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According to your text, three factors are responsible for the rapid rise in new product development. They are faster and more economical transportation, the advent of electronic communication, and

A. mass marketing.

B. the requirement of patents and trademarks.

C. free trade.

D. mass production.

E. lessening of government restrictions.

D

As defined in your text, a product refers to

A. a tangible good that is received in exchange for money, time, or effort.

B. the specific combination of goods, services, or ideas that a firm offers to its target market.

C. any intangible offering a firm makes to an individual consumer or a business.

D. any good or service that is mass produced and sold in more than one market.

E. marketed items of value that fulfill a need of an individual consumer or business.

b

The specific combination of goods, services, or ideas that a firm offers to its target market is referred to as

A. inventory.
B. a load.
C. stock.
D. supply.
E. a product.

e

In marketing terms, the care you receive when you visit your family doctor is an example of

A. a good.

B. an idea.

C. a service.

D. an action.

E. a concept.

c

When Allstate Insurance advertises You’re in Good Hands with Allstate, it is marketing

A. a good.

B. an idea.

C. a service.

D. an action.

E. a concept.

b

Which of the following is NOT a way to categorize new products?

A. new-to-the market products

B. new category entries

C. brand development

D. product line extensions

E. revamped products

c

Which of the following makes up the smallest percentage of new products but carries the most potential (and risk) for the company introducing them?

A. new-to-the market products

B. new category entries

C. repositioned products

D. product line extensions

E. revamped products

a

Inventions that have never been seen before and create a new market are considered

A. revamped products.

B. new category entries.

C. repositioned products.

D. product line extensions.

E. new-to-the-market products.

e

Which of the following is NOT a risk in developing a new-to-the-market product?

A. The product can be time-consuming to develop.

B. It could leave the firm with development costs that can’t be recaptured if the product fails.

C. The value the product provides customers could render existing products obsolete.

D. It can be expensive to develop, creating significant risk for the firm.

E. It requires a great deal of research and development.

c

Which of the following accurately describes new category entries?

A. inventions that have never been seen before and create a new market

B. products that are new to a company but not new to the marketplace

C. products that extend and supplement a company’s established product line

D. products that have new packaging, different features, and updated designs and functions

E. products that are reintroduced into the marketplace after having been off the market for a lengthy time

b

Dell doesn’t currently offer an e-reader in its product line. However, if the company decided to enter the market by producing an e-reader of its own, it would be classified as what type of product?

A. new-to-the-market

B. product line extension

C. revamped product

D. new category entry

E. product line improvement

d

A group of related products marketed by the same firm is its

A. product mix.

B. marketing mix.

C. product line.

D. marketing line.

E. product category.

C

The Ford Motor Company produces the Fiesta, Focus, Fusion, and Escape. As a group, these cars represent a

A. product line.

B. marketing mix.

C. product mix.

D. marketing line.

E. marketing class.

A

Read the following statements and select the one that is NOT an advantage of a product line extension.

A. The company and brand may be easily recognized.

B. Customers may feel loyalty to the product line.

C. Manufacturing of goods may be more efficient.

D. The new product is certain to be accepted by the market.

E. The new product can be advertised alongside existing products.

D

A product labeled new and improved would fall within the category of a

A. new-to-the-market product.

B. revamped product.

C. product line extension.

D. new category entry.

E. remanufactured product.

B

A product that has new packaging, different features, and updated designs and functions is a

A. new-to-the-market product.

B. product line extension.

C. revamped product.

D. new category entry.

E. remanufactured product.

C

How long can a company advertise a product as new and improved after it hits store shelves?

A. 3 months

B. 6 months

C. 1 year

D. 2 years

E. indefinitely

B

Which of the following is NOT one of the stages in the new-product development process?

A. idea screening

B. business analysis

C. concept testing

D. product development

E. product launch

C

The new-product strategy development stage accomplishes all of the following EXCEPT

A. it provides general guidelines for the new-product development process.

B. it specifies how new products will fit into the company’s marketing plan.

C. it outlines general characteristics of the types of products the firm will develop.

D. it specifies the target markets to be served by new products.

E. it outlines the costs that will be incurred for the development of new products.

E

In what stage of the new-product development process would a company use a SWOT analysis and environmental scanning to determine where new products may be able to help strengthen the firm’s marketing position?

A. idea generation

B. idea screening

C. new-product strategy development

D. business analysis

E. test marketing

C

The stage of the new-product development process in which a set of product concepts is generated from which to identify potentially viable new products is called idea

A. generation.

B. screening.

C. development.

D. analysis.

E. marketing.

A

Idea generation is the stage in the new-product development process in which

A. it is determined if the idea fits into the company’s marketing strategy and should be developed.

B. prototypes are developed to test new product ideas.

C. the company determines the direction it will take in developing new products.

D. ideas are test marketed with consumers to determine if they should be developed further.

E. a collection of product concepts is generated for determining potentially viable new products.

E

Which of the following would be considered an internal source of idea generation?

A. a company’s customers

B. a company’s employees

C. a company’s competitors

D. a company’s suppliers

E. an independent inventor

B

The process of applying a product idea in one direction, then, if that does not work out, applying it in another way is called

A. revamping.

B. remanufacturing.

C. pivoting.

D. positioning.

E. spinning.

C

In which stage of the new-product development process do most ideas for new products and services end up getting rejected for one reason or another?

A. business analysis

B. idea generation

C. test marketing

D. idea screening

E. product development

D

Which of the following is NOT a key question that should be asked in the idea screening stage?

A. Will the product sell?

B. Will the product meet the minimum return-on-investment requirements?

C. Can the product be launched in a timely manner?

D. Can the product be developed within the time and budget constraints of the company?

E. Is the proposed product within the company’s ability to produce?

C

The procedure in which marketing professionals ask consumers for their reactions to verbal descriptions and rough visual models of a potential product is called

A. concept testing.

B. test marketing.

C. prototype evaluation.

D. idea screening.

E. concept marketing.

A

A concept test is part of which stage of the new-product development process?

A. idea generation

B. product development

C. product launch

D. idea screening

E. test marketing

D

In what stage of the new-product development process would organizations use social media to evaluate potential new products?

A. idea generation

B. idea screening

C. test marketing

D. product launch

E. business analysis

B

Estimating the cost of a product, identifying the price at which a product will be sold, and estimating the demand for a product all take place in which stage of the new-product development process?

A. product development

B. new-product strategy development

C. test marketing

D. product launch

E. business analysis

E

Business analysis refers to the stage of the new-product development process

A. where the direction a company will take in developing a new product is determined.

B. where a new product is analyzed to determine its profitability.

C. where a SWOT analysis and environmental scanning are used to determine if a new product will help strengthen the firm’s marketing plan.

D. where it is decided if a product can be developed and marketed within the time and budget constraints of the company.

E. where a concept test is performed to determine if the product will sell.

B

A mockup of a good with the materials the firm expects to use in the final product is called a

A. blueprint.

B. sample.

C. template.

D. prototype.

E. model.

D

If a product idea is deemed to have the potential of being profitable in the business analysis stage, then it moves on to the

A. product launch stage.

B. test marketing stage.

C. product development stage.

D. concept testing stage.

E. idea screening stage.

C

In what stage of the new-product development process would a company make a prototype of the product?

A. product launch

B. test marketing

C. idea screening

D. idea generation

E. product development

E

When Fisher-Price comes up with an idea for a new toy, it needs to ensure that the children who play with the toy will not choke on any of its parts and that the toy in general will not be a hazard to the children who will be using it. In what stage of the new-product development process will these safety checks occur?

A. product launch

B. test marketing

C. idea screening

D. idea generation

E. product development

E

A company that is introducing a new product in its final form to a geographically limited market to see how well the product sells and get reactions from potential users is engaged in

A. concept testing.

B. test marketing.

C. idea screening.

D. concept marketing.

E. product screening.

B

During which stage of the new-product development process would a firm test the marketing strategy related to the new product?

A. test marketing

B. business analysis

C. idea screening

D. product development

E. product launch

A

If a firm builds a mock shopping experience for participants to observe their response to marketing stimuli, this is referred to as a

A. prototype.

B. concept test market.

C. focus group.

D. simulated test market.

E. trial test market.

D

Which stage of the new-product development process is usually the most expensive for new products?

A. business analysis

B. product launch

C. test marketing

D. product development

E. idea screening

B

Read the following list of tasks and select the one that does NOT take place during the product launch stage.

A. purchase the materials to make and package the good

B. hire and train employees

C. make sure the product can be manufactured at a cost low enough to generate profits

D. manufacture enough of the good to fill distribution pipelines

E. prepare internal systems for taking service orders

C

The term time to market refers to

A. the time it takes to develop a product.

B. how long a company spends test marketing a product.

C. the time a new product spends on the market before becoming accepted by the public.

D. the speed with which a company launches a product.

E. the time it takes the marketing department to develop an advertising campaign.

D

Burt’s company is in the process of developing what he feels is a complex and risky project. Burt has decided to use a development sequence in which functional areas consecutively complete their development tasks. That way each set of activities can be easily tracked. What type of development path is Burt using?

A. concurrent

B. sequential

C. parallel

D. functional

E. departmental

B

The type of development path preferred by most supply chain management professionals is

A. concurrent new-product development.

B. sequential new-product development.

C. parallel new-product development.

D. functional new-product development.

E. departmental new-product development.

A

Which of the following factors most likely drives the decision to use a concurrent approach in the development of high-tech products?

A. cost

B. risk

C. complexity

D. speed

E. control

D

When categorizing risk in new-product development, the highest level of risk occurs when

A. the product fails to generate sales.

B. supplier cost savings are not achieved.

C. inadequate supply of materials delays production.

D. the product takes sales away from existing products.

E. competitors copy products and sell them at a lower price.

A

Compare the following to determine which is NOT a way that companies can reduce the risk of new product failures?

A. carefully listen to the customer for new product ideas

B. understand current market trends to anticipate demand

C. be willing to fail on occasion

D. anticipate changes in the marketplace

E. skip steps in the development process to market a product sooner

E

The most common ethical issue in new-product development involves the Federal Trade Commission’s definition of the term

A. improved.

B. new.

C. better.

D. guaranteed.

E. healthier.

B

The practice in which companies frequently come out with new models of a product that make existing models obsolete is an ethical issue related to new-product development and is termed

A. bait-and-switch.

B. time to market.

C. planned obsolescence.

D. diffusion.

E. diversion.

C

The process by which new products are likely to be adopted, the rate at which they will be adopted, and the process through which the products will spread into markets is referred to as

A. diffusion.

B. time to market.

C. planned obsolescence.

D. distribution.

E. circulation.

A

Which of the following accurately represents the steps in the consumer adoption process?

A. interest, comparison, evaluation, trial, and adoption

B. awareness, evaluation, trial, adoption, feedback

C. interest, evaluation, comparison, trial, and adoption

D. awareness, interest, evaluation, trial, and adoption

E. awareness, research, comparison, evaluation, and adoption

D

Siobhan wants to join a new health club. Her roommate belongs to a club that Siobhan heard about on the radio. She decides to use her roommate’s free guest passes to try out the club to see if it meets her needs. What stage of the consumer adoption process does this represent?

A. trial

B. awareness

C. interest

D. comparison

E. adoption

A

Siobhan wants to join a new health club. Her roommate belongs to a club that Siobhan heard about on the radio. She decides to use her roommate’s free guest passes to try out the club to see if it meets her needs. What stage of the consumer adoption process does this represent?

A. trial

B. awareness

C. interest

D. comparison

E. adoption

A

What type of adopter is typically well respected by their peers, and marketers seek to gain their acceptance because they tend to be opinion leaders who are willing to talk to other people about their experiences with their purchases?

