BNAD 303 Exam 3

Marketing research includes all of the following except
creating data
After a year in business, Tyrone hired a market research company to analyze his sales data and tell him which groups of customers were the most profitable to his firm. Tyrone will probably use the results of this research to
define market segments
adjust positioning strategies
change product offerings
adjust prices
When Olivia learned that just twenty of her yoga studio customers accounted for eighty percent of her
annual revenue, she probably
adjusted class schedules to meet the needs of those twenty customers.
surveyed those twenty customers to see what other types of yoga classes they were interested in.
offered a special session for just those twenty customers.
analyzed the geodemographics of those twenty customers to see how she could attract more people
like them
Political consultants have been using market research for decades to help their candidates understand
who makes up the voting public and how to reach them
Paul subscribes to an Internet service that alerts him whenever other firms in his industry are quoted in
the media. Paul is using this type of market research primarily to
monitor his competitors
Leonard just bought his first bagel franchise. As part of the franchising agreement, Leonard receives a
monthly report detailing the actions and results of other franchisees. Leonard can use this market research
report to
provide a link between him and his environment.
help him understand the needs of his customers.
monitor the marketplace.
decrease the uncertainty associated with decision making
Every month Dr. Combahee takes her staff to lunch and asks them to share patients’ comments and
concerns. Dr. Combahee is using the lunches as an informal marketing research effort intended primarily
help her to understand the needs of her customers
Retail checkout scanning systems create a tremendous amount of purchasing information usually stored
in a company’s
data warehouse
Through analysis of sales data, Price-Cutters retail store found that customers who bought peanut butter
also tended to buy bananas. Price-Cutters was engaged in
data mining
Walmart is known for its efficient logistical systems. Every time consumers buy something, that purchase
is recorded and sent to company headquarters, where it is used to generate re-orders to vendors. In
addition, customers’ billions of purchases are analyzed using data mining techniques to uncover
patterns of consumers’ purchasing behavior
If a firm has geodemographic and purchasing information about its customers, the firm can use data
mining techniques to
build separate marketing programs for different geodemographic segments
From charitable giving to medical records to Internet tracking, consumers are more anxious than ever
the unstructured nature of market research
American consumers’ concerns about ______________ have led to a variety of government protections
including the “Do Not Call” list
When conducting a survey about choosing vacation destinations, Hillary will need to
____________________ in order to get reluctant respondents to provide honest information.
assure consumers that their individual responses will be kept confidential
Customers have become more and more anxious about breaches of privacy, and it is essential for
marketing researchers that they
respect and protect the privacy of customers without question
The many incidents of identity theft and scams falsely presented to consumers as market research surveys
have made
it more difficult for market researchers to gain cooperation from respondents
The AMA guidelines for marketing research
A. prohibit selling under the guise of conducting research.
B. support research integrity.
C. encourage fair treatment of clients.
D. support the duty of researchers to respect the rights of subjects.
The Marketing Research Process follows five steps, and researchers
may not always go through them in the exact sequence if the situation changes or new information is
The first question a market researcher should ask when considering a research study is
Will the research be useful?
Assuming that a market research study will answer important questions and reduce uncertainty associated
with the proposed project, the other major question that needs to be addressed before starting the study
Is top management committed to the study?
Just as marketers create value by meeting the needs and wants of consumers, market researchers create
value if
the results will be used in making management decisions
Benefit-cost analysis in market research weighs
the benefits of answering questions against the cost of the research
Cheryl and Jim are working on a research project to anticipate customer attitudes toward a proposed new
product line for their company. They have worked with the marketing manager to determine the answers
that are needed, and have created a detailed design of the project. Their next logical step will be to:
begin to collect data
Academic researchers often jump at the opportunity to conduct a research study, curious to learn more
and address unanswered questions for the sake of general knowledge. Business people tend to be more
cautious before embarking on a marketing research study, recognizing that research is often:
expensive and time consuming
Market research begins with
defining the objectives and research needs
Marketing researchers should plan the project in some detail so that:
A. the kind of data collected will yield the planned results.
B. responses to questions can be coded without great difficulty.
C. they can produce meaningful results on time and within budget.
D. they can move through the process without needing to make major alterations.
Poor research design can often be traced to:
focusing on questions that cannot be answered
The manager of a company selling baby products asks you to conduct research into the question, “Is life
expectancy getting longer in Kuwait?” The problem with this research objective is that
it is irrelevant to the baby products company
The manager of a company selling cellular phones in rural U.S. markets asks you to conduct survey
research into the question, “What percentage of people in Kansas live in communities of less than 10,000
people?” The problem with this research objective is that:
it is already known and available on the U.S. Census Web site
Because market research often takes considerable time:
businesses in fast-changing markets often have to rely on experience and intuition to make decisions
After defining objectives and research needs, the next step in the marketing research process
research design
The objectives of a research project define the type of data needed and
the type of research necessary to collect the data
Victor’s custom auctioneering service provides online auction selling assistance. Victor plans to conduct
marketing research to determine which auction site is best for his customers. His next step is to
identify the type of data he needs to have
Company sales invoices, Census data, and trade association statistics are examples of
secondary data
Commercial research firms like ACNielsen, J. D. Power, and Simmons Market Research Bureau are
sources of
syndicated data
Jalel is marketing manager for moderately well-known rock band. He wants to know more about industry
trends including sales by different musical styles, online downloads, and concert attendance. Jalel will
most likely use _______________ to gather this type of data
syndicated data
Once a marketing researcher is ready to move beyond preliminary insights to specific, informed
questions, the researcher is ready to conduct
conclusive research
A marketing research project often begins with a review of the relevant _____________ data
Joe is reviewing secondary data his company collected about seasonal variation in consumer spending.
