question

Which of the following is an excellent market-based performance metric and barometer of future revenues and profits?

answer

a. customer satisfaction

question

Which of the following is NOT one of the benefits of a strong customer focus?

answer

b. can charge higher prices than competitors

question

Which of the following is NOT characteristic of a company with a strong market orientation?

answer

d. They have a strong internal focus.

question

A business determines that 75% of its customers are satisfied. This business also learns that 80% of a leading competitor's customers are satisfied. If this business implements a program to reach 80% customer satisfaction, this is called _____.

answer

c. managing to the averages

question

The first priority of market-based management should be _____.

answer

a. to keep good customers

question

The average life expectancy of a customer for a company with 75% customer retention is _____.

answer

d. 4 years

question

Sally shopped at Dillard's Department store for two years but stopped because she was dissatisfied and started shopping at Parisian's instead. Since Sally was a profitable customer for Dillard's, the store conducted research to learn the reasons for customer dissatisfaction. After conducting research, Dillard's rectified some of the problems that had dissatisfied customers and sent Sally an invitation and a $10 gift certificate to encourage her to come back. To Dillard's, Sally is a(n) _____.

answer

d. win-back customer

question

Time Works, Inc. incurs $400 in variable costs and $60 in marketing expenses for each $800 in sales revenue generated by a retained customer. If there are 150,000 retained customers, what is Time Works, Inc.'s net marketing contribution from these customers?

answer

c. $51,000,000

question

_____ allow market-based businesses to take corrective action before customers switch their purchases to a competitor.

answer

b. In-process market metrics

question

Net marketing contribution _____.

answer

a. separates marketing and sales expenses from overall fixed operating expenses

question

In-process market metrics are particularly important because _____.

answer

b. they are also leading indicators of financial performance

question

Sam is examining his company's financial performance measures. Which of the following would be on the list?

answer

e. marketing and sales expenses

question

Net marketing contribution is equal to _____.

answer

c. (sales revenues) - (cost of goods sold) - (marketing and sales expenses)

question

What is the marketing return on sales (Marketing ROS) for a product line that generates $20 million in sales revenues with cost of goods sold equal to $12 million, marketing and sales expenses equal to $2 million, and other operating expenses equal to $2 million?

answer

b. 30%

question

Overton Enterprises sells widgets to a marketplace where total demand is 12 million. Overton's market share is 12 ½ percent; the selling price per widget is $40 and the variable costs per widget are $25. Overton spends $7 million on marketing expenses. What is Overton Enterprises's net marketing contribution?

answer

b. $15.5 million

question

Some of John's friends consider him an expert on electronic products such as digital video recorders. He purchased one of these products years before any of his friends did, and he paid four times more for this product than they did. He wanted the benefits of this product and was not concerned that his friends thought he was foolish to buy one when they first came out on the market. John is considered to be a _____ customer.

answer

b. lead

question

Awareness does not only refer to product awareness, but also to _____.

answer

e. complete comprehension of benefits

question

In general, the customers who make up the early market are all of the following EXCEPT _____.

answer

c. more likely to demand customer service

question

The stronger the benefits ____ and the more ____ the price, the greater the customer value created by the product and the faster the rate of customer market entry.

answer

c. advantages; affordable

question

Which of the following is NOT a fundamental force that captures the shape of the market growth curve and the rate of market growth?

answer

c. the number of customers who would buy the product if they knew it was available and accurately understood its benefits

question

The number of customers who have entered a market at a certain point in time is known as _____.

answer

b. market penetration

question

A recent Consumer Reports study analyzed toasters and found that the average performance rating for all toasters tested was 69 with an average price of $33. Krups is a brand of toaster that sells for $32 and received an overall performance rating of 70. What is Krups's relative price against the other toasters tested?

answer

c. 97

question

Consumers can purchase inkjet printers for as little as $30. However, the price of replacement ink cartridges can be as much or more than the purchase price of the printer. This is part of the _____ of using an inkjet printer.

answer

c. usage costs

question

Sony's microwave achieved a relative performance rating of 119 relative to other microwaves tested. Its relative price score was 87. This means that according to this test, Sony provides _____.

answer

e. above-average performance with below-average prices

question

Which of the following is NOT true regarding lead users?

answer

c. They are always part of the newest user set.

question

Customer value is determined by _____ in the product category.

answer

a. subtracting relative price from relative performance

question

Companies seeking ____ innovations need more than incremental product improvements that come from lead user analysis.

answer

b. discontinuous

question

Which of the following in NOT a variable in determining value for a channel intermediary?

answer

d. product warranty

question

In delivering customer value, which of the following is least likely to play a part?

answer

c. promotion benefits

question

A study of gas station customers revealed that there are five kinds of gas buyers, each a little different and each differently profitable. If BP - Circle K gas and convenience stores focused their attention on the most profitable three segments, this would be an example of a(n) _____.

answer

d. multi-segment strategy

question

Carla has determined that there are meaningful differences in customer needs within a specific segment that are not being met. What market segmentation strategy would be appropriate for Carla to use to capitalize on this opportunity?

