STUDY GUIDE FOR MIDTERM EXAMINATIONBU270 PRINCIPLES OF MARKETING
NAME:______SCORE:______
I – Check the validity of the statement or sentence
1.Marketing is defined as producing, promoting, and selling products.
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2.A exchange cannot take place unless each party in the exchange has something that the other party values.
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3.Encyclopedia Britannica marketed full sets of encyclopedias that cost a minimum of $1,500, weighed 118 pounds and required four and a half feet of shelf space. For many years, the company had successfully sold its products door-to-door and defined its business as a book publisher. Encyclopedia Britannica had a market orientation.
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4.A marketing-oriented firm defines its business in terms of the benefits it offers to its customers.
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5.Customer value is calculated as the ratio of company profits to company costs
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6.Only a firm’s salespeople need to be customer-oriented.
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7.A firm's mission statement should answer the question, "What products do we produce best?"
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8.A marketing audit is limited to the collection and analysis of information about factors that may affect the organization as well as the identification of market opportunities and threats.
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9.The four Ps of the marketing mix are product, planning, promotion, and price.
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10.Typically, the development of the marketing mix starts with the identification of potential target markets.
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11. . Once a marketer is aware of all possible segmentation variables, choosing which variables to use is a simple, scientific process.
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12. . Gap targets young adults with its nice quality casual clothes. Baby Gap targets children from newborn to 5 years, while GapKids targets children age 6 to teens. Altogether, Gap stores us a concentrated strategy.
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13. . Ol’ Roy (the Wal-Mart store brand) dry dog food is sold at minimal cost with no promotion. Kal-Kan Foods markets Pedigree dry dog food and spends time and money to develop ads to show the relationships between dogs and their owners. The two companies' products provide the same level of nutrients to dogs. These products are not differentiated.
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II – MULTIPLE CHOICE. Identify the letter of your choice that best completes the statement or answers the question
1.Assume you are in charge of the politically-mandated process of converting the economy of a developing African nation from state-controlled to market-driven business ventures. Your ability to control _____ will most likely determine the future success of the country and its government.
a. / the cultureb. / technology
c. / marketing
d. / the competitive environment
e. / the natural environment
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2. Marketing is concerned with managing controllable variables (the marketing mix) within an uncontrollable environment. Because there has been a politically mandated process of economic change from state-controlled to market-driven, ma4. Ashley Kreeger is the director of marketing for a company that operates several assisted-living centers. The company is developing a marketing plan that must cover the next five years of business. Kreeger must be sure she considers which of the following uncontrollable factors in her plan?
a. / place or distribution factorsb. / media buying factors
c. / demographic factors
d. / inventory factors
e. / pricing for repair and maintenance services
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All but demographic factors are controllable factors.
3. Marketing managers cannot control ____, but they can at times influence it.
a. / where advertising is placedb. / the external environment
c. / the sales force
d. / the distribution strategy
e. / how products are priced
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The external environment is basically uncontrollable, but the other four answers are part of the marketing mix.
4. Many people in the United States choose to drink light beer because Americans value thin and fit bodies. In Europe, light beers have had little success because flavor is valued more highly. For international beer manufacturers, this difference illustrates how _____ influence marketing.
a. / demographyb. / competition
c. / social factors
d. / economic conditions
e. / cultural factors
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5. One of the favorite foods in Thailand is shark fin soup. A San Francisco-based organization claimed the soup made by its leading producer contained mercury poison. As a result, sales for this company plummeted. The popularity of this soup in Thailand represents a(n) ______factor while claims of mercury poisoning relate to lax enforcement of environmental protection and consumer protection regulations by the Thai government, a(n) _____ factor.
a. / economic; technologicalb. / social; technological
c. / social; political and legal
d. / competitive; economic
e. / social; technological
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6.Quaker Oats and other cereal manufacturers have developed what they call "breakfast-with-one-hand" products, which are breakfast bars and drinks that can be consumed on the way to work without leaving any mess. This type of food that can be eaten on the go is largely the result of changes in _____ factors.