A. innovator

B. early adopter

C. laggard

D. late majority

E. early majority

B

Nora is in the market for a new HD television. She has spent quite a bit of time gathering information and thinking about the purchase. She has asked her friends for opinions about the models they own and is happy that there are a lot of models to choose from. Nora is most likely what type of adopter?

A. innovator

B. early adopter

C. laggard

D. late majority

E. early majority

E

A good or a service will likely fail to be profitable if which of the following adopters does not purchase the product?

A. innovators

B. early majority

C. laggards

D. late majority

E. early adopter

B

Which category of product adopters relies on others for information and buys a product because their friends have already done so?

A. innovators

B. early majority

C. laggards

D. late majority

E. early adopter

D

Which category of product adopters relies on others for information and buys a product because their friends have already done so?

A. innovators
B. early majority
C. laggards
D. late majority
E. early adopter

d

From a marketing standpoint, which group of product adopters should marketers spend the least amount of time and effort in convincing them to buy a product?

A. innovators

B. early majority

C. laggards

D. late majority

E. early adopter

C

As it pertains to new product characteristics, the superior position a product enjoys over competing products if consumers believe it has more value than other products in its category is referred to as

A. observability.

B. compatibility.

C. superiority.

D. product preference.

E. competitive advantage.

E

The new product characteristic that refers to how well a new product fits into potential customers’ needs, values, product knowledge, and past behaviors is

A. observability.

B. compatibility.

C. trialability.

D. complexity.

E. competitive advantage.

B

The marketers at Pantene included a trial size of their new shampoo within the pages of the September InStyle Magazine. National sales increased dramatically within a few weeks, an example of this product’s

A. observability.

B. compatibility.

C. trialability.

D. complexity.

E. competitive advantage.

C

Which of the following is NOT a stage in the product life cycle?

A. maturity

B. introduction

C. growth

D. obsolescence

E. decline

D

Which stage of the product life cycle is characterized by low or negative profits and companies may need to offer incentives to stores to get them to carry the product?

A. maturity

B. introduction

C. growth

D. beginning

E. decline

B

During which stage of the product life cycle does a company have to promote the differences between its brand and that of the competition, and attempt to portray its competitive advantage?

A. maturity

B. introduction

C. growth

D. beginning

E. decline

C

Which stage of the product life cycle usually lasts the longest?

A. maturity

B. introduction

C. growth

D. beginning

E. decline

A

During which stage of the product life cycle do customer service and repairs begin to take on significance as a way to differentiate a firm’s products?

A. introduction

B. maturity

C. beginning

D. decline

E. growth

B

If a company is using coupons or buy-one-get-one-free promotions to reduce the existing inventory of a product, that product is most likely in what stage of the product life cycle?

A. maturity

B. introduction

C. growth

D. beginning

E. decline

E

Udi’s Gluten Free sells bread, bagels, cookies, pizza crust, and other products that are gluten free. The combination of all the products that Udi’s Gluten Free sells is referred to as its

A. marketing mix.

B. product mix.

C. product line.

D. category line.

E. name brand.

B

As firms introduce new products at a faster rate, what tends to happen to existing products in the product mix?

A. Existing products enter the maturity and decline stages more quickly.

B. Production costs for existing products tends to go down.

C. Existing products enter the maturity and decline stages more slowly.

D. The price of existing products tends to go up.

E. Product life cycles become much slower.

A

Products that take longer for consumers to see the benefits of or that do not have a good infrastructure in place to support them are called

A. low-learning products.

B. complex products.

C. slow-learning products.

D. high-learning products.

E. extended products.

D

Which type of product has a product life cycle curve that is a steep up-and-down curve because consumers rapidly adopt and then abandon the product?

A. low-learning products

B. fad products

C. slow-learning products

D. high-learning products

E. fashion products

B

First introduced in 1935 and highly popular in the early 1980s, Sperry Top-Sider shoes are once again a hit with young adult consumers. These shoes are an example of a

A. low-learning product.

B. fad product.

C. slow-learning product.

D. high-learning product.

E. fashion product.

E

First introduced in 1935 and highly popular in the early 1980s, Sperry Top-Sider shoes are once again a hit with young adult consumers. These shoes are an example of a

A. low-learning product.
B. fad product.
C. slow-learning product.
D. high-learning product.
E. fashion product.

e

In which stage of the product life cycle is the price usually the highest?

A. introduction

B. beginning

C. growth

D. maturity

E. decline

A

What stage of the product life cycle is characterized by a full line of products, an intensive effort to maintain distribution, and a product price is equal or below that of competitors?

A. introduction

B. beginning

C. growth

D. maturity

E. decline

D

All the activities that communicate the value of a product and persuade customers to buy it is referred to as

A. marketing.

B. promotion.

C. positioning.

D. advertising.
.
E. salesmanship

b

The marketing mix element where most of an organization’s communications with the marketplace occurs is

A. price.

B. place.

C. product.

D. promotion.

E. position.

d

Which of the following is NOT an element of the promotion mix?

A. advertising

B. sales promotion

C. Internet ordering

D. personal selling

E. public relations

c

Which element of the promotion mix refers to the set of nonpersonal communication tools designed to stimulate quicker and more frequent purchases of a product?

A. advertising

B. sales promotion

C. Internet ordering

D. personal selling

E. public relations

b

As a promotion mix element, public relations refers to

A. nonpersonal promotional communication about a firm’s goods and services.

B. a set of nonpersonal communication tools designed to stimulate more frequent purchases of a product.

C. advertising focused on promoting the company’s image with its customers.

D. communication focused on promoting positive relations between a firm and its stakeholders.

E. the two-way flow of personal communication between the firm and its customers.

d

What is the name of the promotional strategy that involves coordinating the various promotion mix elements to provide consumers with a clear and consistent message about a firm’s products?

A. integrated promotion mix

B. integrated marketing concept

C. integrated marketing communications

D. integrated promotion concept

E. integrated advertising mix

c

Mars, Inc., makers of Snickers candy bars launched its You’re Not You When You’re Hungry promotion campaign. The company’s television commercials portrayed regular people disguised as celebrities behaving badly because they were hungry. Along with the commercials, print ads were released featuring inversion illusions showing the difference between someone whose hunger is satisfied and someone whose hunger is clearly not. In addition, the print ads included a coupon for a Snickers candy bar. This type of promotional strategy is referred to as

A. an integrated promotion mix.

B. an integrated marketing concept.

C. an integrated advertising mix.

D. integrated promotion communications.

E. integrated marketing communications.

e

The goal of an integrated marketing communications strategy is to coordinate the various promotion mix elements to

A. provide consumers with a clear and consistent message about the firm’s products.

B. find the least expensive alternative to promoting a firm’s products.

C. determine the target market for a firm’s products.

D. discover the firm’s strengths, weaknesses, opportunities and threats.

E. identify which potential customers in the target market have the desire and ability to purchase the firm’s products.

a

Nonpersonal promotional communication about goods, services, or ideas that is paid for by the firm identified in the communication is referred to as

A. publicity.

B. advertising.

C. personal selling.

D. direct marketing.

E. sales promotion.

b

What two key words in the definition of advertising are crucial to understanding how advertising fits into the promotion mix?

A. personal and communication

B. paid and communication

C. nonpaid and nonpersonal

D. paid and nonpersonal

E. nonpaid and personal

d

A collection of coordinated advertisements that share a single theme is called

A. a marketing mix.

B. an advertising mix.

C. an advertising campaign.

D. a promotion mix.

E. an advertising concept.

c

The three primary objectives of an advertising campaign are

A. to promote goodwill, to arouse interest, and to sell.

B. to excite, to entice, and to engage.

C. to inform, to entertain, and to influence.

D. to entertain, to remind, and to sell.

E. to inform, to persuade, and to remind.

e

What type of advertising attempts to develop initial demand for a product?

A. reminder

B. informative

C. persuasive

D. entertainment

E. narrative

b

What type of advertising attempts to increase demand for an existing product?

A. reminder

B. informative

C. persuasive

D. entertainment

E. narrative

c

What type of advertising is common during the growth stage of the product life cycle as firms compete directly and attempt to take market share from one another?

A. reminder

B. informative

C. persuasive

D. entertainment

E. narrative

c

Reminder advertising is most common during which stage of the product life cycle?

A. conceptual

B. introductory

C. growth

D. maturity

E. repositioning

d

As outlined in your text, think about the percentage of global advertising delivered by each major medium. Which advertising medium is projected to see a drop in its use in the future?

A. television

B. magazines

C. newspapers

D. radio

E. outdoor

c

While viewing a webpage for outdoor gear, Phil noticed a graphic display advertising skateboards at low prices. When he clicked on the ad, it took him to a different website where the skateboards were listed for sale. This is an example of what type of Internet advertising?

A. paid search

B. direct marketing

C. linked advertising

D. paid display

E. reminder advertising

d

You placed an order online at Staples.com for a printer and ink cartridges. As part of the checkout process, you were asked to provide your e-mail address. Now you receive e-mails from Staples.com regarding products you might like. This is an example of

A. a paid display ad.

B. integrated marketing communications.

C. sales promotion.

D. an informative advertisement.

E. direct marketing.

e

Direct marketing refers to advertising that

A. seeks to keep the product before the public in an effort to reinforce previous promotional activity.

B. communicates directly with consumers and organizations in an effort to provoke a response.

C. is used in the introductory stage of the product life cycle to attempt to develop initial demand for a product.

D. combines various forms of promotion strategies into a coordinated collection sharing a single theme.

E. attempts to increase demand for an existing product when competition is at its highest.

b

Compared to advertising on other media, Internet advertising is

A. less expensive.

B. less measurable.

C. more expensive.

D. less targeted.

E. less cluttered.

a

The ratio showing how often people who see an Internet ad who end up clicking on it is referred to as

A. cost per click.

B. cost-per-thousand impressions.

C. click-through-rate.

D. click-on-ratio.

E. click-link-rate.

c

Small files on your computer that track information about the websites that you visit and the information that you share online, to collect data and design advertising based on that data, are called

A. cookies.

B. clickers.

C. bugs.

D. data trackers.

E. banners.

a

A disadvantage of Internet advertising involves its

A. high cost.

B. lack of measurability.

C. cost-per-click.

D. methods of data collection.

E. lack of targetability.

d

According to your text, what do people think of FIRST when they hear the term marketing?

A. radio advertising

B. television advertising

C. newspaper advertising

D. sales promotion

E. public relations

b

What is offered by your text as a reason for the decreased viewership of top-rated TV programs?

A. the increased use of sexual innuendo in the programs

B. the greater number of advertisements consumers have to watch

C. the overall decline in the subject matter and acting talent in the programs

D. the increased use of profanity and violence in the programs

E. the greater number of channels available to consumers

e

The dissemination of information to a fairly small, select audience that is defined by its shared values, preferences, or demographic attributes is referred to as

A. narrowcasting.

B. relationship selling.

C. personal selling.

D. prospecting.

E. broadcasting.

a

Compare the following forms of advertising to determine which one is an example of narrowcasting.

A. a Super Bowl advertisement for Doritos

B. an advertisement for Halloween costumes in the Sunday newspaper

C. a radio broadcast for a sale at Walmart

D. an advertisement for Scotts fertilizer shown on the Home and Garden Television network

E. a billboard advertisement for Miller Lite beer

d

High cost is the biggest disadvantage to which form of advertising?

