Chapter 1 Welcome to the World of Marketing 1) A ________ is the ultimate user of a good or service. A) stakeholder B) market C) target market D) marketer E) consumer Answer: E 2) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. A) Demand satisfaction B) Competitive advantage building C) Marketing D) Total quality management E) Value chain management Answer: C 3) The ________ consists of the tools an organization uses to create a desired response among a set of predefined consumers. A) distinctive competency B) market position C) value proposition D) differential benefit E) marketing mix Answer: E 4) The four Ps are ________. A) price, product, place, and promotion B) price, profit, production, and possession C) product, production, possession, and promotion D) product, promotion, price, and profit E) place, production, process, and profit Answer: A 5) Which of the following is a true statement about the four Ps of the marketing mix? A) A decision about one of the Ps affects every other marketing-mix decision. B) Price is always the most important of the four Ps. C) Place is typically the least important of the four Ps. D) The four Ps have little effect on a product's market position. E) The four Ps are used to determine a product's target market. Answer: A 6) Which of the following is part of the product element of the marketing mix? A) a quality discount B) a store coupon C) a newspaper advertisement D) the packaging E) publicity releases Answer: D 7) A ________ is a good, service, idea, place, or person–whatever is offered for sale in the exchange. A) product B) place C) utility D) benefit E) demand Answer: A 8) ________ is the assignment of a product's value, or the amount the consumer must exchange to receive the offering. A) Promotion B) Price C) Benefit D) Need E) Utility Answer: B 9) The ________ element of the marketing mix communicates the value proposition using forms such as personal selling, advertising, coupons, and publicity. A) production B) place C) price D) distribution E) promotion Answer: E 10) Marketing communication is also referred to as ________. A) production B) selling orientation C) societal marketing D) exchange E) promotion Answer: E 11) For an exchange to occur, ________. A) at least two people or organizations must be willing to make a trade, and each must have something the other wants B) there must be one winner and one loser C) someone must make a financial profit D) the item must be tangible E) time utility must be created Answer: A 12) Which element of the marketing mix is most closely associated with a company's supply chain? A) production B) place C) price D) profit E) promotion Answer: B 13) ________ are intangible products that we pay for and use but never own. A) Consumer goods B) Services C) Industrial goods D) E-commerce products E) Value products Answer: B 14) ________ are the tangible products that individuals purchase for personal or family use. A) Consumer services B) Consumer goods C) E-services D) E-products E) Industrial goods Answer: B 15) More goods and services are sold in the ________ market than in the ________ market. A) domestic; international B) business-to-business; consumer C) consumer; producer D) industrial; business-to-business E) e-commerce; Internet Answer: B 16) ________ marketing is the marketing of goods and services from one organization to another. A) Distributive B) Consumer C) Customer D) Business-to-business E) Target Answer: D 17) ________ is the buying and selling of products over the Internet. A) Consumer-generated marketing B) Consumer relationship management C) E-commerce D) Social marketing E) Social networking Answer: C 18) Nongovernmental organizations are also known as ________. A) consumer organizations B) public organizations C) private organizations D) not-for-profit organizations E) for-profit organizations Answer: D 19) Marketers first identify consumer needs and then provide products that satisfy those needs. This practice is referred to as ________. A) the stakeholder orientation B) the marketing concept C) total quality management D) the production orientation E) the marketing mix Answer: B 20) When a gap exists between a consumer's actual state and some ideal or desired state, the consumer has a ________. A) benefit B) demand C) need D) value E) utility Answer: C 21) A ________ is a desire for a particular product a consumer uses to satisfy a need in a specific way that is culturally and socially influenced. A) benefit B) demand C) value D) utility E) want Answer: E 22) A ________ delivered by a product is the outcome that motivates a customer's buying behavior. A) benefit B) demand C) value D) need E) want Answer: A 23) A customer's desire for a product coupled with the buying power or resources to obtain that product is called a ________. A) benefit B) demand C) need D) stake E) service Answer: B 24) To be part of the ________ for a product, consumers must share a common need that can be satisfied by the product and have the resources, willingness, and authority to purchase the product. A) demand center B) audience C) value proposition D) marketplace E) market Answer: E 25) A glitzy