strategies for approaching consumers who had rejected your company’s model of a product for another competitive brand EXCEPT ________.

a. redesign your company’s product

b. alter beliefs about your company’s brand

c. covertly alter the qualitative data about your product

d. alter beliefs about competitors’ brands

e. call attention to neglected attributes

Answer: c Pages: 195–196 Level of difficulty: Medium

49. Customer value analysis reveals the company’s strengths and weaknesses relative to various competitors. Which of the following would be considered to be the first step in this process?

a. Monitor customer values over time.

b. Assess the quantitative importance of the different attributes.

c. Assess the company and competitors’ performances on customer values.

d. Identify the major attributes customers value.

e. Examine customer ratings of the company and competitors.

Answer: d Page: 196 Level of difficulty: Medium

50. With respect to consumer purchase intention, all of the following would be among the sub-decisions made by consumers EXCEPT ________.

a. emotional value

b. brand

c. dealer

d. timing

e. payment method

Answer: a Pages: 196–197 Level of difficulty: Medium

51. With the ________ heuristic, the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes.

a. conjunctive

b. lexicographic

c. elimination-by-aspects

d. primary

e. secondary

Answer: a Pages: 197 Level of difficulty: Hard

52. Even if consumers form brand evaluations, two general factors can intervene between the purchase intention and the purchase decision. One of these is unanticipated situational factors. What is the second factor?

a. Amount of purchasing power.

b. Attitudes of others.

c. Short-term memory capabilities.

d. Ability to return merchandise.

e. The self-concept.

Answer: b Pages: 197 Level of difficulty: Medium

53. ________ risk occurs if the product fails to perform up to expectations.

a. Physical

b. Financial

c. Social

d. Psychological

e. Functional

Answer: e Page: 198 Level of difficulty: Hard

54. If performance meets consumer expectations, the consumer is ________.

a. delighted

b. satisfied

c. disappointed

d. surprised

e. overwhelmed

Answer: b Page: 198 Level of difficulty: Easy

55. A key driver of sales frequency is the ________ rate.

a. product consumption

b. disposal

c. refusal

d. utility

e. option

Answer: a Page: 199 Level of difficulty: Easy

56. The level of engagement and active processing undertaken by the consumer in responding to a marketing stimulus is called ________.

a. elaboration likelihood

b. consumer disengagement

c. consumer involvement

d. variety-seeking

e. low-involvement

Answer: c Page: 200 Level of difficulty: Medium

57. If a consumer is persuaded to buy a product by a message that requires little thought and is based on an association with a brand’s positive consumption experiences from the past, the consumer used a ________ to arrive at this purchase decision.

a. central route

b. peripheral route

c. behavioral route

d. subjective route

e. objective route

Answer: b Page: 200 Level of difficulty: Hard

58. With the ________, predictions of usage are based on quickness and

ease of use.

a. availability heuristic

b. representative heuristic

c. anchoring heuristic

d. adjustment heuristic

e. semantic heuristic

Answer: a Page: 201 Level of difficulty: Medium

59. Ben always reaches for the bright blue and yellow box of Ritz crackers when he visits the snack food aisle in the grocery store. He rarely even reads the box or checks the price. Which of the following heuristics is most likely being used by Ben?

a. Availability

b. Representative

c. Anchoring

d. Adjustment

e. Semantic

Answer: b Page: 201 Level of difficulty: Hard

60. ________ refers to the manner by which consumers code, categorize, and evaluate financial outcomes of choices.

a. Cost accounting

b. Financial accounting

c. Behavioral accounting

d. Mental accounting

e. Factual accounting

Answer: d Page: 202 Level of difficulty: Medium

Chapter 7: Analyzing Business Markets

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. To create and capture value, sellers need to understand business organizations’ needs, resources, policies, and ________.

g. demands

h. protocols

i. strategies

j. buying procedures

k. personnel policies

Answer: d Page: 209 Level of difficulty: Easy

60. Webster and Wind define ________ as the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

a. marketing channels

b. organizational buying

c. demand-oriented buying

d. purchasing

e. inventory control

Answer: b Page: 210 Level of difficulty: Medium

61. The ________ consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

a. business market

b. consumer market

c. e-commerce market

d. global market

e. supplier market

Answer: a Page: 210 Level of difficulty: Medium

62. Business markets have several characteristics that contrast sharply with those of consumer markets. All of the following would be among those characteristics EXCEPT ________.