The advantages of using this data include that
it can be quickly accessed at a relatively low cost
Omar is responsible for marketing and marketing research for a mid-sized manufacturer of assemblies for
the housing market. His boss has asked him to cut back expenses, especially in marketing research, “Why
can’t you just use information off the Internet? There’s plenty out there.” What is Omar’s best response to
try and get his boss to change his mind?
“That’s secondary data, and it may not be as timely, accurate and relevant as what we need. Our
decisions may not be as good, and we’ll run a huge risk.”
Ron is opening a new Internet-based marketing business. He finds a wealth of data on a web design
company’s site. This site describes the tremendous sales potential for Internet-based marketing
companies. Ron should
be cautious, because the data may be more promotional than trustworthy
Marvin is looking for data to help him with a new market research study assigned to him. When
reviewing existing secondary data from a past research study, Marvin should pay careful attention to
how the secondary data were collected
Marketers often race too quickly into research studies to collect __________________ data because it is
designed to address their specific questions, while _____________ data may exist that can sufficiently
address the marketer’s questions at a much lower cost.
primary; secondary
After reviewing the existing data on seasonal spending by his company’s customers, Marvin
decided he needed new information collected to address his research questions. Marvin will need
___________________ data to address the questions in his market research study.
The major advantage of primary data collection is that
it can be tailored to meet the specific research needs
The major disadvantages of primary data collection are that
it takes more time to collect than secondary data and is more costly
Caroline needs to find information about income and age distribution in Orange County, California. The
best source of secondary research of use to Caroline is likely to be
census data
Data collection begins
only after completing the research design process
When the market research problem is not clearly defined, a researcher will likely engage in
__________________ research
Recently, the number of students enrolled in the marketing program dropped while enrollment
in the psychology program increased. The chair of the marketing department will probably use
_______________________ as a first step to gain a better understanding of why enrollments are
structured questionnaires
Because conclusive research is often quantitative in nature, it offers a means to confirm ideas
surveys or experiments
Compared to secondary data, primary data
A. are more expensive to collect
B. are more specific to the project at hand
C. take longer to collect
D. are more timely
Bianca’s discount home furnishings store is in a strip mall. She wants to know what other businesses in
the strip mall her customers visit when they come to her store. To collect information for this objective,
Bianca will most likely use:
Conclusive research
onfirms insights and provides a basis for taking a course of action
_______________ confirms insights and provides a basis for taking a course of action
Conclusive research
Firms that use cameras to monitor the movements and activities of customers as they shop create
an ethical issue
When consumers are _________________, observation becomes particularly useful in understanding
consumers’ preferences.
unable to articulate their experiences
When consumers are unable to articulate their experiences, ____________ becomes particularly useful in
understanding consumers’ preferences
Recently, Google hired a team of economists to study consumers’ online search behavior. This type of
market research is a form of __________________ research.
Using ________________, researchers ask questions, listen to and record responses, and ask additional
questions based on initial responses.
in-depth interviews
Social media monitoring, in-depth interviews, and focus groups are all ______________ research
Zan wants to collect considerable information about the current opinions of his ten most important
customers. Zan will probably use the ________________ research method
in-depth interview
Which of the following research methods would be best in helping a marketer understand how people feel
about a product or service on an individual, detailed level?
In-depth interviews
When the detailed opinions of a few industry experts or experienced consumers are needed,
________________ are often the best exploratory research method.
in-depth interviews
Randall wants to do an online survey of college professors about the factors that influence their textbook
selection. He would like to use a structured questionnaire but is not sure what responses to include for
each question. Randall could use ________________ to help him develop his questionnaire.
in-depth interviews
Frederica manages an upscale women’s clothing store. She wants more information about her customers’
general feelings about upcoming fall fashions. Frederica will most likely use ___________________ to
gather this type of data.
focus group interviews
A(n) _________________ is a small group of people brought together for an intensive discussion of a
focus group
In a focus group, researchers usually videotape the session in order to:
assess both verbal and nonverbal responses
In Ethical and Societal Dilemma 9.1, one reason firms use observation of customers walking around a
store is because:
customers would have difficulty responding to a survey asking how they choose to walk around when
Focus groups are often used to gather:
A. qualitative data about initial reaction to new products.
B. opinions about competitive offerings.
C. reactions to new advertising messages.
D. reactions to point-of-purchase displays.
Tyree is concerned about a competitor’s new line of outdoor barbeque grills that provide most of the
same features as his products. Tyree might consider using ___________________ to gather exploratory
information from consumers about the competitor’s offerings
focus groups
Martin has hired a market research company to bring together a small group of soft drink consumers and get feedback on the three new advertising slogans his firm is considering. The market research firm might conduct a(n) _ to provide the information Martin has requested.
focus group
In the infamous Coke-New Coke taste test, 54 percent of consumers, using a blind taste test, preferred the
New Coke formula. This is an example of a(n) _________________ market research method.
Malcolm is the campaign manager for a Congressional candidate. He wants to know how voters in his
district feel about recent sexual harassment scandals involving politicians. Malcolm will most likely use
_______________ to gather this type of data.
When conducting a descriptive research study attempting to understand what features were most
important to automobile consumers, Gary’s Research Company used a(n) ________________
questionnaire, containing closed-end questions, with a discrete set of response alternatives.
