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This Document Contains Chapters 1 to 20 Chapter 1 Case Study—Girl Scout Cookies TRUE/FALSE 1. Girl Scout cookies are sold to benefit a not-for-profit. So, no marketing is really involved. Answer: False Rationale: The desired outcome of marketing is an exchange. The cookies are sold for money that results in a profit, not a donation. 2. By creating cookies geared toward specific markets, such as Dulce de Leche, the Girl Scouts tried to provide a good that people did not want. Answer: False Rationale: The Girl Scouts were actually trying to achieve one of the five conditions for marketing to take place, creating “something that might be of value to the other party.” 3. Girl Scouts in Atlanta used demographics to identify residential areas with the right discretionary income to spend on cookies. This is an example of a market orientation. Answer: True Rationale: Using demographics to target specific residential areas based on discretionary income reflects a market orientation, where the Girl Scouts adapted their marketing strategy to align with the needs and preferences of their potential customers, maximizing their sales potential by focusing on segments most likely to purchase their products. 4. Girl Scouts selling cookies doesn’t teach real marketing because Girl Scout cookies aren’t something people really need. Answer: False Rationale: Cookie sales have a broader purpose in teaching girls valuable lessons in marketing and career training. That said, between one-fourth and one-third of the entire civilian workforce in the United States performs marketing activities. MULTIPLE CHOICE 1. The Girl Scouts have been selling cookies for a century and have that “long-term, mutually rewarding relationship” with America’s sweet tooth. So why have their sales been lagging in the last decade? A. Girl Scout cookies are too expensive. B. The Great Recession is entirely to blame. C. People don’t like the new flavors. D. Not enough Girl Scouts equals not enough “sales representatives.” E. none of the above Answer: E Rationale: The economic downturn is not the primary cause. Indeed, the case does not provide any details. 2. When Girl Scout councils shifted their focus onto better business approaches and skill development in selling their cookies, even enlisting consultants and hosting sales training seminars, which market philosophy would you say this represents first? A. production orientation B. sales orientation C. market orientation D. social marketing orientation E. product–sales orientation Answer: B Rationale: A sales orientation is based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. 3. Which of the following is not one of the essential skills that the Girl Scout cookie program seeks to develop in scouts? A. decision making B. business ethics C. goal setting D. people skills E. none of the above Answer: E Rationale: The Girl Scouts specify five essential life skills that the cookie program focuses on developing—goal setting, decision making, money management, people skills, and business ethics. 4. A marketing consultant hired by the Girl Scouts suggests they justify the smaller boxes of cookies as “portion control” packaging to combat obesity. Would this be in keeping with the Girl Scouts strategies of selling more cookies and its broader purpose of teaching scouts? A. Yes, it is a perfect example of the merit of a societal marketing orientation. B. No, this would not be good business ethics. C. Yes, there is both a social and an economic justification that benefits the customer and the seller alike. D. Yes, this is a good way of delivering what people don’t know they want. E. No, the smaller packages only have the purpose of saving on cutting production costs. Answer: B Rationale: The Girl Scouts have a broader purpose of teaching business ethics and to justify a cost-cutting practice like this would be unethical. 5. When the Girl Scouts of Nassau County, New York, enlisted the advice of professional sales trainer Jeff Goldberg, he emphasized __________, the same thing he tells adult sales forces when he teaches them. A. market orientation B. professionalism C. brand focus D. goal setting E. all of the above Answer: D Rationale: Says Goldberg, “Goal setting, which was the first thing we covered, is the first thing I cover with any group of sales people.” 6. If we think of the Girl Scouts, a nonprofit organization, as a sales-oriented organization, what is its primary goal in selling cookies? A. Still the same as any business, to make a profit. B. Profits are secondary. The real goal is to teach business skills to Girl Scouts. C. The goal of teaching Girl Scouts how to make money and making money are one in the same. D. Building teams is the primary goal because troops are, after all, teams. E. Empowering girls. Answer: A Rationale: The Girl Scout councils fund two-thirds of their budgets with cookie sales and seek to maximize their profits. The primary goal of a sales-oriented organization is to achieve profitability. Chapter 2 Case Study—Disney: The Happiest Brand on Earth TRUE/FALSE 1. By creating sequels and spinoffs of the original Cars, such as short films and a Cars theme park attraction, Disney is pursuing market penetration. Answer: True Rationale: By expanding the Cars franchise with sequels, short films, and theme park attractions, Disney aims to increase market share and engagement within the existing market. This strategy enhances brand presence and consumer loyalty. 2. Disney is a large corporation with many SBUs creating products for every individual in the typical (and not so typical) family. So, these units can be seen as niche marketing. Answer: False Rationale: A niche market is a market segment that isn’t important to larger competitors. Disney’s operations focus on large markets. 3. When Disney spins off one of its franchises, like a line of Hannah Montana jeans, it is building a sustainable competitive advantage. Answer: True Rationale: By leveraging its popular franchises to create new product lines, Disney capitalizes on brand recognition and loyalty, which helps differentiate its offerings and sustain a competitive edge in the market. 4. Disney’s change in strategy would, if applied to developing a mission statement, would emphasize serving a target audience of young people. Answer: False Rationale: False, because the Disney case shows that the company is intent on producing entertainment products that follow a person throughout his or her life, that is, into adulthood. MULTIPLE CHOICE 1. A significant demographic driver for Disney to expand its target market to teens was __________. A. family-friendly fare B. to achieve tween appeal C. fewer younger children D. to reach out to an adult audience E. all of the above Answer: C Rationale: It was becoming evident that Disney had missed opportunities with the narrowing of its narrowing target market of younger children. 2. If Disney created a Jonas Brothers wristwatch packaged with their latest CD, which only sold in its theme park gift shops to maximize profits over CD sales in third-party outlets, Disney would be pursing what strategy? A. a promotion strategy B. a mixed market C. a pricing strategy D. a place strategy E. all of the above Answer: A Rationale: This is a promotion strategy designed to increase sales in one place, but it is still a promotion strategy first and foremost. 3. You are tasked with doing a market opportunity analysis (MOA) of Disney’s target markets. Which division(s) might create the most value by appealing to each of those markets? A. Pixar B. Disney’s theme parks C. Pixar and Disney’s movie studios D. Disney’s stable of pop stars E. Pirates of the Caribbean franchise Answer: C Rationale: The most probably answer is Pixar and the movie studios because these business units create the products that generate the most spinoffs and sequels. 4. In determining that Disney could achieve a technological advantage in purchasing Pixar as well as appeal to a smaller number of younger children with the most appealing animation, which of the following processes would help most in making that determination? A. market myopia B. environmental scanning C. taking control of resources D. product differentiation E. identifying a cash cow Answer: B Rationale: Environmental scanning helps identify important macroenvironmental forces, including social, demographic, economic, technological, political and legal, and competitive. 5. The decision to purchase Pixar was to revitalize Disney’s animation business. Which of the following most likely have helped in reaching that decision? A. SWOT analysis B. The General Electric Model C. A portfolio matrix D. Ansoff’s Opportunity Matrix E. Any of the above would be of equal help Answer: A Rationale: When Disney chose to buy Pixar, it sought to revitalize one of its core businesses, animation, that is, it addressed both a strength and a weakness. 6. Name the person or persons most critical to the strategic plan behind the success of Disney’s individual franchises. A. the CEO and Roy Disney B. Michael Eisner C. the franchise management teams D. Steve Jobs and Bob Iger E. Bob Iger Answer: E Rationale: The most critical element in successful strategic planning is top management’s support and participation. Chapter 3 Case Study—Barclays Bank: Banking on Ethics TRUE/FALSE 1. In its LIBOR manipulation, Barclays was acting in defiance of the Foreign Corrupt Practices Act. Answer: False Rationale: The Foreign Corrupt Practices Act prohibits U.S. corporations from making illegal payments to public officials of foreign governments. 2. In this case, Barclays demonstrated a strong commitment to corporate social responsibility. Answer: False Rationale: Corporate social responsibility is a business’s concern for society’s welfare. It entails obeying the law, doing what is right, and being a good corporate citizen. 3. Ethics training and a code of ethics could have helped employees put good ethics into practice at Barclays. Answer: True Rationale: Ethics training and a comprehensive code of ethics are essential in guiding employees to understand and apply ethical principles in their decision-making and conduct, potentially preventing ethical lapses such as those observed at Barclays. 