a. fewer, larger buyers

b. close supplier-customer relationship

c. professional purchasing

d. inverted demand

e. multiple sales calls

Answer: d Pages: 210–211 Level of difficulty: Hard

63. All of the following would be among the major industries that make up the business market EXCEPT ________.

a. agriculture, forestry, and fisheries

b. manufacturing

c. construction

d. banking, finance, and insurance

e. the Internet

Answer: e Page: 210 Level of difficulty: hard

64. Trained purchasing agents, who must follow their organization’s ________, often purchase business goods.

a. culture

b. past purchasing history

c. purchasing policies, constraints, and requirements

d. needs

e. financial budgets

Answer: c Page: 211 Level of difficulty: Medium

65. Ultimately, the amount of steel sold to General Motors depends on the consumer’s demand for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following demand forms is most pertinent?

a. Derived demand

b. Inelastic demand

c. Geographic demand

d. Relational demand

e. Static demand

Answer: a Page: 211 Level of difficulty: Hard

66. The demand for business goods is ultimately derived from the demand for ________.

a. raw materials

b. consumer goods

c. electronics

d. business solutions

e. e-commerce

Answer: b Page: 211 Level of difficulty: Easy

67. The business buyer faces many decisions in making a purchase. The number of decisions depends on the buying situation. All of the following examples are appropriate to the preceding EXCEPT ________.

a. complexity of the problem being solved

b. newness of the buying requirement

c. number of people involved

d. applicability of situation to mission statement

e. time required

Answer: d Page: 212 Level of difficulty: Hard

68. The purchasing department buys office supplies on a routine basis. This type of purchase is classified as a ________.

a. straight rebuy

b. modified rebuy

c. new task

d. secondary purchase

e. preordained purchase

Answer: a Page: 212 Level of difficulty: Easy

69. There are a series of guidelines for selling to small businesses. Which of the following should not be among those guidelines?

a. Don’t waste their time.

b. Do keep it simple.

c. Do use the Internet.

d. Don’t forget about direct contact.

e. Do lump small and midsize businesses together for efficiency sake.

Answer: e Page: 212 Level of difficulty: Medium

The business buyer makes the fewest decisions in the ________.

f. modified rebuy

g. regular buy

h. straight rebuy

i. new rebuy

j. new task buy

Answer: c Page: 213 Level of difficulty: Medium

70. Many business buyers prefer to buy a total solution to a problem from one seller. ________ is the correct term for this process.

a. Channel consolidation

b. Systems buying

c. Vertical buying

d. Horizontal buying

e. Supply buying

Answer: b Page: 213 Level of difficulty: Medium

71. Xerox offers a ________ approach to prospective clients when it offers a complete turnkey procedure, operation, and management of the client’s information and communication need.

a. supply buying

b. primary buying

c. systems buying

d. co-op buying system

e. direct buying

Answer: c Page: 213 Level of difficulty: Medium

72. If Ampex Support Systems is the single supplier for a local manufacturing company’s MRO (maintenance, repair, operating) supplies and needs, Ampex Support Systems would then be considered as providing ________ for the manufacturer.

a. systems buying

b. purchasing support

c. turnkey logistics

d. decision support

e. systems contracting

Answer: e Page: 214 Level of difficulty: Hard

73. ________ is a key industrial marketing strategy in bidding to build large-scale industrial products (e.g., dams, pipelines, et cetera).

a. Systems contracting

b. Systems buying

c. Systems selling

d. Solutions buying

e. Turnkey logistics

Answer: c Page: 214 Level of difficulty: Hard

74. ________ is composed of all those individuals and groups who participate in the purchasing decision-making process, who share some common goals and the risks arising from their decisions.

a. The buying center

b. The marketing sales team

c. Strategic management

d. Engineering support

e. The logistics center

Answer: a Page: 214 Level of difficulty: Medium

75. In the purchasing decision process, the ________ are those who request that something be purchased. They may be users or others in the organization.