answer

c. sub-segment strategy

question

Which of the following is NOT a common measure of a market segment's attractiveness?

answer

b. net marketing contribution

question

Which of the following is NOT part of a business' culture?

answer

c. frequency of purchase

question

The first level of customer relationship marketing is a _____ strategy that recognizes individual customers by name and buying behavior.

answer

a. mass-personalization

question

Since most large corporations focus on the mass market, smaller firms might profitably choose the _____.

answer

c. small segment strategy

question

Which is NOT used by businesses to create additional customer value?

answer

e. All of the above are used by businesses to create additional customer value.

question

Which of the following is most likely to be a barrier to exit?

answer

b. specialized assets

question

Which of the following tactics can be used in implementing an oblique strategy?

answer

e. all of the above

question

A larger production volume allows for production and purchasing economies that lower the unit cost of a product producing a _____ effect.

answer

a. scale

question

Which of the following is TRUE regarding an oblique strategy?

answer

b. It leverages a knowledge advantage with respect to customers and competitors.

question

Which of the following behaviors might be exhibited by a competitor under pressure to improve profits/cash flow?

answer

d. tightening the terms of sale and payment conditions

question

Which of the following is an industry force that shapes competitive position and profitability?

answer

d. market entry/exit

question

A business that dominates markets with a relative advantage in distribution, sales coverage, or marketing communications can control (and often block) market access, creating a source of competitive advantage. Which source of competitive advantage is this?

answer

c. marketing advantage

question

As the sales force is given more products to sell to the same customers, a _____ effect is created.

answer

d. marketing cost scope

question

The technique used to capture customer perceptions of competing products and services is known as _____.

answer

b. perceptual mapping

question

What are the two levels of diversification?

answer

b. product and market

question

Which strategy often occurs in the late stages of growth and mature stages of the product life cycle when growth potential is limited and competitive position is set?

answer

a. Optimize Position

question

Defensive portfolio strategies are most likely to occur in _____ markets with _____ levels of competitive advantage or in _____ markets with _____ levels of competitive advantage.

answer

b. attractive; strong; unattractive; weak

question

The three dimensions of market attractiveness are _____.

answer

c. market forces, competitive environment and market access

question

The first step in the _____ process is a careful assessment of current business performance, market attractiveness and competitive position for each product-market a business wishes to consider over a 3- to 5-year planning horizon.

answer

c. strategic market planning

question

Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell's Marketing ROS?

answer

b. 10%

question

Mercedes has selectively invested to strengthen its competition position in the SUV segment of the automotive market, which is growing in market attractiveness. What strategy is Mercedes using?

answer

d. Improve Position

question

The _____ is equal to current market demand divided by market potential.

answer

b. market development index (MDI)

question

Which type of strategic market plan is most appropriate for businesses operating in an unattractive market?

answer

b. defensive

question

_____ emulate the dominant design and enter the market after letting the pioneer invest in developing the technology, establishing the design standard and initiating market development.

answer

d. Early followers

question

Constraints due to price, use compatibility and availability create a large _____ potential for many products.

answer

c. untapped new market

question

Which of the following is NOT a way to implement a new market entry strategy?

answer

d. expand market demand

question

Tony Hawk's skateboard equipment company wants to grow financially, but decides that the market for skateboards and gear is fairly saturated. Hawk decides to expand to snowboards, where he figures his brands will have credibility and the market is not as saturated. This type of strategy is called _____.

answer

b. Enter Related New Markets

question

Sony found its profit margins were shrinking in consumer electronics as prices eroded faster than manufacturing costs could be lowered. To address this problem and restore margins to more acceptable levels, Sony examined its cost structure closely and identified a number of areas where costs could be cut including standardizing parts, reducing material costs, reducing costs of labor and adding more technology to its manufacturing processes. Which offensive strategy did Sony implement?

answer

e. Lower Costs/Improve Marketing Productivity

question

Harley-Davidson derives 77% of its sales from the sale of motorcycles. The other 23% is a result of increased customer purchases of clothing, parts and accessories. The incremental sales of related products have much higher margins, build customer loyalty and enhance their brand awareness and brand equity as wearers of Harley-Davidson merchandise communicate their brand name. Which offensive strategy is Harley-Davidson pursuing?

answer

b. Grow Revenue per Customer

question

The first step in optimizing net marketing contribution is optimal management of _____.

answer

b. margin-volume

question

In the case of the Monetize, Harvest and Divest defensive strategies, each strategy is designed to _____.

answer

a. maximize immediate cash flow

question

Which core defensive strategy is appropriate for a business with a very strong competitive advantage operating in a very attractive market?

answer

d. Protect

question

When profiling the average follower (number two share) business that has achieved above-average profitability and the average follower business with below-average profit performance, it was found that, compared to followers with below-average profits, profitable share followers _____.

answer

e. invest more in research and development as a percentage of sales

question

Which strategy would be used if a business is losing money in a given market and decides to pursue a quick market exit?

answer

c. Divest

question

Which of the following is the strategic objective of the Optimize Position defensive core strategy?