4. Barclays actions are inexcusable because corporate social responsibility is both easy and quick to implement. Answer: False Rationale: Corporate social responsibility isn’t easy or quick—it doesn’t work without a long-term strategy, effort, and coordination throughout the enterprise. MULTIPLE CHOICE 1. What level of morality would have been demonstrated if executives at Barclays asked themselves, “Even though manipulating the LIBOR will increase company profits, is it the right thing to do in the long run?” A. Unconventional B. Preconventional C. Conventional D. Postconventional E. none of the above Answer: D Rationale: A postconventional level of morality is concerned with how one sees and judges oneself over the long run. 2. If Barclays had demonstrated economic, legal, ethical, and philanthropic responsibility, it would have been committing to: A. a code of sustainability B. the pyramid of corporate social responsibility C. moral sustainability D. cause-related marketing E. all of the above Answer: B Rationale: The pyramid of corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities. 3. Which of the following is not a potential benefit of Barclays creating a good code of ethics? A. It could have helped employees identify what Barclays expected of them ethically. B. It could have prevented confusion as to whether LIBOR manipulation was ethical or not. C. It could have prevented manipulation before external controls exposed the scandal. D. It could have facilitated discussion among employees about what was right and wrong. E. It could have allowed employees to rely on the code and substitute rules for judgment. Answer: E Rationale: Codes that are too detailed encourage employees to substitute rules for judgment, which does more harm than good. 4. Which of the following factors likely influenced ethical decision making at Barclays? A. The extent of ethical problems within the organization B. Top management’s actions on ethics C. Social consensus D. The number of people to be affected E. all of the above Answer: E Rationale: Studies show that all of these factors influence ethical decision making and judgments. 5. The rules developed at Barclays as a result of cultural values and norms are known as: A. morals B. ethics C. procedures D. code of conduct E. code of ethics Answer: A Rationale: Morals are the rules people develop as a result of cultural values and norms. 6. If in the wake of the scandal Barclays were to work with a nonprofit organization to improve transparency in the banking sector, this would be an example of: A. green marketing B. the pyramid of corporate social responsibility C. improving sustainability D. cause-related marketing E. developing a code of ethics Answer: C Rationale: Cause-related marketing is the cooperative marketing efforts between a for-profit firm and a nonprofit organization. Chapter 4 Case Study—Daimler/BMW: A New Breed of Driver TRUE/FALSE 1. Companies that engage in car-sharing rely more on new car technology than demographics in making their marketing decisions. Answer: False Rationale: Analysts and researchers for these companies look at the numbers of drivers in metropolitan centers who might use car sharing. 2. Hertz and Enterprise are developing their own car-sharing initiative because they perceive Zipcar as a potential competitor. Answer: True Rationale: Hertz and Enterprise's development of their own car-sharing initiative suggests a strategic response to perceived competition from Zipcar, aiming to capture market share and meet changing consumer preferences for car-sharing services. 3. Do luxury carmakers getting into the car-sharing business see their target markets as just renting out the cachet of their cars to fit a component lifestyle? Answer: False Rationale: A component lifestyle can mean renting a luxury car for a specific purpose. But carmakers such as BMW are developing brand connections and see temporary users of their cars as potential buyers. 4. Carmakers are getting into the car-sharing business because fewer people can afford their cars. They don’t have the purchasing power. Answer: False Rationale: The target market actually does have money. These are young, well-educated drivers, roughly age 18 to mid-30s, with good salaries. MULTIPLE CHOICE 1. All of the following are target markets for car sharing except __________. A. people who do not own cars B. people who need a car on a temporary basis C. people with discretionary income D. younger people such as Generation Y individuals E. people attracted to European cars rather than American rental fleet-type vehicles Answer: C Rationale: Discretionary income is money to spend on nonessential items. The temporary need of a car is first and foremost essential. 2. The falling number of people who no longer see the value of owning a car as necessary for their lifestyle is a __________ variable. A. technology B. environmental management C. grid-free D. social factor E. green Answer: D Rationale: Social factors include attitudes, values, and decisions affecting lifestyle. 3. U.S. consumers rank certain characteristics as important to the quality of a product or service. Which of these characteristics would rank as the most important for a car sharer who wants a car on-demand most of all? A. reliability B. trusted brand name C. ease of using the service D. price E. easy maintenance Answer: C Rationale: For car-sharing firms, the target market are people who no longer view car ownership as a status symbol but rather focus on the convenience and practicality issues. 4. Car-sharing differs from traditional car rental, which costs more, in that the rental period can be by the hour and as needed. Which of the following market factors might convince more people to use this service on a long-term basis? A. education B. the Great Recession C. crowded cities D. the need to splurge on a nice car for a night out E. ethnic preferences Answer: B Rationale: Uncertain economic times have caused many consumers to shift less expensive alternatives. 5. Which demographic group would respond the most positively to an extensive social media campaign, particularly one that allows them to make or extend reservations using their Smartphone? A. Gen Yers B. Baby Boomers C. Gen Xers D. The Greatest Generation E. all of the above Answer: A Rationale: Market research has determined that Gen Yers are the most tech-savvy generation, and they expect brands to be on the internet. 6. For car sharing to work, a company needs to invest in special kinds of __________ to ensure the security and condition of its vehicles. A. gasoline engines for stop-and-go urban driving B. engine immobilizer C. satellite-activated door locks D. telemetry systems E. all of the above Answer: E Rationale: When Daimler car2go vehicles use such technology, it is an example of how creative organizations are willing to invest and innovate to pursue a calculated risk. Chapter 5 Case Study—P&G, Unilever, Panasonic: The $2-a-Day Initiative TRUE/FALSE 1. For multinationals, the primary growth demographic in emerging markets is the very poor. Answer: False Rationale: Virtually every demographic is researched by multinationals for the purpose of expanding their markets. 2. Product demonstrations, rather than promotions such as coupons, are preferred as market tools in the more isolated, rural regions of emerging countries. Answer: True Rationale: In isolated, rural regions of emerging countries, product demonstrations can be more effective as they allow potential customers to directly experience the product's benefits, which builds trust and understanding in areas where promotional infrastructure may be limited. 3. Simplifying design and lowering other costs is still a viable way to penetrate the lowest level of the economic pyramid in emerging markets. Answer: True Rationale: Simplifying design and reducing costs can make products more affordable and accessible to consumers at the lowest economic levels in emerging markets, thereby increasing market penetration and meeting the needs of price-sensitive customers. 4. Panasonic designs its products for the global poor by simplifying preexisting Japanese market designs. For Panasonic, standardization is way to realize profits in these otherwise unprofitable markets. Answer: False Rationale: The head of Panasonic’s overseas consumer products states that “If [a local product] starts with a Japanese product or Japanese design, this [strategy of simplification] is impossible. MULTIPLE CHOICE 1. Single- and small-use packaging, such as Unilever deodorant sticks that sell for pennies, are cost-effective for multinationals because __________. A. of product standardization with free sample packaging used in developed countries B. the income in many countries in less than $1,000 C. they are easier for rural people to carry and use in the fields D. the pricing is fair trade E. all of the above Answer: B Rationale: There are many very poor countries where the GNI per capita is under $1,000 and is a measure of a country’s citizens’ ability to buy various goods. 2. When confronted with a consumer population that can only spend $2 a day—and only a fraction of that is disposable—a marketer is looking at a factor in the __________. A. gross domestic production B. average daily salary of the world’s poor C. economic disparity between developed and emerging countries D. multidomestic strategy E. external environment Answer: E Rationale: A second major factor in the external environment facing the global marketer is the level of economic development in the countries where it operates. 3. By removing certain chemicals from Tide because it irritated the skin when used by rural villagers who wash clothes by hand, Procter & Gamble did not go along with the trend toward __________. A. one-size-fits-all design B. unsafe products for the poor C. human testing D. cheaper versions of brand-name products E. standardized consumer products Answer: E Rationale: Standardized consumer products have emerged on a huge scale, as opposed to segmented foreign markets with different products. 4. Providing low-cost, simplified versions of familiar products can be impossible to market in some regions, especially in Africa. Which of the following is a probable reason for non-existent markets? A. poor channels of distribution B. inadequate physical infrastructure C. high tariffs D. severely impoverished population that don’t even use money E. all of the above Answer: E Rationale: In many developing nations, channels of distribution and the physical infrastructure are inadequate. In Africa, the continent’s GDP is growing rapidly, and African businesses want to expand. Unfortunately, they face high tariffs, weak infrastructure, and severely impoverished populations. 