A. radio

B. television

C. magazine

D. billboard

E. Internet

b

The advertising technique in which a company promotes its products through appearances on television shows, movies, or other media is called

A. media marketing.

B. indirect marketing.

C. product placement.

D. co-branding.

E. joint marketing.

c

In the Twilight series movies, main character Edward Cullen can be seen driving a Volvo car. This is an example of

A. direct marketing.

B. media marketing.

C. co-branding.

D. joint marketing.

E. product placement.

e

One of the advantages of radio as an advertising medium is that it

A. is audio-only.

B. has a long exposure time.

C. is good for complex messages.

D. is cost-effective.

E. doesn’t require marketers to segment an audience.

d

When marketers segment consumers by the type of radio station they listen to and then air their advertisements accordingly, it is a form of

A. narrowcasting.

B. podcasting.

C. simulcasting.

D. prospecting.

E. concentrating.

a

Traditionally, the biggest disadvantage of radio advertising has been that radio ads

A. are expensive.

B. have a long exposure time.

C. are audio-only.

D. have a narrow transmission.

E. don’t allow marketers to segment audiences.

c

According to your text, all of the following technological advances have created disadvantages for radio advertising EXCEPT

A. GPS systems.

B. satellite radio stations.

C. smartphones.

D. MP3 players.

E. digital presets.

a

High-involvement consumer products, such as a house or a car, benefit most from which form of advertising?

A. radio

B. print

C. television

D. outdoor

E. mobile

b

Marketers divide magazines into two categories:

A. informative and entertainment.

B. business and consumer.

C. trade publications and general-interest publications.

D. men’s and women’s.

E. general-interest and specific-interest.

b

Which of the following is NOT an advantage of magazine/newspaper advertising?

A. its ability for small businesses to advertise their goods to the local community

B. its ability to target specific audiences

C. its appeal toward high-involvement consumer products

D. its potential for narrowcasting

E. its use as a primary information source

e

One advantage to using magazines as an advertising medium is

A. the relatively short timeframe necessary to place an ad.

B. its ability to target specific audiences.

C. the control marketers have over ad placement.

D. the quick turnaround between ad creation and ad placement.

E. its use as a primary information source.

b

Billboards, skywriting, and ads on the sides of buses are all forms of

A. mobile advertising.

B. print advertising.

C. direct marketing.

D. outdoor advertising.

E. social media advertising.

d

Compare the following forms of advertising and select the medium that is generally the cheapest form.

A. television advertising

B. outdoor advertising

C. radio advertising

D. newspaper advertising

E. magazine advertising

b

Which of the following is NOT a disadvantage of outdoor advertising?

A. relatively high cost

B. wasted coverage

C. short exposure time

D. limited space for messages

E. difficulty in reading the message

a

Which of the following is a nontraditional form of advertising?

A. advertisements that are painted on the side of a building

B. advertisements that are embedded within a video game

C. advertisements that are flown from the back of an airplane

D. advertisements that show up on web pages

E. advertisements that are placed on the top of taxi cabs

b

The bulk of a firm’s promotion budget is allocated to

A. advertising.

B. personal selling activities.

C. sales promotion activities.

D. public relations.

E. publicity.

c

The goal of sales promotion is to

A. inform the consumer of the product’s benefits.

B. build a trusting relationship with a customer over a long period of time.

C. promote positive relations between a firm and its stakeholders.

D. promote goodwill with customers and the community at large.

E. stimulate quicker and more frequent purchases of a product.

e

What is the most common type of sales promotion?

A. rebates

B. samples

C. loyalty programs

D. coupons

E. contests and sweepstakes

d

As a sales promotion tactic, why do marketers prefer using rebates?

A. because customers often fail to redeem them

B. because they are easy for the customer to use

C. because they offer the customer a chance to actually try the product

D. because they offer incentives that encourage satisfied customers to become repeat customers

E. because they are most effective on everyday purchases

a

A new specialty tea shop opened up in town. In order to lure customers into the store, the owners sent their most popular teabag to 5,000 potential customers. This is an example of

A. a rebate.

B. a coupon.

C. a sample.

D. a loyalty program.

E. an allowance.

c

At a local fair, Ford hosted a booth and brought several models of its cars for customers to sit in and look at up close. Customers were then encouraged to fill out a comment card letting Ford know what their favorite model car was. At the end of the fair, one comment card would be chosen by the company and that person would win the car of their choice. This is an example of

A. a coupon.

B. a sweepstakes.

C. a contest.

D. a premium.

E. a deal.

b

Sales promotions that allow consumers to accumulate points or other benefits for doing business with the same company are known as

A. allowances.

B. rebate programs.

C. contests.

D. premium programs.

E. loyalty programs.

e

A trade sales promotion that typically involves paying retailers for financial losses associated with consumer sales promotions or reimbursing a retailer for an in-store or local expense to promote a specific product is known as

A. an allowance.

B. a rebate.

C. a contest.

D. a premium program.

E. a loyalty program.

a

The two-way flow of communication between a salesperson and a customer that is paid for by the firm and seeks to influence the customer’s purchase decision is referred to as

A. advertising.

B. personal selling.

C. sales promotion.

D. public relations.

E. publicity.

b

Tristan has been calling on the same customer for years. He handles all of the company’s orders and quickly resolves any issues that may come up. On occasion, Tristan takes some of the company employees out to dinner and has even given them tickets to local sporting events. Tristan is involved in

A. relationship selling.

B. multi-level marketing.

C. loyalty selling.

D. publicity.

E. public relations.

a

The single most effective approach for establishing and developing a personal relationship with the customer is through

A. advertising.

B. sales promotion.

C. publicity.

D. personal selling.

E. public relations.

d

Amy just took a job with a scrap metal collection company. Her job is to search for potential customers that need to get rid of scrap metal or those customers who wish to buy scrap metal. Amy’s job fits into the first step of the personal-selling process, that of

A. advertising.

B. personal selling.

C. sales promotion.

D. prospecting.

E. public relations.

d

The main goal of the first step in the personal-selling process is to

A. identify a firm’s key decision makers.

B. identify a customer’s product needs.

C. find qualified prospects.

D. have the salesperson meet the prospective customer.

E. find as many potential customers as possible.

c

In which step of the personal-selling process would you identify key decision makers, review account histories and prepare a sales presentation?

A. the prospecting step

B. the preapproach step

C. the qualifying step

D. the approach step

E. the presentation step

b

During which step of the personal-selling process does the salesperson establish a rapport that sets a foundation for the relationship and asks open-ended questions to learn more about the prospect and his or her needs and wants?

A. the prospecting step

B. the preapproach step

C. the qualifying step

D. the approach step

E. the presentation step

d

As outlined in your text, all of the following should be part of a great sales presentation EXCEPT

A. it should explain the value proposition.

B. it should assert the advantages and benefits of the product.

C. It should refute any complaints or objections about the product.

D. it should enhance the customer’s knowledge of the company and the product.

E. it should create a memorable experience.

c

Compare the following statements made by a salesperson and select the one that exemplifies handling objections by denial.

A. Yes, our service time is slower but our service staff has won the Best Service in the Industry award for the past 5 years.

B. It simply is not accurate to claim that our product is a copycat of XYZ brand. We have a patent showing how our product is considerably different.

C. We can discuss the product’s warranty in a few minutes, but first let me explain one more important benefit of the product.

D. Yes, our prices are higher, but our product has been proven to be more efficient.

E. If I may take just a moment to ask about your production needs, we can then talk about the various delivery options.

b

Which step of the personal-selling process is often the most difficult because it requires the salesperson to overcome the fear of being rejected?

A. preapproach

B. approach

C. sales presentation

D. handling objections

E. closing the sale

e

In which closing method does the salesperson solicit customer reaction without asking for the sale directly?

A. summarization close

B. solicitation close

C. trial method

D. indirect method

E. assumptive close

c

Which of the following statements about the follow-up step of the personal-selling process is NOT true?

A. The follow-up step is critical to creating customer satisfaction.

B. The follow-up step may uncover new customer needs and wants.

C. Referrals can often be discovered in the follow-up step.

D. The follow-up step is not needed for repeat customers.

E. Building long-term relationships with customers is part of the follow-up step.

d

What is the aim of a public relations campaign?

A. to coordinate promotion mix elements to provide a consistent message about the firm

B. to keep the product before the public in an effort to reinforce previous promotional activity

C. to communicate directly with the consumer in an effort to provoke a response

D. to stimulate quicker and more frequent purchases of a product

E. to promote positive relations between a firm and its stakeholders

e

Which of the following is NOT a tool for public relations?

A. speeches

B. annual reports

C. sales presentations

D. blogs

E. brochures

c

Which public relations tool provides a forum for the organization to share with its stakeholders what it has achieved over the past year?

A. speeches

B. annual reports

C. sales presentations

D. blogs

E. brochures

b

Which public relations tool is typically intended to inform and engage the public?

A. speeches

B. annual reports

C. sales presentations

D. blogs

E. brochures

e

Disseminating unpaid news items through some form of media to gain attention or support is referred to as

A. public relations.

B. free advertising.

C. media-controlled content.

D. publicity.

E. sales promotion.

d

What is the major disadvantage of publicity as a promotion mix tool?

A. It is a very costly option.

B. There is less control over how the information is presented.

C. It cannot be presented through multiple media sources.

D. It is time-consuming for the marketer to prepare.

E. It is not helpful in crisis management situations.

b

In the early 2000s, the Mattel Company was faced with a major problem with some of its toys due to faulty magnets and high levels of lead-based paint. When the company realized it was facing a serious problem, it immediately involved federal agencies on product safety, recalled millions of toys from the shelves, and launched a massive campaign to inform consumers about the recall. In addition, the company set up a crisis link on its webpage and posted updates regularly. Mattel’s actions can be classified as

A. negative publicity.

B. crisis management.

C. consumer fraud.

D. direct marketing.

E. poor public relations.

b

Firms typically determine their promotional budget using one of three methods: the affordable method, the percentage-of-sales-method, and the

A. total sales method.

B. market demand method.

C. objective-and-task method.

D. principal accounting method.

E. cost-per-media method.

c

As a budgeting method, which approach is simple and fiscally conservative but offers no other benefits for the organization?

A. affordable method

B. percentage-of-sales method

C. objective-and-task method

D. principal accounting method

E. cost-per-media method

a

The most widely used budgeting approach is the

A. affordable method.

B. percentage-of-sales method.

C. objective-and-task method.

D. principal accounting method.

E. cost-per-media method.

b

The primary disadvantage of the percentage-of-sales budgeting method occurs when

A. a firm’s sales increase.

B. money is leftover when the budgeting period ends.

C. there is not enough time to properly execute the method.

D. demand for the firm’s products increase.

E. a firm’s sales decline.

e

Which budgeting method takes a bottom-up approach by defining specific objectives, determining the tasks needed to achieve these objectives and then estimating how much each task will cost?

A. affordable method

B. percentage-of-sales method

C. objective-and-task method

D. principal accounting method

E. cost-per-media method

c

The name, term, symbol, design, or any combination of these that a firm uses to identify and differentiate its products is its

A. label.

B. trademark.

C. trade name.

D. brand.

E. copyright.

d

A successful brand adds value to organizations in many ways, but which of the following is NOT one of those ways?

A. by generating loyal customers

B. by generating recognizable goods and services

C. by reducing competition

D. by generating more revenue

E. by fostering more donations for nonprofit organizations

c

Randi’s family has always owned Toyota vehicles and has been very happy with them. Now that Randi is ready to buy her first vehicle, she doesn’t even want to look at other manufacturers because she feels that Toyota’s are the best. Randi is exhibiting brand

A. loyalty.

B. recognition.

C. equity.

D. discrimination.

E. exclusion.

a

According to your text, why are brand loyal customers an important contributor to a firm’s long-term success and profitability?