shopping mall, a mail-order catalog, a television shopping network, and an e-commerce website are all examples of ________. A) marketing concepts B) value chains C) monopolies D) marketplaces E) strategic business units Answer: D 26) The trend of consumers renting out their belongings when they are not in use to other consumers who need them for a limited time is called ________. A) e-commerce B) virtual exchange of goods C) the attention economy D) collaborative consumption E) the intrapreneur market Answer: D 27) All of the following are forms of utility created by marketing processes EXCEPT ________. A) form utility B) place utility C) time utility D) possession utility E) price utility Answer: E 28) ________ utility is the benefit marketing provides by transforming raw materials into finished products, as when a dress manufacturer combines silk, thread, and a zipper to create a bridesmaid's gown. A) Form B) Place C) Time D) Possession E) Price Answer: A 29) Women who rent their wedding gowns instead of buying them and wearing them only once are taking advantage of a ________ utility. A) form B) place C) time D) possession E) price Answer: C 30) Buyers, sellers, investors, and community residents are all considered ________ in a company. A) stakeholders B) shareholders C) consumers D) value chain members E) social marketers Answer: A 31) When Tony rented a loft apartment where he would live for the summer, he acted as a ________. A) consumer B) shareholder C) producer D) marketer E) retailer Answer: A 32) Chris just landed her dream job but realizes that her college wardrobe is not going to work for her new professional position. In this situation, Chris has a(n) ________. A) benefit B) exchange C) value D) need E) utility Answer: D 33) Greg Williams now has the buying power to purchase the computer system he has wanted for the last six months. Greg's want now has become a(n) ________. A) need B) necessity C) demand D) exchange E) transaction Answer: C 34) Ruth Terry is a realtor. In her ads, Terry offers the free use of a moving truck to every customer she helps either buy or sell a house. This free use of a moving truck is an example of a ________. A) benefit B) demand C) social marketing concept D) need E) production orientation Answer: A 35) Which of the following is the best example of a consumer good? A) the riding lawn mower purchased by the landscaping company B) the disposable diapers purchased by the new mother for her baby C) the paint purchased by the contractor D) the cookies purchased for the daycare center E) the art supplies purchased for the elementary school art center Answer: B 36) Which of the following is the best example of a service? A) the medical examination Jonathon had yesterday B) the sheet music purchased by the piano teacher C) the software Monica purchased from the website D) the cleaning supplies purchased for the veterinarian's office E) the t-shirt you got for running in a 5K race Answer: A 37) Alex paid for a(n) ________ when he took his car to the carwash to be washed and waxed. A) service B) industrial product C) consumer good D) commercial E) business product Answer: A 38) Which of the following is an example of a transaction that might occur in business-to-business marketing? A) Maurice buys a new razor on his way home from work. B) The amateur gardener buys a new wheelbarrow. C) The retail outlet buys athletic shoes to sell in its store. D) The professional chef bakes a birthday cake for her son. E) Robyn's mother hires a math tutor to help Robyn pass algebra. Answer: C 39) Jack provides heating and air conditioning equipment for office buildings. He sells ________. A) distributive goods B) consumer services C) consumer goods D) industrial goods E) intangible goods Answer: D 40) Which of the following is an example of a not-for-profit organization that would use marketing principles? A) a fast-food restaurant B) a manufacturer of bicycles C) a software developer D) Six Flags Amusement Park E) the Red Cross Answer: E 41) A sign manufacturer who uses plastic, metal, and neon tubing to create a motel sign has performed the marketing benefit of creating ________ utility. A) form B) place C) possession D) time E) creation Answer: A 42) Shane pulled her car into the gas station just as the fuel gauge dropped below empty. In this example, Shane benefited from the ________ utility offered by the gas station. A) creation B) place C) value D) marketing E) quality Answer: B 43) Seth's mother didn't want to have a climbing wall as a permanent feature in her backyard, but it was certainly convenient to rent one from the company that catered Seth's 12th birthday party. The catering company created both ________ utility when it rented her the climbing wall. A) form and place B) place and creation C) possession and price D) time and place E) creation and possession Answer: D 44) A(n) ________ occurs when Kirin Albers trades Max Lynch three hours of babysitting his three-year-old daughter for fixing the hole in his porch roof. A) differential benefit B) promotion C) exchange D) collaborative consumption E) virtual trade Answer: C 45) Two teachers purchased