CH-11 Marketing Processes and Consumer Behavior – Business Essentials US Edition : Exam Guide

Chapter 11 Marketing Processes and Consumer Behavior 1. Product differentiation is selecting the best price at which to sell a product. Answer: False Explanation: Product differentiation is the creation of a feature or image that makes a product differ enough from existing products to attract consumers. 2. Geographic variables describe populations by identifying traits, such as age, income, gender, ethnic background, marital status, race, religion, and social class. Answer: False Explanation: Geographic variables are the geographical units, from countries to neighborhoods, that may be considered in a segmentation strategy. 3. Rational motives involve nonobjective factors and include sociability, imitation of others, and aesthetics. Answer: False Explanation: Rational motives involve the logical evaluation of product attributes: costs, quality, and usefulness. 4. The institutional market is made up of businesses that buy goods to be converted into other products or that are used up during production. Answer: False Explanation: The institutional market consists of nongovernmental organizations, such as hospitals, churches, museums, and charities, that also use supplies and equipment as well as legal, accounting, and transportation services. 5. Buzz marketing relies on television advertising to increase brand awareness. Answer: False Explanation: Buzz marketing relies on word of mouth to spread "buzz" about a particular product or idea. 6. A private brand is a brand name developed by a wholesaler or retailer for their product. Answer: True Explanation: A private brand is created when a wholesaler or retailer develops a brand name and has a manufacturer put it on a product. An example is Sears, which carries the brand of Kenmore appliances. 7. Marketing consists primarily of advertising a product or service. Answer: False Explanation: Marketing is a process of creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. 8. The formula for value is benefits divided by costs. Answer: True Explanation: Further, benefits include not only the functions of the product but also the emotional satisfaction associated with owning, experiencing, or possessing it. 9. Marketing concepts can be extended to the promotion of ideas. Answer: True Explanation: Examples include ads in theaters that remind us to respect copyrighted materials and ads that stress the advantages of avoiding fast food. 10. Economic conditions greatly influence marketing plans for product offerings. Answer: True Explanation: Economic conditions determine spending patterns by consumers, businesses, and governments. Conditions thus influence marketing plans for product offerings, as well as pricing and promotional strategies. 11. A description such as single, aged 20-34, earning $30,000 a year, is an example of a psychographic variable. Answer: False Explanation: Demographic variables identify populations by age, income, gender, ethnic background, marital status, race, religion, and social class. 12. The B2B market includes industrial, reseller, and government/institutional markets. Answer: True Explanation: Taken together, these markets do about $27 trillion in business annually—more than two times the amount done in the U.S. consumer market. 13. Sears' Craftsman Tools is an example of a private brand. Answer: True Explanation: When a wholesaler or retailer develops a brand name and has a manufacturer put it on a product, the resulting name is a private brand. 14. Packaging can serve as an in-store advertisement that makes the product attractive, displays the brand name, and identifies features and benefits. Answer: True Explanation: In addition, advances in materials have created added uses—such as the use of the paper-based material that doubles as a cooking container for Budget Gourmet dinners. 15. Companies with an existing distribution network are at a disadvantage in the global context. Answer: False Explanation: Established distribution networks are so crucial in the international context that some companies buy companies with existing networks to leverage a competitive advantage. 16. Time utility is created by a sales agreement that stipulates where products will be delivered to customers. Answer: False Explanation: Time utility creates a marketing sales agreement that stipulates WHEN products will be delivered to customers, whereas place utility creates sales agreements that stipulate WHERE products will be delivered to customers. 17. Target marketing requires dividing a market into categories of customer types or "segments." Answer: True Explanation: Some firms market products to more than one segment. 18. Psychographics cannot be changed by marketing efforts. Answer: False Explanation: Psychographics are particularly important to marketers because, unlike demographics and geographics, they can be changed by marketing efforts. For example, some companies have overcome consumer resistance by promoting the safety and desirability of using credit rather than depending solely on cash. 19. The reseller market includes farmers, manufacturers, and some retailers. Answer: False Explanation: The reseller market consists of intermediaries, including wholesalers and retailers, that buy and resell finished goods. 20. B2B sellers rarely have long-term relationships with buyers. Answer: False Explanation: In contrast, industrial situations often involve frequent and enduring buyer-seller relationships. 21. Benefits add value by providing features that increase the customer's satisfaction. Answer: False Explanation: Features are the tangible or intangible items in the value package that add benefits that increase the customer's satisfaction. 22. While watching your favorite sitcom, you see an actor holding a particular brand of beer. This is an example of product placement. Answer: True Explanation: When used in successful films and TV shows, the brand's association with famous performers is an implied celebrity endorsement. 23. What is the term for the process of creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders? A) financial planning B) controlling C) operations management D) marketing E) demographic profiling Answer: D Explanation: D) Marketing involves processes that go beyond making advertisements and promoting sales through social networks. 24. What is the term for intangible products, such as time, expertise, or an activity that can be purchased? A) industrial goods B) personal goods C) risky assets D) services E) ideas Answer: D Explanation: D) Examples of services include providing professional advice or information used in making decisions. 25. Which of the following identifies products that are dissimilar from those of competitors but can fulfill the same need? A) brand competition B) international competition C) the marketing mix D) product shift E) substitute products Answer: E Explanation: E) These products may appear to be very different but can fulfil the same need. 26. What is the term for the type of competition based on buyers' perceptions of the benefits of products offered by particular companies? A) institutional competition B) monopolistic competition C) forced competition D) perfect competition E) brand competition Answer: E Explanation: E) An example is the competition between Internet search companies Google, Yahoo, and Bing. 27. What is the term for a detailed strategy for focusing marketing efforts on consumers' needs and wants? A) marketing mix B) marketing manager C) product differentiation D) product development E) marketing plan Answer: E Explanation: E) Marketing strategy begins when a company identifies a consumer need and develops a product to meet it. 28. What is the term that encompasses a good, a service, or an idea designed to fill a consumer need? A) product B) firm C) want D) utility E) condition Answer: A Explanation: A) The conceptualization and development of new products is a constant challenge for marketers. 29. What do marketers call groups of people with similar wants and needs? A) price points B) target markets C) distribution points D) target points E) product positioning Answer: B Explanation: B) Target markets is a key concept for marketers. 30. What type of variables are lifestyles, opinions, interests, and attitudes referred to as? A) geographic variables B) demographic variables C) psychographic variables D) product use variables E) labor market variables Answer: C Explanation: C) These variables are important to marketers because they can be changed by marketing efforts. 31. What is the decision process by which customers come to purchase and consume products? A) marketing B) segmentation C) resource management D) consumer behavior E) acculturation Answer: D Explanation: D) Marketers need to be able to understand why consumers purchase one good over another. 32. What type of behavior do consumers exhibit by regularly purchasing products because they are satisfied with their performance? A) psychological influences B) need recognition C) brand loyalty D) emotional motives E) consumer activism Answer: C Explanation: C) Such people are less subject to influence and are more likely to stick with preferred brands. 