A. Brand loyal customers typically exhibit more price sensitivity.

B. Brand loyal customers write positive reviews of the firm.

C. Brand loyal customers write negative reviews of the competition.

D. Brand loyal customers typically don’t use coupons to reduce the price of the product.

E. Brand loyal customers typically exhibit less price sensitivity.

e

The degree to which customers can identify the brand under a variety of circumstances is referred to as brand

A. awareness.

B. recognition.

C. loyalty.

D. equity.

E. marking.

b

A family traveling in their car is looking for a place to eat off the highway. One of the children in the car sees a sign up ahead with the face of Ronald McDonald on it and exclaims, let’s go to McDonald’s! This is most likely an example of brand

A. discrimination.

B. recognition.

C. preference.

D. equity.

E. labeling.

b

Target stores use an image of a white dog with a red bulls-eye around one of its eyes. In marketing terms, what does this represent for Target?

A. an identifier

B. a brand mark

C. a brand image

D. a patent

E. a brand feature

b

Brand marks are elements of a brand that can be expressed in all of the following ways EXCEPT with

A. symbols.

B. colors.

C. words.

D. designs.

E. figures.

c

The unique set of associations target customers or stakeholders make with a brand is referred to as

A. brand recognition.

B. brand marking.

C. brand value.

D. brand image.

E. brand equity.

d

The Jeep brand of vehicles provides consumers with a unique blend of freedom and adventure. One of their advertising campaigns featured the tagline Have fun out there. Jeep. to highlight how the Jeep brand is about being free and adventuresome. This unique set of associations that consumers will make with the Jeep brand is referred to as brand

A. recognition.

B. marking.

C. image.

D. awareness.

E. equity.

c

The brand image that bears your name and that must be managed 24-hours-a-day, 7-days-a-week, 365-days-a-year, is referred to as your

A. primary brand.

B. personal brand.

C. unique brand.

D. social brand.

E. brand equity.

b

Which of the following is NOT a component of building a successful brand?

A. Deliver a quality product.

B. Create a consistent brand image.

C. Create consistent brand messaging.

D. Monitor the competitive environment.

E. Capture feedback.

d

What aspect of product development should firms try to achieve when developing a successful brand?

A. The product should be unique to the marketplace in order to be competitive.

B. The product should provide value to the customers that will be using it.

C. The product should be aligned with a customer service department to handle complaints.

D. The product should be able to be manufactured as quickly as possible.

E. The product should be promotable through advertising and personal selling.

b

When building a successful brand, it is important that all of the marketing decisions, promotions, and employees reinforce the brand by providing a(n) _______ experience in the minds of consumers.

A. consistent

B. unique

C. memorable

D. simplistic

E. impressive

a

To be successful, brand messaging should

A. strive to explain the product in detail.

B. contain many different messages.

C. be consistent and concise.

D. be complex and varied.

E. keep consumers guessing.

c

Which component of a successful brand allows firms to engage customers through online surveys and social media tools?

A. Deliver a quality product.

B. Create a consistent brand image.

C. Capture feedback.

D. Create consistent brand messaging.

E. Evaluate competitor’s products.

c

The value the firm derives from consumers’ positive perception of its products is called

A. brand capture.

B. brand equity.

C. brand profit.

D. brand relevance.

E. brand esteem.

b

Young and Rubicam, a global advertising agency, developed the BrandAsset Valuator, which suggests that brand equity is based on which of the following four dimensions?

A. image, loyalty, messaging, and recognition

B. differentiation, recognition, knowledge, and image

C. differentiation, relevance, esteem, and knowledge

D. relevance, recognition, image and esteem

E. loyalty, esteem, image, and recognition

c

The fact that a consumer who has tried and likes a product and therefore, is more likely to continue buying it regardless of outside influences exemplifies the fact that

A. consumers are not that knowledgeable in evaluating alternative products.

B. brand image is the main reason consumers continue to purchase a brand.

C. advertising a brand is the surest way to ensure repeat purchasing.

D. brand equity increases a firm’s ability to succeed in a difficult competitive environment.

E. consumers do not like change when it comes to buying products.

d

Which of the following is most helpful in facilitating a brand’s expansion into new markets?

A. changing the brand’s image for each new market

B. having a high level of brand equity

C. advertising on only one platform

D. delivering a different brand message for the new environment

E. reinventing the product for the new environment

b

When it comes to measuring brand equity, which type of research is particularly helpful in identifying the sources of brand equity and its role in consumer decisions?

A. quantitative research

B. brand recognition research

C. qualitative research

D. brand recall surveys

E. product development research

c

What type of research involves asking consumers what comes to mind when they think about the brand?

A. free association

B. aided recall

C. unplanned response

D. unaided recall

E. free thought

a

A marketer is trying to uncover the true opinions of a group of consumers, but they are unwilling to express themselves, so instead he asks them to compare his brand to an automobile, a country and a person. What technique is the marketer using?

A. free association

B. aided recall

C. projective technique

D. brand recognition

E. brand recall survey

c

Which qualitative technique for measuring brand equity helps marketers understand which brands stand out in a consumer’s memory and what the strength of his or her association is with the brand?

A. free association

B. aided recall

C. projective technique

D. brand recognition

E. brand recall survey

d

In a brand recall strategy, how can marketers tell if consumers are truly able to identify the brands they have seen and distinguish between those and brands that they have not been exposed to?

A. They ask consumers questions about details of the brand.

B. They ask consumers to compare the brand to a person, animal, or car.

C. They repeat the technique several times.

D. They ask consumers what comes to mind when they think about the brand.

E. They use decoys that consumers could not possibly have seen.

e

The process of broadening the use of an organization’s current brand to include new products is called

A. product extension.

B. brand revitalization.

C. cannibalization.

D. brand extension.

E. co-branding.

d

When the makers of Snickers candy bars decided to make a line of ice cream treats, they came up with Snickers ice cream bars. This is an example of

A. a product extension.

B. brand revitalization.

C. cannibalization.

D. co-branding.

E. a brand extension.

e

Cannibalization occurs when

A. a brand has been mismanaged and must be revitalized in order remain a viable brand.

B. new products take sales away from the firm’s existing products rather than generating additional revenues.

C. two or more companies collude to set prices, forcing smaller brands to leave the marketplace.

D. a firm develops a new product but does not allocate enough funds to promote the product successfully.

E. existing products have such a strong market share that new products fail to gain acceptance with consumers.

b

Fenton has a food truck in which he sells mainly burgers and fries. He decided to expand his product line to begin serving grilled chicken sandwiches as well. Fenton is noticing that his existing customers now order the chicken over the burgers, and his sales have not increased, in fact, they have decreased slightly. This is most likely due to

A. poor marketing of the burger option.

B. revitalization.

C. low brand equity.

D. differentiation.

E. cannibalization.

e

Which of the following is NOT true regarding a brand extension strategy?

A. It is best to have high brand equity before pursuing a brand extension strategy.

B. Firms must make sure that the extension lives up to the quality consumers expect from the brand.

C. A brand extension strategy is the same thing as a product extension strategy.

D. A brand extension strategy allows new products to profit from recognition the brand already enjoys.

E. Brand extensions must be implemented with an eye towards avoiding cannibalization.

c

The strategy to recapture lost sources of brand equity and identify and establish new sources of brand equity is referred to as

A. brand revitalization.

B. brand extension.

C. cannibalization.

D. brand marking.

E. brand recouping.

a

According to your text, brand revitalization often begins with

A. redesigning the product.

B. rebuilding trust with consumers.

C. revamping its promotional campaign.

D. rebuilding trust with stockholders.

E. employee training and education.

b

Brand revitalization is also referred to as

A. co-branding.

B. rebuilding.

C. recouping.

D. rebranding.

E. remaking.

d

A strategy in which two or more companies issue a single product in an effort to capitalize on the equity of each company’s brand is called

A. dual branding.

B. brand extension.

C. co-branding.

D. partner branding.

E. brand revitalization.

c

The makers of Breyers ice cream have come up with a new line called Breyers Blasts! This line of ice cream combines Breyers ice cream with well-know products such as Oreo cookies, Snickers candy bars, and Reese’s peanut butter cups. This is an example of

A. co-branding.

B. brand extension.

C. dual branding.

D. partner branding.

E. brand revitalization.

a

Co-branding involves

A. one company linking two of its brands.

B. two companies issuing two different products, but using the same name.

C. one company issuing two different products, but packaging them under different names.

D. two or more companies using the same supplier for its products.

E. two or more companies issuing a single product.

e

Products developed by a retailer and sold only by that specific retailer are known as

A. manufacturer brands.

B. generic brands.

C. private label brands.

D. licensed brands.

E. co-brands.

c

Private label brands are also referred to as

A. manufacturer brands.

B. generic brands.

C. co-brands.

D. licensed brands.

E. store brands.

e

As a retailer, Target has developed its own line of products with the brand name up & up. These products are sold exclusively in Target stores and are an example of

A. manufacturer brands.

B. generic brands.

C. co-brands.

D. private label brands.

E. licensed brands.

d

On the store shelf at Walgreens, there are two types of sunscreen. Coppertone Sport Spray, which is a _______ brand, and Walgreens Continuous Spray Sport, which is a _______ brand.

A. private label; manufacturer

B. manufacturer; generic

C. private-label; generic

D. licensed; private label

E. manufacturer; private-label

e

All of the activities of designing and producing the container for a product are referred to as

A. housing.

B. packaging.

C. labeling.

D. containment.

E. sorting.

b

As a marketing tool, packaging

A. is not very important for communicating to the consumer.

B. is only crucial to a few products, since most products are heavily promoted in other ways.

C. gives a product a chance to stand out among all the other choices on a store shelf.

D. does little to help promote and reinforce brand image.

E. is not something that marketers are involved with.

c

Tiffany is well-known as a luxury brand of jewelry. The iconic Tiffany blue box, along with its blue jewelry bag, has been used for over 100 years. By communicating class and sophistication, Tiffany’s packaging is an example of how packaging

A. can take the place of advertising.

B. contributes to low brand equity.

C. can mislead a customer.

D. promotes a brand’s image.

E. takes away from a brand’s image.

d

Watch manufacturer Festina designed a diving watch called the Profundo. The quality promised by Festina in making the Profundo is that this watch stays waterproof. To back up its claim, the watch is sold in a transparent bag filled with distilled water, convincing customers of the watch’s high quality. This most likely is an example of how packaging

A. reinforces the brand’s image.

B. upstages the brand’s image.

C. contributes to low brand equity.

D. can turn off a customer through gimmicks.

E. differs completely from advertising.

a

All of the following could be considered ineffective packaging of your personal brand when preparing for an interview EXCEPT

A. typographical errors on your resume.

B. poor grammar in your e-mails.

C. unprofessional attire for an interview.

D. showing up late to an interview.

E. talking about your personal accomplishments.

e

According to your text, which of the following marketers in today’s world is most likely positioned for success?

A. a marketer who is creative at crafting messages onto print ads

B. a marketer who sticks to the traditional forms of advertising

C. a marketer who connects with his or her audience through social media

D. a marketer who understands that the use of social media carries no risk

E. a marketer who is creative at crafting messages onto digital materials

c

Among consumers who write product reviews online, a majority do so to

A. give recognition for a job well done.

B. receive a product discount.

C. punish the company for a product defect.

D. bond with others.

E. feel personally empowered.

a

Which of the following shows how social media can utilize consumers as brand advocates?

A. A company searches through social media sites looking for negative product reviews so it can address the issues.

B. A company tracks visits to its website to better target its audience.

C. A company encourages customers to enter a contest on its website for a chance to win a free product.

D. A company encourages customers to post pictures promoting the brand and the lifestyle it represents.

E. A company airs its Super Bowl television ad after the game on YouTube.

d

According to recent data from ACNielsen, 60 percent of consumers researching products through online sources learned about a specific brand or retailer from

A. a social networking site.

B. the company webpage.

C. a search engine.

D. a newspaper website.

E. a product comparison website.

a

All of the following are ways listed in your text that customers engage with brands via social media EXCEPT

A. consumers acting as brand advocates.

B. consumers sharing brand information.

C. consumers seeking discounts.

D. consumers seeking contact with customer service.

E. consumers using search engines to find a product.

e

When analyzing the most common sources of product information and the percentage of social media users that prefer each source, it was found that compared to other sources, users prefer

A. a company’s website.

B. a live chat with a company employee.

C. consumer-generated reviews and product ratings.

D. a company’s Twitter page.

E. a company’s Facebook page.

c

which has been a leading producer of bicycle locks for more than three decades. How was this firm impacted by social media?

