MKTG strategy and policy-Test 3- Chapter 6-7 – Flashcards
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__________ refers to the strategic combination of the four basic marketing mix elements.
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The marketing program
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Most firms today compete in mature markets characterized by commoditization. In these cases, the __________ typically becomes incapable of differentiating the product offering from those of the competition.
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core product
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Although the product is at the heart of the marketing program, it is important to remember that product offerings in and of themselves have little value to customers. An offering's real value comes from:
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its ability to deliver benefits that solve a customer's problems.
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Mallory is an avid collector of antiques. In fact, she spends practically every weekend traveling to small towns and antique shops in search of unique antique treasures. For Mallory, antiques are a perfect example of a:
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specialty product.
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Which of the following is the best example of an unsought product? a. gasoline b. clothing c. antiques d. luxury products e. insurance
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insurance
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For laptop computers, processor chips, memory chips, and hard drives are examples of __________ because they are finished items that become a part of the computer after assembly.
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component parts
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Firestone carefully watches the automotive market to ascertain the demand for cars, SUVs, and trucks. Firestone does this because the demand for its products is dependent on the demand for automobiles. This situation describes __________.
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derived demand
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Why would a firm offer a deep assortment of products in its product portfolio?
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To attract a wide range of customers and market segments.
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Why would a firm offer a wide variety of products in its product portfolio?
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To diversify its risk.
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Why is the demand for most services—such as popular restaurants—extremely time-and-place dependent?
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Because customers must be present for service to be delivered.
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Which of the following IS NOT an important benefit of offering a large product portfolio? a.package differentiation b.economies of scale beliefs c.sales and distribution efficiency d.standardization e.equivalent quality
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package differentiation
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Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?
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Because services depend on people for their delivery.
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The phrase "Unused service capacity is lost forever" refers to which major challenge associated with the marketing of services?
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perishability
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To compete in the fast-growing hybrid segment, Honda introduced the Civic Hybrid with unique styling and great fuel economy. The Civic Hybrid was based on the traditional Honda Civic. Which product development strategy has Honda implemented?
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product line extension
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Assume Kia has developed a new product idea to launch a midsize pickup. Currently, Kia is developing a prototype and working on projected costs, revenues, and profit potential. Kia is currently at what stage of the new product development process?
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screening and evaluation
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Why are firms so obsessed with the pricing element of the marketing mix?
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Because the firm's pricing has a direct bearing on its ability to increase revenue.
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Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm's cost structure, they should never be the driving force behind pricing strategy. Why?
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Because different firms have different cost structures.
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__________ is defined as a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other product offerings.
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Value
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Which of the following statements is TRUE with respect to the relationship between price and revenue? a. When business is good, a price increase will increase revenue. b. When business is bad, a price increase will increase revenue. c. Price cuts must be offset by an increase in sales volume to keep the same level of revenue. d. In highly differentiated markets, price cuts will capture greater market share. e. In highly commoditized markets, price cuts will increase revenue.
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Price cuts must be offset by an increase in sales volume to keep the same level of revenue.
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Which pricing objective is associated with the phrase "charging what the market will bear"?
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market demand
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Price elasticity is defined as:
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customers' responsiveness or sensitivity to changes in price.
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Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases? a. When customers have few product choices. b. When products are highly differentiated. c. When the product is a real or a perceived necessity. d. When the total expenditure is high. e. When the product is considered to be "worth it".
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When the total expenditure is high
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The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation: a. reduces the number of perceived substitutes for a product. b. makes the product more expensive than its competitors. c. increases the quality of the product making it worth the expense. d. reduces the time and effort required to obtain the product. e. increases the just noticeable differences among competing products.
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reduces the number of perceived substitutes for a product.
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Because service capacity is perishable and service demand is highly time dependent, service firms employ yield management strategies in an effort to:
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balance price and revenue considerations with their need to fill unused capacity.
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The goal of __________ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.
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penetration pricing
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The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?
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prestige pricing
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Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.
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value-based pricing
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The Club is a local hair salon and day spa that caters to an upper-middle class clientele. Although price competition in the local area has been increasing, the owners of The Club have decided to focus their marketing efforts on quality, service, and value, and to resist the temptation to compete on price. In pursuing this non-price strategy, managers of The Club are ascribing to which of the following assumptions? a. Customers see all salons as being about the same. b. The market for salon services is very price sensitive. c. Customers of The Club are so loyal that price competition is not necessary. d. It is difficult for competitors to copy The Club's differentiating characteristics. e. The managers are ascribing to all of these assumptions.