33. What are the tangible and intangible qualities that a company builds into its products? A) features B) requirements C) benefits D) safety devices E) guarantees Answer: A Explanation: A) It is important to remember that features must also provide benefits. 34. What is selling the rights to place a brand name on products such as t-shirts referred to as? A) international branding B) national branding C) private branding D) regional branding E) licensed branding Answer: E Explanation: E) Marketers exploit brands for their public appeal. 35. When a wholesaler or retailer develops a brand name and has the manufacturer place that name on the product, what is that product name called? A) national brand B) private brand C) luxury brand D) licensed brand E) manufacturer brand Answer: B Explanation: B) Examples of private brands include Craftsman tools and Canyon River Blues denim clothing. 36. A product's benefits include all of the following EXCEPT which? A) the emotional satisfaction associated with owning the product B) the satisfaction associated with experiencing the product C) the time required to purchase the product D) the functions of the product E) the acceptance by a peer group Answer: C Explanation: C) Benefits include both the functions of the product as well as the emotional satisfaction associated with owning, experiencing, or possessing it. 37. What type of goods include raw materials and integrated circuits? A) substitute products B) industrial goods C) consumer goods D) marketing goods E) disposable goods Answer: B Explanation: B) Industrial goods are physical items used by companies to produce other products. 38. What type of marketing do insurance companies, airlines, investment counselors, health clinics, and public accountants typically engage in? A) personal selling B) service marketing C) industrial selling D) consumer marketing E) wholesale selling Answer: B Explanation: B) Service marketing, a major growth area in the United States, involves the sales of services to both consumer markets and industrial markets. 39. What type of marketing is a "loyalty banking" program an example of? A) industrial marketing B) relationship marketing C) social marketing D) economic marketing E) consumer marketing Answer: B Explanation: B) Relationship marketing emphasizes building lasting relationships with customers and suppliers; loyalty banking programs are one example. 40. What is data warehousing? A) a marketing strategy that creates sales agreements that stipulate product delivery B) the process of dividing a market into categories of customer types C) the study of consumer needs and wants and the way in which sellers can best meet them D) the process of collecting, storing, and retrieving data in electronic files E) a customer identification strategy that targets potential buyers Answer: D Explanation: D) The compiling and storage of data provides the raw materials from which marketers can extract information that could enable them to better know their customers and supply more of what they need or want. 41. Congress has conducted hearings on the use of cell phones while driving. What factors would this constitute in a company's external environment? A) political-legal B) sociocultural C) technological D) competitive E) demographic Answer: A Explanation: A) Political activities, both foreign and domestic, have profound effects on marketing. 42. Marketing managers often support the activities of political action committees (PACs). In doing this, which environment are they attempting to influence? A) competitive B) economic C) technological D) political-legal E) geo-demographic Answer: D Explanation: D) When companies contribute to political candidates and support the activities of PACs maintained by their respective industries, they are attempting to influence the political-legal environment. 43. A company decides to introduce a line of golf gear designed specifically for women. What environmental trend is the company responding to? A) competitive B) sociocultural C) political-legal D) economic E) technological Answer: B Explanation: B) Changes in social values encourage companies to develop and promote new products for both individual consumers and industrial consumers in a myriad of ways. 44. What kind of factor in the business environment are cell phones considered an example of? A) economic B) technological C) global D) competitive E) sociocultural Answer: B Explanation: B) New technologies create new goods and services. 45. The satellite dish and home television shopping provide examples of changes to which of the following external environmental factors that affect marketing? A) economic B) technological C) legal D) political E) competitive Answer: B Explanation: B) Both satellite dishes and home television shopping are examples of technological change. 46. What are fitness programs and drug regimens to lower cholesterol levels both an example of? A) brand competition B) marketing targets C) substitute products D) social trends E) brand extension Answer: C Explanation: C) Substitute products may not look alike, or they may seem very different from one another, but can fulfill the same need. 47. What part of the marketing mix includes communicating information about products? A) product B) promotion C) price D) place E) publicity Answer: B Explanation: B) Promotion is the most highly visible element of the marketing mix; promotion involves all of the various techniques used for communicating information about products and services. 48. Which is usually the first step in the marketing strategy? A) distribution B) product differentiation C) target markets D) pricing E) integration Answer: C Explanation: C) Selecting target markets is usually the first step in the marketing strategy. 49. Burberry is repositioning itself as a global luxury brand, such as Gucci and Louis Vuitton, and calls for luring a different type of customer. This is an example of what type of market segmentation? A) geographic B) demographic C) psychographic D) product-use E) strategic Answer: C Explanation: C) Specific lifestyles, attitudes, and interests create certain customer tastes, such as luxury brands, among consumer segments; these are psychographic variables. 50. Which of the following is the LEAST important influence on consumer behavior? A) psychological factors B) personal factors C) social factors D) technological factors E) corporate factors Answer: D Explanation: D) The influences that are most active in explaining consumers' choices and predicting future buying behaviors are psychological factors, personal influences, social influences, and cultural influences. 51. In consumer behavior, what is the name for the influences that include the "way of living" that distinguishes one large group from another and one ethnic group from another? A) psychological B) personal C) social D) domestic E) cultural Answer: E Explanation: E) Cultural influences also include subculture and social class. 52. What do consumers exhibit when they regularly purchase products because they are satisfied with the products' performance? A) aspirations B) cultural influence C) social influence D) brand loyalty E) expectations Answer: D Explanation: D) Further, such consumers are less subject to influence and tend to stick with preferred brands. 53. Reading the relevant issues of Consumer Reports prior to purchasing a product is an example of what part of the consumer buying process? A) problem recognition B) information seeking C) selecting substitutes D) need recognition E) consideration setting Answer: B Explanation: B) The search is not always extensive, but before making major purchases, most people seek information from personal sources, public sources, and experience. 54. Marketing does not stop with the sale of a product. What is the term that describes what happens after the sale? A) post purchase evaluation B) prepurchase evaluation C) rational motives D) emotional motives E) evoked set Answer: A Explanation: A) Marketers want consumers to be happy after buying products so that they are more likely to buy them again. 55. What do B2B buyer-seller situations often involve? A) frequent and enduring buyer-seller relationships B) incidental buyer-seller interactions C) buyers and sellers with limited training D) short term buyer-seller relationships E) commercial buyer-seller networks Answer: A Explanation: A) In contrast, consumer-seller relationships are often impersonal, short-lived, one-time interactions. 56. Bill is looking for an insurance policy at an affordable price. What type of good or service is he looking for? A) shopping good B) shopping service C) specialty good D) specialty service E) convenience good Answer: B Explanation: B) Shopping services (such as insurance) are more expensive and are purchased less often than convenience products. Consumers often compare brands, sometimes in different stores. They may also evaluate alternatives in terms of style, performance, color, price, and other criteria. 