answer

b. maximize profits

question

Which of the following is the strategic objective of the Monetize, Harvest and Divest defensive core strategies?

answer

c. cash flow

question

In general, businesses in high-share positions in growing or mature markets will use which type of strategic market plans to maintain cash flow that supports short-run profit performance and shareholder value?

answer

b. defensive

question

Which of the following is a type of strategy to implement a Monetize, Harvest, or Divest defensive core strategy?

answer

d. Manage for Cash Flow

question

Which of the following is a type of strategy to implement a Protect Position defensive core strategy?

answer

a. Build Customer Retention

question

Which factors influence a channel system's competitive advantage?

answer

a. sale force size, sales force productivity, and/or share of distributor outlets

question

Under what conditions are mixed channel systems particularly important?

answer

c. when products are fairly technical and localized availability and service are important

question

Which is NOT a function of a full service wholesaler?

answer

d. production

question

The choice and management of marketing channels determines the service quality and the efficiency with which end-user customers are served, which impacts the _____ area of performance.

answer

a. customer value

question

Which of the following might be included in a direct channel system?

answer

b. brokers

question

Solutions "R" Us is a business that purchases computers, printers, modems, fax machines, software and telecommunications equipment from several manufacturers and resells them as complete (bundled) customized systems to small businesses to meet their specific needs. What type of channel intermediary is Solutions "R" Us?

answer

b. value-added retailer

question

Arm & Hammer Peroxicare brand of toothpaste, which is manufactured by Church & Dwight, Co., is an example of using a _____ branding strategy.

answer

c. brand and sub-brand name

question

Gardenburger is a company that manufacturers meatless products and markets its core brand as the Original. Gardenburger has since come out with Gardenburger Flame Grilled and Gardenburger Santa Fe offerings. This is an example of _____.

answer

a. vertical brand-line extensions

question

Web portals Explorer, Magellan, Navigator and Safari are examples of names created to subtly communicate the experience of surfing the Web and are examples of _____ names.

answer

b. experiential

question

A(n) _____ brand is the core product of a business, the most visible embodiment of the brand name.

answer

d. umbrella

question

Which of the following is important in the area of branding and brand management strategies?

answer

d. brand identity

question

Brand awareness, market leadership, reputation for quality, brand relevance and brand loyalty are considered to be _____.

answer

b. brand assets

question

The goal of a(n) _____ is to create a product-line position that is attractive to target customers and creates a good source of cash flow for the business.

answer

c. positioning strategy

question

Which of the following is a marketing effort factor influencing a business' market share?

answer

e. retailing and merchandising

question

Which of the following is a favorable condition for implementing a penetration pricing strategy?

answer

a. price-sensitive customers

question

All of the following are non-price life cycle costs of a product EXCEPT _____.

answer

e. retail costs

question

Total contribution minus fixed expenses, marketing expenses and operating expenses equals _____.

answer

c. operating income

question

A primary goal of _____ pricing is to maintain a strong business-to-business relationship even when market conditions in an industry change.

answer

b. strategic-account

question

Which of the following pricing methods is likely to be used later than the others in the product life cycle?

answer

a. plus-one pricing

question

Kawasaki sells motorcycles at relatively lower prices than the competition, even though the bikes it produces are the virtual equals of competitive products. This price edge could be considered what type of pricing method?

answer

b. plus-one pricing

question

Which type of cost-based pricing approach is used in markets where there is little or no product differentiation, bidders are prequalified and bids must meet product specifications and delivery dates in order to be considered? Of those meeting the required specifications, suppliers are selected on the basis of the lowest price.

answer

d. competitive bid pricing

question

A measure used to assess the responsiveness of consumers to advertising expenditures is known as _____.

answer

c. advertising elasticity

question

The three fundamental marketing communications objectives are _____.

answer

c. build awareness, reinforce the message and stimulate action

question

The idea that the advertising effort made in a given period will produce some additional sales response in subsequent sales periods is known as the _____.

answer

c. advertising carryover effect

question

Which of the following is an objective associated with pull type communications?

answer

d. reduced search costs

question

The objectives of a _____ marketing communication are to build awareness, attraction, and loyalty and to reduce search costs for consumers.

answer

b. pull

question

Which of the following statements is FALSE?

answer

c. A business needs to use as many exposures as it can afford because the required level of frequency is infinite

question

If advertising elasticity is equal to 0.35, this means that for every one percent change in advertising expenditures, there will be an estimated _____ percent change in volume sold.

answer

c. 0.35

question

Billabong clothing expects that with its short-run advertising elasticity of 0.22, it can increase sales volume by 160,000 units in the first time period by boosting ad expenditures by 20%. If there is a 0.50 carryover effect, the total sales effect of this ad spending is _____ units.

answer

e. 320,000

question

If a retailer buys around 80% of its products for resale at promotional prices, the retailer is likely _____.

answer

d. forward buying

question

The market share index is an indicator of _____.

answer

what market share should be given certain expected levels of market performance

question

In the early stages of the product life cycle, the marketing and sales expense is greater than gross profits because volumes are _____.