A. Kryptonite was a little-known brand until social media users began raving about the company products, leading to an unprecedented increase in sales.

B. Kryptonite enjoyed steady sales until negative product reviews on Yelp and YouTube drastically reduced company sales, causing the firm to go out of business.

C. Users posted videos showing how the bike lock could be employed for other uses around the house, and this led to an increase in company sales.

D. Users contacted the company about sponsoring a bike competition and this led to social media product endorsements by all types of different companies.

E. Users posted videos showing how the company’s bike locks could be opened with a pen and this forced the company to change its design.

e

When recommending products, which of the following do social media users tend to trust the most?

A. a company’s website

B. friends and family

C. product review sites

D. a company’s Facebook page

E. reviews posted on independent blogs

b

According to your text, men and women, typically between 18 and 49 years old, who reach a large number of potential consumers through social media are referred to as

A. product gurus.

B. opinion leaders.

C. social networking stars.

D. super influencers.

E. online persuaders.

d

Darius has a Facebook and a Twitter account, actively uses Instagram, and has his own personal blog. He has a large network of social media friends and is very effective at influencing those people to act. Based on Darius’ ability to drive other people to act on social media, he would have a high

A. prestige score.

B. sway score.

C. persuasion score.

D. influence score.

E. Klout score.

e

Which brand in 2012 was ranked as the most loved brand on social media, in part because of the specials it offered to its most loyal customers?

A. McDonalds

B. Barnes and Noble

C. Macy’s

D. Starbucks

E. Subway

d

What could be the potential downside of continually offering discounts as a type of promotional strategy?

A. It could pave the way for more competition to enter the marketplace.

B. It could have the effect of overpricing the product.

C. It could potentially devalue the brand and its relationship with its customers.

D. It could cause the firm to have to repackage its product.

E. It could lower a firm’s brand recognition.

c

When it comes to using social media to respond to customer complaints, Research by ACNielsen found that 42 percent of 18-34 year olds expect customer support within _______ of a question or complaint.

A. 30 minutes

B. 1 hour

C. 8 hours

D. 12 hours

E. 24 hours

d

According to your text, social media can support the goal of building a successful brand in two main ways: by allowing the firm to develop deeper relationships with customers, and by

A. allowing the firm to offer coupons and discounts to a larger number of customers.

B. generating positive-word-of-mouth communication about the brand across social networks.

C. having the ability to track the competition on social networks.

D. reducing the number of other promotional activities the firm has to engage in.

E. allowing firms to build a customer database to use to promote other products.

b

What social brand monitoring tool allows a firm to capture its brand across most social media sites by monitoring over 100 platforms, isolating relevant keywords and measuring the brand’s impact online?

A. Social Mention

B. Google Alerts

C. Twitter Search

D. Technorati

E. Klout

a

What tool for monitoring a social brand allows a firm to set up alerts about your company, good, service or brand so that you’re e-mailed whenever they appear online?

A. Social Mention

B. Google Alerts

C. Twitter Search

D. Technorati

E. Klout

b

Which of the following statements regarding monitoring a social brand is true?

A. There are not very many social monitoring tools currently on the market, and the ones that are available tend to be expensive.

B. The social monitoring tools currently available on the market are difficult to set up.

C. Firms that use social monitoring tools are better prepared to facilitate an ongoing dialogue with customers to strengthen brand loyalty over time.

D. Unless a firm has a website or is selling its product in some sort of online format, there is no need to monitor social network activity.

E. Most social network monitoring sites only allow monitoring of one particular platform.

c

The term that your text uses for a brand marketed under the same name in multiple countries is

A. international brand.

B. multinational brand.

C. exported brand.

D. worldwide brand.

E. global brand.

e

What firm tops the list of the most valuable global brand?

A. Microsoft

B. Coca-Cola

C. McDonald’s

D. Toyota

E. IBM

b

When determining the top most valuable global brand in 2012, three criteria were used: (1) the financial performance of the branded product, (2) the ability of the brand to draw a premium price or significantly impact the company’s profits, and (3) the

A. amount of money spent in order to promote the product.

B. number of competitors competing against the product.

C. role the brand plays in corporate philanthropy efforts.

D. role the brand plays in influencing consumers.

E. length of time the product has been on the market.

d

Which of the following is NOT a reason for the global strength of U.S. brands?

A. The U.S. economy rebounded from the most recent financial crisis at a slightly faster pace than many European countries.

B. American companies collectively benefit from the success of U.S. tech companies.

C. The Internet and the language associated with it are rooted in American brands and American imagery.

D. Social networking sites have been important tools in promoting American brands internationally.

E. There are few tariffs levied against U.S. brands imported into other countries.

e

Research indicates that emerging middle-class consumers in developing countries desire brand names that sound

A. British.

B. German.

C. American.

D. French.

E. Chinese.

c

According to your text, what is the biggest challenge in global branding?

A. coming up with different brand strategies for different countries

B. grouping nations with consumers that have similar tastes and brand preferences

C. staying easily recognizable at any location, while remaining compatible with local culture and traditions

D. translating promotional materials into another language so that the meaning does not get lost

E. adhering to the regulations of other countries when promoting the product

c

Of all developed countries, the people living in _______ are the most brand and status conscious and are generally accepting of foreign brands.

A. the United States

B. Japan

C. China

D. France

E. Spain

b

According to your text, what two facets of nonprofit organizations makes branding more critical for them as compared to for-profit organizations?

A. limited funds and complex goals

B. varied audiences and limited funds

C. limited staff and complex goals

D. complex goals and varied audiences

E. global presence and varied audiences

d

According to your text, an effective nonprofit brand should be all of the following EXCEPT

A. unique.

B. pleasing to the eye and ear.

C. easy to remember.

D. reflective of the organization.

E. detailed and thought-provoking.

e

Nonprofit organizations need to use the value stakeholders associate with the organization to raise the funds and support required to accomplish its mission. It is easier for a nonprofit organization to do this if

A. it has high brand equity.

B. it is relevant to only a small, focused group of consumers.

C. its brand is similar to that of its competitors.

D. it is relatively unknown.

E. it has low brand equity.

a

In 2012, the most valuable nonprofit brand in the Youth Interest category was

A. Stand Up for Kids.

B. Big Brothers, Big Sisters of America.

C. Girls Scouts of the USA.

D. Young Life.

E. Boy Scouts of America.

c

When it comes to measuring nonprofit brand equity, your text states that social media tools are particularly important for nonprofit marketers because they

A. are the easiest promotional tools to use.

B. don’t have to be managed by a marketing staff.

C. work better than other promotional tools.

D. can be used to reach a global audience.

E. cost less than other promotional tools.

e

The amount of something (money, time, or effort) that a buyer exchanges with a seller to obtain a product is referred to in marketing terms as

A. renumeration.

B. value.

C. price.

D. fee.

E. worth.

c

One of the most important strategic decisions a firm faces is _______ because it reflects the value the product delivers to consumers as well as the value it captures for the firm.

A. advertising

B. promotion

C. profit management

D. production management

E. pricing

e

Joey set up a lawn-mowing business in his neighborhood. He currently has 7 customers that want their lawns mowed each week for which he charges $25.00 each. Joey spends $10.00 a week in gas and another $17.00 in yard waste bags and stickers. What is Joey’s weekly revenue?

A. $105.00

B. $175.00

C. $148.00

D. $88.00

E. $158.00

b

Joey set up a lawn-mowing business in his neighborhood. He currently has 7 customers that want their lawns mowed each week for which he charges them $25.00 each. Joey spends $10.00 a week in gas and another $17.00 in yard waste bags and stickers. What is Joey’s weekly profit?

A. $105.00

B. $175.00

C. $148.00

D. $88.00

E. $158.00

c

The first step in the price-setting process is to

A. evaluate demand.

B. determine the costs.

C. analyze the competitive price environment.

D. define the pricing objectives.

E. compare alternatives.

d

When Apple released its first iPhone in 2007, it charged customers $599. Shortly thereafter, it reduced the price to $399 for the exact same device. Apple’s decision to set a relatively high price for a period of time after the product launched and then decrease the price to a level that would be more sustainable over time reflects which pricing strategy?

A. price skimming

B. volume maximization

C. survival pricing

D. underpricing

E. target pricing

a

Compare the following statements and select the one that is accurate regarding a profit maximization strategy.

A. For a profit maximization strategy to work over the long term, the firm must have a significant cost or resource advantage over competitors.

B. A profit maximization strategy sets prices low to encourage a greater volume of purchases and lower the level of involvement for the consumer.

C. Profit maximization should not be used as a permanent pricing objective, but is effective in allowing a firm to endure a difficult time.

D. A profit maximization strategy is best used when a product is in the growth and maturity stage of the product life cycle.

E. Profit maximization assumes that customers value a product’s differentiating attributes and are willing to pay a higher price to take advantage of those attributes.

e

Volume maximization is also referred to as

A. price skimming.

B. penetration pricing.

C. profit maximization.

D. survival pricing.

E. target pricing.

b

What is marginal revenue?

A. the change in total revenue that results from selling one additional product unit

B. a percentage change in price that results from a change in quantity demanded

C. the total change in revenue that results from a large change in product price

D. the change in total revenue that results from producing one additional unit

E. the total change in revenue that results from a small change in product price

a

The degree to which the price of a product affects consumers’ purchasing behavior is referred to as

A. price elasticity.

B. dynamic pricing.

C. price sensitivity.

D. marginal pricing.

E. price relevance.

c

Consumers will be more price sensitive when

A. some or all of the purchase price is paid by others.

B. the price they have to pay is more than they anticipated.

C. the cost of not getting the expected benefits of a purchase is high.

D. a product’s price is within the range that they perceive as fair or reasonable.

E. they perceive the price as a gain rather than a forgone loss.

b

One of the most important concepts in marketing is the price elasticity of demand, which is the

A. degree to which the price of a product affects consumers’ purchasing behavior.

B. point at which the costs of producing a product equal the revenue made from selling the product.

C. price that consumers consider reasonable and fair for a product.

D. percentage a product is marked up in response to consumer demand.

E. percentage change in quantity demanded in response to a percentage change in price.

e

A measure of price sensitivity that gives the percentage change in quantity demanded in response to a percentage change in price is known as

A. price elasticity of demand.

B. break-even analysis.

C. profit maximization.

D. price elasticity of supply.

E. marginal revenue.

a

In November the appliance store priced its front-loading washing machines at $899.00 and sold 50 units. In December they reduced the price to $799.00 and sold 53 units. Which of the following statements is accurate regarding this situation?

A. Demand is elastic and total revenue fell from November to December.

B. Demand is inelastic and total revenue fell from November to December.

C. Demand is elastic and total revenue rose from November to December.

D. Demand is inelastic and total revenue rose from November to December.

E. Demand is neither elastic nor inelastic but revenue rose from November to December.

b

For the first quarter of the year, the price of the company’s most popular e-reader was $129.00. The company sold 750,000 units at this price. For the second quarter, the company decided to reduce the price of the e-reader to $109.00. At this price point, the company sold 1.5 million units indicating that demand for the product is

A. inelastic.

B. unstable.

C. stable.

D. elastic.

E. marginal.

d

In the price-setting process, the next step after demand has been evaluated is to

A. define the pricing objectives.

B. analyze the competitive price environment.

C. determine the costs.

D. choose a price.

E. evaluate the alternatives.

c

Which of the following is NOT a fixed cost?

