Practice Exam 2

Flashcard maker : Lily Taylor
Vladimir decided not to purchase the iPod shuffle because he didn’t think it would hold all of his songs. Vladimir was using his assessment of the iPod shuffle’s financial risk in making his decision.

False.

Vladimir is worried about the performance risk, or the failure of the product to perform as he needed.

Maslow’s Hierarchy of Needs is an interesting concept for psychology, but it has little relevance for marketing.

False.

Maslow’s Hierarchy of Needs helps explain motives, which are needs or wants that are strong enough to cause someone to seek satisfaction. In many cases, satisfaction is tied to a purchase decision.

Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ.

True.

This is the definition of determinant attributes.

The consumer decision process begins with a comparison of available alternatives.

False.

The consumer decision process begins with need recognition.

The greater the difference between a consumer’s unsatisfied need and the desired state, the greater the need recognition will be.

True.

A greater discrepancy leads to a more urgent drive to satisfy the need.

Pam didn’t go see the movie Gravity because her friends all said she wouldn’t be able to handle it. When she found out how good it was, she blamed her friends. Pam is demonstrating an internal locus of control.

False.

By letting her friends’ opinions control her actions, and then blaming them for her decision, she is demonstrating an external locus of control.

External agencies and government bodies publish safety ratings for cars to help consumers alleviate _____ risk.

physiological

Physiological risk could also be called safety risk. This risk can be an important issue when buying items such as cars. For this reason, external agencies and government bodies publish safety ratings to help consumers alleviate this risk.

According to the consumer decision process, after consumers recognize the need for a product, they then engage in

an information search.

The second step in the consumer decision process, after the consumer recognizes a need, is to search for information about the various options that exist to satisfy that need.

The vast majority of products and services are likely to satisfy

both functional and psychological needs.

Most products and services satisfy both functional and psychological needs although to different degrees depending on the product category.

A purchase decision that typically involves (at most) a moderate amount of effort and time is called

limited problem solving.

Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of time and effort.

When Catherine was considering different brands of jeans to buy, she could think of only three she would actually consider purchasing. These three brands make up her _____ set.

evoked.

A consumer’s evoked set comprises the alternative brands that the consumer states she would probably consider actually purchasing.

What are the three components that make up a person’s attitude?

Cognitive, affective, behavioral

An attitude consists of three components. The cognitive component reflects a person’s belief system, or what we believe to be true; the affective component involves emotions, or what we feel about the issue at hand, including our like or dislike of something; and the behavioral component pertains to the actions we undertake based on what we know and feel.

Which of the following pertains to the performance of a product or service?

Functional needs

Functional needs pertain to the performance of a product or service.

_____ involves the buyer considering his own personal knowledge about a product based on past experience.

An internal search for information.

An internal search for information involves examining one’s own memory and knowledge about the product or service gathered through past experience.

Because not all purchase intentions result in an actual purchase, marketers calculate the _____ to measure how effectively a decision to purchase a specific product results in a completed purchase.

conversion rate.

Marketers use the conversion rate to measure how well they convert purchase intentions into actual purchases.

Angela considered all sporting goods stores to be roughly equivalent in most ways; however, she considered REI stores to have an exceptional level of customer service. Customer service therefore, would be considered a _____ for her in evaluating sporting goods stores.

determinant attribute.

Consumers look for something special about various choices in a purchase decision to differentiate one brand from another, which is termed the determinant attribute.

Of the five types of risk associated with purchase decisions, which one involves the perceived danger inherent in a poorly performing product or service?

Performance.

Performance risk involves the perceived danger inherent in a poorly performing product or service.

The salient or important attributes about a particular product that a consumer bases his or her product evaluation on are called

evaluative criteria.

Evaluative criteria consist of salient attributes about a particular product category that are used to evaluate the attractiveness of different alternatives.

According to the elaboration likelihood model, which of the following variables determines whether limited or extended problem solving will operate in a particular purchase decision?

The level of involvement.

Consumers engage in two types of buying processes depending on their level of involvement: extended problem solving for high-priced or risky goods, and limited problem solving, which includes impulse buying and habitual decision making.

Ethan considered three important attributes when deciding where he would do his banking: the convenience of the location, hours of operation, and interest rates for CDs. In this situation, these three attributes are called

evaluative criteria.

Evaluative criteria consist of salient attributes about a particular product category that are used to evaluate the attractiveness of different alternatives.

A small business decides to upgrade its aging phone system. The business will probably place a straight rebuy order.

False.

A straight rebuy is typically used for additional purchases of things that are bought regularly. In this case, a new buy is the most likely choice.

Once a vendor receives an order from a firm, it responds by immediately filling the order.

False.

The supplier first sends an acknowledgment that it has received the order, and then it fills the order.

Public institutions do not engage in B2B relationships.

False.

Public institutions oftentimes engage in B2B relationships to fulfill their needs for capital construction, equipment, supplies, food, janitorial services, and so on.

Which of the following is an example of a government buyer?

the Pentagon.

Government buyers include national and local government organizations, as well as government agencies.

Phil put down the phone and told Alice, “I just love that customer. I got another big order, and they just keep on coming.” Phil is most likely selling to a firm in what kind of buying situation?

straight rebuy.

A straight rebuy occurs when the company is buying more of a product it has bought in the past. It sounds like Phil’s customer places straight rebuy orders frequently.

B2B buying decisions are often made by

committees.

B2B buying decisions are often made by a committee, often called the buying center.

The acronym RFP, when used by those involved in business-to-business buying, stands for

request for proposals.

The request for proposals (RFP) is a formal process whereby organizations invite suppliers to bid on supplying their required components according to specifications.

Which of the following is not one of the six buying center roles?