a. users

b. initiators

c. influencers

d. deciders

e. approvers

Answer: b Page: 214 Level of difficulty: Easy

76. In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching members of the buying center.

a. gatekeepers

b. buyers

c. initiators

d. approvers

e. deciders

Answer: a Page: 215 Level of difficulty: Medium

77. The typical buying center has a minimum of ________ members.

a. 2–3

b. 3–4

c. 4–5

d. 5–6

e. 10

Answer: d Page: 215 Level of difficulty: Hard

78. Webster cautions that ultimately, ________ make purchasing decisions.

a. only senior managers

b. individuals, not organizations

c. organizations, not individuals

d. third parties

e. systems contractors

Answer: b Page: 215 Level of difficulty: Medium

79. Small sellers concentrate their marketing efforts on reaching ________.

a. approvers

b. initiators

c. key buying influencers

d. users

e. the purchasing staff

Answer: c Page: 216 Level of difficulty: Medium

80. To the ________ price is everything and transactional selling is used.

a. solution-oriented customers

b. income-oriented customers

c. gold-standard customers

d. strategic-value customers

e. price-oriented customers

Answer: e Page: 216 Level of difficulty: Easy

81. The strategic-value customers want a fairly permanent sole-supplier relationship with your company. Which of the following would be the best selling format to use with the strategic-value customer?

a. Transactional selling

b. Consultative selling

c. Quality selling

d. Enterprise selling

e. Indirect demand selling

Answer: d Page: 216 Level of difficulty: Hard

82. Some customers are willing to handle price-oriented buyers by setting a lower price, but establishing restrictive conditions. All of the following would be among those conditions EXCEPT ________.

a. limiting the quantity that can be purchased

b. no refunds

c. no adjustments

d. no services

e. no customer advertising

Answer: e Page: 216 Level of difficulty: Medium

83. If a supplier signs an agreement with a customer that states $350,000 in savings will be earned by the customer over the next 18 months in an exchange for a ten-fold increase in the customer’s share of supplies ordered by the customer, the two parties will have participated in what is called ________.

a. solution selling

b. consultative selling

c. risk and gain sharing

d. strategic alignment

e. demand shifting

Answer: c Page: 217 Level of difficulty: Medium

84. W.W. Grainger employees work at large customer facilities to reduce materials-management costs. Which of the following forms of solution selling is W.W. Grainger using?

a. Solutions to partnerships.

b. Solutions to alter corporate culture.

c. Solutions to enhance customer revenues.

d. Solutions to decrease customer risks.

e. Solutions to reduce customer costs.

Answer: e Page: 217 Level of difficulty: Medium

85. In principle, business buyers seek to ________ in relation a market offering’s costs.

a. spread risks

b. obtain the highest benefit package

c. maintain everyday-low-prices

d. outsource as much as is possible

e. eliminate partners’ shares in profits as much as possible

Answer: b Page: 217 Level of difficulty: Hard

86. In the past, what position did purchasing departments hold in the management hierarchy of most organizations?

a. A high level because of their role in managing the company’s costs.

b. A moderate level because of their spotty record on controlling costs.

c. A low level despite the fact that they manage more than half of the company’s costs.

d. A secretive position.

e. There has been no determination of this position.

Answer: c Page: 218 Level of difficulty: Hard

87. The new, more strategically-oriented purchasing departments have a mission. Which of the following most accurately describes that mission?

a. Make the most profit possible and remain independent of entanglements.

b. Approach every purchasing opportunity as means to create interdependency.

c. Seek the best value from fewer and better suppliers.

d. Outsource the supply function.

e. Abandon all strategies except for systems selling and buying.

Answer: c Page: 218 Level of difficulty: Hard

88. When the purchaser’s focus is short term and tactical and they are rewarded on their ability to obtain the lowest price from suppliers for the given level of quality and availability, this is referred to as ________.

a. procurement orientation

b. supply chain management orientation

c. buying orientation

d. sellers orientation

e. market orientation

Answer: c Page: 218 Level of difficulty: Medium

89. When buyers simultaneously seek quality improvements and cost reductions and they develop collaborative relationships with major suppliers and seek savings through better management of acquisition, conversion, and disposal costs, this is referred to as ________.

a. sellers orientation

b. supply chain management orientation

c. market orientation

d. procurement orientation

e. buying orientation

Answer: d Page: 218 Level of difficulty: Hard

90. When the purchasing role is further broadened to become a more strategic, value-adding operation, this is referred to as ________.