A. rent

B. material

C. salaries

D. insurance

E. advertising costs

b

Variable costs are defined as costs that

A. vary depending on the type of material used in production.

B. change only during economic downturns.

C. remain constant even though the product offering varies.

D. vary depending on the number of units produced or sold.

E. vary depending on the advertising budget for the product.

d

Which of the following is a variable cost?

A. delivery cost

B. salaries

C. advertising cost

D. insurance

E. rent

a

Which of the following accurately describes break-even analysis?

A. the process of calculating the sales volume needed to achieve a profit of zero

B. the process of calculating the point at which fixed costs and variable costs are equal

C. the process of calculating the difference between marginal revenue and marginal cost

D. the process of calculating the percentage change in quantity demanded in response to a percentage change in price

E. the process of calculating how many units of product must be sold to cover fixed costs

a

Greg is the owner of a full-service car wash. For the month of December he paid $2,000 in rent, $700 in utilities, $2,950 in salaries, and $50 on advertising. A full service car wash costs $10.50. Unit variable costs per car wash are $2.50. How many full-service car washes does Greg need to sell to break-even each month?

A. 713

B. 625

C. 476

D. 543

E. 619

b

Which of the following statements regarding break-even analysis is TRUE?

A. Break-even analysis does not measure the cost of sales.

B. Break-even analysis is an accurate measure of fixed costs.

C. Break-even analysis is an accurate measure of variable costs.

D. Break-even analysis does not measure price sensitivity.

E. Break-even analysis reflects how demand may be affected at different price levels.

d

What can be said regarding the role of industry structure on setting price?

A. In industry in which there are many buyers and sellers, the pricing impact of any single firm will be quite large.

B. In an industry in which there are many buyers and sellers, firms will typically match the price of competitors.

C. In an industry in which there are many buyers and sellers, the pricing impact of any single firm will be fairly small.

D. In an industry in which a small number of firms compete, the pricing impact of any single firm will be fairly small.

E. Marketers should make pricing decisions irrespective of whether there are many or few competitors in the industry.

c

According to your text, pricing resembles a game of

A. checkers.

B. chess.

C. cards.

D. blackjack.

E. roulette.

b

Since consumers have the tendency to compare prices on almost everything they buy, marketers should attempt to capitalize on this tendency when setting prices by determining the price consumers will consider fair and reasonable for a product. This is known as the

A. benchmark price.

B. break-even point.

C. dynamic price.

D. reasonable price.

E. reference price.

e

Which of the following provides the best source of information for marketers regarding how high they can price a product before customers stop considering the product a good value?

A. salespeople

B. sales forecasts

C. historical pricing data

D. advertising staff

E. customer service personnel

a

Justine went to the specialty grocery store by her office after work. When looking at the offerings at the meat counter, she was surprised to see ground beef selling for $4.49/lb. At her normal grocery store, she can get the same quality beef for $3.29/lb., a price Justine feels is reasonable. $3.29/lb. for ground beef is Justine’s

A. benchmark price.

B. break-even point.

C. dynamic price.

D. reasonable price.

E. reference price.

e

According to your text, one of the most common mistakes in modern pricing is

A. failing to correctly calculate the break-even point.

B. charging someone less than they are willing to pay.

C. covering fixed costs while ignoring variable costs.

D. setting the price too high on an introductory product.

E. pricing items based on consumers’ reference prices.

b

Charging someone less than they are willing to pay is a practice referred to as

A. dumping.

B. survival pricing.

C. minimal pricing.

D. underpricing.

E. price skimming.

d

Which of the following statements regarding pricing is TRUE?

A. Marketers should keep prices low during the introductory stage of the product life cycle.

B. Pricing strategies should be reevaluated throughout the product life cycle.

C. Choosing a price is a one-time decision that is made for each individual product.

D. Initiating price increases is one of the least challenging aspects of pricing.

E. A price-skimming strategy is often used during the growth and maturity stages of the product life cycle.

b

What are two of the most common and effective strategies marketers can use for raising prices?

A. unbundling and escalator clauses

B. reference pricing and unbundling

C. markup pricing and escalator clauses

D. prestige pricing and dynamic pricing

E. odd pricing and prestige pricing

a

The price strategy of unbundling involves

A. adding a certain amount to the cost of each item in a product set.

B. pricing products a few cents below the next dollar amount.

C. separating out the individual goods that make up a product and pricing each one individually.

D. placing two or more products together in a package and selling them at a single price.

E. constantly updating prices to reflect changes in supply or demand.

c

Scotts Fertilizer has a 4-step program for lawn care. Each step features a different product. Scotts sells the fertilizer as a set containing one bag of each of the 4-step products. If Scotts decided to sell each product individually rather than as a set, it would be an example of which pricing strategy?

A. dumping

B. dynamic pricing

C. minimal pricing

D. underpricing

E. unbundling

e

A section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship as a result of uncontrollable increases in the costs of or decreases in the availability of something required to deliver products to customers is referred to as a(n)

A. protective clause.

B. hardship clause.

C. materials clause.

D. escalator clause.

E. control clause.

d

One of the most commonly used pricing tactics, markup pricing, is also referred to as

A. profit margin pricing.

B. cost-plus pricing.

C. profit-plus pricing.

D. dynamic pricing.

E. standard pricing.

b

As a pricing tactic, markup pricing is

A. difficult to implement.

B. a good measure of price sensitivity.

C. not very effective at maximizing profits.

D. good at capturing the value consumers place on products.

E. the most effective pricing tactic overall.

c

The amount a product sells for above the total cost of the product itself is called

A. profit margin.

B. the break-even point.

C. marginal revenue.

D. marginal cost.

E. the price elasticity of demand.

a

A pricing tactic in which a firm prices products a few cents below the next dollar amount is called

A. even pricing.

B. perceived pricing.

C. deal pricing.

D. odd pricing.

E. bargain pricing.

d

Bowman’s shoe store just received a shipment of dress boots. The manufacturer’s suggested retail price for the boots is $150.00, but Bowman’s decides to price the boots at $149.95. What pricing tactic is Bowman’s most likely using?

A. prestige pricing

B. perceived pricing

C. odd pricing

D. dynamic pricing

E. yield pricing

c

Prestige pricing involves

A. adding a certain amount to the cost of each item in a product set.

B. pricing a product higher than competitors to signal that it is of higher quality.

C. separating out the individual goods that make up a product and pricing each one individually.

D. pricing generic label goods at the same price as designer goods.

E. constantly updating prices to reflect changes in supply or demand.

b

If luxury brands such as Versace clothing, Lexus automobiles, and Dom Perignon champagne wanted to promote an image of superior quality and exclusivity to customers, they would most likely use which pricing tactic?

A. luxury pricing

B. cost-plus pricing

C. prestige pricing

D. dynamic pricing

E. odd pricing

c

Sunny Pines campground, located in the Midwest, promotes the months of September and October as its value camping months. During this time, it offers reduced rates on camper rentals and campgrounds. It does this, in part, because the weather is not as favorable for camping at this time. The pricing tactic Sunny Pines is using to encourage camping during these months is most likely

A. seasonal discounts.

B. price bundling.

C. prestige pricing.

D. unbundling.

E. odd pricing.

a

If a resort wanted to promote visitors to come during its off-peak times, it would most likely choose which pricing tactic?

A. odd pricing

B. price bundling

C. prestige pricing

D. price skimming

E. seasonal discounts

e

When Sony launched its new PS4 gaming system, the product was sold as a package that included the game console, game controllers, wireless headset, and one video game. This is an example of

A. underpricing.

B. price bundling.

C. yield management.

D. price skimming.

E. survival pricing.

b

A strategy in which two or more products are packaged together and sold at a single price is called price

A. pushing.

B. grouping.

C. packaging.

D. skimming.

E. bundling.

e

All of the following are advantages of using a price bundling strategy EXCEPT

A. bundled packages can be sold for a higher price.

B. it leads to reduced advertising costs.

C. it can lead to higher profits for the firm.

D. it benefits the consumer more than the firm.

E. it leads to reduced selling costs.

d

Your text notes that technology has helped to shift the balance of power from companies to customers. Which of the following exemplifies this statement?

A. Companies can use social networking sites to help them better target their audiences.

B. The Internet has made it possible for customers to comparison shop for products.

C. Data gathered at the point-of-sale can be used by companies to target customers for new products.

D. Automated production systems lead to more efficient and cost-effective manufacturing processes.

E. The Internet allows companies to advertise on more than one platform.

b

Recent research indicates that approximately _______ of consumers search for and purchase a low-priced product using an in-store shopping app or online search engine.

A. 5%

B. 20%

C. 75%

D. 40%

E. 90%

d

What technological advancement created for mobile devices has unleashed a new era of pricing transparency for consumers?

A. text messaging

B. wireless apps

C. GPS systems

D. mobile banking

E. SIM cards

b

A pricing strategy that involves constantly updating prices to reflect changes in supply, demand, or market conditions is called

A. market pricing.

B. demand pricing.

C. dynamic pricing.

D. flexible pricing.

E. penetration pricing.

c

Fenton, a marketer for a major retailer, uses the Internet to aggressively review the prices of products sold by his competitors. Accordingly, he constantly updates his prices based on his findings and what changes he sees in consumer demand. What type of pricing strategy is Fenton most likely using?

A. dynamic pricing.

B. demand pricing.

C. market pricing.

D. flexible pricing.

E. penetration pricing.

a

Yield management is a strategy for maximizing a firm’s

A. production.

B. supply.

C. operating costs.

D. revenue.

E. demand.

d

For an airline, the price of economy-class seats on any given flight may fluctuate over time. For example, the airline may try to fill economy-class seats by lowering the price as the day of the flight draws closer, or try to fill business-class seats first by raising prices on economy tickets. This is an example of

A. market pricing.

B. dynamic pricing.

C. price skimming.

D. odd pricing.

E. seasonal discounts.

b

Which of the following is NOT true regarding global pricing?

A. Firms do not encounter any unique challenges when pricing products globally.

B. Historically, companies have set prices for products sold internationally higher than the same products sold domestically.

C. Technological advancements have made global pricing more transparent.

D. Economic conditions over the past decade have impacted global pricing for products.

E. Pricing is a critical component of a successful global marketing strategy.

a

The illegal buying and selling of products outside of sanctioned channels is referred to as the

A. black market.

B. white market.

C. gray market.

D. blue market.

E. red market.

a

Branded products sold through legal but unauthorized distribution channels is referred to as the

A. black market.

B. white market.

C. gray market.

D. blue market.

E. red market.

c

A couple living in the United States travels to China and buys huge amounts of designer purses for a much lower price than could be purchased at home. They import the purses back into the States where they sell them for less than the normal market price. The purses are considered to be

A. illegal imports.

B. black market goods.

C. contraband

D. smuggled goods.

E. gray market goods.

e

Which of the following statements regarding the gray market is TRUE?

A. The gray market is a benefit for manufacturers, but not for consumers.

B. The gray market involves the illegal buying and selling of goods.

C. The interconnected nature of world economies has made it easier for firms to track gray market exchanges.

D. Gray market goods allow consumers to purchase items for less than they could normally.

E. Gray market exchanges occur when the price of an item is the same in both countries where the exchange occurs.

d

Taxes on imports and exports between countries are called

A. embargoes.

B. tariffs.

C. market equalizers.

D. allowances.

E. sanctions.

b

Which of the following has allowed for easier import/export transactions between the United States, Mexico, and Canada?

A. the gray market

B. the black market

C. the absence of tariffs

D. the implementation of tariffs

E. the implementation of embargoes

c

Dumping occurs when

A. prices for products are lowered to the point at which revenue just covers costs.

B. a company sells its exports to another country at a lower price than it sells the same product in its domestic market.