57. What type of good is a custom-made wedding gown classified as? A) convenience good B) shopping good C) ceremonial good D) luxury good E) specialty good Answer: E Explanation: E) A custom-made wedding gown is a specialty good, often extremely important to the consumer and expensive. Consumers of such goods decide precisely on what they want and will accept no substitutes. 58. A firm makes bookcases, bicycles, soft drinks, armored cars, and novelty dishes. What do these items make up? A) product line B) product variety C) product assortment D) product mix E) product inventory Answer: D Explanation: D) The group of products that a company makes available for sale, whether consumer, industrial, or both, is its product mix. A group of products that are closely related because they function in a similar manner is a product line. 59. What results when companies extend their horizons and identify opportunities outside existing product lines? A) disconnected product lines B) multiple product lines C) uniform product lines D) universal product lines E) tailored product lines Answer: B Explanation: B) Many marketers extend their product lines to include multiple, or diversified, product lines. Starbucks, for example, has a line of home brewing equipment, a line of supermarket products, a line of music, etc. 60. During the product life cycle, when do sales begin to climb and the product begin to show profit? A) ascending B) mature C) initial D) growth E) accelerated Answer: D Explanation: D) In the growth stage, sales start to climb rapidly if the new product attracts enough consumers. The product starts to show profit, and other firms move rapidly to introduce their own versions. 61. During the product life cycle, when do sales begin to slow down while profit levels are high? A) decline B) maturity C) introduction D) growth E) promotion Answer: B Explanation: B) Sales start to slow in the maturity stage; although the product earns its highest profit level early in this stage, increased competition eventually forces price cutting and lower profits. 62. LiveLong Company provides volunteer participants with new products to try and then asks them to share the information with their friends, family, coworkers, and others in their social network. What is this type of marketing called? A) share marketing B) buzz marketing C) viral marketing D) placement marketing E) target marketing Answer: B Explanation: B) Buzz marketing relies on word of mouth to spread "buzz" about a particular product or idea. 63. Noxzema, Prudential, and Minute Maid would be examples of which kind of brand name? A) licensed B) private C) national D) international E) convenience Answer: C Explanation: C) National brands are produced by, widely distributed by, and carry the name of the manufacturer. 64. What type of brands are Sears Craftsman tools and Kenmore appliances examples of? A) national B) licensed C) private D) global E) social Answer: C Explanation: C) When a wholesaler or retailer develops a brand name and has a manufacturer put it on a product, the resulting name is a private brand. 65. Some products can be sold abroad with virtually no changes. Which of the following is an example of such a product? A) Coca-Cola B) electric razors C) Gerber baby food D) Apple computers E) fruit juices Answer: A Explanation: A) On the other hand, a variety of products must be created with inbuilt flexibility in order to be able to be marketed internationally. 66. Little Earth Productions is a company that makes fashion accessories such as handbags. After examining shopping habits, what should they focus on for better visibility of the product for customers? A) better shipping techniques B) better in-store displays C) zero response time D) lower pricing E) distribution Answer: B Explanation: B) Better display techniques showing the products to their best advantage can increase product visibility and sales. 67. Leif designs and sells surfboards. Although his sales are declining, he decides to keep his prices constant. The marketing professionals with whom Leif consults all support his decision. Which of the following statements is LEAST likely to be true? A) Surfboards at the other shops are priced much higher. B) Leif's shop is more strategically located than the other stores are. C) The other shops' promotional materials are far superior to Leif's. D) Leif offers a much wider variety of surfboards than his competitors do. E) Leif and the marketing professionals believe that low demand will continue. Answer: E Explanation: E) Marketing professionals are well-versed in the best marketing practices. If they support Leif's decision, they must have reason to believe his business will recover. 68. Which of the following occurs between similar products and is based on buyers' perceptions of the benefits of products offered by particular companies? A) international competition B) substitute competition C) brand competition D) benefit competition E) placement competition Answer: C Explanation: C) Brand competition is based on buyers' perceptions of the benefits of products offered by particular companies. 69. Garrett is in the business of selling baseball bats. He decides to employ focus groups to determine which bats will likely be bestsellers. Which of the following groups will he be LEAST likely to invite as participants? A) players from the state's professional baseball team B) local college and high school coaches C) administrators of the local Little League baseball program D) spectators at a baseball tournament E) junior high players from the surrounding counties Answer: D Explanation: D) Spectators have an interest in baseball but are not necessarily baseball bat users. They would not provide the best feedback to inform a good decision. 70. Tamika starts a business making teddy bears and is excited to deliver the first batch to young patients. When Tamika arrives at the hospital, she learns that she has more bears than she needs. Which of the following would likely explain this? A) Tamika failed to collect primary data. B) Tamika did not interview all of the children. C) Tamika was not told that five more children had been admitted. D) Tamika conducted too much market research. E) Tamika received incorrect secondary data from the hospital. Answer: E Explanation: E) Secondary data are data that have already been collected and processed. The hospital most likely gave Tamika the wrong number of children. 71. Tamika starts a business making teddy bears and elects to use focus groups to determine whether customized bears would be well received in a hospital setting. The focus groups prove to be unhelpful in answering this question. Which of the following could NOT be a valid explanation? A) Not enough focus groups were used. B) Focus groups are not a recommended method for obtaining people's opinions. C) The people in the focus groups could not relate to a hospitalized child's experience. D) Responses from focus group members were not recorded accurately. E) The questions asked were not designed to reveal the information being sought. Answer: B Explanation: B) This statement is untrue. Focus groups are a primary data source used to solicit feedback in reference to a product or service. 72. Quinn Clothes is a successful business selling fashionable and athletic swimwear. The marketing staff has said that the company's plan to develop and market waterproof perfumes might be hindered by a lack of experience in the perfume field. Which of the following is the BEST response to that weakness? A) Hire a chemist to develop the fragrances. B) Seek product ideas from existing staff. C) Employ new graphic designers to develop a new logo. D) Ensure that the perfume can be sold in the same retail stores as the swimwear. E) Rethink the company's promotional approach to selling products. Answer: A Explanation: A) Bringing in a specialist will best help develop a good product. 73. What does the process of "positioning" involve? A) hiring only employees who have the strongest credentials B) designing a company's products to appeal to target customers C) focusing on only one component of the marketing mix D) disregarding customers' reactions to a company's products E) reorganizing employees according to seniority Answer: B Explanation: B) By definition, positioning is the process of developing a unique marketing mix that best satisfies a target market. 74. What would be the best target market for waterproof fragrances? A) male lifeguards B) college fraternity members C) Olympic ice skaters D) school-aged children who live in warm climates E) female swimmers and divers Answer: E Explanation: E) This product would best meet the needs of female (with the perfume) swimmers and divers (with the bathing suits). 75. Which of the following is the best example of an emotional motive in consumer purchasing? A) A major shoe company purchases the latest designer styles in order to please customers. B) A leather shop provides goods to local handbag makers. C) A businesswoman buys a new suit for an important presentation. D) A housewife donates unworn dresses to a resale shop. E) A group of neighborhood moms holds a free childcare seminar for new mothers. Answer: C Explanation: C) A consumer market transaction involves less sophisticated and more emotional purchase decisions made by an individual. 