art supplies for their classes. One paid $103.45 for eight large boxes of crayons. The other teacher purchased ten identical boxes for $105.55. The second teacher got more for her money because she took advantage of a quantity discount, a reduced price for buying ten or more boxes. Which element of the marketing mix most directly relates to these purchases? A) production B) profit C) price D) place E) possession Answer: C 46) Conveniently located vending machines around your college or university campus make it easy for you to buy a soda and a snack between classes. This is an example of the ________ element of the marketing mix. A) production B) place C) price D) profit E) promotion Answer: B 47) The principles of marketing can apply to people, just as they apply to goods and services. Answer: True 48) The term "marketing" is synonymous with the term "advertising." Answer: False 49) Marketers define a need as the difference between a consumer's actual state and some ideal or desired state. Answer: True 50) Although having something to eat or drink may be a want, the desire for a specific brand name is referred to as a need. Answer: False 51) Very little of the online action in e-commerce is in business-to-business marketing. Answer: False 52) Many not-for-profit organizations use marketing principles. Answer: True 53) The marketing mix is the marketer's strategic toolbox. Answer: True 54) The elements of the marketing mix are the four Ps. Answer: True 55) The pricing element of the marketing mix always involves monetary exchanges. Answer: False 56) The promotion element of the marketing mix includes the design of the product. Answer: False 57) Within the context of the marketing mix, place refers to the availability of the product to the customer at the desired time and location. Answer: True 58) Automobiles, haircuts, tutoring, and lighting fixtures are all examples of consumer goods. Answer: False 59) Ria, a college sophomore, writes a daily blog that typically has over 50,000 readers each week. Ria is an example of a microcelebrity. Answer: True 60) An entertainer such as Garth Brooks, a television show, and a magazine subscription are all examples of products. Answer: True 61) Discuss how the principles of marketing can be applied to people. Answer: The principles of marketing apply to people in the same way that they apply to products and services. People market, or "sell," themselves all of the time, whether they are applying for a job, hoping to gain a promotion, or participating in online dating. People package and promote themselves through the clothes and accessories they choose, the cars they drive, the music they listen to, the books they read, and much more. 62) How would an ice cream vendor create the four types of utility? Answer: The ice cream vendor would create form utility by combining ingredients to make a milkshake or a sundae. Place utility would mean the ice cream is available where the customer wants it. Time utility would mean the ice cream is available when the customer wants it. Possession utility refers to the enjoyment consumers have eating the ice cream. 63) What does the phrase "exchange relationship" mean in relation to marketing? Answer: An exchange occurs when something is obtained for something else in return. The buyer receives an object, service, or idea that satisfies a need, and the seller receives something she feels is of equivalent value. For an exchange to occur, at least two people or organizations must be willing to make a trade, and each must have something the other wants. Both parties must agree on the value of the exchange and how it will be carried out. Each party also must be free to accept or reject the other's terms for the exchange. An exchange is at the heart of every marketing act. 64) What is the difference between consumer goods and consumer services? Give an example of each. Answer: Consumer goods are the tangible products that individual consumers purchase for personal or family use. Consumer services are intangible products that consumers pay for and use but never own. Examples will vary, but should reflect these definitions. 65) Identify the four Ps in the following description: Rosa Alvarez markets 23 different varieties of salsa in 8-ounce and 12-ounce bottles at supermarkets in the southwestern United States. The 8-ounce bottle sells for $5.95, and the larger size sells for $7.95. Periodically, she sets up a table in one of the marketplaces that carries her salsa brand and offers customers a sample. She recently received considerable publicity for being the "Hispanic Entrepreneur of the Year." Answer: The four Ps are product, price, place, and promotion. Product: 23 different varieties of salsa in 8-ounce and 12-ounce bottles Price: $5.95 for smaller size and $7.95 for larger size Place: supermarkets in southwestern United States Promotion: sampling and publicity 66) Provide a brief explanation of what marketing is. Answer: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. 