answer

very small

question

In smaller towns, consumers have to travel long distances to find acceptable choices of goods such as clothing and furniture. This is an example of lack of _____ limiting the maximum number of potential customers in smaller towns.

answer

availability

question

New customers will be hard to find, once a market reaches ____.

answer

saturation

question

The market in which a business competes for target customers is known as a _____.

answer

served market

question

Harley-Davidson Motor Company sends consultants to biker rallies to discover how their products are used and modified. Recent visits found that bikers were seeking items, such as bolt-on chrome products, horsepower performance enhancers and improved braking systems. This field research is an example of studying _____.

answer

lead users

question

Which of the following is NOT considered when determining an overall measure of perceived customer benefits?

answer

relative price

question

Which of the following is NOT a source of life cycle costs that create economic value for a customer?

answer

transaction cost

question

A Value Map plots _____ on one axis against _____ on the other axis.

answer

relative price and relative performance

question

John is a small business owner who has a master's degree in business, uses sophisticated computer systems to assist in the management of his business and has a passion to grow his business. John is a _____.

answer

growth-oriented entrepreneur

question

After grouping customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem, the next step in a needs-based market segmentation process is to _____.

answer

determine the overall attractiveness of a segment

question

_____ forces created by differences in values, attitudes and interests can contribute to differences in consumer needs.

answer

Lifestyle

question

At the core of customer relationship marketing is _____.

answer

database marketing

question

_____ is focused more on what happens after a customer is acquired in an effort to build a customer relationship that benefits both the customer and the company.

answer

customer relationship marketing

question

Which of the following would NOT be considered a customer touch point?

answer

television ads

question

If a market-based business with a strong market orientation is gathering competitor intelligence all the time and, as a result, has continuously evolving competitor profiles from which to evaluate its own competitiveness and competitive advantages, it is engaging in

answer

competitor analysis

question

Firms with partial intelligence with respect to customers or competitors are likely to employ _____.

answer

reactive strategies

question

Political barriers, technology or low-cost manufacturing, and high expenditures for advertising, R&D, and sale forces are all examples of _____.

answer

barriers to entry

question

For a source of relative advantage to be considered a competitive advantage, it requires _____. a. that the area of relative advantage be meaningful to target customers b.that the relative advantage be sustainable c.that the relative advantage be based on a low cost advantage d.A and B above e.A, B and C above

answer

A and B above

question

If a business is a large purchaser of a commodity product (less important to the buyer) and is in an industry in which switching costs are low, supplier power is generally _____.

answer

low

question

Luscious Lip's market share should have been 8% in the lipstick market, but owing to a variety of other factors, its actual market share was only 5%. Furthermore, it was estimated that the business' market share index potential would be 15% if the business achieved the desired level of customer response along the share development path. What is Luscious Lip's Share Development Index (SDI)? a.20 b.53.3 c.62.5 d. 160 e. 3

answer

b.53.3

question

In general, the customers who make up the early market are all of the following EXCEPT _____. Selected Answer: a. more knowledgeable b. less price sensitive c. more likely to demand customer service d. less dependent on what others do or think e. critical to a company's early success

answer

c. more likely to demand customer service

question

In the early stages of the product life cycle, the marketing and sales expense is greater than gross profits because volumes are _____. a. very small b. in the growth stage c. very large d. near peak levels e. declining

answer

a. very small

question

What is the first step in developing a good estimate of sales volume? a. develop a good estimate of market demand b. determine which stage of the product life cycle the product is in c. determine the product life cycle profitability index d. determine the share development path e. determine market share

answer

a. develop a good estimate of market demand

question

For a new market to move from the early market to the mainstream market requires the development of _____. a. innovative solutions b. unique features c. emerging solutions d. complete solutions e. more products

answer

d. complete solutions

question

Suppose the benchmark competitive product has a price of $300, costs $200 to install, and averages $500 in usage and maintenance costs. Your product is priced at $400, costs $100 to install, and averages $400 in usage and maintenance costs. In this situation, the economic value of your product over the benchmark competitive product is _____. a. -$100 b. $0 c.$100 d. $125 e. $200

answer

c.$100

question

A relative measure of performance can be created by _____. a. dividing the overall rating of a product's performance by the overall average performance rating for all products analyzed b. dividing the overall rating of a product's performance by the rating of the top-performing brand c. dividing the overall rating of a product's performance by its price d. dividing the overall rating of a product's performance by the average price for products in that product category e. dividing a measure of the product's benefits by the overall measure of all product's in that category

answer

a. dividing the overall rating of a product's performance by the overall average performance rating for all products analyzed

question

Automobile paint and body shops use materials that are considered environmental hazards that are subject to several requirements regarding its disposal. As part of the cost of repair, customers getting their car repaired are assessed a $1.00 hazardous material handling fee. This is assessed to reduce the auto shop's _____. a. usage costs b. acquisition costs c. maintenance costs d. ownership costs e. disposal costs

answer

e. disposal costs

question

Using _____ analysis, a business can more accurately determine what customers value when they make product choices involving several alternative product-price configurations. a. conjoint b. regression c. empathic d. focus group e. discovery