76. Accessing a Web site in search of magazine articles about a product before its purchase is an example of what part of the consumer buying process? A) post-purchase evaluation B) problem-solving C) information seeking D) purchasing the product E) recognizing a need Answer: C Explanation: C) The search is not always extensive, but before making major purchases, most people seek information from personal sources, public sources, and experience. 77. Which of the following is the best example of a B2B market transaction? A) A college student buys dorm furniture from an on-campus store. B) A group of teenage girls buy new clothes for the upcoming school year. C) A high-school coach borrows sports equipment from a neighboring school. D) A dentist provides free toothbrushes to patients. E) A chain of ice cream parlors regularly purchases napkins from the same supplier. Answer: E Explanation: E) Often buyers in B2B markets purchase directly from sellers, as opposed to consumer markets, where products typically go through many wholesalers before the product is delivered to the end user. 78. Which defining word or phrase below best captures the meaning of capital items? A) bulk loads B) directly used in the production process C) to the consumer within a year D) permanent E) stable Answer: D Explanation: D) Capital items are permanent goods or services; they have expected lives of more than a year and, typically, of several years. 79. Explain the difference between demographic variables and psychographic variables. Answer: Demographic variables describe populations by identifying traits, such as age, income, gender, ethnic background, marital status, race, religion, and social class. Psychographic variables are lifestyles, interests, and attitudes. Explanation: Psychographic variables are important to marketers because, unlike demographic variables, they can be changed by marketing efforts. 80. Why is product development a long and expensive process? Answer: Faced with competition and shifting consumer preferences, no firm can count on a single successful product to carry it forever. Even products that have been popular for decades need ongoing renewal. Explanation: Many firms have research and development (R&D) departments for exploring new product possibilities. 81. What are three functions of packaging? Answer: Packaging serves as an in-store advertisement, makes the product attractive, displays the brand name, identifies features and benefits, and reduces the risk of damage, breakage, or spoilage. Explanation: Packaging can also make a product more visible and therefore less easy to steal. 82. In small business, why are some new products and firms doomed at the start? Answer: Some new products and firms are doomed at the start because few consumers want or need what they have to offer. Many small businesses fail to realistically estimate market potential, and some offer new products before they have clear pictures of their target segments. Explanation: Therefore, an important component of small business success is a thorough understanding of customer needs. 83. Discuss the three categories of B2B markets. Answer: The three categories of B2B markets are industrial, reseller, and government/institutional. The industrial market includes businesses that buy goods to be converted into other products and goods that are used up during production. The reseller market consists of intermediaries, including wholesalers and retailers, who buy the finished goods and resell them. Federal, state, and local governments and institutions, which consist of nongovernmental organizations, such as hospitals, churches, museums, and charitable organizations, make up the final category of organizational markets. Explanation: The B2B market is a larger market than the U.S. consumer market. 84. How does a product mix differ from a product line? Answer: A product mix is the group of products that a firm makes available for sale. A product line is a group of similar products intended for a similar group of buyers who will use the product in similar ways. Explanation: A company will have only one product mix but may have multiple product lines. 85. How do expense items differ from capital items? Answer: Expense items are goods or services that are consumed within a year by firms producing other goods or supplying other services. Capital items are permanent goods and services that usually have expected lives of more than a year. Explanation: How these items are used determines their classification. 86. Why is speed to market so important? Answer: According to the textbook, one study reports that a product that is only three months late to market (three months behind the leader) loses 12 percent of its lifetime profit potential. At six months, it will lose 33 percent. Explanation: Another term is time compression, which captures a firm's speed in responding to consumer needs. 87. What is branding? Give an example to clarify your response. Answer: Branding is the process of using names and symbols to communicate the qualities of a particular product made by a particular producer. Examples of brands include the name Coca-Cola and the golden arches of McDonald's. Explanation: Brands are important because they signal in a succinct way the uniformity of quality of a product. 88. Why is product placement important? Answer: Product placement is effective because the message is delivered in an attractive setting that holds the consumer's interest. Explanation: Product placement is a promotional activity that can be found in movies, TV, and magazines. 89. Discuss the issues of international promotion. Answer: Occasionally, an ad campaign may be appropriate for global use. However, often U.S. promotional tactics don't succeed abroad. International marketers must be aware that cultural differences can cause negative reactions to improperly advertised products. Explanation: Product promotions must be carefully matched to local customers and cultural values. 90. Why do smaller companies have advantages over larger competitors when it comes to the distribution aspect of the marketing mix? Answer: A smaller company may be able to address customers' needs more quickly and efficiently with an added personal touch. Explanation: A small company may be able to address a consumer's needs more quickly. 91. What are target markets? Explain the role that target markets play in market segmentation. Answer: Target markets are groups of people with similar wants and needs. Target marketing requires market segmentation, which is dividing a market into categories of customer types or "segments." Explanation: Once companies identify market segments, they may adopt a variety of marketing strategies that appeal to each segment. 92. Explain how marketers identify different market segments. Answer: In identifying market segments, researchers look at a number of different influences on consumer behavior. The three most important are geographic, demographic, and psychographic variables. Geographic variables are geographical units that may be considered in developing a segmentation strategy. Demographic variables describe populations, identifying traits such as age, income, gender, etc. Psychographic variables are lifestyles, opinions, interests, and attitudes. Explanation: Two other segments include geo-demographic and behavioral segments. 93. Why is it important for a company to develop new products? Answer: To expand or diversify product lines, companies must introduce new products. Faced with competition and shifting consumer preferences, no firm can count on a single product to carry it forever. Even products that have been popular for decades need renewal. Explanation: It is estimated that it takes 50 new ideas to generate one product that finally reaches the market. Even then, only a few of these survivors become successful. 94. Describe the three types of brand names and give an example of each. Answer: Brand names may be national brands, licensed brands, or private brands. National brands are produced by, widely distributed by, and carry the name of the manufacturer. Examples of national brands include Scotch tape, Scope mouthwash, Coke, and Pepsi. Licensed brands are brand names for whose name the seller has purchased the right from an individual or organization. Examples include Dilbert, the NFL, and Ferrari. Finally, private brand names are found when a wholesaler or retailer develops a brand name and has a manufacturer place that name on the product. Examples of private brands include Sears' Craftsman tools and Kenmore appliances. Explanation: Brand names have an important function in increasing the attention of the buyer to the differences between brands of similar products. 