C. a product is exported to a foreign country because demand for the product domestically has waned.

D. an abundance of inventory is sold off to discount retailers to recoup costs.

E. a company charges less for a product than what customers are willing to pay.

b

The protectionist strategy in which a company sells its exports to another country at a lower price than it sells the same product in its domestic market is referred to as

A. survival pricing.

B. mass exporting.

C. dumping.

D. bundling.

E. the gray market.

c

As noted in your text, producers in which country were accused of dumping by selling silk at unreasonably low prices?

A. China

B. India

C. Japan

D. Brazil

E. Morocco

a

According to your text, which of the elements of the marketing mix is one of the most watched and regulated activities?

A. place

B. product

C. promotion

D. price

E. profit

d

Located on a college campus, Ben’s Burger Barn charges $4.99 for its burger basket. However, students receive a 10% discount off the price for showing their student ID. This is an example of

A. price fixing.

B. predatory pricing.

C. price discrimination.

D. deceptive pricing.

E. price inflation.

c

The practice of charging different customers different prices for the same product is called

A. price discrimination.

B. predatory pricing.

C. price fixing.

D. deceptive pricing.

E. price inflation.

a

The three largest manufacturers of solenoid values for plumbing applications conspired together so that all three firms would charge the same price for its 3-way valve. This is an example of

A. price discrimination.

B. predatory pricing.

C. price fixing.

D. deceptive pricing.

E. price inflation.

c

A new Home Depot opened up down the street from Hank’s Hardware and has drastically reduced prices on many of the same products that Hank sells, forcing him to go out of business. After Hank closed his store, he noticed that Home Depot began raising its prices to more normal levels. This is an example of

A. price discrimination.

B. predatory pricing.

C. price fixing.

D. deceptive pricing.

E. price inflation.

b

Because it could be considered an attempt to create a monopoly, which pricing strategy is illegal under U.S. law but is difficult to prove?

A. price discrimination.

B. deceptive pricing.

C. price fixing.

D. predatory pricing.

E. price inflation.

d

Deceptive pricing involves

A. charging different customers different prices for the same product.

B. two or more companies colluding to set a product’s price

C. selling exports to another country at an unreasonably low price.

D. adding hidden taxes to products that are imported or exported.

E. intentionally misleading customers with price promotions.

e

A retailer inflated the price of its leather jackets so that when it put the jackets on sale, it appeared to customers that they were getting a better deal than they really were. This is an example of what pricing strategy?

A. price discrimination

B. deceptive pricing

C. price fixing

D. predatory pricing

E. price inflation

b

All of the following are legal under the Robinson-Patman Act EXCEPT:

A. charging different prices if it is part of a quantity discount program.

B. promising to match competitor’s prices if the consumer produces proof of the lower price.

C. charging a different price for a product that has changed in quality.

D. charging different prices as a result of a going-out-of-business sale.

E. allowing a significant price reduction on an artificially high retail price.

e

The Robinson-Patman Act was passed in 1936 and

A. requires sellers to charge everyone the same price for a product.

B. established the Federal Trade Commission.

C. was designed to protect consumers from false advertising practices.

D. established maximum rates for tariffs on imports and exports.

E. made illegal the practice of price fixing.

a

Which of the following established the Federal Trade Commission, giving it the authority to enforce laws aimed at prohibiting unfair methods of competition?

A. the Sherman Antitrust Act

B. the Robinson-Patman Act

C. the Clayton Antitrust Act

D. the Federal Trade Commission Act

E. The Wheeler-Lea Act

d

Which of the following is also called the Advertising Act?

A. the Anti-Price Discrimination Act

B. the Robinson-Patman Act

C. the Clayton Antitrust Act

D. the Federal Trade Commission Act

E. The Wheeler-Lea Act

e

A set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer is referred to as

A. logistics.

B. distribution management.

C. a supply chain.

D. a distribution center.

E. a value chain.

c

By leveraging the resources and skills of its various component firms, a supply chain provides the end customer with

A. value.

B. variety.

C. flexibility.

D. stability.

E. competition.

a

A supply chain refers to

A. the intermediaries (wholesalers, distributors, and retailers) through which the flow of products travels.

B. the planning, implementation, and control of the flow of goods, services and information between the point of origin and the final customer.

C. The inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.

D. the set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer.

E. the activities involved in delivering the right product, to the right place, to the right customer, at the right time, in the right quantity, in the right condition, and at the right price.

d

Brenda and Tim went to Carl’s Custom Dining to buy a new dining room set. At the store they configured the set to their specifications in terms of size, finish and style. The store sent the order out via the Internet to the manufacturer. The manufacturer, in turn, secured the correct type of wood from its supplier to complete the dining room set. When finished, the manufacturer shipped the product to its local warehouse where Carl’s Custom Dining arranged for delivery to its store by a local trucking company. For Carl’s Custom Dining, this is an example of

A. a push strategy.

B. a stockout.

C. its supply chain.

D. a just-in-time inventory system.

E. its inventory management system.

c

Intermediaries through which the flow of products travels are called

A. logistics chains.

B. core carriers.

C. supply chains.

D. logistic channels.

E. distribution channels.

e

Which of the following statements is accurate regarding the way a supply chain works?

A. In a supply chain, products flow upstream, finances flow downstream, and information flows both upstream and downstream.

B. In a supply chain, products flow downstream, finances flow upstream, and information flows both upstream and downstream.

C. In a supply chain, products, finances and information flow both upstream and downstream.

D. In a supply chain, products flow downstream, while finances and information flow both upstream and downstream.

E. In a supply chain, products flow both upstream and downstream, finances flow upstream, and information flows downstream.

b

All along the supply chain, distribution channels add value to the product by

A. getting the product closer to the end-consumer.

B. reducing the final cost that consumers must pay for the product.

C. getting the product to the customer in a timely manner.

D. changing the product’s form and location.

E. listening to customer feedback and reacting accordingly.

d

A management philosophy that guides the actions of company members toward the goal of actively managing the upstream and downstream flows of goods, services, finances, and information across the supply chain is referred to as a

A. logistics approach.

B. distribution orientation.

C. marketing orientation.

D. supply chain orientation.

E. channel management approach.

d

Compare the following statements and select the one that accurately describes a company that is practicing supply chain management.

A. It sets up technology to enable the sharing of demand information with suppliers.

B. It has an inward focus on the activities and performance of other companies.

C. It recognizes the importance of sharing supply and demand information with suppliers and customers.

D. It has an outward focus regarding the activities of its own company.

E. It does not rely on other members of the supply chain to add value to the final product.

a

Supply chain management refers to

A. the actions a firm takes to manage the costs required to make or buy a product.

B. the planning, implementation, and control of the manufacture of a product.

C. the actions a firm takes to coordinate the various flows within a supply chain.

D. the management of data to integrate information across all departments of an organization.

E. the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.

c

Which of the following statements reflects the underlying philosophy behind the concept of supply chain management?

A. You get out of it what you put into it.

B. Every company for himself.

C. Money makes the world go ’round.

D. No company is an island.

E. Better late than never.

d

The costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods, are called

A. supply chain costs.

B. inventory carrying costs.

C. marketing channel costs.

D. distribution channel costs.

E. logistics management costs.

b

Which of the following statements regarding supply chain management is NOT true?

A. The term supply chain management became common in the 1990s.

B. Supply chain management seeks to coordinate the various flows within a supply chain.

C. Decisions made in one area of the supply chain will affect other areas, sometimes negatively.

D. In a supply chain, all companies rely on related companies whose activities add value to the final product.

E. Each channel within a supply chain acts independently of the other channels.

e

According to your text, the ultimate objective of supply chain management is

A. to make each channel as efficient as possible, thus saving the company money.

B. to utilize as few channel members as possible in the manufacture of the product.

C. to integrate related companies so they function as one organization.

D. to accurately predict production levels in order to minimize inventory carrying costs.

E. to choose intermediaries that share the same mission as the company.

c

What sort of strategies must companies embrace for an integrated supply chain to work?

A. customer-based

B. relationship-based

C. profit-based

D. production-based

E. supplier-based

b

A supply chain strategy in which a company builds goods based on a sales forecast, puts those goods into storage, and waits for a customer to order the product is called a

A. pull strategy.

B. supply strategy.

C. demand strategy.

D. push strategy.

E. push-pull strategy.

d

The main advantage of a push strategy is that

A. it allows firms to customize orders.

B. it reduces inventory carrying costs.

C. it allows firms to achieve economies of scale.

D. it eliminates the risk associated with producing an unwanted product.

E. it allows firms to respond rapidly to changing market conditions.

c

After the economic recession, the boating industry suffered from a decline in sales. However, recent sales forecasts indicate that the upcoming season will produce a strong demand for boats and boating equipment. Based on this, Les has decided to ramp up production this winter of both his bass fishing boats and speed boats, keep them in storage until the boating sales season officially resumes, and hope that customers will buy them. This is an example of a

A. push strategy.

B. supply strategy.

C. demand strategy.

D. pull strategy.

E. push-pull strategy.

a

Bob’s Custom Millwork is a business that provides custom cabinetry and furniture for both businesses and individual consumers. Bob does not make any products until he receives an order from the customer. What type of marketing strategy does this represent?

A. push strategy.

B. supply strategy.

C. demand strategy.

D. forecast strategy.

E. pull strategy.

e

Which of the following terms is NOT associated with a pull strategy?

A. customization

B. responsive

C. speculation

D. flexibility

E. tailored

c

A company that forecasts sales, builds an inventory based on the forecast, holds the components in inventory until a customer order is received and then finalizes the product based on the order is using a

A. push strategy.

B. supply strategy.

C. demand strategy.

D. push-pull strategy.

E. pull strategy.

d

A push-pull supply chain strategy

A. allows the firm to achieve economies of scale in purchasing.

B. is the most cost competitive supply chain strategy to use.

C. allows the firm to take advantage of manufacturing and transportation economies of scale.

D. relieves the firm of having to incur inventory costs.

E. does not rely on sales forecasts.

a

If demand is unstable, as it often is in the introductory and growth stages of the product life cycle, it might be best for a firm to use a

A. push strategy.

B. supply strategy.

C. demand strategy.

D. forecast strategy.

E. pull strategy.

e

If cost reduction is part of a firm’s strategy, which of the following systems will allow it to achieve cost savings through economies of scale in purchasing, manufacturing, and transportation?

A. push strategy

B. supply strategy

C. demand strategy

D. push-pull strategy

E. pull strategy

a

Outdoor Living is a manufacturer of patio dining sets and outdoor furniture. Typically, customers purchase the company’s products as the summer season begins and as such, do not want to wait for the product to be manufactured. Which supply chain strategy would work best for Outdoor Living?

A. a forecast strategy

B. supply strategy

C. demand strategy

D. push strategy

E. pull strategy

d

Which type of supply chain strategy is demonstrated by the following sequence: (Step 1) forecast sales, (Step 2) plan production, (Step 3) order materials, (Step 4) customer orders, (Step 5) make product, and (Step 6) ship product?

A. a push-pull strategy

B. supply strategy

C. demand strategy

D. push strategy

E. pull strategy

a

The part of supply chain management that plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer is called

A. supply chain management.

B. logistics.

C. warehousing.

D. production management.

E. value chain optimization.

b

Those activities that focus on delivering the right product, to the right place, to the right customer, at the right time, in the right quantity, in the right condition, and at the right price is referred to as

A. transportation management.

B. value chain optimization.

C. distribution.

D. production management.

E. logistics.

e

Which element(s) of the four Ps of the marketing mix is/are affected by logistics?

A. product, price, and place

B. place only

C. product and place

D. product only

E. product, price, place, and promotion

e

Which of the following demonstrates how logistics has an effect on the product element of the marketing mix?