answer

a. conjoint

question

Dell Computers allows each customer to build a custom product to meet his or her specific needs, personal constraints and price considerations. By doing so, Dell also obtains important information about which features customers prefer, how preferences differ across demographic market segments and how they change over time. Dell is using which type of customer relationship marketing strategy? a. mass-personalization b. mass-customization c. customer relationship management d. sub-segment e. multi-segment

answer

b. mass-customization

question

Honda motor company started selling small (125-250 cc engines) motorcycles in the U.S. in the 1960s. Since then, Honda has steadily moved up in numbers of models and engine displacement sizes. In 2000, for example, Honda introduced a V-Twin cruiser model that sported an 1800 cc engine. This movement up the scale is which type of market segmentation strategy? a. step-up segment strategy b. adjacent segment strategy c. small segment strategy d. niche segment strategy e. sub-segment strategy

answer

b. adjacent segment strategy

question

Customer familiarity, channel access and company fit are all measures of the _____ assessment of a segment's attractiveness. a. competitive intensity b. market access c. market growth d. profitability e. feasibility

answer

b. market access

question

Market size, growth rate and market potential are all measures of the _____ assessment of a segment's attractiveness. a. competitive intensity b. market access c. market growth d. profitability e. feasibility

answer

c. market growth

question

Which of the following is NOT a public and readily available source of competitor intelligence? a. dealers b. trade press c. industry consultants d. government documents e. All of the above are public and readily available sources of competitor intelligence.

answer

e. All of the above are public and readily available sources of competitor intelligence.

question

Which of the following behavior might be exhibited by competitors that lack marketing leadership/market focus? a. frequently cutting prices to increase volume b. reducing advertising and not attending trade shows c. tightening the terms of sale and payment conditions d. pay sales people to collect unpaid bills e. cutting investment in research and development

answer

a. frequently cutting prices to increase volume

question

Which type of portfolio strategy is less likely to generate significant sales revenue growth but are critical sources of short-run cash flow and profit performance?

answer

Defensive

question

Which of the following is TRUE? a. Offensive strategic market plans require investment for growth, which limits long-run profit performance, but does not limit sales revenue. b. Defensive strategic market plans promote short-run profit performance but are not that effective in growing sales revenue. c. In the long run, a defensive-oriented market strategy will shift from an offensive strategic market plan to a growth-oriented plan. d.Offensive strategic market plans are geared to deliver above-average performance in the areas of sales growth, share position, and improved short-run profits. e.Defensive strategic market plans are not geared towards the protection of market share.

answer

b. Defensive strategic market plans promote short-run profit performance but are not that effective in growing sales revenue.

question

The sum of the weighted competitive advantage scores for differentiation advantage, cost advantage and marketing advantage is known as the _____.

answer

Competitive Position Index

question

The three dimensions of competitive position are _____.

answer

differentiation position, cost position and marketing position

question

Which strategy would be appropriate for a business with a very high competitive advantage operating in a highly attractive market?

answer

Protect Position

question

Bob is performing a careful assessment of current business performance, market attractiveness and competitive position for each product-market his business wishes to consider over a 3- to 5-year planning horizon. Bob is performing a _____ process.

answer

Strategic Marketing Planning

question

Which of the following is an advantage of entering unrelated new markets?

answer

reduced market dependency

question

With few, if any, competitors in an untapped new market, a business has the opportunity to pioneer a portion of the market largely ignored by competitors. This is known as _____.

answer

first-mover advantage

question

Which of the following is NOT a fundamental reason why businesses examine growth opportunities outside the existing markets they serve?

answer

Their share development index is too low.

question

A business with a share development index equal to 35 means _____.

answer

that the business has achieved only 35 percent of its potential market share

question

Coca-Cola is still seeking to grow market share by entering the $1 billion energy drinks market. Which type new market strategy is this?

answer

Enter Related New Markets

question

With demand in the under $1,000 personal computer segment growing faster than in any other segment, Intel responded with a new product, the Celeron chip, designed for the price-performance needs of the segment. Which offensive strategy is Intel pursuing?

answer

Enter New-Market Segments

question

The goal of a monetize strategy is to _____.

answer

extract the maximum short-run cash flow from the market

question

Profitable high-share businesses and profitable low-share businesses have which area of performance in common?

answer

relative product quality

question

Which defensive strategy operates with minimal market resources and typically low prices?

answer

Monetize

question

Customer Value Equals

answer

relative benefits minus relative price

question

Which defensive strategy requires careful margin management and efficient use of marketing resources?

answer

Maximize Net Marketing Contribution

question

Which is NOT a factor that a business second in market share needs to consider before deciding whether to challenge the leader with an offensive share penetration strategy or to protect its share position and maximize the profits that can be extracted from its current share

answer

the number of competitors in the market

question

Which type of business can build profits with a defensive strategy to protect share while building customer retention? a. high-share market leader b. share follower c. low-share niche business d. A and B above e. A, B and C above

answer

e. A, B and C above

question

When additional profits can be made with a slow exit from a market, a _____ strategy can be a good source of short-run profits.