Quitman had no idea how consumers would respond to a survey about marketing of space travel to
private customers. He decided to use a(n) ___________________ to allow respondents to answer in their
own words.
unstructured questionnaire
A. C. Flora Ford Dealership wanted to know why consumers chose his company. He was fairly sure that
most customers had one of three reasons–service, reputation, or location–but wanted to know which
was the most frequent reason. A. C. Flora will probably use a(n) __________________ questionnaire to
address his research problem
Which of the following is NOT one of the guidelines for developing a market research questionnaire?
Sensitive questions should be asked first
In questionnaire design, a question such as, “When was the first time you went to a dentist?” suffers from
the problem of a question
that respondents cannot easily or accurately answer
In questionnaire design, a question such as, “When will the technology exist to allow humans to live on
Mars?” suffers from the problem of a question:
that is complex and something respondents may be unfamiliar with
In questionnaire design, a question such as, “Marketing is the best part of the business program, isn’t it?”
suffers from the problem of a question:
that steers respondents to a particular response.
In questionnaire design, a question such as, “Do you like Wendy’s hamburgers and fries?” suffers from
the problem of a question:
that asks two questions at once
In questionnaire design, a question such as, “Do anti-lock braking systems reduce car accidents?” suffers
from the problem of a question:
that respondents cannot easily or accurately answer.
Compared to offline surveys, online surveys benefit market researchers through all of the following
A. relatively high response rates.
B. less lying by respondents.
C. lower cost.
D. faster data collection.
Charles wants to survey recent customers about the quality of service they received at his small auto
service dealership. He has customers’ mailing and e-mail addresses. Charles will likely use an online
survey primarily because it offers:
fast responses at a lower cost
For her personal care products line, Natalie wanted to develop some quantitative information on attitudes,
perceived quality, value, willingness to buy and loyalty. Her best choice in building a survey is to
questions using scales to determine strength of the responses
research is a type of quantitative research that manipulates variables to help
determine cause and effect
Each time you go to the grocery store and have your purchases scanned while using a loyalty or bonus
reward card, you are contributing to a database that can help marketers determine:
A. what a typical shopping list looks like.
B. whether changes in prices affect buying.
C. marketplace trends.
D. what kinds of promotions might be attractive to you.
Henri started his own business insurance software firm. He has no budget for marketing research but
wants to keep track of what his competitors are doing. Henri’s best option, using a “shoestring budget,” to
research this problem would be:
visiting competitor’s Web sites
Henri started his own platinum importing firm. He has no budget for marketing research but wants to
identify potential business customers. Henri’s best option, using a “shoestring budget,” to research this
problem would be:
checking NAICS codes
Felicia is the new Southeastern U.S. sales representative for Cemex, a giant global cement company.
Without spending much money, she would like to identify geographic areas with the largest potential
growth in demand for her company’s product. She will most likely use
census data
Randall is preparing a market research report based on analysis of recreational users of the Inland
Waterway. When preparing the report, Randall will do all of the following EXCEPT:
make the report as lengthy as possible
You have spent weeks designing the project, gathering data and analyzing it. Now it is time to present
your findings to senior executives. Your best course of action is to:
make sure the executive summary highlights what they need to know to make the decision
When a supermarket collects information about individual customers based on information gathered
through the use of its loyalty card, and then analyzes the data to look for patterns in purchases, this is
known as:
data mining
When a research team has gathered data for specific research needs this is known as:
primary data
Which of the following statements best describes secondary data?
Secondary data are pieces of information that have been collected prior to the start of the focal
research project.
Which of the following types of research would be considered conclusive research?
Experimental research
Which of the following is a systematic means of collecting information from people using a
If a marketing researcher encounters severe time constraints, which of the following types of data sources
would probably be available soonest?
Syndicated data
Which of the following statements is NOT an example of the guidelines provided by the American
Marketing Association for conducting marketing research?
Personal information about research participants should not be shared, except with a designated
member of senior management.
The number of customers who discontinue their use of a service divided by the average number of total
participants is called:
Which of the following data sources would be considered external secondary data?
A. U.S. Census data
B. Syndicated data
C. Newspaper articles
D. Scanner data
Which of the following types of data would be the best choice for a fast food restaurant wanting to know
how many hamburgers versus chicken sandwiches it has sold in past years?
Internal secondary data
A restaurant chain is working on improving the quality of its food and service. It recruits customers who
agree to respond to customer satisfaction surveys once every three months over the next two years, in
order to track its progress. What kind of data is the restaurant chain collecting?
Panel data
Which of the following is an unstructured question?
“What are the most important characteristics for choosing a brand of shampoo?”
Which of the following provides the information needed to confirm insights and help managers to pursue
appropriate courses of action?
Conclusive research
A product is ____________________ that can be offered through a voluntary marketing exchange
the brand associations`
In retailing, effective packaging sends the message:
Buy me!
The complete set of all products offered by a firm is called its
product mix
A ____ is a group of associated items that consumers tend to use together or think of as
part of a group of similar products
product line
For a major university, undergraduate studies, graduate studies, and professional programs would be______ within the university’s product mix
private label brands
A(n) ____ is a name, symbol, design, or term that identifies a seller’s good or service as
distinct from those of other sellers.
It is almost impossible to watch a sporting event on television without seeing Nike’s “swoosh” check
mark, which is Nike’s:
A firm’s product mix breadth is its:
number of product lines
____is the number of items within a product line.
Product line depth
Zappos is a successful online shoe company. One of the difficulties in running a shoe company is the
need to have significant _____, a large number of items in each product line
product line depth
Marketers with successful brands sometimes hesitate to expand the use of their brands because:
it is costly to maintain many product lines, and might weaken the firm’s brand reputation
Firms often add new product lines to:
A. capture new markets.
B. respond to evolving markets.
C. increase sales.
D. compete in new venues.
For many years, General Electric had a corporate strategy of being among the top three firms in any
market in which it operated; if it could not achieve a top-three position, it would exit the market. This
strategy often resulted in the company _____when certain product lines failed to meet this
decreasing product mix breadth
The decision to delete a product is never taken lightly because, generally, manufacturers have:
made substantial investments in brand development and manufacturing
A university that has separate graduate and undergraduate admission offices recognizes that these are
product/service lines
The primary purpose of a brand is to:
distinctly identify one seller’s goods or services from competitors’ offerings.