5. Procter & Gamble’s policy, described as __________ by its CEO, puts patience before a quick return on investment. A. “time-intensive growth” B. “fair price–product mix” C. “purpose-inspired growth” D. “diluting expectations” E. none of the above” Answer: C Rationale: McDonald looks on the strategy as one of “purpose-inspired growth”—one designed to generate profitable business for P&G and improve its customers’ daily lives with quality products. 6. Marketers are often surprised that the poor reject products that have been made cheaper for their benefit. What explains the failure of P&G and other firms, such as L’Oréal when both used a strategy of “diluting”? A. The special pricing was not cheap enough. B. The poor can tell when water has been added. C. The poor don’t see themselves as poor. D. Poor customers have product aspirations just like other customers. E. Poor customers have aesthetics about package design too. Answer: D Rationale: The firm must not assume that low-income customers will accept lower quality. Chapter 6 Case Study—eBay: Creating Customers on the Move TRUE/FALSE 1. eBay’s Selling, Fashion, and RedLaser apps are nonmarketing-controlled information sources. Answer: True Rationale: eBay’s Selling, Fashion, and RedLaser apps are marketing-controlled information sources because they are managed by eBay and are designed to influence consumer behavior and purchasing decisions. 2. m-commerce only benefits online stores. Answer: False Rationale: Consumers can search for information about brick-and-mortar stores and even make purchases from them with the assistance of m-commerce technology. 3. In cultures where consumers are reluctant to use credit cards, they might be just as reluctant to make purchases on a smartphone and thus restrict their m-commerce activities to research. Answer: True Rationale: In cultures where there is hesitance to use credit cards, similar reluctance can extend to making purchases on smartphones, leading consumers to limit their m-commerce activities to research rather than transactions. 4. Most people are now comfortable with spending just under $1,000 when making m-commerce purchases. Answer: False Rationale: While comfort levels with m-commerce purchases are increasing, spending just under $1,000 may still be considered high for many consumers, who often prefer to make smaller, less risky purchases on mobile platforms. MULTIPLE CHOICE 1. What does it mean when we say m-commerce applications level the playing field for shoppers? A. Consumers can deal directly with the sellers just like using eBay. B. m-commerce means tax free shopping in many states. C. It makes the market a buyer’s market. D. Consumers can comparison shop on the price and features of a product. E. all of the above Answer: D Rationale: In the evaluation of alternatives and purchase, the consumer, as much as the marketer, has access to information about price and selection, especially in regard to traditional stores. 2. Which of the following is not one of eBay’s m-commerce marketing tools? A. StubHub B. Fashion C. RedLaser D. eBay E. none of the above Answer: E Rationale: For Internet consumer research, all of the above are eBay tools, including the eBay auction site itself. 3. Using a mobile app such as RedLaser, a bar code scanner for smartphones, would assist in what kind of decision making? A. limited decision making B. extensive decision making C. routine decision making D. all of the above E. none of the above Answer: D Rationale: Even for very expensive products, such as home or car purchases, bar codes are often used on For Sale signs and the like. 4. The combination of apps and smartphones eliminates __________. The cultural impact of this is that consumers and marketers interact in situations where a purchase would be unthinkable before. A. downtime B. driving C. closed stores D. in-store browsing E. comparison shopping Answer: A Rationale: The combination of apps with mobile devices enables browsing and purchasing virtually anywhere at any time, especially during downtime. 5. Using a camera phone and the Fashion app to see how an outfit looks on you is an example of what aspect of the consumer decision-making process? 1. Need recognition 2. Information search 3 Evaluation of alternatives 4. Purchase 5. Post purchase behavior A. 1, 2, 4, & 5 B. 3 C. 1, 2, & 3 D. 1 & 3 E. 2 & 3 Answer: E Rationale: Information search involves searching for alternatives and the evaluation of alternatives determines the desired selection. 6. An eBay VP said of his company’s m-commerce business, “We want consumers to engage when they don’t have a purchase in mind.” What kind of consumer involvement does he most likely mean? A. product involvement B. enduring involvement C. shopping involvement D. emotional involvement E. all of the above Answer: B Rationale: Enduring involvement represents an ongoing interest in some product or activity. The consumer is always searching for opportunities to consume the product or participate in the activity. Chapter 7 Case Study—Pantone: This Year’s Color: Honeysuckle TRUE/FALSE 1. Pantone’s color-management system is an industrial classification system. Answer: False Rationale: Pantone's color-management system is a standardized color matching system used across various industries to ensure color consistency, not an industrial classification system. 2. Pantone, like many B2Bs, tries to limit itself to a few industries, in this case color printing. Answer: False Rationale: Pantone’s color system is used by a broad range of businesses, including fashion designers, cosmetic producers, makers of home furnishings and appliances, and the like. 3. Leatrice Eismen’s choice of Pantone 18-2120 TCX as the color of the year for 2010 has as much to do with consumer demand as it does with business. Answer: True Rationale: The selection of Pantone's color of the year is influenced by both consumer trends and business needs, as it reflects current cultural and design preferences while also guiding future product development and marketing strategies. 4. Pantone recently partnered with Fine Paints of Europe, a high-end paintmaker. Such strategic alliances are not possible with a business service provider. Answer: False Rationale: Fine Paints of Europe would use Pantone’s research and color formulations and benefit as would Pantone’s reputation and the licensing of its name. So this would be a strategic alliance. MULTIPLE CHOICE 1. Which of the following would best describe the Pantone color-management system? A. a supply B. color accessory C. business service D. a component part, that is, dye E. none of the above Answer: C Rationale: Pantone provides a service that facilitates inter-business operations, that is, a way of ensuring uniform color used in business and business-to-business. 2. When Pantone announces its color of the year, it serves Pantone in what way? A. It advertises Pantone’s line of color inks. B. For Pantone, it is a form of marketing since its intellectual property is its pigment values. C. It is Pantone’s way of marketing the products of its resellers. D. The color of the year is a form of reciprocity with the color paint and ink industry. E. As a multiplier effect given the many potential users of the annual color pick. Answer: B Rationale: The annual color does market a particular color and it also helps those businesses who use the annual color in their products. 3. In which of the following scenarios does a Pantone color swatch book cease to facilitate business-to-business marketing? A. When kitchen remodeler uses it to color coordinate a client’s refrigerator with her Corian countertop. B. When the client in a purchases the same color swatch book and cuts it up to make a color collage out of it to decorate her new kitchen. C. When it is an outdated Pantone color swatch book. D. When the remodeler returns the book to the countertop maker. E. none of the above Answer: A Rationale: The key characteristic distinguishing business products from consumer products is intended use, not physical characteristics. In this case, a regular consumer has appropriated a business product and made it into a consumer good. 4. If you worked for Pantone, which method of marketing its services is the least suitable? A. Web site B. Fax C. HTML-formatted e-mail D. business-to-business online exchange E. placing bids Answer: E Rationale: Pantone is virtually the only service of its kind and so would not have to market its services in this way, even to the government. 5. Pantone’s handheld CAPSURE device, which can be used to pull color samples from objects, surfaces, and the like, is one of the company’s __________. A. major equipment B. supplies C. component part D. accessory equipment E. business services Answer: D Rationale: The CAPSURE device provides a service in line with Pantone’s color management and it is an accessory device. 6. As a company that maintains an industry standard, which of the following is most important in Pantone’s success. A. trust B. strategic alliances C. relationship commitment D. keiretsu E. OEMs Answer: A Rationale: Given the importance of Pantone color-management system, trust is the most important aspect of its success. Its business customers rely on the integrity of Pantone’s color assurance products. Chapter 8—Coke Zero TRUE/FALSE 1. A list of reasons why customers choose to drink Diet Coke Plus would be helpful for marketers using benefit segmentation. Answer: True Rationale: Benefit segmentation is the process of grouping customers into market segments according to the benefits they seek from the product. It groups potential customers on the basis of their needs and wants rather than some other characteristic, such as age or gender. 2. The Coca-Cola Company uses an undifferentiated targeting strategy for its entire line of products. Answer: False Rationale: Before 1960, the Coca-Cola Company produced only one beverage and aimed it at the entire soft-drink market. Today, however, it sells a variety of products with multi-segment targeting. An undifferentiated targeting strategy, by contrast, adopts a mass-market philosophy, viewing the market as one big market with no individual segments. 3. If the Coca-Cola Company decided to start marketing Coke Zero as a drink for middle-aged women, then they would be repositioning it. Answer: True Rationale: Repositioning takes a known brand and changes consumers’ perceptions of it. 4. A clear version of Coke Zero would probably be successful if it was positioned as the only clear diet cola on the market. Answer: False Rationale: Positioning assumes that consumers compare products on the basis of important features. Crystal Pepsi failed because consumers perceived the “clear” positioning as more of a marketing gimmick than a benefit. 