95. Explain the elements that comprise the marketing environment. Answer: The marketing environment is comprised of everything outside of an organization's boundaries that might affect it, including the political-legal, sociocultural, technological, economic, and competitive environments. Rules, regulations, and legislation make up the political-legal environment; most industries are affected in some way by political-legal elements. The sociocultural environment includes changes in social values, consumer preferences, language, demographics, etc. The technological environment has had a profound impact on the marketing environment with the advent of new technologies that completely change our lifestyles. The economic environment includes such factors as inflation, interest rates, and recession; because they determine spending patterns by consumers, businesses, and governments, economic factors influence marketing plans for product offerings, pricing, and promotional strategies. The competitive environment encompasses all organizations that supply or provide similar products; all players in the competitive environment compete for consumers' purchasing power. 96. Describe the three types of competition faced by marketers. Answer: The three types of competition faced by marketers include substitute products, brand competition, and international competition. Substitute products may not look alike, or they may seem very different from one another but can fulfill the same need. Brand competition occurs between similar products, such as the auditing services provided by the large accounting firms of Ernst & Young and KPMG. Brand competition is based on buyers' perceptions of the benefits of products offered by particular companies. International competition matches the products of domestic marketers again those of foreign competitors. After identifying which type of competition is present, the marketer can then develop a strategy for attracting more customers. 97. Describe the elements of the marketing mix. What is their collective role? Answer: The elements of the marketing mix include product, price, promotion, and place. The product portion of the marketing mix includes goods, services, or ideas designed to fill a consumer need or want. Meeting consumer needs often means changing existing products to keep pace with emerging markets and competition; many marketers focus on differentiating their product(s) from those of competitors. Pricing a product involves the selection of the best price at which to sell the product. Prices must support a variety of costs within the organization. Further, both low- and high-price strategies can be effective in different situations. Place, or distribution, refers to the proper placement of products in the market. Place decisions—including transporting, warehousing, and inventory control—are all about getting the product from the producer to the consumer. Promotion is the most highly visible component of the marketing mix; promotion refers to the techniques for communicating information about products. Promotion involves activities surrounding advertising, sales promotions, publicity, and public relations. Collectively, the marketing mix allows a marketer to better relate to the identified target market; based on the characteristics of the target market, the marketer will "build" the marketing mix elements around the target market. 98. Describe psychological, personal, social, and cultural influences on consumer behavior. Answer: Marketers try to explain consumer choices and predict future buying behaviors based on psychological, personal, social, and cultural influences. Psychological influences include an individual's motivations, perceptions, ability to learn, and attitudes. Personal influences include lifestyle, personality, and economic status. Social influences include family, opinion leaders (people whose opinions are sought by others), and such reference groups as friends, coworkers, and professional associates. Cultural influences include culture (the way of living that distinguishes one large group from another), subculture (smaller groups, such as ethnic groups, with shared values), and social class (the cultural ranking of groups according to such criteria as background, occupation, house type, and income). 99. Explain each step in the consumer buying process. Answer: The consumer buying process begins with problem/need recognition. At this point, the consumer likely knows that there is a product or service available in the marketplace that will fulfill the problem or need. The consumer then seeks information. This process is not always extensive, but before making major purchases, most people seek information from personal sources, public sources, and experience. After seeking information, the consumer has come up with some alternatives; the next step is to evaluate those alternatives. When making a product or service choice, most consumers evaluate alternatives based on price, availabilities, guarantees, etc. A list of pros and cons is often developed for each alternative. Finally, the consumer chooses from among the alternatives when making the purchase decision. Post purchase evaluation includes the consumer's perceptions about the product or service after the purchase; at this point, the consumer feels a certain level of satisfaction or dissatisfaction with the purchase. 100. Identify the ways that small businesses can benefit from an understanding of the marketing mix. Answer: Small businesses need to understand the marketing mix, products, pricing, distribution, and promotion. Small businesses need a thorough understanding of what customers want. Small-business pricing errors usually result from a failure to estimate operating expenses accurately, but when small businesses set prices by carefully assessing costs, many earn satisfactory profits. Small-business distribution is the ability of many small businesses to attract and retain customers depending partly on the choice of location, especially for new service businesses. Small-business promotion includes holding down costs by using less expensive promotional methods, like publicity in local newspapers or identifying themselves and their products with associated groups, organizations, and events. Martin Winner, a Denver businessman, has had a successful career in marketing, starting out in retail sales and moving up through positions in industrial sales and public relations. Seeking a new challenge and hoping to move south, Martin decides to look for a new job in Texas, New Mexico, or Arizona. Martin is delighted to be hired as the Director for Marketing at Panther Shoes, a manufacturer of athletic apparel. 101. Martin realizes that he knows less about the company than he had thought. He is not sure if Panther Shoes is selling consumer or industrial products. Can you help Martin clarify that? Answer: It is possible that Panther Shoes is selling either consumer or industrial products. Most likely, they are selling their products to consumers, who are using the products for their own personal use. As such, their product would be a consumer product. However, Panther Shoes may be selling an industrial good. Industrial goods are those products sold to companies for use directly or indirectly in producing other products. If Panther Shoes are sold to sports teams for the use of their players, for example, the sale could be considered an industrial transaction. 102. When Martin suggested a relationship marketing campaign, his supervisor expressed little need for Panther Shoes to focus on such a campaign. How could Panther Shoes benefit from relationship marketing? Answer: Relationship marketing emphasizes building lasting relationships with customers and suppliers. Stronger relationships can result in greater long-term satisfaction and customer loyalty. 103. Martin has begun to look at product differentiation strategies for Panther Shoes. Explain product differentiation. Answer: Product differentiation is the creation of a feature or image that makes a product differ enough from existing products to attract consumers. 104. Panther Shoes manufacturers multiple product lines in the athletic apparel industry. How can Panther benefit from multiple product lines? Answer: Multiple product lines allow a company to grow rapidly and can help to offset the consequences of slow sales in any one product line. 105. How might economic environmental factors affect business for Panther Shoes? Answer: Inflation rates affect prices; in turn, increased prices limit consumers' purchasing power. Further, economic conditions influence marketing plans for product offerings, pricing, and promotional strategies. 106. Why is the role of the marketing manager and the culmination of the marketing plan critical for the company? Answer: The marketing manager is responsible for planning and implementing all the activities that result in the transfer of goods and services to its customers. The marketing plan is a detailed strategy for focusing marketing efforts on consumer needs and wants. 107. List five possible attributes likely to be found in the value package for Panther Shoes' top-selling shoes. Answer: Answers will vary. Examples include easy access to understandable prepurchase information, choices of color, attractive prices, ordering via the Internet, security for credit card purchasing, assurance of speedy delivery, product guarantees, and prestige of owning a pair of Panther shoes. Five possible attributes in the value package for Panther Shoes' top-selling shoes are high-quality materials, innovative design, superior comfort, advanced performance features, and excellent customer support. 