Marketers spend billions of dollars annually attempting to build effective brands. The basic benefit of a
brand is that it:
provides a way for a firm to differentiate its product offerings from those of its competitors
For a brand to be effective, it needs to be:
easy for consumers to recognize and remember
One key feature of the value of a brand is that:
it often protects the firm from competition and price competition
When consumers associate a brand with a certain level of quality and familiar attributes allowing
consumers to make quick decisions, the brand:
facilitates purchasing
Parents of young children have been known to drive out of their way so their kids will not see
McDonald’s Golden Arches and plead with their parents to stop. For McDonalds, the Golden Arches
reduce marketing costs because people (including young children):
know what the Golden Arches brand symbol means
Firms with well-known brands can spend relatively less on marketing costs than firms with little-known
brands because:
people already know what the brand means
Brands are assets that can be legally protected through:
copyrights and trademarks
Firms with upscale brands like Rolex and Gucci often have to protect their brand assets from:
A ___________ is one where there is a contractual arrangement between firms allowing one to use its
brand name for a fee.
licensed brand
The value of a brand is often calculated by assessing the:
earning potential of the brand over the next 12 months
_______________ is the set of assets and liabilities linked to a brand that add to or subtract from the
value provided by the product or service.
Brand equity
Many former Enron professionals who had nothing to do with the corporate scandal have found that
listing employment with Enron hurt their chances of being hired elsewhere. For these people, the Enron
name has:
negative brand equity
Firms spend millions of dollars annually to build brand equity, recognizing brand equity contributes
Which of the following is NOT one of the four criteria used for determining how “good” a brand is?
Brand conceptualization
If many consumers in the marketplace are familiar with a brand and what it stands for and have an
opinion about the brand, the brand has considerable:
Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion
about American-made cars. This familiarity makes it easier for consumers to:
make purchase decisions
Sometimes brand names become synonymous with a product itself. If that happens, the firm:
could lose its trademark
Kleenex tissues, Clorox bleach and Scotch tape brands have:
become synonymous with the product itself
Salina is working to create greater brand awareness for her company’s new line of personal digital
assistants. To create greater brand awareness Salina will make sure that promotion features the brand:
A. name.
B. logo.
C. packaging.
D. slogan.
Why would a firm spend over $2 million for a 30-second ad on television during the Super Bowl?
Because the Super Bowl offers an opportunity to create significant brand awareness.
Relatively few consumers like to go to the dentist. Dental insurance plans that pay for regular check ups
increase the ________________ of dental care by reducing the cost to the consumer.
perceived value
In a competitive market, perceived value is determined by consumers mostly:
In a competitive market, perceived value is determined by consumers mostly:
Nora is deciding whether to purchase brand name sneakers or a store brand. She has purchased other shoes with the same brand name in the past but was only marginally satisfied. In this situation, Nora is likely to purchase the store brand sneakers because they offer:
greater perceived value
Recent Apple Computer Company ads showed a young, casually-dressed, friendly and knowledgeable
person as an Apple computer type, while the Microsoft computer person was portrayed a stiff, geeky,
awkward person. Apple was trying to create comparative:
brand personalities
Matt was passionate about Abercrombie & Fitch. It was the only place he’d buy his clothes. If anyone
asked him about clothes, he would talk for what seemed like hours about why he only shopped there.
From a strictly marketing perspective, this word of mouth is part of:
brand loyalty
Jenna always buys Stacy’s brand pita bread chips. She does not even consider alternatives. Jenna is a
_________________ customer
brand loyal
Laura prefers Sony products and will only purchase alternatives when there are no Sony products
available. Laura’s brand loyalty means she is:
relatively insensitive to price
For marketers, one of the benefits of having achieved brand loyalty is:
lower marketing costs associated with reaching loyal customers
Lionel Smith Ltd. is a traditional men’s clothing store. Every fall the owner sends an embossed invitation (much like a wedding invitation) to his regular customers, inviting them to a private reception showing the new fall line of clothes. For Lionel Smith Ltd., one of the benefits of having established a loyal
customer base is:
that he can be less concerned about competitors’ actions
One of the major tools used by marketers to meet the needs of loyal customers is:
Frequent buyer/user award programs are used to:
maintain contact with loyal customers
A personal digital assistant programmed with key customers’ birthdates, wine preferences, and food
allergies is a _____________ tool.
Brands can be owned by:
any firm in the supply chain.
Another name for a manufacturer’s brand is a _______ brand.
Which of the following is NOT a national brand?
President’s Choice
The basic reason manufacturers spend time and money building their own brands is to:
build brand equity
Procter & Gamble is a huge national brand manufacturer. By having leading brands like Tide and Crest,
has greater control over marketing strategy
Brands that are owned by ___________ are called private-label brands.
Which of the following is NOT one of the types of private label brands?
Experiential brands
Becky was very particular. She always chose designer labels and nationally known brands, even if they were more expensive, with one exception. She always bought the high-end chocolate chip cookies from her grocery store. They were made with real butter and other fresh ingredients. These cookies were a store brand, known as a:
premium brand
Private-label brands are owned and managed by:
Private-label brands like Gap and Victoria’s Secret have increased in importance along with the increased
power of _____________ in the supply chain.
