Final Exam Flashcards by kelly leonard

A brand is ______________.

a) Created by memorable, meaningful and likable advertising
b) A set of associations linked to a name
c) A reputation
d) A and B
e) A and C
f) B and C
g) A, B and C

f. B and C

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The great era of branding started?

a) In the early 1800s
b) In the late 1800s
c) In the early 1900s
d) In the 1950s

b. In the late 1800s

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The connection between a lot of advertising and brand equity is ________ between sustained innovation excellence and brand equity.

a) A lot weaker than
b) About the same as
c) A lot stronger than

a. A lot weaker than

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Given the results of the Nescafe Instant coffee experiment, how did Nescafe reposition its brand?

a) Great tasting and convenient
b) Great tasting for the busy homemaker
c) Great tasting and it frees up time to do more important chores
d) Great tasting to the last drop

c. Great tasting and it frees up time to do more important chores

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There are different types of brand loyalty that have different strengths. Which of the following is the correct order of strength presented in the section? Strongest first, weakest last.

a) Identity, differentiation, emotional, service contract, convenience
b) Differentiation, emotional, identity, service contract, convenience
c) Emotional, differentiation, identity, convenience, service contract
d) Emotional, identity, differentiation, service contract, convenience

d. Emotional, identity, differentiation, service contract, convenience

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Harley Davidson is a great example of what sort of brand loyalty?

a) Emotional loyalty
b) Differentiation loyalty
c) Identity loyalty
d) Service contract loyalty

c. Identity loyalty

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Who are/were most likely to be the most brand-loyal to packaged goods and appliances?

a) Your generation
b) Your parents’ generation
c) Your grandparents’ generation

c. Your grandparents’ generation

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What is the reason for the change in brand loyalty between generations?

a) Exposure to more advertising
b) Greater innocence
c) Much busier
d) Reduced product improvement

d. Reduced product improvement

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Where are the greatest branding opportunities today?

a) In big ticket items involving a lot of risk
b) To insecure teenagers
c) In developing economies

c. In developing economies

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In leveraging brand reputation, a strong brand .

a) Opens the door and invites you in
b) Provides a foot in the door, that is all
c) Blows down the door and blows out the windows

b. Provides a foot in the door, that is all

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Which of the following has Virgin used to extend its brand name?

a) The extension category is used in the same usage situation
b) The extension category is distributed through the same channels
c) The extension category is not dominated by existing, powerful brands
d) All of these options
e) None of the above

e. None of the above

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Bruce McLaren, a New Zealander, founded the McLaren racing team that won eight Formula One World championships during the 1980s, and McLaren is still a major player in the design of race cars and winning championships. Which of the following would not have been a good brand extension?

a) McLaren after-market high performance auto parts and accessories
b) McLaren high-performance driving courses
c) McLaren scenic tours of New Zealand
d) A super sports car
e) None of the above

c. McLaren scenic tours of New Zealand

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Singer sewing machine wrecked its brand equity by .
a) Ceasing to provide customer support and education
b) Selling off all of its company owned stores
c) Stopped investing in developing and innovating high quality sewing machines
d) All of these options
e) None of the above

d. All of these options

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Which of the following is likely to most increase shareholder value and obtain financing?

a) A very clever brand advertising campaign
b) Having the Chief Executive Officer appear in the brand advertising campaign
c) Having the company name as the brand name
d) All of the above

c. Having the company name as the brand name

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Which of the following is the odd brand out?

a) NoDoz
b) Handy Wipes
c) Slim Fast
d) Mop and Glow
e) Tide

e. Tide

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When a logo’s reputation is earned over decades, ______.

a) The logo should stay the same for decades
b) The logo needs to be refreshed to create more interest and attention
c) The logo needs to be changed to create new brand associations

a. The logo should stay the same for decades

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Which of the following was not one of the first two activities in the Good Grip’s product development process?

a) Identify a consumer need
b) Hire a designer
c) Learn about the market

b. Hire a designer

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The Good Grips case study highlighted best practice in ________.

a) Understanding customer product use and benefits sought
b) Design
c) Funding the project
d) Maximizing distribution reach
e) Minimizing opportunities for imitators
f) All of the above

f. All of the above

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The filter or stage-gate product development process is made up of which of the following stages?

a) Idea development, analysis and screening, concept development, prototype design, prototype manufacturing and testing
b) Analysis and screening, idea development, concept development, prototype design, prototype manufacturing and testing
c) Idea development, concept development, analysis and screening, prototype design, prototype manufacturing and testing
d) Idea development, concept development, prototype design, analysis and screening, prototype manufacturing and testing

a. Idea development, analysis and screening, concept development, prototype design, prototype manufacturing and testing