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It is difficult for competitors to copy The Club's differentiating characteristics.
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Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as "Regularly $99, Now $49."
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reference pricing
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In business markets, __________ is used to quote prices in terms of reductions or increases based on transportation costs or the actual physical distance between the buyer and the seller.
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geographic pricing
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A __________ is an organized system of marketing institutions through which products, resources, information, funds and/or product ownership flow from the point of production to the final user.
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marketing channel
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Ensuring the availability of products in the right place in the right quantities at the right time in a cost efficient manner is the main focus of:
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physical distribution.
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The creation of an extended enterprise in the supply chain depends heavily on the ability of channel members to integrate their operations. Which of the following IS NOT a key factor in successful supply chain integration? a. trust b. interdependence c. cooperation d. mutual benefit e. coercive power
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coercive power
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The most basic benefit of marketing channels is __________ where channels reduce the number of contacts necessary to exchange products.
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contact efficiency
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In terms of marketing channel functions, which of the following statements describes the concept of discrepancy of quantity? a. Manufacturers make one or a few product(s)—customers need variety and assortment. b. Channels must make products available in convenient locations. c. Channels add value to products by standardizing the exchange process. d. Channels must provide for the storage of products for future purchase and use. e. Manufacturers produce large quantities; customers usually want only one item.
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Manufacturers produce large quantities; customers usually want only one item.
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Which member of the marketing channel has the primary responsibility of fulfilling the channel's main functions? a.manufacturers b.wholesalers c.retailers d.customers e.It does not matter.
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it does not matter.
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In the Mercedes dealer network, individual dealers are given the sole right to sell Mercedes vehicles within a defined geographic area. What type of distribution does Mercedes employ?
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exclusive distribution
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What is the most appropriate type of distribution to use when customers need the opportunity to comparison shop, or when after-sale services are important?
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selective distribution
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Many products, such as candy, soft drinks, and gum are sold via intensive distribution. However, this strategy has a major drawback. What is it?
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The manufacturer must give up a good degree of control over pricing and product display
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Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow down deliveries and postpone product availability to these resellers. What type of power is Acme wielding in the channel?
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coercive power
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Which of the following statements best describes the term "slotting allowances"? a.The amount of shelf space that a retailer grants to a specific brand or product. b.The amount of product from a specific manufacturer that a wholesaler agrees to carry. c.A fee, paid by manufacturers to retailers, to get a product placed on retail shelves. d.A fee, paid by retailers to wholesalers, to get them to carry the retailer's private label brand. e.The amount of product from a specific manufacturer that a retailer agrees to carry.
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A fee, paid by manufacturers to retailers, to get a product placed on retail shelves.
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In most marketing channels for consumer products, the balance of power has shifted to __________ due to their size and buying power.
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mass merchandise retailers
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Today, though cutting expenses is still a main factor, the desire of many firms to focus on core competencies is a driving force behind the increase in:
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outsourcing
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Hallmark is a good example of a company that uses __________ distribution as a means of offering two or more lines of the same merchandise through two or more channels
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dual
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Overall, the trends occurring in marketing channels today (growth in e-commerce, outsourcing, growth of nontraditional channels) have one major theme in common. What is that theme?
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Increasing channel efficiency by reducing waste, overhead, and other costs.
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Which of the following statements about integrated marketing communications (IMC) is FALSE? a.IMC refers to the strategic, coordinated use of promotion to create one consistent message. b.IMC takes a 360-degree view of the customer. c.The role of mass television advertising is growing more important to IMC strategy. d.IMC reduces costs and increases efficiency because it can reduce or eliminate redundancies and waste. e.The key to IMC is consistency and uniformity of message across all elements of promotion.
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The role of mass television advertising is growing more important to IMC strategy.
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To be successful, firms must move potential customers beyond mere interest in the product. Good promotion will stimulate __________ by convincing potential customers of the product's superiority and its ability to satisfy specific needs.
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desire
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In terms of the AIDA model, mass communication elements such as advertising and public relations tend to be very effective at:
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stimulating awareness of and interest in a product.
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When firms use a(n) __________ strategy, they focus their promotional efforts toward stimulating demand among final customers, who then exert pressure on the supply chain to carry the product.
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pull
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In launching its new line of power tools, Black and Decker spent a considerable amount of time and resources to educate, motivate, and compensate members of its supply chain. By investing heavily in these types of promotions, Black and Decker hopes its __________ strategy will lead to a more effective product launch.