108. Where would athletic shoes fit into the product life cycle? Answer: Athletic shoes would fall within the maturity stage of the product life cycle. In maturity, sales growth starts to slow as profits begin to decline and increased competition eventually forces price cutting and lower profits. Five possible attributes in the value package for Panther Shoes' top-selling shoes are comfort, durability, style, affordability, and brand reputation. 109. Martin is surprised at the narrow scope of his responsibilities and he wishes to explain to his boss that marketing is more than just advertising. Help Martin by giving a more complete definition of marketing. Answer: The American Marketing Association defines marketing as "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." 110. Martin remembers learning about the three major categories of consumer goods while in graduate school. How would shoes and athletic apparel sold by Panther be categorized? Answer: Shoes and athletic apparel are categorized as shopping goods; they are moderately expensive and purchased on a monthly or yearly basis. 111. In his first staff meeting, a heated discussion erupts over the need to develop new products. The product manager explains that they have had a loyal following of consumers and do not need to develop new products. Others disagree. How should Martin respond? Answer: Faced with competition and shifting consumer preferences, no firm can count on a product to carry it forever. Even products that have been popular for decades need renewal. Martin should encourage the product manager to begin the product development process. 112. What elements of Panther's marketing mix might change when going international? Answer: The products themselves will likely remain the same. Higher costs of transporting and selling products abroad will drive prices up. Further, Panther will benefit in distributing athletic apparel with any networks that can be built with other partners; these networks will be much different from current networks. Promotional elements will change if sociocultural differences warrant the change. DVD Heaven sells new and used DVDs, particularly to college students in large university cities. It plans to expand its business online, hoping to increase sales by offering a more convenient means of ordering for busy college students. 113. The vice president of marketing suggests opening a Facebook page for DVD Heaven, but the president argues that social media sites would not help its business. Which of the following statements, if true, would support the argument made by the president for NOT using social media sites as part of DVD Heaven's advertising strategy? A) Social media is changing so rapidly that what is relevant today may easily be outdated tomorrow. B) Search ads combined with social media campaigns lead to higher results for products than just using general search ads. C) Brands entered in social networks as topics or members of the community can build customer relations. D) Social media sites can increase buzz and word of mouth simply by conversation about a product or business. E) Social media sites provide real-time discussions that can include the latest DVDs available or recommendations for DVD purchases. Answer: A Explanation: A) Choice A would be the only statement that supports the argument of the president for not using social media advertising, because it is changing so rapidly that strategies developed today may not be relevant in the near future. Choices B, C, D, and E all would support the argument made by the vice president for using social media sites. Choice B emphasizes that combining social media and general search ads leads to better results than general search ads alone. Choices C and D indicate that social media sites increase brand recognition and customer relations. Choice E supports the vice president's argument in that real-time discussions can lead to increased buzz, resulting in increased sales. 114. The president of DVD Heaven has been talking to several other business owners, and now expresses some concerns over developing the e-commerce side of the business. The vice president argues that it is essential for continued growth, but the president argues that there are too many consumer concerns. Which of the following statements, if true, would NOT support the argument being made by the president regarding consumer concerns? A) Fraudulent businesses are being set up and run on the Internet. Many consumers would rather enter a building that houses a business they know really exists. B) Identity theft and the theft of credit card numbers can occur when ordering online. C) Privacy can be compromised on the Internet, and unethical e-businesses can track or sell sensitive information such as buying patterns. D) College students are five times more likely to order over the Internet than older adults. E) Customers like to see and feel products before ordering them. Answer: D Explanation: D) Choice D would not support the president's argument, but rather the vice president's for expanding the e-commerce side of the business. Younger adults are more comfortable with all aspects of Internet buying and selling, and since DVD Heaven caters to college students, its customers and potential customers would already be comfortable with Internet ordering. Choices A, B, C, and E would all support the president's argument about consumer Internet concerns. Fraudulent businesses, identity theft, privacy issues, and wanting to actually see and hold purchases are all consumer concerns. Penelope's Pizza, a local chain of carryout restaurants, has made the decision to expand to a national basis. It plans to open 50 Penelope's in 20 cities across the country within the next two years. In order to efficiently integrate all the tools and company resources to maximize the impact on new customers, Penelope's Pizza is considering using an integrated marketing strategy to promote a coherent national brand perception. The account manager argues that an integrated marketing strategy is the way to go, but the CEO argues that each local community is different, and the needs, values, and norms of the host cities should drive the marketing campaign. 115. Which of the following practices would support the CEO's argument? A) Penelope's Pizza decides to pursue a co-branding partnership with either Pepsi or Coke. B) Penelope's Pizza employees all must wear the same uniform. C) Penelope's corporate Web site has links to individual stores for ordering pizza online. D) All Penelope's Pizza restaurants have an art deco interior design. E) Penelope's Pizza encourages individual stores to create their own menu options and pricing structure. Answer: E Explanation: E) Allowing individual stores to create their own unique menus would not promote a coherent brand perception, particularly with multiple stores within an individual city. Choices A, B, and D: A co-branding partnership with an iconic soft drink, standardized employee uniforms, and a common interior design are all factors that could be used to promote a coherent national brand. Choice C, a Web site with local links, could be a feature of an integrated marketing strategy or a more localized approach. 116. Penelope's Pizza also wants to be at the forefront of current trends and changes in the practice of advertising. The account manager wants to focus on consumer generated advertising via YouTube, Twitter, and Facebook, whereas the CEO prefers to focus on mainstream media. Which of the following, if true, would support the position of the account manager? A) The number of television cable channels has skyrocketed in recent years. B) Over the same time, the four major television networks suffered a 20 percent decrease in viewership, leading to a reduction in advertising rates. C) The emphasis on effectiveness and accountability has lowered the production costs for a 30-second television commercial. D) Television networks are seeking to ban the feature in recording devices that allows viewers to record television shows while deleting all commercial messages. E) Young adults, under the age of 30, consume the largest amount of pizza per capita, and are the greatest users of social media. Answer: E Explanation: E) Choice E supports the argument of the account manager to focus on consumer generated advertising through social media sites. Since young males use the sites most frequently, and also eat the most pizza, the account manager is reaching a greater number of the target audience. Choices A, B, and C support the position by the CEO, by suggesting that the opportunities for mainstream media advertising have never been higher, during a time when both production and rate costs are falling. Choice D represents a long-term concern for the CEO's position if the networks lose the battle to limit commercial-skipping features, but it isn't really relevant to the current argument between the account manager and the CEO. 117. After becoming a successful national brand, Penelope's Pizza has made the decision to expand overseas and enter the