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In 1990, ___ of new product development projects were next generation, break-through products and by 2004, ___ were next generation, break-through products according to Professor Cooper.

a) 12%, 20%
b) 20%, 12%
c) 41%, 61%
d) 61%, 41%

b. 20%, 12%

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The typical performance metric for judging new product success is .

a) Return on investment
b) Market share
c) % of sales coming from new products launched in the last 3-5 years
d) All of the above

c. % of sales coming from new products launched in the last 3-5 years

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The current emphasis in new product development in North America encourages:

a) Managers to think inside the box
b) Managers to think outside the box
c) Partnerships with companies in low cost markets

a. Managers to think inside the box

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The Chief Executive of GE, Jeff Immelt thinks .

a) North America has a great future in developing new products
b) His company will do more product development in Germany
c) GE will move its break-through product development efforts to India and China

c. GE will move its break-through product development efforts to India and China

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The filtering, stage-gate approach in turbulent times is considered by two leading marketing scholars to be:

a) Best practice
b) A way of ensuring that 70% of your product development projects are successful
c) A way of ensuring that 50% of your product development projects are successful
d) Cumbersome and inappropriate

d. Cumbersome and inappropriate

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Product development is about strong a) Design creativity b) Leadership c) Focus d) Simplicity e) All of the above

e. All of the above

Concurrent engineering is ______. a) The development of the production process and marketing plan after the development of the product b) The development of the production process and marketing plan before the development of the product c) When several product development teams work in parallel rather than in sequence d) When several product development teams work in sequence rather than in parallel

c. When several product development teams work in parallel rather than in sequence

A study found that concurrent engineering . a) Reduces time to market by 50-80 percent b) Development time is 20-50 percent less c) Dollar sales are 60-90 percent higher d) Overall quality is 200-600 percent higher

d. Overall quality is 200-600 percent higher

Research has shown that the design management skills listed in the section _____. a) Are positively related to firm growth and profitability b) Moderate the effect of investment in design on performance c) Both A and B d) None of the above

c. Both A and B

Which of the following statements is true, as discussed in the product development module? a) One third of the CEO’s of very successful high-growth, high-profit companies manage the task of designing low cost into their products well b) It has been proven that concurrent engineering is very effective c) It is easy to implement concurrent engineering d) Many admit they are doing a good job of early testing of product design for manufacturability, of estimating costs, and of involving customers and suppliers during the design process

b. It has been proven that concurrent engineering is very effective

What is the key to a successful product design process? a) Iterating or cycling from design improvement and improved prototype to customer testing and consultation b) Spending a lot of time in designing the first prototype c) Hiring professionals to design the product d) Allocating big budget for product design

a. Iterating or cycling from design improvement and improved prototype to customer testing and consultation

Which of the following statements is true about prototyping? a) You develop the clay model and then use it as input into computer-aided design b) Quality prototyping is about getting the prototype right the first time c) The working model that the organization has figured out how to manufacture is called the prototype d) Organizations don’t spend enough time in developing detailed specifications of the first prototype

c. The working model that the organization has figured out how to manufacture is called the prototype

Royal Phillips Electronics developed a global branding effort called “Sense and Simplicity” in 2004. Which of the following activities is incorrect? a) Set up a Simplicity Advisory Board of company outsiders to evaluate products and report to the CEO b) This principle applies to all good design: Simplify! c) Everything should be made as simple as possible, and then simpler d) It is an extension of the Chinese principle of feng shui: buildings and interiors with no clutter and complexity are healthy

c. Everything should be made as simple as possible, and then simpler

A major part of product development involves: a) Improving the process b) Getting rid of the “not invented here” business mentality c) Changing the “corporate lawyers are king” business culture d) All of the above

d. All of the above

The CEO of P&G talks about two consumer moments of truth. Which of the following is NOT one of them? a) When the consumer confronts the product on the store shelf b) When the consumer talks to other consumers c) When the consumer uses the product at home d) All of the above

b. When the consumer talks to other consumers

P&G’s recent success in product development is because it has set a goal of having ____ of its new products come from outside the company. a) 30 percent b) 40 percent c) 50 percent d) 80 percent

c. 50 percent

Which of the following is NOT one of the outside sources of innovation ideas? a) New ideas from employees b) Copying innovations in foreign markets c) New ideas from consumers d) Existing specialized industrial product e) None of the above

e. None of the above

A.G. Lafley, the P&G CEO, used simple slogans. a) He felt that such simplification enables everybody to understand what the goal is and how to get there b) His plan is simple: focus on the billion-dollar brands c) He wanted to try to grow new brands rather than sell more Tide d) Both A and B e) A, B, and C