a. supply chain management orientation

b. buying orientation

c. sellers orientation

d. procurement orientation

e. routine orientation

Answer: a Page: 218 Level of difficulty: Medium

91. Peter Kraljic distinguished four product-related purchasing processes. Which of the following matches to products that have high value and cost to the customer but involve little risk of supply because many companies make them?

a. Strategic products

b. Bottleneck products

c. Leverage products

d. Routine products

e. Commodity products

Answer: c Page: 219 Level of difficulty: Hard

92. The products that have high value and cost to the customer and also involve high risk (e.g., mainframe computers) are called ________.

a. strategic products

b. bottleneck products

c. leverage products

d. routine products

e. commodity products

Answer: a Page: 219 Level of difficulty: Medium

93. Most purchasing professionals describe their jobs as more ________, technical, team-oriented, and involving more responsibility than ever before.

a. risky

b. strategic

c. ethically difficult

d. Web-based

e. human-based

Answer: b Page: 219 Level of difficulty: Hard

94. Robinson and Associates have identified eight stages and called them buyphases. This model is called the ________ framework.

a. buygrid

b. buying/selling

c. seller-centered

d. commercial

e. buy-analysis

Answer: a Page: 219 Level of difficulty: Medium

95. The first step (buyphase) in the straight rebuy buyclass is ________.

a. problem recognition

b. general need description

c. product specification

d. supplier search

e. proposal solicitation

Answer: c Page: 220 Level of difficulty: Hard

96. A new task buyclass decision begins with which of the following buyphases?

a. Problem recognition

b. General need description

c. Product specification

d. Supplier search

e. Proposal solicitation

Answer: a Page: 220 Level of difficulty: Medium

97. Business marketers can stimulate problem recognition by ________.

a. trade directories

b. direct mail, telemarketing, and calling on prospects

c. encouraging the Better Business Bureau to release statistics

d. consumer advertising

e. requesting testimonials from existing customers

Answer: b Page: 221 Level of difficulty: Medium

98. When Hewlett-Packard sells such complex products as a network computer system, it is engaging in what it calls the ________ concept because it offers information and specific solutions to unique problems.

a. “product specification”

b. “price de-escalation”

c. “systems selling”

d. “trusted advisor”

e. “strategic alliance”

Answer: d Page: 221 Level of difficulty: Medium

99. U.S. businesses spent about ________ on online transactions with other businesses in 2002 as compared to consumer online purchases of $71 billion during the same time period.

a. $650 billion

b. $500 billion

c. $482 billion

d. $225 billion

e. $53 billion

Answer: c Page: 222 Level of difficulty: Hard

100. With respect to e-procurement, Web sites are organized around two types of e-hubs: ________.

a. vertical and horizontal hubs

b. vertical and functional hubs

c. functional hubs and organizational hubs

d. supplier and user hubs

e. manufacturer and supplier hubs

Answer: b Page: 222 Level of difficulty: Hard

101. With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, Gillette, P&G, and several other companies joined forces to form a ________ called Transora to use their combined leverage to obtain lower prices for raw materials.

a. manufacturer’s co-op

b. supplier’s co-op

c. middleman group

d. buying alliance

e. cabal

Answer: d Page: 222 Level of difficulty: Medium

102. Business-to-business cyberbuying is flourishing on the Internet. So far, most of the products that businesses are buying electronically are ________, and travel and entertainment services.

a. promotion services such as advertising

b. HR services (e.g., employee recruitment)

c. MRO materials (maintenance, repair, and operations)

d. food services

e. marketing research services

Answer: c Page: 223 Level of difficulty: Medium

103. Moving into e-procurement has many benefits. Which of the following would not be among those benefits?

a. Aggregating purchasing across multiple departments gains larger volume discounts.

b. Aggregating purchasing across multiple departments gains centrally negotiated volume discounts.

c. There is less buying of substandard goods from outside the approved list of suppliers.

d. A smaller purchasing staff is required.

e. Purchasing gains a significant leverage with top management because of its management team.