answer

Harvest

question

Which defensive strategy would be most appropriate when there are not sufficient resources to invest to protect the current share position or when greater levels of profitability can be derived from a narrower, more selective choice of target customers?

answer

Reduce Market Focus

question

Low levels of ad exposure occur because of

answer

poor media selection

question

To reach target consumers effectively a business has to have a good understanding of their

answer

Media Habits

question

Product positioning starts with target consumers NOT

answer

Company engineers or product managers

question

Original equipment manufacturers

answer

buy components products from manufacturers to incorporate into their manufactured products

question

To determine if a channel system is visible a business has to consider which of the following benefits with respects to a customers service needs and expectations

answer

availability/delivery

question

Why might a business use a combination of direct, indirect and mixed channel systems

answer

to reach different target market cost effectively and to deliver the service

question

The service quality dimension of __________ relates to service obsession to get it right when things go wrong.

answer

responsiveness

question

Which is NOT an element of the brand and product line strategies step of developing product positioning strategies?

answer

Product and/or service differentiation

question

_____ buy component products from manufacturers to incorporate into their manufactured products.

answer

Original equipment manufacturers

question

To determine if a channel system is viable, a business has to consider which of the following benefits with respect to a customer's service needs and expectations?

answer

availability/delivery

question

If there are 10 manufacturers and 200 retailers, and each manufacturer has 12 interactions per year with each retailer at a cost of $100 per transaction, the total transaction cost of doing business through this channel method is _____.

answer

$2,000

question

Procter & Gamble has over 10 brands of laundry detergent, each with a unique focus and product-positioning strategy. Buyers would not know that Procter & Gamble is the manufacturer of a specific brand unless they looked closely at the small print on the package. This is an example of using a _____ branding strategy.

answer

brand name only

question

When customers walk into Moe's, a southwest franchised grill, they are greeted by the employees yelling, "Welcome to Moe's!" This is best an example of a service quality _____.

answer

emotional enhancer

question

The purpose of a ________________is to attract more customers and also allow existing customers to trade up to higher quality higher price products.

answer

Expanded line products

question

The steps in developing a __________is to define the desire product positioning and value proposition for a specific target market.

answer

Brand identity

question

Within the dimensions of product quality which of the following is a "quality killer"?

answer

conformance

question

Which of the following is a cost based approach to pricing?

answer

floor pricing

question

The value is used pricing method assesses a product ___________ value when determining price.

answer

economic

question

Which of the following is part of the ease of switching index?

answer

Product differentiation

question

Which is not favorable condition for implementing skim pricing?

answer

no or limited differentiation

question

Which pricing approach is done in response to different groups of customers and their different needs and price sensitivities?

answer

segment pricing

question

Jose's Mexican restaurant has a margin per unit of $2.00 for a typical dinner offering on his menu, total fixed expenses of $10,000, and average variable costs of $3.00 per dinner. How many dinners must Jose sell to break even?

answer

$5,000

question

Building awareness, comprehension, intentions and action are major steps upward in the _____.

answer

hierarchy of customer response

question

Which of the following is an objective associated with push type communications?

answer

greater shelf space

question

The objective of ________ market communication are to build awareness, attraction, and loyalty and reduce search cost for consumers.

answer

Pull

question

Market communication targeted to end user consumers are known as which type of communication strategy

answer

Pull

question

The decisions activities and communications strategies that are directed towards trying to create and maintain a firms intended product concept in the customers mind

answer

product positioning

question

The decisions and activities intended to create and maintain a certain concept of firms product in customers mind

answer

positioning

question

A value proposition

answer

a set of benefits and values that company promises to deliver to customers to satisfy their needs

question

Positioning process

answer

must be continually modified to match customers wants

question

5 service qualities

answer

empathy, assurance, responsiveness, reliability and tangibles

question

An ad campaign that buys a constant amount of GRPs throughout the year but then increases the GRP total during the eight weeks leading up to the most heavy purchasing period of the year is using a _____ message reinforcement strategy.

answer

Heavy up

question

Which type of exposure pattern would be most appropriate for products that can be purchased more readily at some times of the year such as products consumed most heavily in the summer?

answer

Heavy up

question

An indirect marketing channel might include all EXCEPT which of the following?

answer

Telemarketing

question

Marketing channels are a key component of a(n) _____ that links manufacturers with end-user customers.

answer

Supply Chain

question

Charles recently purchased a Dell computer. Included in his purchase were an inkjet printer, a digital camera and an office software program that included a word processor, a spreadsheet, a database and an email program. The price he paid for the computer, software and accessories was lower than the total price that he would have paid if the products were purchased separately. This is an example of _____.

answer

Product Bundling

question

Within the dimensions of service quality, which of the following is a "quality enhancer"?

answer

Customer Empathy

question

Achieving a certain level of _____ is directly dependent on the strength of a business' product positioning and marketing effort.

answer

Market Share

question

A price elasticity of -2.0 means that a price reduction of one percent will result in _____.