d. Both A and B

Why do we have warranties if the common law is that a product must be of merchandise quality? a) To protect the seller b) To bolster the promise of customer satisfaction c) Both A and B d) We don’t have to have warranties for every product

c. Both A and B

A positive warranty or guarantee can . a) Raise quality expectations b) Raise employee efforts and morale c) Act as a quality control process d) Be a competitive differentiation feature e) All of the above

e. All of the above

In following through on claims, . a) When a customer complains, it will always lead to negative word-of-mouth b) If a complaint is handled promptly and graciously it can create a more loyal customer c) It is essential to process a warranty claim quickly and efficiently d) Both B and C e) A, B, and C

d. Both B and C

Which of the following statements is true, as discussed in the product development module? a) All products have an implied warranty b) A defensive warranty acts as a spur to improve product quality and design c) An outstanding warranty has an impact on consumer perceptions of quality, particularly for an established brand d) A good customer service manager points out when customers have obviously not read product instructions

a, All products have an implied warranty

An outstanding warranty has an impact on consumer perceptions of quality, particularly for . a) An existing brand b) A new brand c) A brand extension d) Both existing and new brands

b. A new brand

Each year, marketers spend far more on _______. a) Advertising b) Packaging c) Distribution channel promotions d) Similar budget are allocated to all of the above

b. Packaging

2. A product’s packaging _______. a) Is its dressing b) Is often its most distinctive marketing effort c) Is a critical selling tool d) May have to be designed to fit unique display locations e) All of the above

e. All of the above

Which of the following statements about packaging is true? a) A one-page guide to product use is a sure sign of poor marketing b) The consumer cannot benefit from clever packaging designed for the usage situation c) Innovative packages can add real convenience to product use d) Recyclable packages will appeal to environmentally concerned market segments e) Both C and D

e. Both C and D

Which of the following statements about a label is NOT true? a) A good product label will be easy to remove b) A good product label will have an 800 number c) A good product label will signal quality d) A good product label is designed to be read by the target segment e) None of the above

a. A good product label will be easy to remove

Which material in packaging may enhance the quality image of the brand in beverages and foods industries, as discussed in the product development module? a) Cans b) Plastic c) A glass bottle d) Cardboard

c. A glass bottle

When supply increases faster than demand increases: a) Price increases b) Price decreases c) Price stays the same

b. Price decreases

When demand increases faster than supply increases: a) Price increases b) Price decreases c) Price stays the same

a. Price increases

When demand decreases faster than supply decreases: a) Price increases b) Price decreases c) Price stays the same

b. Price decreases

When supply decreases faster than demand decreases: a) Price increases b) Price decreases c) Price stays the same

a. Price increases

5. The long-term solution to the high price of gasoline is _________. a) To find new sources of supply b) Decrease the fuel consumption of cars c) Reduce the price through government subsidy d) Increase the price further through government taxation

d. Increase the price further through government taxation

Prices are economic stop lights. They direct buying and selling. When prices become sticky: a) The market is less efficient in allocating resources b) Demand is increasing faster than supply so invest in supply c) Supply is increasing faster than demand so divest in supply d) The market is in efficient equilibrium

a. The market is less efficient in allocating resources

In which of the following continents do prices change most often? a) Asia b) Europe c) North America

c. North America

What is the consequence of increased general global demand that is only somewhat answered by increased supply? a) General price increases b) General price decreases c) Prices stay the same

a. General price increases

Which of the following does the Price Setting worksheet analysis do? a) Tells you how much you have to sell to meet the profit targets b) Tells you what market share you have to achieve to meet the profit targets c) Specifies your allocation of fixed costs and variable costs d) All of the above

d. All of the above

What can you learn from the Price Change worksheet? a) What price sensitivity it will take to make a price reduction pay off b) What price sensitivity it will take to make a price promotion pay off c) Both A and B

c. Both A and B

What is gross contribution? a) Price minus variable cost per unit b) Price minus total fixed cost c) Quantity sold times contribution

c. Quantity sold times contribution

If the contribution margin percentage is currently 40 percent and a price reduction of 20 percent is proposed, by what percentage will sales have to increase for the price- reduction to be worthwhile? a) 20% b) 50% c) 100% d) 200%

c. 100%

If you face fierce competition, the short-term effect on sales of a price reduction will be: a) Greater than the long-term effect of a price reduction b) Less than the long-term effect of a price reduction c) The same as the long-term effect of a price reduction