5. Coca-Cola was hoping that its customer’s loyalty to drinking Diet Coke would easily transition to market share for Diet Coke Plus. Answer: True Rationale: Diet Coke Plus was a failure because customers were already satisfied with Diet Coke, and were not looking for soda to be “Healthy.” However, Coca-Cola was hoping that the Diet Coke drinkers would be thrilled at the prospect of a healthier soda made by a company to which they were already a loyal. MULTIPLE CHOICE 1. MyCokeRewards.com, which gives Coke drinkers points for each purchase that they can redeem for rewards such as downloadable ring tones, is an example of A. a frequency/loyalty program. B. benefit segmentation. C. mass marketing. D. product differentiation. E. a points-for-purchase program. Answer: A Rationale: Developing customers into heavy users is the goal behind frequency/loyalty programs such as My Coke Rewards. The more Coke you purchase the more rewards you earn. 2. When the Coca-Cola Company set out to create a product that would appeal to young Hispanic men, they were using ________ segmentation. A. benefit B. demographic C. geographic D. racial E. psychographic Answer: B Rationale: Demographic segmentation is based on age, gender, income level, ethnicity, and family life cycle characteristics. 3. The hidden-camera videos that were placed strategically on Web sites like YouTube to promote Coke Zero were an example of marketing according to A. benefit segmentation. B. demographics. C. geodemographic segmentation. D. usage-rate segmentation. E. psychographic segmentation. Answer: E Rationale: Psychographic segmentation is market segmentation on the basis of personality, motives, lifestyles, and geodemographics. Coke Zero was being marketed to young men who were likely to use the Internet and who would be the most appreciative audience for the hidden-camera humor shown in the videos. 4. When Coca-Cola reintroduced the Coke Zero can in 2007 with a new black label for the U.S. market so that it would no longer be confused with Diet Coke or other diet colas, it was attempting: A. one-to-one marketing. B. geodemographic segmentation. C. product differentiation. D. repositioning. E. All of the above Answer: C Rationale: Product differentiation is a positioning strategy that companies use to distinguish their products from those of competitors. 5. A potential cost of marketing Coke Zero could be the ________ of sales from other drinks within the Coca-Cola product line. A. differentiation B. segmentation C. concentration D. cannibalization E. None of the above Answer: D Rationale: A potential cost of multi-segment targeting is cannibalization, which occurs when sales of a new product cut into sales of a firm’s existing products. In this case, regular and Diet Coke may see a drop in sales as some customers switch to Coke Zero. Chapter 9 Case Study—Marriott International: A Marriott Site for Those on the Move TRUE/FALSE 1. Marriott’s decision on creating a phone app allowed it to gather data from every type of handset. Answer: False Rationale: Marriott created a general mobile site, not a phone app because apps are limited to one type of handset. 2. Marriott Mobile’s purpose is to conduct primary marketing research. Answer: False Rationale: Marriott Mobile is designed to book hotel rooms and other Marriott services. Using it for market research is not its primary function. 3. If the survey results for Marriott Mobile are used for hotel room design research, the data would be secondary data. Answer: True Rationale: Survey results collected for Marriott Mobile, if used for hotel room design research, would constitute secondary data because they were originally gathered for a different purpose (mobile app feedback) and are now being repurposed for a new research context (hotel room design). 4. Surveying users of Marriott Mobile about their mobile booking preferences when they were using the site was a convenience sample, but provided good information for Marriott because those are the users they were interested in sampling. Answer: True Rationale: Conducting a survey of Marriott Mobile users about their mobile booking preferences while they were actively using the site constitutes a convenience sample, which may provide relevant and useful insights for Marriott because it targets the specific user group they are interested in understanding. This method can yield valuable data directly related to user behavior and preferences within the context of their mobile booking experience. MULTIPLE CHOICE 1. What kind of data can Marriott gather from the users of its Blackberry and iPhone booking apps? A. secondary B. computer-assisted self-interviewing C. survey results D. primary E. behavioral targeting Answer: A Rationale: It would be secondary data since it is data previously collected for another purpose, i.e., booking. 2. The kind of data gathered from Marriott Mobile made what strategy decisions possible? A. Creating Mobile Web sites designed for specific handsets B. Creating the Blackberry app C. Deciding which apps to create first based on usage D. Analyzing mobile feedback E. all of the above Answer: C Rationale: Marriott gathered a data set that was better able to direct its app strategy to create a BlackBerry app followed by an iPhone app. 3. Which of the following market research design would seem the most likely technology/methodology that Marriott used to gather data? A. personal mobile phone interview B. mobile intercept C. mobile executive interview D. computer-assisted self-interview E. none of the above Answer: D Rationale: Marriott [Mobile] connected with customers right as they were using the mobile platform. 4. All of the following is true about the Marriott Mobile survey except: A. questions were open-ended B. questions were short (i.e., multiple choice) C. questions focused on site functionality D. site usage patterns E. questions about Marriott Mobile’s city guide Answer: A Rationale: Open-ended questions lets the customer respond in his or her own words. 5. The Marriott Mobile survey has which of the following characteristics of ethnographic research? A. participant observers B. observers can monitor the electronic devices being used C. behavioral targeting D. mystery observers E. human behavior in its natural context Answer: E Rationale: In ethnographic research, the behavior is observed in its natural context—m-commerce at the mobile site, which is the natural context here. The electronic devices are the handsets (compare the iPhone research described in the chapter). 6. That one-third of the survey correspondents took the survey at home showed the increasing penetration of mobile usage. What most likely would produce this intended result? A. mobile platform technology B. report C. cross-tabulation D. frame error E. research experiment Answer: C Rationale: A cross-tabulation lets the analyst look at the responses to one question—in this case, the response to where you are taking the survey—in relation to the responses to one or more other questions—e.g., a response to whether you are at a PC or using a handset. Chapter 10 Case Study—Ford Motor Co.: One Ford; One Big Turnaround TRUE/FALSE 1. Ford’s new emphasis on small cars is a classic example of “greening.” Answer: False Rationale: Greenwashing is when a product or company attempts to give the impression of environmental friendliness whether or not it is environmentally friendly. 2. Small cars are already making Ford a more profitable company. Answer: False Rationale: CEO Mullaly is confident that Ford will continue to produce solid profits with the realization that Ford will “make less money on smaller cars, but … can make a return”). 3. Selling off noncore brands is not always beneficial for a company heavily dependent on design and R&D staffs such as Ford. Answer: True Rationale: For companies like Ford that heavily rely on design and R&D staffs, selling off noncore brands may not always be beneficial because these brands can provide diversification, additional revenue streams, and opportunities for innovation that complement the core business activities of design and R&D. 4. Ending the Mercury division and selling off its stakes in luxury cars helped Ford transition to being a greener company. Answer: False Rationale: Ending the Mercury division and selling off stakes in luxury cars did not directly contribute to Ford's transition to being a greener company. Transitioning to greener practices typically involves changes in manufacturing processes, vehicle technologies, and sustainability initiatives, rather than just divesting from certain vehicle brands or divisions. MULTIPLE CHOICE 1. When you purchase a new Ford F150 from the dealer with every option as well as a custom airbrushed painting of your horse farm, you have purchased a __________ product. A. consumer B. business C. shopping D. specialty E. convenience Answer: D Rationale: One product can fit more than one label depending on the context, but the high level of customization makes this a specialty product, though it could be considered a consumer product. 2. When Ford sold its stake in Volvo, Jaguar, Aston Martin, and other brands, it __________. A. reduced its product items B. repositioned its product lines C. contracted its product mix D. engaged in a rebranding strategy E. all of the above Answer: C Rationale: Contracting product lines (brands in this context) is a strategic way to deal with overextension, which is why Ford divested itself of non-Ford brands. 3. The Focus and Fiesta lines use a single platform for each worldwide market. How does that benefit these product lines? A. advertising economies B. package uniformity C. equivalent quality D. product line depth E. standardized components Answer: E Rationale: Standardize components reduce manufacturing and inventory costs, and this is especially true for automobile makes and models. 4. That Ford offers five Focus variants based on one platform, i.e., four-door, hatchback, SUV, minivan, and commercial vehicle, is an example of __________. A. standardized components B. functional modification C. product line depth D. style modification E. all of the above Answer: C Rationale: Product line (in this context, the Ford Focus) depth is the number of product items in a product line. 5. There are three major benefits when a firm contracts. When Ford divested itself of its unprofitable foreign luxury brands and Volvo, and discontinued its Mercury brand, which of the following was the most important benefit discussed in the case? A. managers no longer waste resources on poorly performing brands B. new product items have a greater chance of being successful C. resources become concentrated on important Ford products D. reposition Ford as a domestic carmaker only E. all of the above Answer: C Rationale: Divesting noncore brands allowed Ford to focus on recharging the Ford brand and making it great. 