A. deciding to reduce the amount of inventory in the warehouse

B. providing feedback on product packaging

C. deciding which mode of transportation to employ

D. utilizing volume discounts

E. shipping goods in full rather than partial vehicles

b

According to your text, companies that employ a pull or push-pull strategy typically establish logistics operations based on

A. sales forecasts, inventory stockpiles, and volume.

B. speculation, forecasting, and chance.

C. routine, standardization, and transportation efficiency.

D. service quality, innovation, and flexibility.

E. inventory levels, customer orders, and flexibility.

d

Data management systems that integrate information across all the departments of an organization are called

A. enterprise resource planning (ERP) systems.

B. electronic data interchange (EDI) systems.

C. just-in-time (JIT) inventory systems.

D. intermodal data planning (IDP) systems.

E. enterprise data planning (EDP) systems.

a

The almost instantaneous transfer of information from one company’s computer to another that allows ERP systems to communicate with the information technology systems of other companies is done through

A. a radio frequency identification system.

B. a just-in-time inventory system.

C. an electronic data interchange.

D. a computerized identification system.

E. an electronic inventory system.

c

According to your text, the primary reason firms rely on inventory management is

A. to avoid an abundance of stock sitting in a warehouse.

B. so they can predict how much product to manufacture at the lowest cost.

C. to facilitate the movement of product from the warehouse to the end-customer.

D. to be able to forecast future production runs of a product.

E. so that customer service won’t suffer from lack of product in any given location.

e

Xin has a business in which she assembles and decorates gift baskets for various occasions such as birthdays, bridal showers, retirement parties and weddings. She makes each basket based on customer orders and gathers the basket components from various stores only when they are needed. This is an example of what type of manufacturing process?

A. just-in-time

B. cyclical

C. pipeline

D. anticipative

E. seasonal

a

The type of inventory a firm needs to meet average demand is called

A. typical.

B. cyclical.

C. pipeline.

D. anticipative.

E. standard.

b

Pipeline inventory refers to

A. inventory that is in transit between suppliers and customers.

B. the inventory a firm needs in its pipeline to meet average demand.

C. inventory that is produced or purchased to cover anticipated demand.

D. the inventory a firm needs to accommodate seasonal demand.

E. inventory that has been over-ordered or that has expired.

a

Taylor’s toy shop bought a very large inventory of the newest superhero action figure. Because a new movie was supposed to come out featuring the superhero, Taylor didn’t anticipate a problem selling the toy. However, production on the movie was halted and now Taylor is having a hard time selling the action figure. This represents what type of inventory?

A. cyclical

B. pipeline

C. obsolete

D. seasonal

E. anticipative

c

A firm must track three types of costs to determine the correct level of inventory to keep in stock: purchasing costs, inventory carrying costs, and the costs incurred by

A. stockouts.

B. overruns.

C. obsolete inventory.

D. distribution.

E. customer returns.

a

Storage and handling expenses and service costs such as property taxes and insurance are what type of inventory costs?

A. purchasing costs

B. distribution costs

C. inventory carrying costs

D. production costs

E. stockout costs

c

What is the term for the situation in which a company does not have enough inventory available to fill an order?

A. stockout

B. overrun

C. obsolete inventory

D. shortage

E. put-away

a

The number of times a firm’s entire inventory is sold and replaced is referred to as

A. days of supply.

B. inventory turns.

C. stockout.

D. inventory supply.

E. days of stock.

b

Dividing the inventory on hand by the average daily usage or sales is the calculation for

A. days of stock.

B. inventory turns.

C. stockout.

D. inventory supply.

E. days of supply.

e

Purchasing is an important logistical function for all of the following reasons EXCEPT

A. savings in purchase costs can add significantly to a company’s profits.

B. it is a major factor in good and service quality.

C. purchasing contracts protect the company from legal action.

D. purchasing can help improve product design and time to market.

E. sourcing materials from reliable suppliers ensures that the flow of goods meets demand.

c

Which of the following is NOT a job function of a purchasing manager as outlined in your text?

A. select appropriate suppliers

B. negotiate contracts

C. monitor supplier performance

D. place purchase orders

E. manage warehouse inventory

e

A legal obligation to buy a certain amount of product at a certain price from a supplier to be delivered at a specified date is referred to as

A. a contract.

B. a bill of sale.

C. an agreement.

D. a purchase order.

E. the cost of goods sold.

d

Keegan is a purchasing manager for a large auto manufacturer. The contract with the company’s steel provider is just about to expire, so Keegan is negotiating the terms and condition of a new contract with his supplier. Keegan is satisfied with the negotiations, so he takes the next step of drawing up a legal obligation to buy the negotiated amount of steel at the price and delivery date agreed upon by himself and his supplier. This legal obligation is otherwise known as

A. a purchase order.

B. a bill of sale.

C. an agreement.

D. a contract amendment.

E. the cost of goods sold.

a

Which person is responsible for establishing performance expectations for suppliers and developing ways to measure their performance?

A. warehouse manager

B. purchasing manager

C. salesperson

D. distribution channel manager

E. plant manager

b

Purchasing goods and services from suppliers only if they buy from the purchasing manager’s company is an unethical practice called

A. personal buying.

B. picking.

C. reciprocity.

D. stockout.

E. pulling.

c

Compare the following definitions and select the one that accurately describes the term personal buying.

A. A purchasing manager develops a relationship with a supplier and buys directly from that supplier and no one else.

B. A purchasing manager buys items for the personal use of employees rather than for business use.

C. Sales representatives add-on to a supplier order for items that they intend to keep for themselves.

D. Employees buy items from the company using their employee discount.

E. A purchasing manager buys items from a supplier in return for free items for himself.

b

Read through the following scenarios and select the one that represents unethical behavior on the part of a purchasing manager.

A. A purchasing manager will not buy from a supplier unless the supplier agrees to renegotiate the terms of the contract.

B. A purchasing manager requests bids from three different companies before deciding which vendor to buy from.

C. A purchasing manager has lunch with one of his suppliers and picks up the tab.

D. A purchasing manager gives business to a supplier because the purchasing manager has relatives that work for the company.

E. A purchasing manager provides training for his supplier’s employees.

d

What is the term used for the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process?

A. intermodal transportation

B. supply chain management

C. materials management

D. distribution channel management

E. warehouse management

c

Coordinating the supply and demand for materials and ensuring that stored or recently received materials get to the production floor when needed are jobs of the

A. materials manager.

B. purchasing manager.

C. plant manager.

D. supply chain manager.

E. production manager.

a

Warehouse activities can be organized into three basic functions:

A. storage, shipping, and restocking.

B. sorting, allocating, and movement.

C. production, assembly, and storage.

D. receiving, storing, and movement.

E. storage, movement, and production.

e

What is the warehouse activity that involves retrieving materials from storage and bringing them to manufacturing to fulfill a production order, or retrieving finishing goods from storage and preparing them for shipment to fulfill a customer order?

A. put-away

B. logistics

C. stocking

D. picking

E. movement

d

Alejandro works in a warehouse. His job is to assemble store displays and refurbish goods that have been returned by customers. What warehouse function is Alejandro responsible for?

A. production

B. logistics

C. put-away

D. picking

E. movement

a

A distribution center functions much like a warehouse, but performs additional activities. Which of the following is NOT one of the activities performed by a distribution center?

A. product accumulation

B. sortation

C. product removal

D. allocation

E. assortment

c

The distribution center function of product accumulation involves

A. gathering goods with similar characteristics in one area of the distribution center to facilitate proper inventory control and effectively provide customer service.

B. receiving goods from various suppliers, storing the goods until they’re ordered by a customer and consolidating orders to achieve transportation economies of scale.

C. picking available goods to fill customer orders whether it is a full pallet, full case, or individual item.

D. mixing goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good.

E. retrieving materials from storage and bringing them to manufacturing to fulfill a production order.

b

Lucy works in a distribution center for a vitamin and nutritional supplement company. Part of her job entails gathering all goods with similar characteristics in one area of the distribution center. From there, she can facilitate the proper inventory controls to ensure that no expired vitamins or supplements are shipped to stores for sale. Lucy’s job involves product

A. accumulation.

B. allocation.

C. sortation.

D. assortment.

E. picking.

c

The ability of a distribution center to pick available goods down to a single piece allows customers to buy in quantities that make sense for their business. This exemplifies the function of product

A. accumulation.

B. allocation.

C. sortation.

D. assortment.

E. picking.

b

When the distribution center mixes goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good, this is referred to as product

A. accumulation.

B. allocation.

C. sortation.

D. assortment.

E. picking.

d

Differentiate between the following statements to determine which one is TRUE regarding the design of a distribution network.

A. The more facilities in the network, the lower the overall inventory in the system.

B. The fewer the facilities in the network, the more operating expense incurred.

C. More facilities results in delays in delivery due to network communication issues.

D. More facilities lead to lower transportation costs from production sites and suppliers to the warehouses.

E. More facilities result in faster delivery to customers since facilities will be closer to markets.

e

According to your text, a company should consider all of the following when designing its distribution network EXCEPT:

A. inventory levels.

B. proximity to suppliers.

C. operating expenses.

D. customer service.

E. transportation costs.

b

A firm that sells mainly to end-user consumers is referred to as a

A. wholesaler.

B. supplier.

C. distributor.

D. broker.

E. retailer.

e

Celeste is a company representative for Tastefully Simple. She holds parties at the homes of her family and friends where she demonstrates various uses for the company’s products. Celeste works as a

A. direct retailer.

B. telemarketer.

C. independent retailer.

D. broker.

E. wholesaler.

a

Which of the following is NOT a form of nonstore retailing?

A. mail order retailing

B. telemarketing

C. direct retailing

D. independent retailing

E. online retailing

d

As noted in your text, managing ________ is one of the most important logistics function for retailers and every other member of the supply chain because it creates place and time utilities that are essential to keeping customers satisfied.

A. purchasing activities

B. transportation

C. inventory costs

D. operating expenses

E. customer service

b

Almost half of the ton-miles moved in the United States are moved by

A. air transportation.

B. pipelines.

C. cyberspace.

D. trucks.

E. railroads.

e

Companies can either maintain their own fleet of trucks to transport goods or they can hire carriers. What are the two types of for-hire carriers?

A. domestic and international

B. union and private

C. common and contract

D. local and regional

E. perishable goods and durable goods

c

At auction, Maria purchased an antique porcelain vase valued at $25,000. The vase must be shipped from California to her home in Florida. What would be the best mode of transportation for this item?

A. air transportation

B. railroad

C. water transportation

D. common carrier truck

E. contract carrier truck

a

What is intermodal transportation?

A. transportation from one warehouse or distribution center to another

B. transportation that is performed by a contract carrier

C. using several types of transportation for the same shipment

D. transportation that crosses state lines

E. transportation of goods to overseas destinations

c

A British company manufactures specialty teas and sells them to a retailer in Estes Park, Colorado. In order to get the product to the end-user, the teas are shipped via ocean liner to a port in the Gulf of Mexico and then placed on a railway car to Denver, Colorado. From Denver, the tea is placed on a truck and taken to the retailer in Estes Park. This is an example of

A. intermodal transportation.

B. contract carrier transportation.

C. international transportation.

D. just-in-time delivery.

E. common carrier transportation.

a

Intermodal transportation got its start with what transportation innovation developed in the 1950s?

A. the pallet

B. the corrugated box

C. the drum

D. the container

E. the forklift

d

According to your text, efficient and effective international transportation has, in part, contributed to the rise in

A. domestic shipping rates.

B. the number of distribution centers worldwide.

C. multinational firms.

D. tariffs and export fees.

E. outsourcing and offshoring.

e

When a firm selects a small number of carriers as opposed to using a large number of different carriers, it is a type of strategy known as

A. contract carrier.

B. core carrier.

C. common carrier.

D. central carrier.

E. constrained carrier.

b

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