global market. Using a globally integrated marketing plan, Penelope's plans to enter the pizza market in Germany, Japan, and India. The CEO wants to use an adaptation plan in the new markets, and thus offer kielbasa pizza in Germany, sushi pizza in Japan, and vegetarian pizza in India. The advertising firm recommends a standardization approach as being more cost efficient and brand identifiable. Which statement, if true, supports the CEO's argument? A) Traditionally, all three markets are slow to adapt to the idea of fast food, and prefer meals with known ingredients that are familiar to them. B) The cost of introducing new ingredients to the menu will increase the price of pizza by 15 percent. C) Marketing surveys show that the under-30 generation in each of the three countries is increasingly eager to consume American fast food as a status symbol of increasing wealth. D) The current economic slump has decreased the volume of sales for all fast foods on a global basis. E) Obtaining vendors for new pizza toppings would require the hiring of additional translators in each country. Answer: A Explanation: A) Choice A says that these three markets are unlikely to embrace a new fast food product with mostly foreign ingredients. Thus the CEO's plan—to adapt the product and the advertising to focus on cultural preferences and known ingredients that are familiar and readily available locally—makes sense. Choices B and E would support the argument made by the advertising firm for standardization, since adaptation would raise costs. Choice C also supports the advertising firm's stand, as it would emphasize fast food as sold in America, thus standardization. Choice D does not support either argument. Snazzy Sodas is known for a variety of all-natural sodas as well as its efforts toward social responsibility. The company has decided to produce a new line of energy drinks, and while it does not have the resources to promote its product widely, it can make a sizeable impact with a carefully chosen market segment. The CEO favors marketing the product primarily to young males, but the VP of Operations recommends targeting female professionals. 118. Which of the following, if true, would support the CEO's position? A) Snazzy decided that producing a line of energy drinks would be more profitable than attempting to penetrate international markets. B) Young males, as a group, consume more energy drinks than any other market segment. C) Energy drinks cost more per ounce than other popular beverages. D) Energy drink manufacturers have recently tried to associate their product with positive social causes. E) Different companies define "young" differently. Answer: B Explanation: B) The CEO wants to target young males. If young males are heavy consumers of energy drinks, Choice B, then the CEO's approach looks better. Choices A, C, and D concern the decision to produce energy drinks at all, and not the issue of which segments to target. Choice E suggests that the CEO's segment definition might be imprecise, so Choice E could only hurt the CEO's position. But we don't care about everyone's definition of "young," anyway. We just care about Snazzy Sodas' definition. 119. Which of the following, if true, would weaken the CEO's position? A) Young males have shown strong brand loyalty to the current market leader in energy drinks. B) Young males are especially likely to be opinion leaders on many lifestyle issues. C) Clothing companies typically segment more precisely than beverage companies. D) Even effective targeting does not guarantee success when it is followed by ineffective positioning. E) As compared to other groups, young males spend a high percentage of their income on discretionary purchases. Answer: A Explanation: A) The CEO wants to market to young males, but if those people are very loyal to another brand, Choice A, then marketing to them sounds like a waste of resources. Choices B and E could only strengthen the CEO's position. Choice C: Clothing companies are irrelevant. Choice D speaks to the effects of doing targeting well, but the issue here is how to target well. 120. Which of the following, if true, would most strongly support the VP of Operation's position? A) Industry-leading companies tend to target as wide a market as possible. B) Female professionals are more likely to stay with a known brand for expensive items such as cars. C) Female professionals tend to have a strongly positive opinion of Snazzy's current products. D) Young females consume more energy drinks per person than does the general population. E) Male professionals often report a lack of energy while at work. Answer: C Explanation: C) The VP of Operations wants to target female professionals. If those people already have a positive opinion of Snazzy, Choice C, then they would be more likely to try a new Snazzy product. So Choice C strengthens the argument. Choice A: This is about Snazzy, not about industry in general. In any case, Choice A works against the notion of targeting. Choice B is irrelevant because energy drinks would not qualify as an "expensive item." Choice D would be correct if it said "female professionals," but young females are a different group. Choice E suggests that male professionals might be a good target. 121. Which of the following, if true, would weaken the VP of Operation's position? A) Success in the energy drink market was an important goal mentioned in the company's annual report. B) Young males have demonstrated low awareness of many soda brands. C) Professionals tend to have more disposable income than nonprofessionals. D) Concern over social responsibility is rising across a wide variety of market segments. E) Professionals are more likely than nonprofessionals to be concerned about the long-term health effects of energy drinks. Answer: E Explanation: E) The VP of Operations wants to target female professionals. But if Choice E is true, and professionals are concerned about the health effects of energy drinks, then professionals might not buy as many energy drinks. Choice E would be even stronger if it spoke directly to female professionals, but as is, it still qualifies as a weakener by casting doubt on the "professional" part of the female professional segment. 122. Which of the following questions is LEAST relevant to Snazzy Sodas' evaluation of the desirability of the young male market segment? A) What is the percentage of young males in the general population? B) What attitudes do members of this group likely have about Snazzy Sodas? C) How does the consumption of energy drinks by young males compare to the consumption patterns of other groups? D) Would Snazzy Sodas be likely to target young males if it were producing a different product? E) Are young males likely to consider a company's reputation for social responsibility when they purchase energy drinks? Answer: D Explanation: D) Lots of issues are relevant here. Bigger segments are, in general, more desirable, Choice A. Snazzy also cares about the group's predisposition to the brand, Choice B. If they like Snazzy, they will be more likely to try a new product from the company. Choice E is similar in this regard, because Snazzy is known for social responsibility, and if young males care about social responsibility, they might like Snazzy. Choice C would tell us how much this group consumes as compared to other groups. Snazzy would want to go after regular consumers. Choice D is the irrelevant choice. The issue at hand is energy drinks, not other products. Macmoo Real Estate is beginning to use data-driven processes to determine the value that it gets from different marketing activities. Macmoo's Web site lists available properties and allows customers to request information. Macmoo tends to advertise in local newspapers and specialized real estate periodicals. The Marketing Director believes that Macmoo's traditional spring advertising campaign, which runs during the month of March, is an effective use of advertising resources. When pressed for evidence, the Marketing Director points out that revenues in March have consistently been higher than revenues in February. 