a. Greater than the long-term effect of a price reduction

The Price Change worksheet uses the “Wisdom of the Crowd” by: a) Employing economic analysis that has been tested and proven b) Using the forecasts of everyone involved c) Both A and B d) None of the above

b, Using the forecasts of everyone involved

Which of the following scenarios best describe a high negative price elasticity? a) When price increases, demand decreases a lot b) When price increases, demand decreases little c) When price decreases, demand increases a lot d) Both A and C

d. Both A and C

Which of the following increases consumer price sensitivity? a) When the purchase accounts for an insignificant percentage of income b) When prices are dropping c) When product innovation increases d) When prices can be searched on the Internet

d. When prices can be searched on the Internet

Which of the following decreases consumer price sensitivity? a) When the purchase is a necessity b) When prices are increasing c) When product innovation decreases d) When there are close competitive substitutes

a. When the purchase is a necessity

Which of the following price points should markets focus on? a) Supply curve kink points b) Demand curve kink points c) Both supply curve and demand curve kink points

c. Both supply curve and demand curve kink points

Optimal price is very likely to be at one of the demand curve kinks because it produces the: a) Target return on investment b) Lowest variable costs c) Highest gross contribution d) None of the above

c. Highest gross contribution

Kinks in the demand curve for a particular product are more likely to occur when: a) The firm has successfully distanced the product from potential substitute products b) There exist perceptual price points wherein small changes in actual price are associated with rather large changes in perceived price and hence demand c) There exist close substitute products d) Both A and B occur e) Both B and C occur

e. Both B and C occur

An enterprising manufacturer of filing-cabinet hanging folders makes them in several bright, modern colours rather than the standard, dull, cardboard green. Which of the following reasons contributed to the great success of this very successful and very profitable quality-added product feature and product positioning differentiation? The different colours are more aesthetically attractive a) Yes b) No

a. Yes

b. No

An enterprising manufacturer of filing-cabinet hanging folders makes them in several bright, modern colours rather than the standard, dull, cardboard green. Which of the following reasons contributed to the great success of this very successful and very profitable quality-added product feature and product positioning differentiation? The extra cost is only a cent or so per file a) Yes b) No

a. Yes

An enterprising manufacturer of filing-cabinet hanging folders makes them in several bright, modern colours rather than the standard, dull, cardboard green. Which of the following reasons contributed to the great success of this very successful and very profitable quality-added product feature and product positioning differentiation? Customers have to keep a larger inventory of files a) Yes b) No

a. Yes

When administered according to a careful feeding schedule, a premium nutritional additive called Supercowchow increases milk production earnings in a dairy herd to $1,050,000 from the $1,000,000 using the standard Cowchow that costs $50 a sack for the farmer to buy. The farmer uses 1,000 sacks of Cowchow a year. Supercowchow costs $10 per sack extra to manufacture and the farmer would use 1,000 sacks of it. Thus the added-value of Supercowchow over regular Cowchow is $50,000/1,000 sacks, which is $50 per sack. Which of the following would be the farmers’ highest acceptable price for the new Supercowchow per sack? a. $60 b. $70 c. $80 d. $90 e. $100

d. $90

g. $70

m. $80

c. Decrease

Dell computer sets the price of its added-value notepad features based on: a) The cost of the additional feature b) Buyers’ perceived value of the feature c) Both the cost and the perceived value

c. Both the cost and the perceived value

When the market has distinguishable segments that vary in their degree of price sensitivity, the best pricing strategy to use when initially introducing a new product is likely: a) Penetration pricing b) Price point pricing c) Price skimming d) Substitute pricing e) Predatory pricing

c. Price skimming

Which of the following products can price skimming strategy be applied with? a) Luxury goods b) Highly demanded new drugs c) A Rolex watch d) All of the above

d. All of the above

A price skimming strategy: a) Is more likely to attract a large number of buyers b) Is more likely to attract competitors c) Is illegal if the price is set lower than the firm’s average cost d) Will work only when there are substitute products on the market

b. Is more likely to attract competitors

Lower introductory prices can lead to higher per unit margins by: a) Increasing demand for competing products b) Decreasing demand for competing products c) Increasing sales volume and achieving economies of scale and sales efficiencies d) Maintaining brand loyalty with price discounts

c. Increasing sales volume and achieving economies of scale and sales efficiencies