a. / natural environmentalb. / demographic
c. / technological
d. / social
e. / political
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7. Ruth is a mother of two, loves to travel, is a member of a book club, enjoys jogging, likes to wear the latest fashions, and is a police officer. All of these diverse needs and interests influence her choice of the goods and services she buys. Ruth has a:
a. / component lifestyleb. / demographically-oriented lifestyle
c. / multicultural demography
d. / fragmented market orientation
e. / segmented buying process
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8. Mountain Dew markets its soft drink to members of Generation Y who love extreme sports and are risk-takers. In this case, Generation Y is considered to be Mountain Dew's:
a. / mass marketb. / environment
c. / target market
d. / market segmentation
e. / external environment
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9. Where are Older Baby Boomers most likely to spend their money?
a. / Private school education for their young children.b. / Their own college education.
c. / Home upgrades and improvement
d. / Babysitting services
e. / First-time cars
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10. Field Entertainment was given the task of distilling 75 years of Disney Magic into a two-hour show. While the task was formidable, the company described the results as multi-generational (meaning that the newly created show appeals to children, parents, and grandparents). Field Entertainment relied heavily on _____ factors to develop a new show that would be appreciated by potential audiences.
a. / technologicalb. / cultural
c. / demographic
d. / competitive
e. / legal
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11. The higher your _____, the higher your purchasing power:
a. / gross incomeb. / social class
c. / disposable income
d. / cost of living
e. / inflation index
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12 . When planning marketing strategies during times of inflation, marketers must be aware that inflation causes consumers to:
a. / purchase more goods and services to support their psychological selves, such as counseling and stress management trainingb. / consume more meals away from home
c. / buy in small quantities until inflation is over
d. / decrease their brand loyalty to products they have traditionally used
e. / put more money into savings accounts because prices are too high
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In times of inflation, consumers are more price conscious and less brand-loyal
13. The scientists at Motorola want to create Iridium, a constellation of 66 satellites that will offer telephone service anywhere on the globe. This is an example of:
a. / technical diversityb. / transactional research
c. / applied research
d. / synergistic research
e. / basic research
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14. _____ is a governmental body that has the power to prescribe mandatory safety standards for almost all products consumers use.
a. / Health and Welfare Agencyb. / Federal Trade Commission
c. / Food and Drug Administration
d. / Federal Communications Commission
e. / Consumer Product Safety Commission
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15. Which of the following statements describes how terrorism influences marketing activities?
a. / International shipping costs have decreased as the result of terrorists’ activities.b. / Concern about terrorism has caused consumers to feel insecure in their homes.
c. / Due to terrorism, the U.S. government has returned to its traditional role as guardians of the country’s safety.
d. / Terrorism has probably had the least effect on the tourism and airline industries.
e. / All of the above following statements describe how terrorism influences marketing activities.
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Scenarios
Boeing Co.
Boeing Co. has spent more than $100 million plan to build a major presence in China, complete with a major office complex, a large spare-parts facility, extra training programs for Chinese air crews, and a deal to buy fuselage sections for the 737 from local manufacturers. Asia is the fastest growing aircraft market in the world. Asian carriers have been a major part of Boeing's sales, and Boeing predicts that 40 percent of future air-traffic growth will come from Asia-Pacific travel, and it wants those passengers flying on Boeing jets. So, Boeing is jointly designing and building an American-Japanese-Chinese plane, all to lock out any European, American, or even Asian threat to its market. To keep the fate of Asian aerospace in its hands, Boeing is steadily broadening its contractual relationship with Japan's three major players, Mitsubishi Heavy Industries, Kawasaki Heavy Industries, and Fuji Heavy Industries. The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane, the 777. This strategy should ensure Boeing's dominance in Japan.