123. Which of the following is assumed by the Marketing Director's argument? A) Real estate transactions can usually be completed in one month. B) The rates for advertising during the spring are lower than the rates during other times of the year. C) Other real estate companies increase the amount they spend on advertising during March. D) The spring advertising campaign is better at promoting general awareness of the Macmoo brand than it is at generating sales leads. E) The spring advertising campaign is equally effective for commercial real estate and private real estate. Answer: A Explanation: A) Revenues are higher in March, when the advertising campaign is going on, but that doesn't mean that the advertising campaign led to higher revenues. In fact, if Choice A isn't true, then the campaign couldn't have led to higher revenues. If the transactions generally take longer than one month to complete, then it would make no sense to claim that advertising in March would lead to revenue in March. That revenue would have to come in later. Choice A, therefore, must be assumed. Choice B would strengthen the case for the advertising campaign if it were true, but it doesn't need to be true in order for the argument to work. Choice C: Other real estate companies don't matter. This is about Macmoo. Choices D and E are both possible, but neither one needs to be true in order for the advertising campaign to be a good idea. 124. Which of the following, if true about the real estate industry in general, would weaken the Marketing Director's argument? A) The demand for houses is higher than it was last year. B) The supply of houses for sale is lower than it was last year. C) Sales are generally higher in March than in February. D) Sales are generally higher in April than in March. E) In February, home loan interest rates dropped. Answer: C Explanation: C) This year, sales were higher in March, but if Choice C is true, and sales are always higher in March, then it is harder to believe that the higher revenues were caused by the advertising campaign. Choice C makes it sound like normal seasonal variation is the best explanation for the March sales. Choices A and B compare this year to last year, but last year is irrelevant because the evidence compares February and March. If the Marketing Director had claimed that improved results this year demonstrate the effectiveness of the campaign, then Choices A and B would be relevant. Choice D compares March to April, but we don't know anything about the April results. Choice E would have helped February sales, which would only strengthen the argument. But since the Web site was most likely active in March as well, Choice E doesn't matter. 125. During 2010, Macmoo completed fewer real estate transactions than it did during any similar time period during the last five years. Still, the Marketing Director claims that its marketing efforts led to very positive financial results for Macmoo. Which of the following, if true, would resolve this seeming discrepancy? A) In 2010, Macmoo spent more on advertising than it did in 2009. B) In 2010, Macmoo diverted marketing efforts to support several corporate social responsibility initiatives. C) Sales projections completed in 2010 predicted even lower sales volume in 2011. D) In 2010, marketing efforts focused on sales of very expensive properties. E) In 2010, Macmoo's principal competitors cut back on their marketing expenditures. Answer: D Explanation: D) Volume isn't everything. A year with a low number of sales transactions could still be successful if the prices of the properties sold were high. Choice D, therefore, explains how the efforts could have been successful even though relatively few transactions were completed. Choices A and E would deepen the mystery by making the efforts sound less effective. Choice B sounds like a good thing to do, but it would not demonstrate that the efforts led to better financial results. Choice C says that things will get worse, but doesn't explain why. Hilltel is a U.S.-based company that sells mobile phones and other handheld devices. The company has decided to sell its products internationally, and is considering using a standardized marketing approach wherever it sells its products. 126. Hilltel's CEO thinks that having a standardized marketing strategy will enable the company to control and plan production better. Which of the following, if true about using a single marketing approach, would strengthen her case? A) It means the company will sell in the same way to countries regardless of culture. B) It allows for simplifying inventory and quality control processes. C) It means that more employees will need to be hired at the company's headquarters. D) It locks the company into one marketing strategy for the long term. E) It means that more extensive managerial oversight in sales will be needed. Answer: B Explanation: B) If inventory and quality control processes are simplified, this will probably significantly lower the company's operating costs, all other things being equal. Choices A and D indicate a disadvantage in that the company's flexibility and responsiveness to local markets and changes over time will be greatly limited. Choices C and E suggest a greater cost to the company, so they would weaken the CEO's case. 127. Hilltel's head of marketing thinks that a standardized marketing strategy will allow the company to portray a consistent global brand. Which of the following, if true about using a single marketing approach, would strengthen his case? A) The company would face more competition overseas than otherwise. B) The company's products would need to be of the most recent technology. C) The prices of the company's products will be the same everywhere in the world. D) An international marketing team would need to be hired to craft an appropriate strategy. E) The company's products could be standardized accordingly. Answer: E Explanation: E) If standardized products match best with a standardized marketing strategy, then this will allow the company to save money since they will enjoy an economy of scale from making more of the same product rather than many different customized products. More competition (Choice A) and more expensive products (Choice B) would both weaken the case for a standardized marketing approach since they make it more difficult to sell products. The case would also be weakened if the company would not be able to customize prices to whatever is most appropriate in local markets (Choice C), and a successful standardized marketing strategy would be costly and difficult to develop (Choice D). Dinasonic, an American company that manufactures and markets consumer kitchen products, is preparing to introduce its products to international markets. The company's director of marketing wants the company to adapt its marketing approach to the various markets in different countries that the company is looking to enter. He needs to defend the proposal for his recommended marketing strategy to the rest of the executive team. 128. The director of marketing argues that Dinasonic should use an adaptation strategy for its marketing because its products will need to be adapted to different markets. Which of the following, if true, would strengthen this position? A) Dinasonic's products have consistently had the most competitive prices in the U.S. market. B) For the kinds of products that Dinasonic makes, preferences for their use vary between different cultures. C) Dinasonic will not face much competition in the countries in which it plans to sell its products. D) Dinasonic will have a limited advertising budget for its international marketing efforts. E) Dinasonic has consistently gained in market share in the United States over the last several years. Answer: B Explanation: B) If Dinasonic's products will need to be adapted to different markets, then it is likely that marketing approaches adapted to those products will also be necessary. Choices A and E are not relevant to whether the company should adapt its products to different markets. Choices C and D would weaken the case that Dinasonic should adapt its products to different markets. 129. The director of marketing argues that Dinasonic should alter its marketing strategy in different countries by adapting its methods of advertising. Which of the following, if true, would support this position? A) Dinasonic has won awards for its advertising campaigns. B) Consumers in most countries are attracted to American consumer goods. C) Laws regulating advertising vary between different countries. D) Dinasonic has several sales managers experienced in international sales. E) The company is planning to subcontract some of its international sales operations. Answer: C Explanation: C) If laws regulating advertising differ between different countries, this increases the likelihood that the company will need to adapt its advertising to comply with local regulations. Choices A and B would weaken the case that Dinasonic should adapt its advertising to different markets. Choices D and E are not relevant to whether the company's advertising needs to be adapted to local markets. 130. The director of marketing argues that Dinasonic's products will need to be adapted to local markets to fit the standard of living in other countries. Which of the following, if true, would strengthen this position? A) Dinasonic plans to enter only markets in advanced economies. B) Dinasonic has some of the best marketing talent in the industry. C) Dinasonic's manufacturing processes are very cost-effective. D) None of Dinasonic's major competitors will be entering the same markets Dinasonic will. E) Many consumers in developing economies would not be able to afford Dinasonic's products. Answer: E Explanation: E) If the company wants to sell to consumers in developing economies, then its products should be adapted to what those consumers can afford. Choices A, C, and D would weaken the case that Dinasonic should adapt its products to different markets. Choice B is not relevant to whether Dinasonic's products will need to be adapted to local markets. Test Bank for Business Essentials US Edition Ronald J. Ebert, Ricky W. Griffin 9780133034028, 9780273766599, 9780136070764