According to the module, which of the following products/services uses a premium pricing strategy? a) Extended appliance warranties of Walmart b) P&G’s Crest Spinbrush c) Extended appliance warranties of Best Buy d) None of the above

c. Extended appliance warranties of Best Buy

Consistently pricing your product below your average cost: a) Can be profitable if you can sell complementary products at a relatively high margin b) Is price discrimination if certain consumer groups do not purchase the products c) Can be considered predatory pricing if it results in taking sales away from competitors d) Can be profitable if there are multiple substitutes in the market e) Both A & C

e. Both A and C

What kind of pricing strategies have Toyota and Honda done over the last 50 years in the United States? a) Penetration pricing strategy b) Keep raising quality with each improved model c) Keep reducing prices with each improved model d) Both A and B

d. Both A and B

A penetration pricing strategy can be attractive when: a) Creating the necessary long-term aftermarket relationship with a customer that generates profitability b) It creates an industry platform or standard to which all other rivals must use or conform c) Both A and B d) None of the above

c. Both A and B

Price shading: a) Is illegal in North America b) Allows sellers to lower prices for buyers who are knowledgeable about competitive suppliers c) Results when sellers maintain their prices at the same level when competitors raise prices d) Results when sellers maintain their prices at the same level when competitors lower prices e) Is useless when trying to deal with seasonal fluctuations of supply and demand

b. Allows sellers to lower prices for buyers who are knowledgeable about competitive suppliers

In a market where price shading is relatively common, sellers who do not shade their prices: a) Are typically seen as much more ethical than their competitors b) End up haggling with customers over prices c) May be perceived as uncooperative and unreasonable d) Are better able to deal with seasonal fluctuations in supply and demand e) Often acquire greater brand loyalty as a result of their unwillingness to participate in this illegal activity

c. May be perceived as uncooperative and unreasonable

A method to reduce price shading’s potential to lower profits is to: a) Fire employees who participate in this activity b) Prosecute employees who participate in this activity c) Educate employees regarding legal pricing practices d) Set list prices relatively low and allow unrestricted salesperson price negotiations e) Base commissions on profits and not sales volume

e. Base commissions on profits and not sales volume

Payment terms: a) Price discriminate against slow-paying customers b) Many markets use the standard term “2-10, net 30” c) Most sellers impose and charge interest penalties on delinquent customer debt d) Both A and B

d. Both A and B

Volume discounting: a) Is a form of price discrimination b) Is a form of predatory pricing c) Results in lower overall demand for the selling firm’s brand d) Results in a sustainable competitive advantage over non-discounting sellers e) Is more likely to occur when there are no substitutes in the marketplace

a. Is a form of price discrimination

A tied pricing contract: a) Is illegal in the United States b) Results in lower profits for the selling firm, due to the necessarily lower margins c) Fixes the price of a product for a period of time (usually one year) d) Ties the firm’s price increases to changes in the consumer price index (CPI) e) Results in lower prices for complementary products

a. Is illegal in the United States

Price discrimination: a) Is illegal in the United States b) Results when sellers maintain their prices even though competitors raise their prices c) Results when sellers maintain their prices even though competitors lower their prices d) Is a form of predatory pricing e) Results when a seller differentially adapts prices to various buyers

e. Results when a seller differentially adapts prices to various buyers

A movie theatre that prices afternoon showings lower than more popular evening showings: a) Is in danger of a class action lawsuit for price discrimination b) Must prove that afternoon showings cost less on average than evening showings c) Cannot sustain such a strategy over the long term d) Does so because of lower demand and because it cannot store its excess seating capacity e) Is foolishly losing revenue that could have been generated by pricing evening showings at the lower price

d. Does so because of lower demand and because it cannot store its excess seating capacity

Electric utilities have developed _____ to compete in the home heating market segment. a) Usage segment discounting b) Volume discounting c) Price shading d) All are correct answers

a. Usage segment discounting

What impact(s) might occur when off-peak demand pricing is applied? a) Increasing the annual overall average selling price b) Reducing the annual overall contribution margin c) Price-sensitive shoppers wait for the sales to occur d) Both B and C

b. Reducing the annual overall contribution margin

A negative aspect of price promotions in a mature market is: a) That they can reduce the degree of brand loyalty in the market b) That they cause buyers to switch to non-promoted brands c) The lack of competition that results d) That brand switching decreases e) None of the above

a. That they can reduce the degree of brand loyalty in the market

Price promotions: a) Lead to a transfer of positive feelings to the product or brand b) Are typically superior to free sample promotions c) Work best with mature brands d) Have strong reinforcing effects and train shoppers to become deal-seeking shoppers e) None of the above

d. Have strong reinforcing effects and train shoppers to become deal-seeking shoppers