1.Refer to Boeing Co. Boeing has utilized a global vision in marketing its planes in Asia. The company realizes different countries require different strategies but that effective global marketing is a key to success. Boeing is practicing:
a. / global marketingb. / standard international marketing
c. / global marketing standardization
d. / the foreign vision
e. / international selling schemes
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2.Refer to Boeing Co. The Boeing facility in China is only one branch of this huge organization. Boeing can be called a(n):
a. / domestic traderb. / cultural trader
c. / multinational corporation
d. / export agent
e. / localized corporation
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3.Refer to Boeing Co. The new American-Japanese-Chinese plane that Boeing plans to design and build gives partial ownership to the manufacturing partners involved in the project. This is an example of:
a. / direct investmentb. / a joint venture
c. / buying-for-export agreements
d. / market groupings
e. / a contract manufacturing agreement
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4.Refer to Boeing Co. Boeing has chosen the _____ method of entering the Japanese market.
a. / dumpingb. / contract manufacturing
c. / licensing
d. / direct investment
e. / joint venture
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Boeing has entered into a contractual agreement with Japanese manufacturers.
5. Refer to Boeing Co. Boeing has chosen the _____ method of entry into the Chinese market.
a. / dumpingb. / contract manufacturing
c. / licensing
d. / direct investment
e. / joint venture
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Coca-Cola
It is almost 100 degrees outside, and Ed is on his way to the supermarket to buy groceries. His air conditioner is broken, so he is hot and thirsty. Ed notices a billboard featuring an ice-cold Coca-Cola. Ed remembers that he is out of Coke. Once in the store, Ed heads straight for the soft-drink aisle and picks up a six-pack of Coke.
1.Refer to Coca-Cola. In this case, the billboard ad is a(n):
a. / purchase outcomeb. / internal stimulus
c. / problem recognition
d. / external stimulus
e. / cognitive dissonance
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2.Refer to Coca-Cola. Ed's Coke purchase best represents which type of consumer buying decision:
a. / routine response behaviorb. / limited decision making
c. / extensive decision making
d. / situation convenience
e. / motivational response
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3.Refer to Coca-Cola. Ed knows Michael Jordan (a basketball all-star) drinks Gatorade, and he remembers he can be more like Jordan if he drinks it. Because Ed very much wants to be like Jordan he purchases Gatorade in addition to Coke. In this example, Michael Jordan is acting as a(n):
a. / purchase catalystb. / opinion leader
c. / consumer advocate
d. / dissociative reference
e. / cultural icon
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4.Refer to Coca-Cola. According to Maslow's hierarchy of needs model, which need was Ed trying to satisfy?
a. / self-actualizationb. / esteem
c. / safety
d. / social
e. / physiological
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Daycare
Fiona is considering a daycare facility for her five-week-old daughter Kate. She has been visiting daycare centers for the past two weeks and has interviewed caregivers at eight different centers. It is extremely important to Fiona that Kate be stimulated intellectually and fed according to schedule. After considering all eight daycare centers, Fiona chose PerfectCare. While she is quite pleased with her choice, she does continue to wonder if she made the correct decision.
1.Refer to Daycare. Fiona's visits to the daycare centers and interviews with the caregivers represent which step of the consumer decision process?
a. / postpurchase behaviorb. / stimulus
c. / evaluation of alternatives
d. / information rejection
e. / need recognition
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These activities best represent evaluation of alternatives.
2.Refer to Daycare. Fiona's uncertainty about whether she made the correct decision and the feelings that go along with this uncertainty are called:
a. / selective retentionb. / perceptual distortion
c. / postpurchase action
d. / cognitive dissonance
e. / routine response
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3.Refer to Daycare. Fiona spent a significant amount of time and effort in selecting the daycare center for Kate. This suggests the center is a(n) _____ product for Fiona.
a. / impulseb. / low-involvement
c. / routine response
d. / convenience
e. / high-involvement
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4. Refer to Daycare. Fiona's selection of a daycare facility represents which type of consumer buying decision?
a. / routine responseb. / limited decision making
c. / extensive decision making
d. / impulse buying
e. / motivational response
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5.Refer to Daycare. Shannon, Fiona's best friend, recommended PerfectCare because she takes her daughter there. Shannon is acting as a(n):
a. / family memberb. / opinion leader
c. / dissociative reference
d. / busybody
e. / gatekeeper
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An opinion leader is a person who influences others.