Answer: e Page: 224 Level of difficulty: Hard

104. With respect to e-procurement commitment, in 2003 ________ was named number one in BtoB magazine’s annual ranking of the top B-to-B Web sites because of its ability to generate sales (about 55 percent of the company’s total sales) and commitment to the process.

a. Coca-Cola

b. Dell Computers

c. Hewlett-Packard

d. Cadillac

e. Boeing

Answer: c Page: 224 Level of difficulty: Hard

105. In the proposal solicitation process, ________ should be marketing documents that describe value and benefits in customer terms.

a. written proposals

b. oral proposals

c. e-proposals

d. alliance proposals

e. global proposals

Answer: a Page: 225 Level of difficulty: Medium

106. Xerox qualifies only suppliers who meet the ISO 9000 quality standards, but to win the company’s top award—certification status—a supplier must first complete ________.

a. government certification

b. an extensive ethics statement evaluation

c. the Xerox Multinational Supplier Quality Survey

d. a company training and indoctrination period

e. a Malcolm Baldridge National Quality Award entry form and then enter

Answer: c Page: 225 Level of difficulty: Medium

107. All of the following are considered to be methods of assessing customer value EXCEPT ________.

a. direct survey questions

b. exit interviewing

c. focus-group value assessment

d. conjoint analysis

e. benchmarks

Answer: b Page: 226 Level of difficulty: Medium

108. According to purchasing professionals, which of the following is considered to be the major responsibility of the purchasing agent in supplier negotiations?

a. Forming networks for future business.

b. Assuring quality conformance.

c. Being fair with all parties.

d. To use a team approach in negotiations.

e. Negotiating price.

Answer: e Page: 226 Level of difficulty: Hard

109. If an industrial buyer leases heavy equipment like machinery and trucks rather than purchasing them, the lessee gains several advantages. Which of the following would NOT be among those advantages?

a. Higher quality products.

b. Conserving capital.

c. Getting the latest products.

d. Receiving better service.

e. Some tax advantages.

Answer: a Page: 227 Level of difficulty: Hard

110. “OTIFNE” is a term that summarizes three desirable outcomes of a B-to-B transaction: OT—deliver on time; IF—in full; and, NE—________.

a. no error

b. no emergencies

c. non-experimental

d. new entrepreneurs

e. need equipment

Answer: a Page: 227 Level of difficulty: Easy

111. Corporate credibility depends on three factors: corporate expertise, corporate trustworthiness, and ________.

a. corporate manpower

b. corporate mission statement

c. corporate likeability

d. corporate governance

e. corporate management structure

Answer: c Page: 228 Level of difficulty: Hard

112. Cannon and Perreault found that buyer-suppler relationships differed according to four factors. Which of the following would NOT be among those factors?

a. Importance of supply.

b. Complexity of supply.

c. Availability of alternatives.

d. Supply market dynamism.

e. Demand market conservatism.

Answer: e Page: 229 Level of difficulty: Medium

113. According to Cannon and Perreault, buyer-supplier relationships fall into eight different categories. Which of the following relationships is characterized as being one that has much trust and commitment leading to a true partnership?

a. Mutually adaptive

b. Collaborative

c. Basic buying and selling

d. Customer supply

e. Cooperative systems

Answer: b Page: 229 Level of difficulty: Medium

114. In the ________ category of Cannon and Perreault’s buyer-supplier relationship categorization, although bonded by a close, cooperative relationship, the seller adapts to meet the customer’s needs without expecting much adaptation or change on the part of the customer in exchange.

a. contractual transaction

b. cooperative system

c. collaborative

d. mutually adaptive

e. customer is king

Answer: e Page: 229 Level of difficulty: Medium

115. Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to consumer’s and supplier’s ________ (e.g., those expenditures tailored to a particular company and value chain partner).

a. logistics channel

b. independent operations

c. specific investments

d. leverage ability

e. liquidity situation

Answer: c Page: 230 Level of difficulty: Hard

116. The ________ market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care.

a. vertical

b. nonprofit

c. spot

d. secondary business

e. institutional

Answer: e Page: 230 Level of difficulty: Medium

117. With purchases of $200 billion annually in goods and services, ________ is the largest customer in the world.

a. Wal-Mart

b. Grainger

c. the State of California

d. the U.S. government

e. Latin America

Answer: d Page: 232 Level of difficulty: Medium

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