Which of the following types of products and services is most likely to be sold without a brand name?
Brian was working on the floor of a chain electronics store trying to help a confused customer. The
customer said, “The television sets look the same, but the model numbers are different and this one is
more expensive.” Brian explained it was made specifically for his store. This is an example of a specific
type of private-label brand, called a:
exclusive co-brand
Consumers might not realize that Old Spice health and wellness products and Iams pet nutrition
products are made by the same company–Procter & Gamble. Old Spice and Iams are known as
individual brands
When Procter & Gamble added teeth whitening products under the Crest brand, the firm was engaged
brand extension
Brand extension is a popular marketing strategy because:
the firm can spend less on creating brand awareness and associations
The potential benefits of brand extension include:
A. It allows the perception of a brand with a quality image to be carried over to the new product.
B. It lowers marketing costs.
C. It can boost sales of the core brand.
D. the firm can spend less on creating brand awareness and associations.
One of the categories of products for which brand extension is logical is:
complementary goods
Jake developed a toothpaste using only natural ingredients, and he has been quite successful selling the
product in health food stores and some grocery stores. He has recently developed a toothbrush using
bamboo and natural components. Jake is considering a ________________, giving the toothbrush the
same brand name as the toothpaste in order to have greater brand awareness.
brand extension
Brand dilution occurs when:
A. customers don’t see the “fit” between products sharing the same brand name.
B. there are too many products and product categories.
C. new brands cannibalize existing brands.
D. customer perceptions about the core brand are adversely affected.
Marco tried a new fruit-flavored beverage and thought it was awful. He was especially disappointed
because he had liked the dried fruit snacks marketed under the same brand name. Now he wasn’t sure he
even wanted to buy the snacks he had liked before. This highlights a problem in branding known as:
brand dilution
________________ occurs when the brand extension adversely affects consumer perceptions about the
attributes of the core brand.
Brand dilution
Toyota, a well-established, reputable brand, recently introduced a new line of vehicles under the Scion
brand, targeted at young car buyers. Toyota probably used the new brand to:
appeal to a different market segment
Marketers with luxury brands use brand extension cautiously in order to avoid:
diluting the core brand
Shell MasterCard, created cooperatively by Shell Oil Company and Master Card, is an example of:
Brand licensing is:
A. common for toys.
B. a way to build brand equity.
C. a means of generating additional revenue.
D. widely used by sports teams.
Efforts to change a brand’s focus to target new markets or change the image of a brand are called:
brand dilution
Brand repositioning refers to a strategy in which marketing changes a brand’s focus to target new
customers or realign the brand with changing perceptions. Another name for brand repositioning is:
Ella had been using an imported brand of shampoo for several years, but she could no longer find it
anywhere. As she was considering what kind of shampoo to try, she was surprised to see ads for Procter
& Gamble’s Head and Shoulders, which was being promoted as a glamorous health-oriented product. She
had always thought of Head and Shoulders as an anti-dandruff shampoo. The new ads suggest that Head
& Shoulders has been:
Secondary packaging:
A. can provide information to consumers not found on the primary packaging.
B. is important to the retailer in terms of convenience in handling.
C. can be an important positioning tool by helping to convey the brand image.
D. can allow for cost efficiencies due to larger order and shipment sizes.
A ____________ package is the one a consumer uses. A _____________ package is used by retailers to
display and sell the product.
primary; secondary
Which of the following is NOT one of the important functions of labels on products and packages?
Protecting against damage to the product
What U.S., government agency reviews food and package labels to ensure claims made by the
manufacturer about the product are true?
Food and Drug Administration
One of the advantages of selling specialty goods and services is that when consumers want them, they
search for them
Zappos, an online shoe company, knows shoes are typically a ______________ good, with consumers
often spending time comparing alternatives. They overcome that aspect of consumers’ search process by
offering a free, no questions asked return policy
Marketers selling milk, bread, and other consumer staples, know most customers do not spend much time
searching or comparing alternatives. For most consumers, these are _____________ goods.
Andy likes gourmet popcorn, and will spend time trying to find his favorite brand. His girlfriend, Joanne,
loves popcorn but doesn’t care about brands. For Andy popcorn is a _____________ good while for
Joanne it is a _____________ good.
specialty; convenience
Marketers need to think about the product offer on three levels. Which of the following levels includes
associated services such as warranties, financing, support and after-sale service?
Augmented product
Which of the following is NOT part of the “actual product” level of the product offer?
Product warranty
When manufacturers try to understand what customers are looking for, they are thinking about the
_______ component of the product offer.
core customer value
Why would a company choose to use an established brand name when introducing a new product?
Since the brand name is already well established, the firm can spend less in developing consumer brand
awareness and brand associations for the new product.
Since the original brand or the brand extension has strong consumer acceptance, the positive perception
will carry over to the other product.
C. An established brand name can be useful when introducing a complementary product.
The new product introduction can often be accomplished more quickly when using an established
brand name.
Suppose that Walgreens (a major drug store chain) wants to introduce its own brand of cough medicine
that is similar in contents and packaging to a national brand, but at a lower cost. What kind of privatelabel
brand would Walgreens be introducing?
Copycat brand
When a company launches a new product with an existing brand name this is known as:
a brand extension
Which of the following brand strategies is being used when the local ice cream shop decides to add a new
flavor to its menu?
A line extension
When a restaurant chain, Big Burgers, launches its own brand of frozen meals, this is an example of
brand extension.
Which of the following best describes when Johnson & Johnson introduces a travel sized package for its
existing baby oil product?
