Practice Test #2 Test Answers – Flashcards

Answer = b, Marketing only occurs when two or more parties are willing to exchange one thing for another thing. Marketing focuses on facilitating exchanges. In fact, marketing does not occur unless two or more parties are willing to exchange something for something else. For example, in a pure subsistence economy—when each family unit produces everything it consumes—there is no need to exchange goods and services and no marketing is involved.

Answer = c, firms seek to benefit from economies of scale. Many manufacturers prefer mass production with its economies of scale, which means that as a company produces larger numbers of a particular

Answer = a, making goods or performing services Production refers to the process of actually making goods or performing services. Marketing, on the other hand, provides needed direction for production and helps make sure that the right goods and services are produced in the necessary amounts, and that they find their way to consumers.

Answer = c, to develop screening criteria that will help a company identify what marketing strategy to pursue A S.W.O.T. analysis aids a company in developing a marketing strategy by helping it to develop screening criteria.

Answer = a, is tailored to fit some specific target customers while mass marketing aims at everyone with roughly the same marketing mix Target marketing involves creating a marketing strategy that is focused on a particular group of customers. In contrast, mass marketing—the typical production-oriented approach—vaguely aims at "everyone" with the same marketing mix.

Answer = d, It is an unpaid form of communication. Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services—including getting favorable coverage in newspaper stories or on television.

Answer = d, Target marketing is limited to fairly homogeneous market segments. Target marketing is not limited to small market segments—only to fairly homogeneous ones. A very large market—even what is sometimes called the "mass market"—may be fairly homogeneous, and a target marketer will deliberately aim at it.

Answer = e, Robinson-Patman Act The Robinson-Patman Act seeks prohibits "fake" advertising allowances and limits quantity discounts.

Answer = a, It can change rapidly. The economic environment refers to macro-economic factors that affect patterns of consumer and business spending such as national income, economic growth, and inflation. The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have big impacts on what customers buy. Changes in the economic environment can happen rapidly.

Answer = c, direct environment There are four areas of the external market environment: technological, economic, cultural and social, and political and legal. The direct market environment includes customers, the company, and competitors.

Answer = d, The demand for bicycles is increasing because consumers are becoming more health conscious. The economic environment refers to macro-economic factors that affect patterns of consumer and business spending such as national income, economic growth, and inflation. The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have big impacts on what customers buy. Changes in consumer tastes are also important to marketing strategy planning but are not an aspect of the economic environment.

Answer = b, that are as large as possible. The most important criteria for a good market segment is that it be operational, meaning that the firm is capable of applying it to identify customers and adjusting the marketing mix.

Answer = e, multiple target market approach The multiple target market approach involves segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.

Answer = b, A variation of the clustering approach relies on customer relationship management. A variation of the clustering approach relies on customer relationship management (CRM), where the seller fine-tunes the marketing effort with information from a detailed customer database.

Answer = a, The generic market includes only three of four aspects of the product-market definition—customer needs, customer types, and geographic area. It does not include product type. The complete product-market definition includes a four-part description: product type (type of good and type of service), customer (user) needs, customer types, and geographic area. A generic market description doesn't include any product-type terms.

Answer = b, determining dimensions Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product- market.

Answer = b, This approach is especially attractive for firms with limited resources. A combined target market approach may help achieve some economies of scale. It may also require less investment than developing different marketing mixes for different segments—making it especially attractive for firms with limited resources.

Answer = d, A combiner looks at various submarkets for similarities rather than differences. Combiners try to increase the size of their target market(s) by combining two or more segments and pleasing a relatively large group of people fairly well. They look at various submarkets for similarities rather than differences. Segmenters try to appeal to specific market segments using unique marketing mixes for each segment. They look for differences and aim to satisfy a few people very well.

Answer = a, It specifies which types of marks can be protected. The Lanham Act specifies what kinds of marks can be protected and the exact method of protecting them. It applies to goods shipped in both interstate and foreign commerce. It does not force registration, either domestically or in foreign nations.

Answer = e, a warranty must be clearly written, if one is offered. The federal Magnuson-Moss Act (of 1975) says that producers must provide a clearly written warranty if they choose to offer any warranty. The warranty does not have to be strong.

Answer = d, components, unlike supplies, become part of a finished product. Components are processed expense items that become part of a finished product. In contrast, supplies do not become part of a finished product.

Answer = a, brand equity. The value of a brand to its current owner or a company that wants to acquire it is known as brand equity. This is the brand's overall strength in the market.

Answer = d, fluctuations in product quality due to inevitable variations in raw materials The following are some of the conditions that are favorable to successful branding: Dependable and widespread availability is possible. When customers start using a brand, they want to be able to continue using it. There are economies of scale. If the branding is really successful, costs should drop and profits should increase. The product is easy to label and identify by brand or trademark. Demand is strong enough that the market price can be high enough to make the branding effort profitable. By contrast, if a product's quality is liable to vary considerably over time then branding may not be advisable since customers expect brands to be consistent.

Answer = d, Services are perishable. Services are perishable. They cannot be produced and then stored to sell at a future time when more customers want to buy. This makes it difficult to balance supply and demand, especially if demand varies a lot.

Answer = a, customers can own goods, but they cannot keep services. A good is a tangible item. It is usually easy to know exactly what one will get before one decides to buy a good, and once purchased, the item is in one's possession. In contrast, services are not physical—they are intangible. When one provides a customer with a service, the customer cannot keep it. Rather, a service is experienced, used, or consumed.