6. Mercury was a long-time division of the Ford Motor Company. What kind of branding did Ford eliminate when it ended the Mercury product line? A. noncore brand B. Ford family branding C. co-branding D. the automotive equivalent of a captive brand E. individual branding Answer: D Rationale: The former Mercury line was intended to appeal to a target market that existed between two economic segments—people who bought Fords and those who bought the luxury Lincoln vehicles, which Ford still carries as an individual brand. Chapter 11 Case Study—Harmonix: Embrace Your Inner Rock Star TRUE/FALSE 1. The product lifestyle Guitar Hero would qualify as a typical fad. Answer: False Rationale: Fads are typically characterized by a sudden and unpredictable spike in sales followed by a rather abrupt decline. Although Guitar Hero’s rise and fall has some of the characteristics of a fad, it went through all four stages of PLC. 2. By performing cover songs in Guitar Hero, Harmonix had changed one core idea in it product design. Answer: True Rationale: Harmonix changed a core idea in its product design by allowing players to perform cover songs in Guitar Hero, which diverged from the traditional approach of featuring original recordings. This shift expanded the game's appeal by offering a wider range of music genres and tracks, enhancing player engagement and satisfaction. 3. Putting a guitar-shaped controller in the player’s hands solved the fun deficit of earlier Harmonix products. Answer: True Rationale: The introduction of a guitar-shaped controller in games like Guitar Hero addressed a perceived fun deficit in earlier Harmonix products by creating a more immersive and interactive experience. This innovative controller design enhanced gameplay realism and enjoyment, appealing to a broader audience and revitalizing interest in music rhythm games. 4. Guitar Hero is the diffusion of an innovative product, Karaoke Revolution. Answer: False Rationale: Diffusion is adoption process. Guitar Hero is really an innovation based on Karaoke Revolution. MULTIPLE CHOICE 1. To further exploit the growing popularity Guitar Hero, Harmonix came out with Rock Band. Which stage of the PLC would this most likely take place? A. decline stage B. introductory stage C. growth stage D. maturity stage E. fashion stage Answer: D Rationale: During the maturity stage, product lines are lengthened to appeal to additional market segments. 2. Harmonix’s move from software to videogames gave it a sense of purpose and ultimately a winning product. Though hardly a traditional development process, which one aspect of that process is consistent with the development of Guitar Hero? A. test marketing B. winnowing out products C. a core idea D. idea screening E. competition Answer: C Rationale: Simplified, computer-assisted music creation was the core idea that Harmonix brought over to its video games. 3. Which of the following rate of adoption characteristics most likely frustrated Harmonix as a software company and pointed it in the direction of Guitar Hero? A. relative advantage B. compatibility C. complexity D. observability E. trialability Answer: E Rationale: Most likely trialability. The first attempts to market music software failed because users did not find the program interesting for very long or fun. 4. During its introductory stage, Guitar Hero experienced none of the following typical scenarios except __________. A. little competition B. high failure rate C. frequent product modification D. product recalls E. limited distribution Answer: A Rationale: Guitar Hero was virtually a unique product in the video gaming industry. It’s only real competition was air guitar and other video game genres. 5. How did Viacom’s marketing managers respond to early drops in sales? A. selling Harmonix for a loss B. they took the initiative to expand product lines C. correcting design flaws D. making the product attractive to professional musicians E. with organized abandonment Answer: B Rationale: Viacom’s Harmonix unit essentially followed the maturity–decline template for videogames that lose their cachet, trying to capture whatever is left of it through expanded product lines—updated games and add-on accessories, and other platforms. 6. The failure of Rock Band 3 signaled what stage of Harmonix’s venture into the music videogame? A. When the design changes become less functional and more stylistic. B. The sudden and precipitous sales drop at the end of a fad. C. It marked the decline phase. D. It was a desperate extension of the product line and thus a continuation of the maturity stage. E. all of the above Answer: C Rationale: A long-run drop in sales marks the beginning of a classic decline stage. But signs of decline were already taking place in the maturity phase, when so many product spinoffs were released to exploit the brand recognition while it lasted. This event, however, is the clearest indicator. Chapter 12—Minute Clinic TRUE/FALSE 1. A key factor influencing the selection of a retail-based health clinic is convenience. Answer: True Rationale: A key factor influencing the selection of any service provider is convenience; therefore service firms that offer it the way MinuteClinic does with its retail location settings are more likely to succeed. 2. The demand for health services in the United States is expected to drop off sharply within the next ten years as Baby Boomers age. Answer: False Rationale: The demand for health services is expected to continue as an aging population will need nurses and healthcare. 3. Health services such as those provided by MinuteClinic tend to exhibit more experience and credence qualities than goods sold in the drugstore. Answer: True Rationale: An experience quality is a characteristic that can be accessed only after use. A credence quality is a characteristic that consumers may have difficulty assessing even after purchase. Medical services are examples. 4. MinuteClinic’s services are sold, produced, and consumed at the same time, which is an example of the heterogeneity of its services versus goods. Answer: False Rationale: Services are sold, produced, and consumed at the same time, which is an example of the inseparability of its services versus goods. 5. When nurse practitioners follow up with patients with postcard surveys, telephone calls, or brochures, they are engaging in post purchase communication. Answer: True Rationale: Post purchase communication refers to the follow-up activities that a service firm might engage in after a customer transaction. MULTIPLE CHOICE 1. The basic difference between selling a healthcare service at MinuteClinic and selling a Band-Aid at the drugstore is that healthcare services are ________ performances. A. tangible B. intangible C. responsive D. standardized E. operations oriented Answer: B Rationale: The basic difference between services and goods is that services are intangible performances. Because of their intangibility, they cannot be touched, seen, tasted, heard, or felt in the same way that goods can be sensed. 2. MinuteClinic’s services belong in which of the following categories? A. people processing B. possession processing C. mental stimulus processing D. information processing E. All of the above Answer: A Rationale: People processing takes place when the service is directed at a customer, such as with dental care and healthcare. 3. Evaluating the quality of medical services at MinuteClinic may be difficult for a patient before or after being treated because services tend to exhibit fewer ________ qualities. A. intangible B. search C. experience D. credence E. standardized Answer: B Rationale: A search quality is a characteristic that can be easily assessed before purchase, such as the color of a product. Compared to goods, services tend to exhibit fewer search qualities. 4. A nurse practitioner that addresses a patient by name and offers caring, individualized attention during his visit is practicing the service quality known as A. reliability. B. responsiveness. C. assurance. D. empathy. E. tangibles. Answer: D Rationale: Empathy is characterized by offering caring, individualized attention to customers: calling them by name, learning to recognize them when they return, and learning their specific requirements. 5. If MinuteClinic hired Patrick Dempsey, who plays a doctor on “Grey’s Anatomy,” to appear in commercials for them, they would be engaging in which type of promotion strategy? A. stressing tangible cues B. using personal information sources C. creating a strong organizational image D. engaging in post-purchase communications E. All of the above Answer: B Rationale: Celebrity endorsements are sometimes used to reduce customers’ perceived risk in choosing a service. It is a promotion strategy that involves personal information sources. Chapter 13 Case Study—The U.S. Transportation Industry: Planning for a Potential Post-Recession Capacity Crunch TRUE/FALSE 1. Demand fulfillment, as used in the case, would be considered a primary factor in how supply chain management is customer-driven. Answer: True Rationale: Demand fulfillment is a primary factor in customer-driven supply chain management because it focuses on meeting customer expectations by ensuring products are available when and where they are needed. This approach enhances customer satisfaction, loyalty, and ultimately, the competitiveness of the supply chain. 2. The demand management process also includes hiring new drivers to replace those laid off. Answer: False Rationale: Demand management is largely concerned with “smoothing out” inventory with customer desires. 3. The supply chain team is strictly an internal operation. It would hardly include an owner-operator truck driver. Answer: False Rationale: Supply chain teams typically cut across organizational boundaries, embracing all parties who participate in moving the product to market. 