Line extension
What aspect of the product is being described when a used car sales person explains that each car comes
with a one-year extended warranty and a two-year maintenance plan?
Associated services
Some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer
pays for a rental car using the card. This extra insurance is an example of:
an associated service
When a salesperson approaches you to sell a cemetery plot, this is considered what type of product?
Unsought product
Sun Chips developed a compostable bag to reduce waste from its products. Unfortunately, U.S.
consumers objected to the bag because it was noisy. A bag of Sun Chips in the compostable bag is an
example of:
a green product
New product development adds value to a firm’s products and services through:
_____ is the process by which ideas are transformed into new products and services that
will help firms grow.
Eric is a sales rep for an established building materials manufacturer. Business is good, but he is
concerned that the company has spent little on new product development and has not created a new
product in over five years. Without new products, Eric can only market to his current customers or:
market the same products to similar customers
Without new products, a firm can:
only market to current customers or similar customers
Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu.
These daily specials primarily provide the new product benefit of:
satisfying the changing needs of current and new customers.
By adding new product lines beyond its core business of computer software, like the Zune MP3 player
and XBox 360 game system, Microsoft primarily benefits by:
creating diversification and reducing risk
Computer game companies constantly monitor computer game-related blogs keeping track of the latest
hot products, because they know that their customers crave the “latest and greatest” games. They use this
information to create new products that primarily provide the benefit of:
keeping up in a market where sales come mostly from new products
Which of the following is NOT one of the benefits to a firm of new product development?
Reduced costs of production
If they create new markets, pioneer or breakthrough products:
can add tremendous value to firms
Which of the following was NOT a new-to the-world product or service when it was introduced?
The Mercedes mini sport utility vehicle, a smaller version of its larger SUVs
One of the potential benefits to a firm of introducing new-to-the-world products or services is:
a greater market share that can be held over an extended period of time
Successful first movers create a market or a product category. They often benefit from being readily
recognizable to consumers and:
establishing an early market share lead
In many cases, pioneers lose their market lead and initial market share to imitators who:
capitalize on the pioneers’ weaknesses
Motorola was a pioneer in developing cell phone technology, but their early phones weighed several
pounds and required frequent recharging. As a pioneer, Motorola:
A. allowed competitors to focus on creating demand for their brand.
B. paved the way for alternative brands in that product category.
C. allowed other competing firms to spend less on introductory advertising.
D. allowed competitors to focus on making improved versions.
Early personal computers cost several thousand dollars, allowing competitors:
to introduce lower-priced alternatives
Even if they succeed, new-to-the-world products are:
not adopted by everyone at the same time
The process by which the use of a new product or service spreads throughout a market group is referred
to as:
diffusion of innovation
The diffusion of innovation theory focuses on:
the rate at which consumers are likely to adopt a new product or service.
Which of the following is NOT one of the five groups in the diffusion of innovation curve?
Innovators are a critical group of new product adopters because they:
help the product gain market acceptance
Whenever Donald considers upgrading his personal computer system, he consults with Jeremy, a
knowledgeable friend who always has the newest technology. For Donald, Jeremy is a(n) ___________
in the diffusion of innovation curve
In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly
knowledgeable. Marketers want to identify innovators because
other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals
Janet is an avid marathon runner. She is what marketers would call an innovator. Janet is likely to:
A. own the newest, most advanced running shoes available.
B. attend or participate in the famous national marathons.
C. subscribe to newsletters about the latest marathon-running health and nutrition information.
D. have a number of marathon running links bookmarked on her computer.
Brian is trying to sell a new line of ultrasound imaging equipment. Unlike existing technology, these
machines are compact, creating the potential for general practice physicians to have and use them in their
offices. Brian is trying to identify innovators in his market, knowing these customers will:
spread positive word of mouth to other physicians
For new product marketers, early adopters are important because they tend to be:
opinion leaders
Robin recently bought Voice Over Internet protocol (VOIP) phone service (phone service delivered over the Internet). A few of Robin’s friends bought VOIP before she did, but many other friends were interested in Robin’s opinions of the new phone service. Robin is a(n) _________ in this product
early adopter
If the ___ diffusion of innovation group is relatively small, the number of people whoultimately adopt the innovation likely will also be small.
early adopter
The ________________ diffusion of innovation group is crucial because few new products can be
profitable until this large group buys them.
early majority
As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making
the wrong choice. She waited until there were many alternatives in the market with lower prices and
improved quality. Hillary is part of the _________________ diffusion of innovation group.
early majority
When microwaves were new, they often cost over $300, were huge, and full of numerous settings
and options. Brenda and Bart waited, concerned about potential health hazards and wishing for more
choices in the market. By the time they purchased a microwave, sales had leveled off and prices had
declined significantly. Brenda and Bart were part of the ____________________ diffusion of innovation
late majority
The _________________ diffusion of innovation group is the last large group of consumers to adopt a
new product or service.
late majority
By the time BMW got into the mini-SUV market, sales had leveled off and were even starting to decline.
BMW had to target its marketing efforts toward the _________________ diffusion of innovation
late majority
Bob and George both live in the U.S. Bob recently asked for George’s cell phone number, but George
said he didn’t have one. George would probably be considered a(n) _________________ in the diffusion
of innovation process.
When John began helping his favorite uncle Burton with his finances, he discovered his uncle was still
renting a rotary-dial telephone from the phone company. Uncle Burton had paid thousands of dollars
in rental fees over the previous forty years. Uncle Burton is a(n) ______________ in the diffusion of
innovation process for telephones.