Advisor.

The six roles of the buying center are influencer, decider, buyer, user, gatekeeper, and initiator.

In a(n) _____ buying center, one person is authorized to make a decision, but input from others is gathered before doing so.

consultative.

Consultative buying centers use one person to make a decision but solicit input from others in the process.

In B2B markets, _____ are firms that buy and reprocess products and services before selling them again to the next buyer.

manufacturers.

Manufacturers buy raw materials, components, and parts that they reprocess, allowing them to produce their own goods for resale.

Autocratic buying centers are characterized by

a single decision maker.

In autocratic buying centers, one person makes the decision alone even though there may be multiple participants.

John is involved in the buying center of a large organization. He ultimately will determine whether to buy, what to buy, how to buy, or where to buy. What role does John play in this situation?

Decider.

The decider is the person who ultimately determines any part of the entire buying decision including whether to buy, what to buy, how to buy, or where to buy.

Although she wasn’t told this when hired, at her new job Dana noticed that the employees eat lunch at their desks while continuing to work and that on Fridays most everyone dresses casually. These behaviors are most likely part of the

organizational culture.

A firm’s organizational culture reflects the set of values, traditions, and customs that guide its employees’ behavior. The firm’s culture often comprises a set of unspoken guidelines that employees share with one another through various work situations.

Which of the following social media tools is mainly used for professional networking in the B2B marketplace?
LinkedIn.
In _____, the buyer is often the only member of the buying center involved in the process.

straight rebuys.

Straight rebuys occur when buyers simply buy additional units of products that they had previously purchased and the buyer is often the only member of the buying center involved in the process.

Which of the following statements regarding the B2B buying process is true?

In the B2B buying process, the search for information and evaluation of alternatives is more formal and structured.

The B2B buying process parallels the B2C process, but in the B2B process the search for information and evaluation of alternatives is more formal and structured.

When Kinko’s replenishes its supply of copy paper, it most likely involves a _____ situation.

straight rebuy.

Straight rebuys occur when buyers simply buy additional units of products that they had previously purchased.

In terms of business markets, organizations like hospitals that provide goods and services to people in their care are classified as

institutions.

Hospitals, educational organizations, and religious organizations are classified as institutional business markets.

Used by many smaller companies to help streamline procurement or distribution processes, _____ is an Internet site whose purpose is to be a major starting point for users when they connect to the web.

a web portal.

In general, a web portal is an Internet site whose purpose is to be a major starting point for users when they connect to the web.

Direct investment offers the firm complete control over its operations in the foreign country.
Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country.
The BRIC countries are Bolivia, Russia, Italy, and China.

False.

The BRIC countries are Brazil, Russia, India, and China.

Entering into a global franchise agreement exposes a company to higher risk than if the company had entered into direct investment in the country.

False.

Franchising is a contractual agreement between the firm and a local firm. In a global franchising agreement, this entails lower risks and requires less investment than if entering into direct investment in a country.

Exporting refers to a situation where a company maintains ownership of its plants, operational facilities, and offices in a foreign country in which it sells its products.

False.

Exporting means producing goods in one country and selling them in another, and involves the least financial risk of all the global entry strategies.

Which of the following is not one of Hofstede’s cultural dimensions?

certainty assurance

Hofstede’s five dimensions are power distance, uncertainty avoidance, individualism, masculinity, and time orientation.

Tariffs, quotas, and currency exchange policies affect global

pricing strategies.

These are all important issues that will impact the price consumers will pay for a product.

The term trade deficit refers to
higher levels of imports than exports.
The global product strategy a firm chooses depends on
the needs of its target market.
BMW, the German company that manufactures automobiles, motorcycles, and other products, owns and operates a manufacturing plant in Spartanburg, South Carolina, in the United States. This is an example of which global entry strategy?

Direct investment.

Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries.

Which global entry strategy has the highest degree of risk?

Direct investment

Direct investment requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments.

The measure of how much one currency is worth in relation to another is referred to as
the exchange rate.
A(n) _____ forms when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.
joint venture.
_____ includes both the market value of the goods and services produced by country in a particular year plus the net income earned from investments abroad.
Gross national income
According to your text, which of the following is not one of the fundamental changes that have resulted in global markets?
Increased use of tariffs and embargoes by countries.
The Economist’s Big Mac Index, which suggests that exchange rates should adjust to equalize the cost of a basket of goods and services wherever it is bought around the world, is an example of which of the following metrics?
Purchasing power parity.
Because the United States imports more goods than it exports, it operates under a(n)
trade deficit.
In terms of market size and population growth rate, which of the following is a trend that is occurring in the world market that impacts the marketing of goods and services?
Marketing to more rural populations is more costly than reaching urban areas.
If a firm wants to conduct a country market analysis, it must look at major economic factors using well-established metrics. Which of the following is not a major economic factor that the firm would consider?

Trade agreements.

A firm conducting an economic analysis of a country market must look at three major economic factors using well-established metrics: the general economic environment, the market size, and population growth rate, and real income. Trade agreements are part of the government actions that a firm would assess.

In pricing products in parts of Europe, including Belgium, Italy, Spain, Greece and France, U.S. companies need to be aware that sales (i.e., temporary promotional discounts)

are allowed only twice per year.

Determining the selling price in the global marketplace is an extremely difficult task. For example, in many European countries, sales are allowed only twice a year, in January and June or July.

In the process of ______, companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.

reverse innovation.

Global expansion can move in various directions. In reverse innovation, for example, companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.

Although China represents one of the largest markets for soup in the world, Campbell’s Soup Company had to invest considerable time and effort in making changes to its existing products to sell them in China primarily due to
cultural differences.

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