answer

an increase in demand by 2%

question

Which of the following is most likely to occur at the early stages of the product life cycle?

answer

Skim Pricing

question

The goal in creating a pricing strategy should be to determine what price produces a combination of volume and margin that increases the business's total _____.

answer

contribution

question

Cost-based pricing by low-cost producers is most likely to occur in which stage of the product life cycle?

answer

Growth

question

Harvest pricing is usually used in the _____ stage of the product life cycle.

answer

Decline

question

_____ is the percentage of target customers who will be exposed to the business' message given a certain combination of media.

answer

Reach

question

One approach to message reinforcement that maintains awareness, reduces copy wear-out and is cost efficient is _____.

answer

Pulsing

question

Television advertising that achieves, for example, 150 GRPs over a 4-week exposure period and is run in alternating 4-week periods in which during the intervening 4-week period no messages are run is an example of which approach to message reinforcement?

answer

Pulsing

question

If 60% of the target market is exposed to a marketing communication, and 50% of that group is aware of the offering, and 70% understand the message, and 60% of that group intends to purchase, and 90% of that group actually does purchase, what is the Customer Response Index for the buying group.

answer

11.3%

question

When Walkman personal stereo systems were introduced, they were an instant hit because it was easy for potential buyers to see how they worked. Based on this information, the success of this product early on was due to _____.

answer

observability

question

What can be said about a new product that has an overall customer adoption forces index of 80% and an overall product adoption index of 40%?

answer

This product's rate of market penetration is slowed by product forces.

question

For a business with several products at different stages of the product life cycle, we can use the percentage of sales at each stage to compute _____.

answer

an overall product life cycle profit

question

If four-wheel drive capability is weighed a 40 on relative importance, and your truck scores eight out of 10, while the three competitors score eight, six, and six, respectively, your truck has a relative advantage score of _____.

answer

27

question

Automobile paint and body shops use materials that are considered environmental hazards that are subject to several requirements regarding its disposal. As part of the cost of repair, customers getting their car repaired are assessed a $1.00 hazardous material handling fee. This is assessed to reduce the auto shop's _____.

answer

disposal costs

question

Whereas product-focused businesses are providers of products, market-based businesses are _____.

answer

providers of solutions

question

Using _____ analysis, a business can more accurately determine what customers value when they make product choices involving several alternative product-price configurations.

answer

Conjoint

question

Number of competitors, ease of entry and the number of substitutes are all measures of the _____ assessment of a segment's attractiveness.

answer

competitive intensity

question

Which of the following is NOT a usage behavior force that shapes customer needs?

answer

Interest

question

As a business adds products to its product line that have similar purchased materials and manufacturing processes, it is able to lower the average unit cost of all products, producing a _____ effect.

answer

Scope

question

A market-based strategy that leverages a knowledge advantage with respect to both customers and competitors and can be implemented with a nonconfrontational approach that minimizes losses is known as a(n) _____.

answer

oblique strategy

question

Which of the following is TRUE regarding a reactive strategy? a. It is an overreaction to customer demands due to limited competitor knowledge. b. It leverages a knowledge advantage with respect to customers and competitors. c. It is an overreaction to competitor moves due to limited competitor knowledge. d. It is based on minimal or limited customer/competitor knowledge. e. either A or C above

answer

e. either A or C above

question

More intense competitor rivalry tends to _____ prices and margins and _____ marketing expenses in the battle to attract and retain customers.

answer

lower; raise

question

A business in a market with low entry barriers, high exit barriers, high levels of customer and supplier power, many substitutes and intense rivalry among competitors will have _____ than a business with a more favorable set of competitive forces.

answer

a lower profit potential

question

What three components combine to form the customer loyalty score (CLS)?

answer

customer satisfaction, customer retention and customer recommendation

question

In general, it costs _____ times more to replace a customer than it costs to keep a customer.

answer

Five

question

Which of the following does NOT affect customer lifetime value?

answer

net operating expenses

question

A "captured customer" most likely _____.

answer

will not to recommend a brand or company to others

question

Hood Industrials received $800 in sales revenue by an average retained customer. To attain that $800, the company incurred $400 in variable costs and $60 in direct marketing expenses for each retained customer. Each lost customer generated $200 in sales revenue while costing the company $150 in variable costs and $100 in direct marketing costs. Each new customer generated $400 in sales revenue, but Hood had to incur $300 in variable costs and $300 in direct marketing expenses for each new customer attained. If there are 150,000 retained customers, 50,000 lost customers, and 50,000 new customers, which type of customer generates the lowest net marketing contribution?

answer

New

question

Estimate the net present value of the customer cash flow with an 80% customer retention rate and a 10% discount rate if the initial cost to acquire this customer is $50, and the business receives $30 in revenues in the first year, $40 in the second, $45 in the third, $50 in the fourth, $55 in the fifth, and $0 in the sixth.

answer

$112

question

Market-based accounting helps a business understand all of the following EXCEPT _____.

answer

product unit margin

question

Which of the following is NOT a market performance metric?

answer

relative price and value

question

Cash flow is only produced _____.