The diffusion of innovation theory is useful to marketers in helping them:
predict which types of customers will buy their product immediately and later
With an understanding of which consumers buy a firm’s new products at each stage of the diffusion of
innovation process, the firm can adjust its _______________ strategy accordingly.
A. pricing
B. advertising
C. sales promotion
D. distribution
Ginger is a sales rep for PuttPutt Golf Cart Company. Golf carts are a mature market. She has noted
that an increasing percentage of her company’s golf cart sales are to non-golfers living in active lifestyle
retirement communities. She will use this insight to adjust her firm’s:
A. pricing
B. promotion
C. product style
D. distribution
Early personal computer users remember the cumbersome, user-unfriendly “DOS” system. When Apple
introduced System 1 and Microsoft introduced Windows, both of which were much easier to use, these
new products diffused rapidly because of their:
relative advantage
Inkjet personal computer printers were a big improvement over the dot matrix printers they replaced.
Inkjet printers gained rapid acceptance in the marketplace primarily because of their:
relative advantage
When automobile manufacturers introduced SUVs, they distributed and promoted them in the United
States, but not in Europe where gasoline is heavily taxed and roads are much smaller. Car manufacturers
recognized that this new line of cars:
were not compatible with European consumers’ lifestyle
Laptop computers, personal digital assistants, and cellular phones were all readily accepted and diffused
in U.S. markets where business and personal lifestyles tend to be faster-paced, compared to many other
areas in the world. These products offered _____________ with consumers’ needs and priorities.
______________ is important for rapid diffusion of new products because products that are consistent
with consumers’ past behavior and values will be more readily accepted
Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers
because they know their new products will benefit from:
Samples are often used for new products when _________________ will influence the diffusion of the
Personal selling is often used for introducing new products when _______________ will slow the
diffusion of the product
complexity, an online shoe store, worked to overcome the problem of new product ______________
with its easy, no hassle return procedure.
Which of the following is LEAST likely to be a source of ideas for new products?
Geodemographic segmentation
Between concept testing and market testing, a firm should engage in which stage of the product
development process?
product development
A major limitation in the use of internal R&D departments for new idea generation is that:
the costs tend to be quite high
Which of the following industries tend to use R&D departments as a significant source of new product
A. Pharmaceuticals.
B. Computer software.
C. Motion pictures.
D. Chemicals.
The pharmaceutical industry often justifies the high prices for new drugs by arguing that they research
as many as one hundred new compounds before they come up with one ______________, an extremely
successful product that pays for the costs associated with the other attempts to develop new products.
R&D consortia often include:
A. university laboratories.
B. government agencies.
C. non-profit organizations.
D. competing firms in an industry.
Biotechnology companies often conduct internal R&D efforts but do not bring new products to market.
Instead, new biotechnology products come to market through:
licensing technology
A ________________ is a medical study that tests the safety and effectiveness of a drug or treatment in
clinical trial
Suppose that you work for an advertising agency and are brought into a meeting where everyone is asked
to come up with names for a new beach resort. You are engaged in ________________, a form of new
idea generation.
One of the key characteristics of brainstorming sessions is that:
no idea is immediately accepted or rejected
At the end of a brainstorming session, participants are often asked to:
vote on the best ideas
____involves taking apart a product, analyzing it, and creating an improved product
that does not infringe on the competitor’s patents.
Reverse engineering
Companies that develop customized-business software often work closely with their customers when
installing their products. This close contact often creates new product ideas through:
listening to customers
Ron sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to
see if they are using his tools for other tasks or have modified the tools for some other purpose. These
customers are _______, who can provide ideas for new and improved products.
lead users
_____ are customers who modify existing products according to their own ideas to suit their specific needs.
Lead users
Concept testing is important because it can:
help a firm avoid the costs of unnecessary product development
Dee has a new product concept for her Internet anti-piracy software company. She knows she needs to do
exploratory research such as:
A. in-depth interviews.
B. focus groups.
C. Internet surveys.
D. trade show intercept surveys.
When conducting exploratory research for her firm’s new Internet anti-piracy software, Dee knows the
most important question is:
whether or not respondents would purchase the software if it becomes available
Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers.
Kristina will ask consumers what they think of the clothing, but the most important question is:
whether or not they would purchase the swimwear if it becomes available
During concept testing for a new product, a marketer will likely ask:
A. whether or not consumers will buy it.
B. how frequently consumers would purchase it.
C. whether or not consumers think it is a good value for the price being suggested.
D. whether consumers would buy it as a gift or for themselves.
If a new product concept gets positive evaluations from potential customers, the next step for a marketer
product development
Before the development of computer-assisted design software, many firms handcrafted ______, wooden
or clay models that served as rough physical representations of the new product.
Barbara is using a test model of her firm’s new inline skates to see if they work according to the design
specifications. Barbara is involved in:
alpha testing
Before Segway manufactured their two-wheel people movers, they built a prototype and had staff
engineers test it for performance and stability. At this stage, Segway was involved in:
alpha testing
When testing new products, most firms consider the question of whether testing products on animals:
should be done when the new product does not contribute to the health and well being of human users
Golf ball manufacturers use “Iron Mike,” a machine that swings a golf club at a constant velocity, to test
the distance for new golf ball designs. When using Iron Mike, the manufacturers are engaged in:
alpha testing.
One reason auto companies spend millions on racing cars is that they offer the opportunity to test new
designs and technology under extreme conditions. Car racing provides an opportunity for:
beta testing
Technology can provide innovative solutions to consumer products, but they often mean increased costs.
For example, airlines could use radio frequency identification (RFID) to track luggage, which would
lead to fewer lost luggage problems and more satisfied customers. The airlines that adopt this kind of
innovation could:
gain a sustainable competitive advantage
Lorraine belongs to a national consumer panel created by a market research company. She regularly
receives samples of new products from a variety of firms and fills out questionnaires about the products.