4. Shippers of natural resources who contract with intermodal shipping, such as Maersk and BNSF, also benefit from economies of scale. Answer: True Rationale: Shippers of natural resources like Maersk and BNSF benefit from economies of scale through intermodal shipping because it allows them to transport larger volumes more efficiently and cost-effectively. By consolidating shipments and utilizing larger containers or rail cars, these companies can reduce per-unit transportation costs, improving overall profitability and competitiveness in the market. MULTIPLE CHOICE 1. __________ logistics is the best description for the transportation companies discussed in the case. A. Just-in-Time B. Outsourcing C. Motor carrier D. Contract E. all of the above Answer: D Rationale: With an improved economy, supply chain managers will be contracting with the transportation companies that will transport their offerings to the marketplace. 2. Which of following integration types in supply chain management would probably not include contractual motor carrier and warehouse services? A. measurement integration B. relationship integration C. material and service integration D. technology and planning integration E. internal operations integration Answer: E Rationale: Contractual logistics partners would not be considered internal operations. 3. When the amount of inventory to be shipped is more than motor carriers can transport, supply chain managers face __________. A. an increase in competition for logistics services B. fewer truck drivers C. capacity crunch D. problems in demand fulfillment E. all of the above Answer: E Rationale: All of the answers are symptomatic of an insufficient supply of logistics workers. 4. Those firms that warehouse, pick orders, and ship directly to the customer as well as hire and manage logistics workers are known as __________ companies. A. 3PL B. flow management C. owner- D. order fulfillment E. all of the above Answer: A Rationale: Third-party logistics firms is contracted to manage a firm’s order fulfillment process from beginning to end. 5. Which of the following criteria might be least affected by an economic upswing in regard to motor carriers. A. capability B. cost C. transit time D. accessibility E. reliability Answer: D Rationale: Accessibility—a carrier’s ability to move goods over a specific route or network—has the least to do with labor supply. 6. “Seamless” is a favorite buzzword of supply chain management proponents, especially those who advocate JIT. Given the case, what disruption was left out of the chapter discussion? A. natural disasters B. human resources C. customer demand D. flow reversal E. none of the above Answer: B Rationale: During economic downturns, workers leave the transportation industry and replacing them would be a disruption. Chapter 14—Nordstrom's TRUE/FALSE 1. Nordstrom, as a family-owned business, is an independent retailer. Answer: False Rationale: Nordstrom is a chain store with 157 stores in 27 states. 2. Nordstrom has franchises in 27 states. Answer: False Rationale: Nordstrom is a chain store with 157 stores in 27 states. 3. Nordstrom has a concentrated product assortment, carrying narrow product lines but in considerable depth. Answer: False Rationale: Nordstrom offers a wide assortment of shopping and specialty goods, including apparel, cosmetics, and housewares. 4. Nordstrom typically charges the full “suggested retail price” on its merchandise, unlike discounters, factory outlets, and off-price retailers, which use low prices to attract shoppers. Answer: True Rationale: Nordstrom generally adheres to the suggested retail price (SRP) on its merchandise, distinguishing itself from discounters, factory outlets, and off-price retailers that use lower prices as a key strategy to attract shoppers seeking bargains. This pricing approach helps Nordstrom maintain its brand image as a high-end retailer focused on quality and service rather than price-based promotions. 5. With more than 200 stores in 28 states, Nordstrom’s could be argued to have selective distribution. Answer: True Rationale: Nordstrom's distribution strategy can be considered selective because it carefully chooses locations and limits the number of stores to maintain exclusivity and control over its brand image. This approach allows Nordstrom to cater to affluent and fashion-conscious consumers in specific geographic areas while ensuring a premium shopping experience across its store network. MULTIPLE CHOICE 1. Nordstrom is an example of a A. department store. B. specialty store. C. supermarket. D. drugstore. E. category killer. Answer: A Rationale: Nordstrom is an example of a department store. 2. When Nordstrom mails catalogs to its customers, it is using a technique known as A. telemarketing. B. spam. C. direct marketing. D. indirect marketing. E. electronic retailing. Answer: C Rationale: Direct marketing, sometimes called direct-response marketing, refers to the techniques used to get consumers to make a purchase from their home, office, or other non-retail setting. These techniques include direct mail, catalogs, and mail order. 3. The main element of Nordstrom’s in-store presentation is its ________, the overall impression conveyed by its physical layout, décor, and surroundings. A. organization B. atmosphere C. attitude D. style E. design Answer: B Rationale: The main element of a store’s presentation is its atmosphere, the overall impression conveyed by its physical layout, décor, and surroundings. 4. The ________ of employees within a Nordstrom store is presumably higher than it is in a store like Kmart, which has a “do-it-yourself,” casual atmosphere. A. concentration B. market-basket analysis C. fixture-type D. allowance E. density Answer: E Rationale: Density is the number of employees per thousand square feet of selling space. Nordstrom’s density is much higher than a discounter like Kmart’s, denoting readiness to serve the customer. 5. When a Nordstrom salesperson suggests that a customer might want to purchase a belt to go with his new suit, he is employing a common practice among retailers known as A. trading up. B. adding on. C. suggestion selling. D. retail mixing. E. All of the above Answer: C Rationale: Suggestion selling, a common practice among most retailers, seeks to broaden customers’ original purchases with related items. Chapter 15—HBO's True Blood TRUE/FALSE 1. This case details HBO’s competitive advantage for True Blood. Answer: False Rationale: This case is about HBO’s promotional strategy for True Blood. 2. Because the initial communications were unidentified (and in dead languages), they would be considered publicity rather than advertising. Answer: True Rationale: Communications that are unidentified and in dead languages would typically be categorized as publicity rather than advertising. Publicity involves disseminating information or messages through media channels without direct payment, whereas advertising is a paid form of communication intended to promote a product, service, or brand with identified sources and clear messaging objectives. 3. The coded messages in the True Blood campaign were designed to get attention. The DVDs at the film festival and the Blockbuster rentals were designed to inform and instill desire to watch the show. The True Blood campaign was using the goals of promotion tactic. Answer: False Rationale: These are steps in AIDA. 4. Before Web 2.0, this sort of elaborate marketing campaign would not have been possible because of proliferation of the Internet and popularity of viral campaigns. Answer: True Rationale: Elaborate marketing campaigns were possible before Web 2.0, but they were executed differently due to the limited capabilities of the early internet and the absence of widespread social media platforms for viral campaigns. Web 2.0 brought about a shift by enabling interactive and user-generated content, which facilitated more sophisticated and viral marketing campaigns leveraging social sharing and engagement. MULTIPLE CHOICE 1. Which of the following goals of promotion did Campfire Media accomplish to great success with its subtle True Blood campaign? A. persuading B. informing C. reminding D. None of the above Answer: B Rationale: The campaign succeeded in stimulating interest in the new TV show, a consequence of information. 2. HBO used a challenging initial contact with coded mailers. That some people decoded the messages functioned as a type of what to marketers? A. noise B. message flexibility C. encoding D. feedback Answer: D Rationale: This is feedback because the decoding of the message gives marketers an idea of who is interested in the promotion and the show. 3. The individuals trying to locate distributors for the product TruBlood misunderstood the advertisements because of A. noise. B. feedback C. decoding. D. encoding. Answer: A Rationale: Noise is anything that interferes with, distorts, or slows down the transmission of information. 4. The Cloverfield trailer used the movie theater as A. feedback. B. a channel. C. receivers. D. All of the above Answer: B Rationale: The movie theater was a channel for the trailer’s message. 5. Which of the following players in the communication process do all three of the examples in the case try to obscure during the marketing campaigns? A. the channel B. the sender C. the decoder D. the receiver Answer: B Rationale: The sender is purposefully obscured at the beginning of these campaigns to generate buzz about the products. Chapter 16—Burger King TRUE/FALSE 1. Burger King’s Coq Roq Web site, while controversial, had a direct influence on the sale of its Chicken Fries. Answer: True Rationale: The Web site generated a lot of publicity, which affected its sales in a positive way, even though much of the publicity was negative. 2. Burger King did not understand who its target audience was for Chicken Fries when it attempted to model its fictional band of masked chickens on the heavy metal band Slipknot. Answer: False Rationale: Burger King appears to have known who its target audience was, and in fact utilized the resulting controversy to boost its sale of Chicken Fries. 3. Burger King utilized the growing interest in the Internet as an advertising medium when it put up its Coq Roq Web site. Answer: True Rationale: Burger King's creation of the Coq Roq website demonstrates its strategic use of the internet as an advertising platform, capitalizing on the medium's increasing popularity to reach and engage consumers effectively. 4. Burger King needed crisis management to control the negative publicity surrounding the Coq Roq Web site, in order to keep the launch of Chicken Fries from being ruined. Answer: False Rationale: In this case, the negative publicity surrounding the Web site served to generate further interest in Chicken Fries and make them one of Burger King’s most successful product launches. 