Many price discounts are wasted because: a) About two in three are not supported by special point-of-purchase displays b) About 30 percent are not passed on to consumers c) They are not noticed by buyers d) They are automatically given to all consumers e) B, C and D

e. B,C, and D

Research suggests that compared to price promotions, consumers may have a more positive feeling about: a) An equivalent price reduction made in the base price b) Coupons and rebates c) None of the options are true

b. Coupons and rebates

Which of the following statements is true? a) The timing of promotion isn’t an important tactical decision b) In the fashion world, promotions running late in the season are designed to reduce inventory carrying costs and the risk of fashion obsolescence c) Retailers don’t manage the promotions by scheduling their manufacturer orders d) Providing an early promotion will not attract buyers who would buy later at the usual higher price

b. In the fashion world, promotions running late in the season are designed to reduce inventory carrying costs and the risk of fashion obsolescence

Which of the following scenarios described in the price module best represents the advantage of differentiation over price promotion? a) Procter & Gamble’s patented innovation “Pert Plus” b) Grind-your–own gourmet coffee beans by entrepreneurial firms c) Maxwell House coffee d) Both A and B

d. Both A and B

What are the possible underlying implications when companies rely on price promotions to sell their mature product? a) Companies don’t have innovative strategies b) The product- development process is broken c) The product-development process needs to be fixed d) All of the above

d. All of the above

What can be done to discourage price promotions? a) Operate close to production capacity b) Salesforce incentives should be based on sales volume c) No need to discourage price promotions d) None of the above

a. Operate close to production capacity

Transfer pricing is a) The price you charge transfer companies for a product or service b) The price you charge another unit or subsidiary of your company for a product or service c) The price you charge an overseas subsidiary of your company for a product or service d) The price you pay transfer companies for a product or services

b. The price you charge another unit or subsidiary of your company for a product or service

The most efficient transfer price is: a) The market price of the goods and services that the subsidiary faces b) The price that minimizes overall taxes c) The price that minimizes taxes of the selling subsidiary d) The price that minimizes taxes of the buying subsidiary

a. The market price of the goods and services that the subsidiary faces

Transfer prices are most often adjusted because of: a) Tax implications b) Currency fluctuations c) The personalities involved d) The organizational politics involved

a. Tax implications

Which of the following statements is true? a) If a company can, and it is legal, it will keep most of the profits earned in the country with the highest corporate income tax on profits b) If a company can, and it is legal, it will keep most of the profits earned in the country with the lowest corporate income tax on profits c) Financial accountants are likely to use the market price as a starting point and make a taxation consideration adjustment d) Both B and C e) None of the above

d. Both B and C

It is likely that the internal buyer will suggest that the transfer price should be the market price: a) Less half the cost savings in sales commissions and distribution that result from selling to a subsidiary (an internal buyer) b) Less the cost in sales commissions and distribution that result from selling to a subsidiary (an internal buyer) c) Plus half the cost savings in sales commissions and distribution that result from selling to a subsidiary (an internal buyer) d) Plus the cost in sales commissions and distribution that result from selling to a subsidiary (an internal buyer)

b. Less the cost in sales commissions and distribution that result from selling to a subsidiary (an internal buyer)

In addition to economic efficiency and tax arguments, most of the rest of transfer pricing is about: a) Organization politics b) Power plays c) Pushing the legal and ethical limits of tax-based transfer pricing d) All of the above

d. All of the above

What is the first principle of sales management? a) A company needs to hire people with excellent personal selling skills b) Be able to organize and lead such people, otherwise the company cannot win in the marketplace c) Both A and B d) None of the above

c. Both A and B

Which of the following statement(s) is NOT true for salespeople? a) They hasten the adoption and diffusion of new innovations b) They hasten the adaptation of their company to market realities c) They don’t know networks of customers and distributors on a personal level d) They seldom unravel the marketing mistakes made by others e) Both C and D

e. Both C and D

Which of the following is an objective of personal selling? a) To keep a current customer happy and loyal b) To persuade a current customer to buy more c) To persuade a potential customer to buy a new product or service d) All of the above e) Both B and C

d. All of the above

What might be the objectives if a salesforce calls on retail accounts? a) Introducing new product lines b) Making sure merchandising displays are put in place c) Attempting to increase the amount and quality of shelf space given to its product d) Encouraging the account to cooperate with promotion programs e) All of the above

e. All of the above

According to the sales module, what percentage of time spent with customers is high salesforce efficiency? a) 35% b) 50% c) 65% d) 85% e) None of the above

b. 50%

Creative, win-win process improvements give the trading relationship a differentiation that benefits . a) The buyer b) The seller c) Both the buyer and the seller d) None of the above

c. Both the buyer and the seller

Which of the following is NOT a relationship selling tactic? a) Expanding the size of the pie b) Giving back parts of the pie c) Adding a new ingredient to the pie d) Reengineering the whole pie-making process e) They all are all a relationship selling tactic