The national consumer panel Lorraine is part of is engaged in:
premarket testing
A marketing professor in Ithaca, New York maintains a museum of failed consumer products. Most new
products in this museum failed during the _______________ stage of new product development, when
they are introduced to a limited geographic area.
test marketing
When McDonalds comes up with a new drink or sandwich for its fast food stores, they often market it in
a dozen or so of their outlets. When they do this, they are engaged in:
test marketing
The ____ step in the product development process is critical because it requires
tremendous resources and extensive coordination of all aspects of the marketing mix.
product launch
Michaela took her idea for a new toy for pre-school aged children through a long product development
process, and she had just concluded a very successful market test. She was making a list of what she’d
need to do to launch the product. Which of the following should appear on her to-do list?
A. Confirm target markets
B. Confirm positioning
C. Finalize marketing mix
D. Finalize marketing budget
_______ are special incentives offering reduced prices for a limited time, offered to retailers to get them to try a new product.
Introductory price promotions
Which of the following would NOT be part of the launch of a new product?
Starting to make preliminary decisions about the target market
Ken’s new product seemed like a perfect new addition to the product line, but he was getting some pushback from distributors, who did not seem to want to take on the new product. What options would
make the most sense for Ken?
A. Generate additional demand with customers so retailers and distributors will clamor for the product.
B. Offer to provide educational efforts if consumers don’t understand the product.
C. Offer technical support to ensure consumers will be satisfied with the product.
D. Provide financial incentives for the distributors
Now that the consumer demand was building for Miranda’s new organic shampoo, she and her team faced a new set of decisions. Which of the following is NOT one of the decision items not on the agenda for the
team discussion of Place in the marketing mix for a new product launch?
Are the packaging colors working well with the target markets?
A(n) _______ is a fee paid by manufacturers to get new products into stores or to gain more or better shelf space for products.
slotting allowance
Which of the following is an example of “timing” in new product development?
A. Launching new fashion products just before the new sales season.
B. Releasing G and PG rated movies at the beginning of summer.
C. Offering sample textbooks in spring for fall adoptions.
D. Announcing new technology products at the annual COMDEX computer trade show.
Beverly is assessing the results of a new product launch of a series of e-books for her bookstore. When
evaluating the results, Beverly will likely consider all of the following EXCEPT:
why it took her so long to consider the new product line
Which of the following is NOT one of the four product life cycle stages?
Microsoft’s Windows operating system continues to dominate the market, even though it has been around for over twenty years. Windows will likely remain in the mature stage of the product life cycle:
until a superior product comes along to replace it
During the ___ stage of the product life cycle, sales are low and profits are small or
When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage:
sales would be low, profits non-existent, and he would attract golf equipment innovators
During the _____________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a
small but increasing number of competitors
When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other
manufacturers entered the market, shifting the product life cycle for hybrid cars into the _____________
stage of the product life cycle.
Some products may stay comfortably in the maturity phase of the product life cycle often until a new
product emerges to replace them. An example of such a mature product is:
The growth phase of the product life cycle is always dynamic. Which of the following does NOT occur in
this phase?
Price competition with protracted price wars erodes profits
Lisa was extremely disappointed when, in her first marketing job, she was assigned to work on a
product in the mature phase of the product life cycle. Her work in school had focused on new products,
which seemed much more exciting. Once she started working with the product team, she became more
enthusiastic as she discovered that:
A. she could take the product into a new market segment to stimulate new growth.
B. simple product redesign could reinvigorate the product.
C. changes in consumers’ preferences were opening up new market segments.
D. taking the product to international markets would stimulate growth.
Which of the following is NOT a characteristic of products in the maturity stage of the product life cycle?
Laggards are a major focus of marketing efforts
During the _____________ stage of the product life cycle, sales peak and profits begin to decline as
competition becomes intense.
By the time BMW and Mercedes Benz entered the mini-SUV market, there were many competitors, sales
had peaked, and profits were declining. These firms entered the market during the ______________ stage
of the product life cycle.
During the _____stage of the product life cycle, firms either position themselves for a
niche market of loyal consumers or they exit the market.
The shape of the product life cycle curve isn’t always a smooth bell shape. The curve of a product may be
affected by:
how valuable the product is to the customer
The CEO of David’s firm just came back from a business seminar, and he called David into his office. “I
just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to
drop whatever you’re doing and inventory all of our products to determine exactly where they are in the
product life cycle.” David needs to think fast for a good answer because he knows that:
it is often impossible to identify with precision where a product is in the product life cycle
Which of the following is the correct sequence of new product adopters in the Diffusion of Innovation
Innovators, Early adopters, Early majority, Late majority, Laggards
Which of the following adopter categories refers to the last large group of buyers to enter a new product
Late majority
During _______ stage of the product life cycle there are few but an increasing number of
If a few of Nintendo’s customers are asked to try out a new video game which has not yet been released
on the market, this is an example of:
beta testing
The ______ is a specific price at which manufacturers encourage retailers to sell a product.
A. manufacturer’s suggested retail price
slotting fee
When a manufacturer launches a new product, it may offer _________ to wholesalers and retailers,
including introductory price promotions, special events, and personal selling.
trade promotions
The Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs
was a _______ in the MP3 player market.
In one test before product launch, customers try a sample product and are then surveyed to understand
whether or not they would buy/use the product again. This is known as:
premarket testing
Which of the following is not a stage in the product life cycle?
What type of event exposes retailers to large numbers of new products in a concentrated location?
Trade shows

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