5. An example of sales promotion for BK Chicken Fries would be to offer customers a 50 cents off coupon when they visit the Coq Roq Web site and click on the coupon icon. Answer: True Rationale: Offering a coupon on the Coq Roq website encourages traffic to the site and incentivizes customers to purchase BK Chicken Fries by providing a direct discount, thereby stimulating sales through a targeted promotional offer. MULTIPLE CHOICE 1. Burger King used its Coq Roq Web site as a(n) ________ to communicate the message about its new Chicken Fries. A. marketing objective B. online chat room C. channel D. informational device E. personal selling tool Answer: C Rationale: A Web site is one medium of communication that an advertiser can use to transmit a message. 2. Which step in the AIDA concept of promotional goals was met by the controversial Coq Roq Web site? A. attention B. interest C. desire D. action E. The Coq Roq Web site was designed to fulfill all elements of the AIDA concept. Answer: E Rationale: Despite, or perhaps because of, the negative publicity of the photo gallery, the site fulfilled each of the steps of the AIDA concept. 3. Burger King used a heavy metal rock band of masked chickens to promote its Chicken Fries. This is an example of which executional style of advertising? A. scientific B. demonstration C. spokesperson/testimonial D. real/animated product symbols E. lifestyle Answer: D Rationale: Burger King used the masked chicken band as characters that represent BK Chicken Fries on their Web site, like Ronald McDonald represents McDonalds’ food. 4. By using a Web site to promote Chicken Fries, Burger King chose a ________ in which to promote their new product. A. channel control B. medium C. retailer D. product line E. supply chain Answer: B Rationale: A medium, in this case the Internet, is the channel used to convey a message to a target market. Chapter 17—Ron Popeil TRUE/FALSE 1. Ron Popeil’s ability to gain sales using the trust he established in previous products he invented is a form of relationship selling because his honesty and products gained long-term, satisfied customers. Answer: True Rationale: Ron Popeil's ability to leverage trust from previous successful products to sell new inventions demonstrates relationship selling. By consistently delivering quality products and maintaining customer satisfaction, he builds long-term relationships with customers who trust his brand, leading to repeat purchases and word-of-mouth recommendations. This trust-based approach fosters customer loyalty and contributes to sustained sales success. 2. When a customer sees Ron Popeil selling his indoor Turkey Fryer on TV, it is an interaction. Answer: False Rationale: It is not an interaction because the customer is not exchanging information with RonCO. 3. Because Ron Popeil has sold his products for over 30 years on television, many viewers have gotten to know him and feel he is being sincere about his products’ benefits. Popeil has turned his long-term familiarity with viewers into a form of relationship selling. Answer: True Rationale: Relationship selling is a multistage process that emphasizes personalization and empathy as key ingredients in identifying prospects and developing them as long-term, satisified customers. Although Ron Popeil has not met most of his customers personally, his years of selling on television has established a relationship of sorts between him and many viewers, and he has their trust. 4. Ron Popeil has combined personal selling with advertising and sales promotion through his infomercials. Answer: True Rationale: In essence, Ron Popeil has used the mass-marketing medium of television to recreate personal selling through infomercials. He has used infomercials to sell the more than 150 products he has invented and produced. MULTIPLE CHOICE 1. Ron Popeil is known for his ability to invent products that really improve the customer’s efficiency in common tasks. Which of the following best describes how Popeil chooses products to invent and sell via infomercial? A. Touch point B. Pre-approach C. Networking D. Negotiation E. Needs Assessment Answer: E Rationale: By performing a needs assessment on his large customer base (by reviewing daily activity and seeing where people struggle with cumbersome gadgets or inefficient methods), Popeil is able to determine what products to invent and sell to the target market. 2. Ron Popeil’s infomercials represent what in the CRM cycle? A. Sales Presentation B. Sales Proposal C. Sales Interaction D. Touch Point E. Pre-Approach Answer: A Rationale: The infomercial is Popeil’s Sales Presentation, because it addresses the client’s needs and offers the opportunity for demonstration. 3. Which aspect of personal selling does Ron Popeil use to his advantage in his infomercials? A. The ability to vary the sales message for different customers. B. The ability to direct the sales message to qualified prospects. C. The ability to adjust selling costs by managing the sales force. D. The ability to give a detailed explanation and demonstration of his products. E. All of these are why Ron Popeil uses infomercials and his unique style of personal selling. Answer: D Rationale: The infomercial style is not particularly suited to modifying the message for a specific customer, but it is very good at providing explanations and demonstrations. 4. Ron Popeil uses his infomercials to: A. sell products. B. tell customers about the product. C. make proposals based on price and product features. D. offer products based on a needs assessment related to a specific product. E. do all of these things. Answer: E Rationale: Ron Popeil uses traditional personal selling in his infomercials, which includes all the characteristics listed here. Reference Exhibit 17.3 for a comparison between traditional and relationship selling. 5. Selling products through television with memorable catch phrases such as “But wait, there’s more!” and “Operators are standing by” have enabled Ron Popeil to turn advertising into: A. switch and bait selling B. cold calling C. personal selling D. prospecting E. a sales proposal Answer: C Rationale: Personal selling, which is a direct communication between a sales representative and one or more prospective buyers is not normally associated with television. Popeil has been able to effectively turn his infomercials into a personal selling encounter with his customers through his catchy phrases, sincere attitude and excitability. 6. When a customer calls Ronco’s 800 number and orders a product, which step of the selling process are Ronco representatives involved in? A. closing the sale B. approaching the customer C. handling objectives D. needs assessment E. qualifying leads Answer: A Rationale: The end of the selling process occurs when the customer shows signs that he or she is ready to purchase the product and all their questions have been answered and objections met. That is called closing the sale. Chapter 18 Case Study—Facebook: Advertising’s Troubling Future TRUE/FALSE 1. As with newspapers, television, and other forms of traditional media, marketing on Facebook generally takes the form of mass-media information transmission. Answer: False Rationale: Whereas traditional marketing media offer a mass-media method of interacting with consumers, social media like Facebook offer more one-to-one ways to meet consumers. 2. Before embarking on Facebook advertising campaigns, corporations big and small should engage in listening. Listening allows companies to understand Facebook’s advertising landscape before they enter it. Answer: True Rationale: Engaging in listening activities before starting Facebook advertising campaigns helps corporations of all sizes gain insights into the platform's advertising dynamics and audience behavior, enabling more informed and effective campaign strategies. 3. Despite the loss of GM’s advertising, Forrester Research predicts that display advertising and other forms of social media marketing will grow to more than 21 percent of spending by 2014. Answer: True Rationale: Forrester Research's prediction reflects the trend towards increased spending on digital advertising, including display advertising and social media marketing, as businesses adapt to changing consumer behavior and online engagement. This shift signifies a move towards more targeted and measurable advertising strategies that leverage the growing influence of digital platforms in reaching and engaging with audiences. 4. Even if Facebook begins to lose substantial amounts of Web-based advertising revenue, it should continue to focus on this type of marketing instead of developing a mobile marketing plan. Answer: False Rationale: While much of the excitement in social media has been based on Web sites, much of Facebook’s future growth will lie in new technologies, particularly mobile and Smartphone platforms. MULTIPLE CHOICE 1. Display advertising on Facebook is an example of: A. owned media B. earned media C. paid media D. publicity E. all of the above Answer: C Rationale: Ads purchased on Facebook are considered paid media since the brand is paying for the text-based or visual ad that shows up on the right hand side of Facebook profiles. 2. To gauge the success of a Facebook advertising campaign, a company should track metrics tied to key performance indicators. Which of the below is an example of such a metric? A. click throughs to an external Web site B. a Facebook page’s number of fans C. the volume of consumer-created buzz D. search engine rank and results E. all of the above Answer: E Rationale: All of these are examples of social media metrics that apply to a Facebook advertising campaign. 3. A social media user who surfs Facebook and clicks on advertisements but does not create any content herself is likely a: A. creator B. critic C. collector D. joiner E. spectator Answer: E Rationale: Spectators generally consume media, but do not create it themselves. 73 percent of social media users function as spectators. 4. If the studies conducted by Greenlight and comScore considered what was being said about Facebook’s advertising platform on various social media Web sites, they would be engaging in what process? A. Social media monitoring B. environmental scanning C. identifying the target audience D. product differentiation E. developing earned media Answer: A Rationale: Social media monitoring is the process of identifying and assessing what is being said about a company, individual, product or brand. 