e. They all are all a relationship selling tactic

Which of the following statement is true for bridging, as described in the sales module? a) Just add a new trading dimension b) Fundamental, long-term trading processes are altered to both seller’s and buyer’s advantages c) It has happened between Walmart and Procter & Gamble d) Both B and C e) All of the above

d. Both B and C

Which of the following statement is true for logrolling, as described in the sales module? a) Both the buyer and seller need to discuss the trading terms that are most important to each b) Each gives on different dimensions to make the deal c) Decrease the total value of the exchange and the relationship d) Both A and B e) None of the above

d. Both A and B

What are the characteristics of successful order getters? a) They uncover customer needs b) They sell value-added technical and process solutions c) Honest concern for the customer d) All of the above e) Both A and C

d. All of the above

What may occur if firms do not handle the redefining of the salesperson’s role in the new age of team selling? a) They may lose key salespeople b) They may lose accounts c) Both A and B d) None of the above

c. Both A and B

What are the characteristics of EDI (electronic data interchange)? a) Enables automated just-in-time delivery b) Close monitoring of product and service quality conformance to contract c) Greatly reduces the need for a salesperson to service an account d) All of the above

d. All of the above

Which of the following statements is true about cross-functional team management? a) Has a dramatic effect on the sales management of key accounts b) A key supplier of a component cannot become a permanent member of the cross- functional account team c) May invite a supplier (vendor) to attend a special or occasional meeting d) Both A and C e) All of the above