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push
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Which of the following is perhaps the main advantage associated with the use of advertising? a.It takes little time to develop an advertising campaign. b.The total dollar layout in advertising is usually low. c.It is an extremely cost efficient way to reach a large number of people. d.It can quickly convey a large amount of technical information. e.It can be quite memorable.
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It is an extremely cost efficient way to reach a large number of people.
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In the context of IMC strategy, what is the difference between public relations and publicity?
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Publicity is more narrowly defined and focused on gaining media attention.
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Overall, what is the major disadvantage associated with the use of public relations and publicity?
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The firm has limited control over how the message will be delivered or interpreted.
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__________ is paid personal communication that attempts to inform customers about products and persuade them to purchase those products.
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Personal selling
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In today's economy, personal selling has evolved to take on elements of customer service and marketing research. Why is this the case?
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Personal selling focuses more on developing customer relationships than on generating transactions.
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Which sales force compensation system is best suited to situations where salespeople are responsible for pre- and post-sale service and sales managers want maximum control over selling expenses?
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straight salary
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Despite conventional thinking, __________ accounts for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products in grocery stores and mass-merchandise retailers.
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sales promotion
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Which of the following statements best represents the universal goal of all sales promotion activities?
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To induce product trial and purchase.
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Which of the following sales promotion methods would you recommend to a packaged goods marketer who wants to stimulate trial of a new product?
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a free sample of the product
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A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a single time is called a:
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buying allowance
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Which of the following is the best example of a brand mark? a. Honda b. Nike's swoosh c. WD-40 d. BMW e. 7-Eleven
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Nike's swoosh
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Branding strategy involves much more than developing a clever brand name or brand mark. To be truly effective, a brand should succinctly capture the total offering in a way that:
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answers a question in the customer's mind.
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What is the overall goal of effective corporate branding?
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To build and enhance the organization's reputation.
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Walmart offers many different private-label brands including Sam's Choice, Equate, and Ol' Roy. Overall, what is the primary reason that Walmart would offer these and other private-label brands?
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increased profit margin
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Best Buy offers many different manufacturer (name) brands including HP, Panasonic, Sony, and Canon. Which of the following is a primary reason that Best Buy would offer these and other manufacturer brands?
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reduced marketing costs
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Procter & Gamble is well known for its use of __________ branding because every product in P&G's portfolio has a different brand name.
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individual
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If you purchase a notebook computer from Dell, you will note several brand insignias on the outside, such as Dell, Intel, and Microsoft Windows. What type of branding strategy does this example represent?
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co-branding
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Rovio recently launched a new version of its popular Angry Birds game called "Angry Birds: Star Wars." What type of brand alliance does this represent?
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brand licensing
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When Meghan went to buy groceries, she found everything on her list except Pampers diapers. While the store had other competing brands in stock, Meghan left and drove five miles to the next store where she found the Pampers. It appears that Meghan exhibits a high degree of __________ for Pampers diapers.
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brand insistence
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While Madison was shopping for coffee makers at Target, she recognized many of the brands that were available. Although she was looking for a machine made by Mr. Coffee, she bought a coffee maker by Hamilton Beach because Target was out of all Mr. Coffee machines. What type of brand loyalty is Madison exhibiting?
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brand preference
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One way of looking at __________ is to consider the marketing and financial value associated with a brand's position in the marketplace.
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brand equity
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Which of the following IS NOT a function or potential function of packaging? a. protection b. storage c. convenience d. integration e. co-branding
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integration
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Overall, what is the difference between differentiation and positioning?
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Differentiation is about creating differences among competing products, while positioning is about creating a mental image in consumers' minds.
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As a tool of positioning strategy, perceptual maps illustrate two basic issues. First, they indicate products/brands that are similar in terms of relative mental position. Second, they illustrate:
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voids in the current mindscape for a product category.
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Without a doubt, the most important tool of differentiation is:
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the brand
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With respect to product descriptors, the product's __________ communicate(s) how the product behaves, hopefully in a fashion that is distinctive and appealing to customers.
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advantages
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One of the most common marketing goals during the introduction stage of the product life cycle is to:
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engage in customer education activities.
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Which stage of the product life cycle has (1) establishing a strong, defensible market position, and (2) achieving financial objectives that repay investment as its main priorities?
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Growth
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During the maturity stage of the product life cycle, a firm has four general goals that can be pursued. Which of the following IS NOT one of these options? a.divest the product b.generate cash flow c.steal market share d.hold market share e.increase share of customer
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divest the product
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Firms using the __________ approach during the decline stage of the product life cycle will gradually reduce marketing expenditures and use a less resource-intensive marketing mix.
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harvesting