5. Which of the following statements should a marketing executive consider before deciding to invest in Facebook advertising? A. The rate of change in social media is astounding. B. Facebook’s growth is forecasted to slow by nearly half in 2013. C. In-actives decreased from 44 percent in 2007 to only 18 percent in 2009. D. Though GM pulled its ads from Facebook, Ford and Coca-Cola announced plans to intensify their social media marketing. E. All of the above Answer: E Rationale: It is important for marketers entering social media to have as much information as possible. Listening to customers and industry trends, as well as continually revising the social media plan to meet the needs of the changing market are keys to successful social media marketing. 6. Which of the following is not an important step when creating an effective Facebook advertising campaign? A. Set the objectives that the campaign should accomplish. B. Examine trends and best practices in Facebook advertising. C. Identify the advertising campaign’s target audience. D. Ask friends and family to click your ads to boost your campaign’s metrics. E. Implement and monitor the campaign. Answer: E Rationale: Artificially inflating your campaign’s metrics is not one of the six stages involved in creating an effective social media plan. In fact, intentionally altering metrics could distort your campaign’s results, distorting the metrics’ usefulness. Chapter 19 Case Study—Groupon vs. LivingSocial: Coupon Wars TRUE/FALSE 1. Only Amazon profited—as it does in its standard credit card transactions—from the gift card. Answer: False Rationale: Amazon had invested $175 million in LivingSocial before the gift card deal. So the purchase, in part, of the gift card, was bought with its own cash and its benefit, too, was very likely publicity. 2. Using Groupon coupons is first and foremost to generate a sale, any sale. Answer: True Rationale: The primary objective of using Groupon coupons is to generate sales by attracting customers through discounts and special offers. Groupon's platform incentivizes consumers to make purchases they might not have otherwise made at full price, helping businesses increase sales volume and customer acquisition through promotional pricing strategies. 3. LivingSocial sold Amazon gift cards at a loss. Therefore, they are not a good or service on the basis of cost. Answer: True Rationale: Selling Amazon gift cards at a loss indicates that LivingSocial treated them more as a promotional tool rather than a profitable product. In such cases, the cost basis shifts from profitability to customer acquisition and engagement, emphasizing the strategic use of discounts to drive sales and build brand loyalty. 4. Selling $20 gift cards for $10 is, essentially, a variation of a loss-leader promotion. Answer: True Rationale: Selling $20 gift cards for $10 is akin to a loss-leader promotion where the retailer incurs a loss on the initial sale to attract customers who may make additional purchases at regular prices. This strategy aims to stimulate sales volume, increase foot traffic, and potentially foster repeat business, leveraging the appeal of deep discounts to drive overall revenue growth. MULTIPLE CHOICE 1. What kind of pricing objective did LivingSocial have in selling something worth $20 for $10? A. maximum profit B. a satisfactory profit C. a targeted return on investment D. market share E. promotional pricing Answer: D Rationale: It is not unusual for a company to post a lost in order to achieve market share that pays for the “investment” of the immediate loss sometime in the future. 2. Let’s say that Amazon ultimately made a profit—not from the sale of the $20 cards—but from sales of books, CDs, and the like that cost well over $20 a unit. What kind of elasticity would that demonstrate? A. inelastic demand B. unitary demand C. inelastic demand D. elastic demand E. none of the above Answer: B Rationale: Unitary elasticity means that an increase in sales offsets a decrease in prices. 3. As it is suggested in the case study, Amazon, a direct investor in in LivingSocial, may have helped the company. How could Amazon have made money if it sold the discount cards at well below face value? A. commissions from LivingSocial B. ROI C. with marginal revenue D. markup pricing E. It can’t. Selling discount cards below face value is counterfeiting. Answer: D Rationale: Although markup is normally thought of as based on cost or selling price, it also factors the cost of advertisements and promotions, that is, what it costs Amazon to sell product. 4. The marketing event that took place between LivingSocial and Groupon is all of the following except __________. A. taking market share from the other B. competition C. a price war D. a promotional strategy E. preservation of market share Answer: C Rationale: Neither engaged in an actual price war, but rather a discount aimed at consumers who wanted clothes and consumers who wanted books, CDs, and like merchandise. 5. What is meant by the colorful term “land grabbing” when Groupon and its competitors offer attractive deals and promotions? A. increase sales and revenue B. grow their memberships C. “buying in bulk” gift cards and retail “coupons” D. steal shoppers from each other E. get better deals from retailers to offer shoppers Answer: B Rationale: Companies such as Groupon and LivingSocial are in a “land grabbing” stage—“the more members they sign up, the better deals they bring in.” 6. Market saturation in the online deal industry would certainly affect the prices of goods and services. This is because it would __________. A. end prestige pricing B. create real coupon wars C. lower every barrier for retail outlets to participate D. intensify competition between its subscribers E. bring about the sacrifice effect of price Answer: D Rationale: With more platforms offering more deals to shoppers, diners, and the like, subscriber businesses to these online deal services would have to compete more robustly and would be encouraged to do so by Groupon, LivingSocial, and the like as they compete against each other. Chapter 20 Case Study—Black Friday Sales: Deal…or No Deal? TRUE/FALSE 1. Black Friday is a short-term fix for months of slow sales. Answer: False Rationale: Black Friday actually begins several weeks of managed sales that are intended for long-term profit goals. 2. Manufacturers are stakeholders in Black Friday sales, even though they were paid earlier in the year. Answer: False Rationale: Because low Black Friday prices attract additional buyers to the market, the increased sales justify production expansion and having inventory on hand to restock sellers. 3. Offering a free telescopic lens boxed with a compatible digital camera is bundling both for the same low price. Answer: False Rationale: Offering a free telescopic lens with a compatible digital camera is a form of bundling, but it does not mean both items are offered for the same low price. Bundling involves combining multiple products or services together for sale as a single package, often at a discounted or competitive price compared to purchasing each item separately. The free lens adds value to the camera purchase without necessarily reducing the overall price of the bundle. 4. The price of a television sold in Black Friday sale can use more than one pricing tactic to discount the price below the competition. Answer: True Rationale: During Black Friday sales, retailers often employ multiple pricing tactics simultaneously to discount the price of televisions below the competition. This can include using strategies such as loss-leader pricing (selling TVs at or below cost to attract customers), bundle pricing (offering TVs with additional items at a discounted total price), and promotional pricing (temporary price reductions or special offers) to drive sales and compete effectively in the competitive holiday shopping season. MULTIPLE CHOICE 1. Black Friday offers retailers the opportunity to aggressively use _________ as a pricing strategy. A. price skimming B. status quo pricing C. market plus D. penetration pricing E. bargain anchoring Answer: D Rationale: Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. 2. Black Friday discounting can best be defined by which of the following? A. seasonal discount B. quantity discount C. functional discount D. promotional discount E. none of the above Answer: E Rationale: Black Friday prices are typically value-based and/or loss-leader to encourage shoppers to spend on additional merchandise. 3. A Black Friday advertisement for a heavily discounted Android tablet has some fine print: Only 3 per store. This is an example of __________. A. bait and switch B. leader pricing C. manufacturer’s rebate D. a promotional allowance E. quantity discount Answer: B Rationale: Even with the limited quantity, the most likely answer is leader or bait pricing (only when customers are deliberately shown more expensive alternatives is this bait and switch). 4. Micro Center Mall has published its After-Black Friday Sale flyer. It has an ad for a Vaio laptop on special and below it, a one line ad for an upgraded model. This is an example of __________. A. a unique offering B. bait pricing C. escalator pricing D. cultivating selected demand E. none of the above Answer: A Rationale: Here the marketing manager has targeted customers who are both looking for a bargain and willing to pay more for additional features. 5. All of the following contribute to profitability during Black Friday sales except __________. A. low fixed costs B. additional or more expensive purchases C. high volume of sales D. competitors don’t undersell or offer alternatives E. inelastic demand Answer: E Rationale: Demand would need to be elastic for sale pricing. 6. Why is there so much hype about Black Friday, why make it seem like the price point and the merchandise won’t ever happen again? A. It makes shoppers buy now rather than later from another store. B. The merchandise is what people want for gift giving. C. Demand can outstrip supply. D. People feel smarter after shopping early. E. all of the above Answer: A Rationale: Door-buster sales, limited-time offers, coupons, shopper cash all force consumers to make purchasing decisions faster and in one place, making it difficult to comparison shop. Test Bank for MKTG Charles W. Lamb, Jr. Hair, Joseph F., Carl McDaniel 9781285091860

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