67) Select one real company located in your home state. Identify at least four different types of stakeholders in this company. Answer: Each student will present different information in responding to this question. Stakeholders should include the company's customers, the company's employees, investors in the company, and residents of the community. One real company in my home state is Apple Inc. Four different types of stakeholders are employees, customers, shareholders, and suppliers. 68) Can a consumer of a product be a stakeholder in the company that markets the product? Briefly explain your answer. Answer: Yes. A consumer is one type of stakeholder. A stakeholder can be a buyer, seller, or investor in a company; a community resident; or a citizen of the nation where the company's goods or services are made or sold. A consumer is the ultimate user of a good or service. Therefore, a consumer could be a stakeholder who is also the ultimate consumer using the product. 69) Needs relate to either physical or psychological functions. How does Levi Strauss & Co. satisfy both of these needs with Levi's jeans? Answer: Levi Strauss & Co. jeans meet physical needs in that people need to wear clothes. The psychological needs are fulfilled in the way people may feel or think they look when wearing these jeans. 70) Give three examples of modern marketplaces. Answer: Answers will vary, but should reflect the broad range of marketplaces, from stand-alone retailers and shopping malls to mail-order catalogs and Web sites. Three examples of modern marketplaces are Amazon, eBay, and Etsy. 71) Explain the concept of business-to-business marketing and give an example of a business-to-business transaction. Answer: Business-to-business marketing is the marketing of goods and services from one organization to another. Examples will vary, but should reflect this definition. 72) In which kind of market would a production orientation be most successful? A) a buyer's market in which supply exceeds demand B) a market in which there are more sellers than buyers C) a seller's market in which demand is greater than supply D) a market that sells only intangible products E) an e-commerce market Answer: C 73) A firm that focuses on a ________ orientation is likely to view the market as a homogeneous group that will be satisfied with the basic function of a product. A) production B) consumer C) sustainability D) triple-bottom-line E) TQM Answer: A 74) Companies that have a ________ orientation tend to be more successful at making one-time sales than at building repeat business. A) consumer B) marketing C) selling D) societal E) relationship Answer: C 75) A ________ orientation is a management philosophy that focuses on ways to satisfy customers' needs and wants. A) consumer B) promotion C) selling D) production E) quality Answer: A 76) The total quality management (TQM) philosophy involves all employees in ________. A) customer relationship management B) continuous product quality improvement C) market positioning D) creating sustainability E) increasing the lifetime value of customers Answer: B 77) A(n) ________ only produces a product when it is ordered. A) social marketer B) business-to-business marketer C) e-commerce marketer D) marketing planner E) intrapreneur Answer: E 78) In general, companies that focus on a triple bottom line are most likely to place a priority on which of the following? A) sustainability B) the production orientation C) the selling orientation D) manufacturing on demand E) instapreneurship Answer: A 79) Which of the following lists the three components of the triple bottom line orientation? A) the financial bottom line, the social bottom line, and the environmental bottom line B) the financial bottom line, the social bottom line, and the political bottom line C) the financial bottom line, the cultural bottom line, and the business bottom line D) the value bottom line, the service bottom line, and the business bottom line E) the product bottom line, the service bottom line, and the relationship bottom line Answer: A 80) ________ maintains that marketers must satisfy customers' needs in ways that also benefit society and are profitable to the firm. A) Value propositioning B) Instapreneurship C) The societal marketing concept D) A sales orientation E) Value chain management Answer: C 81) A company that focuses on ________ is concerned with meeting present consumer needs without compromising the ability of future generations to meet their needs. A) the selling orientation B) the production orientation C) total quality management D) sustainability E) return on investment Answer: D 82) Which of the following refers to marketing strategies that support environmental stewardship by establishing an environmentally founded differential benefit in the minds of consumers? A) greenwashing B) green marketing C) triple-bottom-line orientation D) societal marketing E) social networking Answer: B 83) The direct financial impact of a firm's expenditure on marketing activities is called the ________. A) value chain B) value proposition C) differential benefit D) return on investment (ROI) E) utility function Answer: D 84) The Internet has created a paradigm shift for businesses, moving us toward an attention economy in which a company's success