Lucent Technologies
Because AT&T Corporation wanted to become a big player in the booming market for outsourcing computer services, it set up Lucent Technologies to manage corporate clients' worldwide computer networks. Lucent Technologies assists corporations in global network and computer management by drawing on AT&T's world-wide digital network and its computer hardware and software businesses. It also relies on the expertise of technicians at Bell Laboratories.
1.Refer to Lucent Technologies. Lucent Technologies sells:
a. / consumer productsb. / business products
c. / supplies
d. / consumer and business products
e. / installations
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2.Refer to Lucent Technologies. Lucent Technologies depends on AT&T, but also has found it necessary to form cooperative partnerships with other technology, telecommunications, and software firms, such as Lotus Development. Lucent has found it necessary to form:
a. / strategic alliancesb. / relationship contracts
c. / outsourcing vendor liaisons
d. / bargaining positioning grids
e. / market groupings
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3.Refer to Lucent Technologies. First National Bank of Chicago, one of AT&T's customers, claims the new network helped the bank win a huge contract from the U.S. Treasury. For classification purposes, First National Bank would be which type of customer:
a. / producerb. / reseller
c. / government
d. / institution
e. / wholesaler
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4.Refer to Lucent Technologies. Consumers utilizing the First National Bank of Chicago to purchase U.S. Treasury Bonds will affect the demand for and use of the AT&T network computer system capabilities. This is called:
a. / joint demandb. / inelastic demand
c. / derived demand
d. / fluctuating demand
e. / elastic demand
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5.Refer to Lucent Technologies. AT&T requires its customers to purchase all the necessary technology to run the network. This requires expensive machinery that will be purchased and then depreciated over time. The machinery is classified as:
a. / processed materialsb. / accessory equipment
c. / installations
d. / supplies
e. / component parts
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Installations (major equipment) is expensive and depreciated over a long period of time.
Wrestling Merchandise
Market research has shown that 6- to 17-year-old males, 18- to 24-year-old females, and 18- to 44-year-old males are most likely to watch a televised professional wrestling event or to attend a live match. Wrestling events are regularly broadcast in 120 different countries. Merchandise licensed by World Wrestling Entertainment (formerly known as the World Wrestling Federation) can be purchased at JCPenney and Wal-Mart. Clothes for adults are used to reach markets that may not buy action figures, video games, and novelty candy, but who are still proud to sport World Wrestling Entertainment (WWE) trademarks.
1.Refer to Wrestling Merchandise. The groups identified above as strong wrestling fans can be described as:
a. / market positionsb. / market segments
c. / positionings
d. / organizational buyers
e. / microsegments
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2.Refer to Wrestling Merchandise. The marketing research revealed that _____ segmentation can be used to identify the biggest fans of professional wrestling.
a. / benefitb. / psychographic
c. / demographic
d. / geographic
e. / geodemographic
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3.Refer to Wrestling Merchandise. Since the WWE must use different methods to reach its three largest target markets, it must use:
a. / undifferentiated targetingb. / concentrated or niche targeting
c. / multisegment targeting
d. / demarketing
e. / repositioning
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4 .Refer to Wrestling Merchandise. Prior to the 1990s, professional wrestling tried to compete as a legitimate sport just like football and baseball. Now it uses the term “sports entertainment” when talking about what it is marketing to its fans. This is an example of the implementation of a _____ strategy.
a. / multisegmentb. / product differentiation
c. / undifferentiated marketing
d. / target market
e. / repositioning
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Business Division –CIS ProgramCOM-FSM National Campus