answer

when a customer buys a business' product or service

question

Which of the following is a financial performance metric?

answer

sales per employee

question

Overton Enterprises sells widgets to a marketplace where total demand is 12 million. Overton's market share is 12 ½ percent; the selling price per widget is $40 and the variable costs per widget are $25. Overton spends $7 million on marketing expenses and has $2 million in other operating expenses. What is Overton Enterprises's profit (before tax)?

answer

$13.5 Million

question

If 75% of consumers are aware of Toyota's Prius hybrid car, and 45% of that group likes the product's benefit, and 44% of that group finds the price acceptable, and 51% of that group is able to easily buy the product in their local market, and 75% of that group has a favorable service experience when dealing with Toyota and its dealers, then the market share index for the Prius is _____.

answer

5.7%

question

Which is NOT one of the key benefits to a market-based business provided by a broad strategic market definition?

answer

It creates an awareness of a product and its benefits.

question

Which of the following statements is FALSE regarding the product life cycle profit index?

answer

The product life cycle profit index cannot be used by a business with several products at different stages of the product life cycle.

question

Suppose the benchmark competitive product has a price of $300, costs $200 to install, and averages $500 in usage and maintenance costs. Your product is priced at $400, costs $100 to install, and averages $400 in usage and maintenance costs. In this situation, the economic value of your product over the benchmark competitive product is _____.

answer

$100

question

Value for the channel intermediary is derived from a combination of (1) profitable use of space, (2) inventory turnover, and (3) ____.

answer

the marketing expenses needed to promote the product held in that space

question

Sub-Zero, with a 2 percent share of the U.S. refrigerator market, competes with industry giants who have large economies of scale and marketing resources. However, Sub-Zero holds 70 percent of the "Super Premium" segment, specializing in very expensive built-in refrigerators that start at $3,500. What type of market segmentation strategy is Sub-Zero pursuing?

answer

niche segment strategy

question

Coca-Cola, Caterpiller, Sony and Toyota are well-recognized global brands that use a generic value proposition built around their core customers' needs and the business' generic positioning strategy. The type of segmentation strategy used by these companies can best be described as a(n) _____ strategy.

answer

Mass market

question

Market size, growth rate and market potential are all measures of the _____ assessment of a segment's attractiveness.

answer

Market Growth

question

Customer relationship marketing has different strategies based on different levels of _____ for the company and its customers.

answer

Value

question

Which of the following is TRUE regarding an inside the box strategy?

answer

It is based on minimal or limited customer/competitor knowledge.

question

Which of the following is NOT a public and readily available source of competitor intelligence? a. dealers b. trade press c. industry consultants d. government documents e. All of the above are public and readily available sources of competitor intelligence.

answer

All of the above are public and readily available sources of competitor intelligence.

question

Which of the following in an internal metric?

answer

Order Cycle Time

question

Which of the following behavior might be exhibited by competitors that lack marketing leadership/market focus?

answer

frequently cutting prices to increase volume

question

The offensive strategic market plan to invest marketing resources to grow the market or market share is known as _____.

answer

Invest to grow

question

Which of the following is considered a market force that influences a market's attractiveness?

answer

Buyer Power

question

Which of the following is TRUE with respect to offensive strategic market plans and short-run performance?

answer

Offensive strategic market plans require investment for growth, which limits short-run profit performance.

question

Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell's net marketing contribution?

answer

$2.5 Billion

question

Dell Computer has a 10 percent of a $250 billion market. Dell is the low-cost leader and realizes a 20% margin on sales, and marketing, sales and administrative expenses equaling 10% of sales. What is Dell's gross profit?

answer

$5 Billion

question

What does it mean if the market development index is equal to 20?

answer

There are many potential customers who have not entered the market.

question

A firm should use an offensive strategy when they compete in a _____ market and has a(n) _____ competitive advantage.

answer

very attractive; very weak

question

What is meant by "new emerging market"?

answer

Customers have not yet entered.

question

Carol has determined that along the share-development path, she estimates that her business should perform at a 90% level of product awareness, 50% in product preference, 80% in intentions to purchase, 80% in product availability and 70% in rate of purchase. Carol's actual market share is equal to 9%. What is the approximate market share potential for Carol's business?

answer

20%

question

Nautilus was a pioneer in the home-fitness equipment market and sold their products exclusively through a direct marketing approach. Since the majority of sales in this market occurred in retail stores, Nautilus began selling through specialty sports equipment retailers as well as mass market sporting goods stores. Which offensive strategy does this represent?

answer

Build Marketing Advantage

question

Which of the following is the strategic objective of the Protect Position defensive core strategy?

answer

Maintain Sales

question

Which of the following statements is TRUE?

answer

Low-share niche businesses with above-average customer value are more profitable than other low-share niche businesses with a different customer value profile.

question

To divest a share position, the desired choice is to _____.

answer

find a buyer for the business

question

Customer Value equals _____.

answer

relative benefits minus relative price

question

In heavily advertised consumer goods markets, share erosion _____ with major reductions in the advertising budget.

answer

Can be rather dramatic

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