will be measured by its ________. A) sustainability B) social responsibility C) consumer-generated value D) social network E) share of mind Answer: E 85) A flour producer that identifies its mission as "the milling of fine flour in the most efficient manner possible" most likely has a ________ orientation. A) customer B) marketing C) selling D) production E) new era Answer: D 86) Jolene's firm markets preplanning services for a mortician. She finds that most of her target market wants to avoid discussing future funeral needs, so she must somehow first get their attention. Jolene's firm most likely uses the ________. A) production orientation B) sustainability concept C) selling orientation D) consumer orientation E) societal marketing concept Answer: C 87) IBM manager Celia Moore coordinates IBM's long-standing "Reinventing Education" program that involves intensive research into how educational institutions can use the fruits of new technologies to transform what they do. In the process, the program is actually helping to shape a market of significant interest to IBM. "We see the program very much as an investment, rather than handing out money," says Moore. The existence of this program indicates that IBM has a(n) ________ orientation. A) environmental B) financial bottom line C) selling D) production E) triple-bottom-line Answer: E 88) Using the just-in-time model, a manufacturer doesn't produce a product until a customer orders it. Answer: True 89) The consumer orientation maintains that marketers must satisfy customers' needs in ways that also benefit society. Answer: False 90) The acronym ROI stands for rely on instinct. Answer: False 91) Explain why the selling orientation was popular during the period following World War II. Answer: The selling orientation views marketing as a sales function, or as a method of moving products out of warehouses so that inventories do not pile up. During World War II, the United States increased its industrial capacity to manufacture tanks, combat boots, parachutes, and countless other wartime goods. After the war, this huge industrial capacity was converted to producing consumer goods. Consumers who had not been able to purchase such consumer goods during the war years were eager to buy, and marketers had substantial inventories. 92) Explain why and how a company would adopt a consumer orientation. Answer: A company might adopt a consumer orientation to better identify and satisfy the needs and wants of customers. In the competitive marketplace of today, a company has to go beyond the selling and production orientations and consider the customer's desires. Following a consumer orientation, marketers would conduct research to understand the needs of different customers, tailor products to the needs of these various groups, and design marketing messages to speak to the needs of those customers. 93) Briefly discuss how companies are adapting to the paradigm shift of the wired world. Answer: Companies promote their products in innovative and interesting ways while becoming part of their target markets' lives. In the attention economy, share of mind rather than share of market takes on greater importance. Product websites offer entertainment and high-value information that keep the consumer coming back to the site and continuing to buy the product. Companies have to do more to differentiate their products from the competition and to connect on a more personal level with potential customers. 94) Explain why it is often difficult to measure the value of marketing activities. Answer: Marketing objectives are sometimes stated in vague terms, such as "increase product awareness." This lack of specificity in objectives makes it difficult to measure the impact of marketing. 95) A ________ is a marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased. A) product position B) market segment C) mass market D) value proposition E) target market Answer: D 96) The ratio of benefits to costs is one way to think of ________. A) sustainability B) profits C) value D) competitive advantage E) distinctive competency Answer: C 97) When companies calculate the lifetime value of a customer they look at ________. A) how much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future B) the positive word of mouth about the product that the customer can spread among her family, friends, and acquaintances C) the lifetime expectancy of the product the customer purchased D) the age of the customer to see whether she is likely to live long enough to utilize the product being sold E) the career path of the customer to see if she may move to a different geographic area and no longer purchase from the company Answer: A 98) A firm's capability that is superior to that of its competition is referred to as a(n) ________. A) distinctive competency B) added value C) value proposition D) value chain E) social benefit Answer: A 99) The second step in developing a competitive advantage is to turn a distinctive competency into a ________ that is important to customers. A) target market B) service C) marketing mix D) market position E) differential benefit Answer: E 100) ________ provides reasons for customers to pay a premium for a firm's products and exhibit a strong brand preference. A) An exchange B) A differential benefit C) An industrial good D) A promotion position E) A customer lifetime value Answer: B 101) A ________ is a series of activities involved in designing, producing, marketing, delivering, and supporting any product. A) value proposition B) production orientation C) value chain D) marketing concept E) market position Answer: C 102) In addition to marketing activities, the ________ includes business functions such as human resource management and technology development. A) value chain B) marketing mix C) utility function D) customer relationship management process E) market position Answer: A 103) The main activities of value chain members include all of the following EXCEPT ________. A) bringing in materials to make the product B) converting the materials into the final product C) providing unbiased information about the product to consumers D) shipping out the final product E) servicing the product after purchase Answer: C 104) The value chain activity of ________ refers to converting materials into a final product for consumers. A) inbound logistics B) outbound logistics C) operations D) marketing E) service Answer: C 105) The phenomenon of ________ includes consumers creating their own ads and buying and selling products on eBay. A) production orientation B) the triple bottom line orientation C) consumer-generated value D) socially responsible marketing E) the marketing concept Answer: C 106) Consumers who share their ideas about products with companies for fun or a challenge, rather than a paycheck, are referred to as ________. A) instapreneurs B) amafessionals C) consumed consumers D) folksonomists E) open sourcers Answer: B 107) Social networking is an integral part of which of the following? A) the triple-bottom-line orientation B) lifetime value of a customer C) the value chain D) Web 2.0 E) Web 1.0 Answer: D 108) Which of the following is true of Web 2.0? A) It categorizes entries according to a strict taxonomy. B) It gets updated constantly. C) It is based on the open source model. D) It is based on the wisdom of crowds model. E) It improves as the number of users decreases. Answer: B 109) According to the theory of the wisdom of crowds, under the right circumstances ________. A) a mass market approach is favorable to a target market approach B) a target market approach is favorable to a mass market approach C) groups are smarter than the smartest people in them D) companies can make money by giving their products away for free E) consumers can generate value Answer: C 110) In a(n) ________ model, developers make their programs available for free. A) amafessional B) instapreneur C) anticonsumption D) open-source E) Web 2.0 Answer: D 111) Alcoholism and cigarette smoking are both examples of ________. A) anticonsumption behaviors B) "bait-and-switch" behaviors C) consumer addictions D) shrinkage E) consumed consumer behaviors Answer: C 112) Which of the following is the industry term for inventory and cash losses from shoplifting and employee theft? A) bait-and-switch B) anticonsumption C) demarketing D) shrinkage E) lifetime cost of a customer Answer: D 113) Product tampering and spray-painting graffiti on buildings are both examples of ________. A) demarketing B) exploitative consumption C) addictive consumption D) shrinkage E) anticonsumption Answer: E 114) Consumed consumers are people who ________. A) have been "fired" as customers B) are manipulated by societal marketing techniques C) experience consumer addiction D) participate in social networking E) become commodities themselves Answer: E 115) A new shampoo advertisement on television identifies all of the wonderful benefits the consumer will enjoy when using one company's shampoo as opposed to another company's shampoo. What is this company seeking to convey in this television commercial? A) the product's time utility B) the product's distinctive competency C) the company's production orientation D) the company's marketing segmentation process E) the product's differential benefits Answer: E 116) Kao Corp., which makes Ban deodorant, invited teenage girls to make an ad that would encourage other girls to buy the product. This program is an example of ________. A) the wisdom of crowds B) the production concept C) the selling orientation D) open-source modeling E) consumer-generated content Answer: E 117) To calculate lifetime value, a company would estimate the amount of money a person would spend with the company over a lifetime and then subtract what it will cost the company to maintain this relationship. Answer: True 118) A firm has a competitive advantage when it is able to outperform the competition, providing customers with a desired benefit not provided by the competition. Answer: True 119) Differential benefits set products apart from competitors' products by providing something unique that customers want. Answer: True 120) Providing service to the customer after a purchase is not an activity associated with the value chain. Answer: False 121) According to the theory of the wisdom of crowds, companies that make some of their products available for free are actually able to generate more revenue than companies that charge for all of their products. Answer: False 122) A value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself. Answer: True 123) Why might a company try to determine the lifetime value of a customer? What must a company do to determine this information? Answer: A company must look at how much profit it expects to make from a particular customer, including each and every purchase he will make from the company now and in the future. To calculate lifetime value, the company estimates the amount the person will spend and then subtracts what it will cost to maintain this relationship. This information will help a company decide which customers should be the focus of promotional efforts and which customers should be "fired." 124) Explain how marketers are held accountable for the results of their work, including a discussion of scorecards and ROI. Answer: Marketers must prove to management that they are generating measurable value by aligning marketing activities with the firm's overall business objectives. Scorecards, which are like the marketing department's report card, are used to report how the company or brand is actually progressing in achieving various goals. Marketers assess the return on investment (ROI) by measuring how much they are spending and measuring the effects of marketing activities on the company's bottom line. 125) The Ford Motor Company sponsored "The Great American Pony Drive II" in honor of devotees of its legendary Mustang. In this example, how is the Ford Motor Company considering the lifetime value of a customer of the Mustang? Answer: Ford Motor Company would calculate how much lifetime profit it expects to make from a devoted Mustang customer minus the cost of maintaining this relationship. The cost of sponsoring "The Great American Pony Drive II" may be much less than the profits from current and future sales of the Mustang car to participating customers. 126) Why should a firm be aware of its competitors' distinctive competencies? Answer: A distinctive competence is a firm's capability that is superior to the competition. A company must be aware of its competitors' distinctive competencies in order to successfully compete in the marketplace, shaping its own distinctive competencies into differential benefits that customers desire more than they desire the benefits offered by competitors. 127) What are two competitive advantages a customer may benefit from when buying a bottle of soda from a local corner convenience store versus a chain supermarket? Answer: The customer may be able to park his car close to the door of the convenience store and make the purchase in only a few minutes. The parking lot of the chain store may require the customer to walk a distance before entering the store. The volume of customers in the supermarket may cause the purchase to take longer than the purchase at the convenience store. 128) Explain how addictive consumption is a dimension of the "dark side" of marketing. Answer: Consumer addiction is a physiological or psychological dependency on products or services. Many companies profit by providing addictive products or by selling solutions. Consumers can use any product or service to relieve some problem to the point that reliance on it becomes extreme. 129) Briefly explain how the value chain is related to competitive advantage. Answer: Every link, or activity, in the value chain is an opportunity to either remove value from or add value to the product the consumer eventually buys. A successful company creates a competitive advantage by performing one or more of the value chain activities better than its competitors. 130) ________ is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal. A) Total quality management B) Sustainability C) Return on investment D) Marketing E) The open source model Answer: D 131) The ________ is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy. A) marketing mix B) marketing plan C) value proposition D) value chain E) open source model Answer: B 132) The first phase of market planning is to ________. A) identify a target market B) calculate production costs C) develop a value chain D) determine a market position E) analyze the marketing environment Answer: E 133) Which of the following is a major marketing decision for most companies? A) the type of metrics used to calculate ROI B) how many people to employ C) the geographic layout of the factory making the product D) which products to market to which consumers without turning off other consumers E) the accounting method used to report earnings Answer: D 134) ________ is the process of thinking strategically about the big picture and where the firm and its products fit within it. A) The marketing mix B) Total quality management C) Marketing planning D) Customer relationship management E) Value proposition creation Answer: C 135) A ________ consists of all possible customers in a market regardless of the differences in their specific needs and wants. A) popular culture B) value chain C) marketing mix D) marketing concept E) mass market Answer: E 136) Which of these statements about mass marketing is true? A) A mass marketing strategy is always preferable to a target marketing strategy. B) The success of any organization's marketing efforts depends on its ability to engage in mass marketing. C) Mass marketing can be cost effective. D) Mass marketing allows marketers to develop products to satisfy the specific needs and wants of specific groups of customers. E) Automakers typically use a mass marketing strategy. Answer: C 137) A ________ is a distinctive group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. A) market segment B) popular culture C) mass market D) market mix E) market position Answer: A 138) A ________ is defined as a market segment on which an organization focuses its marketing plan and toward which it directs its marketing efforts. A) social network B) market convergence C) subculture D) value chain E) target market Answer: E 139) A market position refers to ________. A) the organization's decision to use no more than two elements of the marketing mix B) the location where the organization sells its products C) the specific means the organization uses to distribute its products D) how the target market perceives a product in relation to competitors' products E) the strategic planning and execution of the marketing mix Answer: D 140) When a firm analyzes the marketing environment, it is least likely to look at which of the following? A) the firm's current strengths B) the firm's current weaknesses C) the actions of competitors D) the state of the economy E) the cost of developing a new product Answer: E 141) Using a(n) ________ approach, a company uses a single strategy to reach all customers. A) open-source B) crowdsourcing C) mass market D) social networking E) societal marketing Answer: C 142) A catalog retailer has identified African-American professionals between the ages of thirty-five and forty-five as the group of customers within the larger market that is a potential market for its products. The retailer plans to direct its marketing efforts toward this group of consumers. The retailer has identified a ________. A) target market B) marketing mix C) product mix D) mass market E) market aggregation Answer: A 143) An organic farmer has identified three distinct groups who might be interested in his products: vegetarians, people who are concerned about chemicals in their foods, and people who consider themselves innovators and trendsetters. These three groups are examples of ________. A) marketing mixes B) market segments C) product mixes D) mass markets E) market positions Answer: B 144) There are several different sports watches for cyclists. When compared to its competitors, the Bike Nashbar watch is the least expensive. The Acumen Basic is the only one designed for older cyclists who prefer a larger display. Sports Instrument is the most comfortable of all the available watches. This describes the ________ of the three sports watches. A) marketing mixes B) mass marketing strategies C) market positions D) consumer orientations E) selling orientations Answer: C 145) When comparing itself to its competitors, Hidden Valley describes its Ranch dressing as the original. This is the ________ the manufacturer has selected for the product. A) marketing mix B) market segment C) market position D) marketing concept E) value chain Answer: C 146) The first phase of marketing planning is the development of a market position. Answer: False 147) A marketer who wants to achieve a competitive advantage over her rivals cannot use the marketing mix to achieve this goal. Answer: False 148) Write two questions that a firm would be likely to consider during the market planning stage. Answer: Answers will vary, but should reflect an understanding of the "big picture" nature of market planning. Examples: What product benefits will our customers want in the near future? What sets our firm apart from competitors? How will legal and regulatory issues affect our business? Two questions a firm might consider during the market planning stage are: 1. What are the demographics and psychographics of our target market? 2. How can we effectively position our product or service against competitors? 149) What is a market segment? Explain how an automaker might appeal to different market segments. Answer: A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. An automaker offers different car models–sedans, sports cars, SUVs, station wagons, minivans, etc.–to appeal to different segments of the car-buying market. 150) What is the difference between a mass market and a market segment? Answer: A mass market consists of all possible customers in a market regardless of their differences, while a market segment is a smaller group of customers within the mass market who are similar to each other in one or some ways and different from the others in the mass market. Test Bank for Marketing: Real People, Real Choices Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart 9780132948937, 9780135199893, 9780134292663, 9780135209929
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