d. Both A and C

``` Some entrepreneurial risks may have to be taken to give heavy support and service to . a) Large, slow-growth customers b) Small, slow-growth customers c) Large, high-growth customers d) Small, high-growth customers ```

d. Small, high-growth customers

A seller in a high-growth market faces particular problems, such as: a) It constantly has to adjust its organization as its sales expand b) If it does not adjust its organization accordingly, it opens up the market to rivals c) It can serve all of the new customers that are springing up in a territory d) Adding salespeople until they no longer generate enough contribution to justify their employment e) A, B, and D

e. A, B, and D

Regardless of the approach used to organize the salesforce, which of the following environmental realities must be recognized by the selling firm? a) All customers should be given equal sales service b) The competition in the market c) Treat all salespeople equally d) All of the above

b. The competition in the market

The old-fashioned geographical sales territory is often still preferred over other sales organizational structures designed around customers or products because: a) It offers the firm the greatest control at a lower cost b) It increases sales efficiency c) It is more popular d) All of the above

a. It offers the firm the greatest control at a lower cost

Which of the following statements is true about parallel saleforces? a) A parallel salesforce organization is often created as the result of a takeover or merger b) They exist to avoid organizational politics c) Kraft had four different saleforces which have now been arranged into one with 300 customer service teams d) All of the above are true

d. All of the above are true

Total Quality Management (TQM) reengineering of processes: a) Can be applied to sales b) Can produce the same benefits as it provides in manufacturing and physical distribution c) Cannot be applied to sales because it has to deal with human beings d) Both A and B

d. Both A and B

The use of technology such as 800 service call numbers, cell phones, home Internet access to account records and to members of a sales support team, has: a) Made salespeople so much more efficient and productive b) Enabled many companies to greatly increase their salesforce size c) Led to less direct person to person interaction with customers d) Both A and C e) All of the above

d. Both A and C

The basic principle behind best practice in increasing salesforce size is . a) Marginal return b) Total sales volume c) Salary and commission d) All of the above

a. Marginal return

Changing a sales territory . a) Is a significant event b) Disturbs established customer relations c) Has repercussions on other territories d) All of the above

d. All of the above

Which of the following statements is true? a) In the 1960s, the growth of telemarketing forced many companies to re-evaluate their sales territory strategy b) In the 2000s, the growth of the Internet forced a re-evaluation of sales territories c) Technology innovations in communication sometimes necessitate a complete restructuring of sales-force territories d) Both B and C e) All of the above

d. Both B and C

Which of the following is the first step in the process used to determine salesforce size? a) Set the average time that salespeople are to spend with AA to D accounts b) Divide the total time required to service accounts by the selling time available to the average salesperson c) Total the amount of time required in a year to service all accounts by multiplying the number of each account category by the minutes per year to service that category and summing the totals of AA, A, B, C and D accounts

a. Set the average time that salespeople are to spend with AA to D accounts

Which of the following is the second step in the process used to determine salesforce size? a) Set the average time that salespeople are to spend with AA to D accounts b) Divide the total time required to service accounts by the selling time available to the average salesperson c) Total the amount of time required in a year to service all accounts by multiplying the number of each account category by the minutes per year to service that category and summing the totals of AA, A, B, C and D accounts

c. Total the amount of time required in a year to service all accounts by multiplying the number of each account category by the minutes per year to service that category and summing the totals of AA, A, B, C and D accounts

Which of the following is the third step in the process used to determine salesforce size? a) Set the average time that salespeople are to spend with AA to D accounts b) Divide the total time required to service accounts by the selling time available to the average salesperson c) Total the amount of time required in a year to service all accounts by multiplying the number of each account category by the minutes per year to service that category and summing the totals of AA, A, B, C and D accounts

b. Divide the total time required to service accounts by the selling time available to the average salesperson

A firm has a total of 800 of all types of customers and the time required to service all those customers totals 16,000 hours per year. The firm’s salespeople have 1,000 hours of selling time per year, 25 hours of selling time per week, multiplied by 40 weeks [remember to subtract vacations (3 weeks), holidays (1 week), sick days (2 weeks) and 30 training days (6 weeks) from 52]. How many salespeople are needed to cover the market? a) 12 b) 14 c) 16 d) 20

c. 16

A firm has a total of 40 of all types of customers and the time required to service all those customers totals 100 hours per year on average for each customer. The firm’s salespeople have 1,000 hours of selling time per year, that was calculated by multiplying 25 hours of selling time per week that the salesperson typically has available to be on the job with the customer, multiplied by 40 weeks [remember to subtract vacations (3 weeks), holidays (1 week), sick days (2 weeks) and 30 training days (6 weeks) from 52]. How many salespeople are needed to cover the market? a) 2 b) 4 c) 6 d) 8

b. 4

In determining salesforce size based on profit maximization, which of the following statements is true? a) Consider the full costs of compensating, training, managing and supporting the salesperson’s operational expenses b) If the salesperson’s expected incremental dollar contribution min;77us the full cost of the salesperson is positive, then a new salesperson should be hired c) If the existing salespeople generate negative cash flow and the long-term prognosis is not good, you should stop hiring new salespeople d) All of the options are true

d. All of the options are true

What characteristics does a field staff support have? a) Comprised of engineering and marketers b) Available to the customer or the salesperson by various communication methods c) Interacts with customer R & D and production on the development of new products, quality control or service problem d) All of the above

d. All of the above

If it takes a rep longer than 3-6 months to start moving the product, then: a) The rep is more than likely just doing nothing b) The rep is not selling it to his or her existing customers c) The rep may be trying to use the product to break into new markets d) All of the above

d. All of the above

The fair and honorable way of handling non-performance is: a) For the firm to inform the rep that it will follow up any leads if the manufacturer’s rep does not b) Fire the reps because they are not performing as expected c) Remind the rep to follow up with the leads d) None of the above

a. For the firm to inform the rep that it will follow up any leads if the manufacturer’s rep does not

Which of the following is/are an advantage(s) of employing a rep salesforce? a) A fast way of building consumer franchise b) Ease of management and greater control c) Low start-up investment costs d) Both A and C e) All of the above

d. Both A and C

Which of the following is a disadvantage(s) of employing a rep salesforce? a) Low risk, reps get paid for what they sell b) Improved cash flow, you pay when you get paid c) Product knowledge training d) Good advice from reps on product design and marketing for a new venture e) Establishing proven performance

c. Product knowledge training

The concerns of “Channel Fit” can also be applied to manufacturer’s reps _____. a) Whether they are a family business or not b) In the amount of business they currently do in the target industry c) If the rep is selling leading brands of complementary products to the target industry, it implies the rep has legitimate, desirable clients d) Both B and C e) The concerns of “Channel Fit” should only apply to marketing channels

d. Both B and C

Many representatives are eager to reduce price because ______. a) Manufacturers’ profit margins cannot be really hurt b) Manufacturers encourage them to do so c) The sale takes less time and energy d) They suffer a minor commission reduction e) Both C and D

e. Both C and D

Which of the following statements is true about reps and customer service problems? a) A customer often wants to deal directly with the supplier b) Problems occur when the reps follow up on leads c) Manufacturers’ reps are good at responding to their regular customers d) Both A and C e) Most of the time, there are no problems with reps and customer service

d. Both A and C

Which of the following is/are NOT an advantage(s) of employing a rep salesforce? a) The halo effect (the company benefits from the other brands the rep sells) b) Economies of scale c) Sales territories where fewer customers are covered more efficiently d) Lower average selling cost e) None of the above

b. Economies of scale

Which of the following is/are NOT a disadvantage(s) of employing a rep salesforce? a) Diseconomies of scale b) Difficult to fire, may lead to loss of customers and betrayal of confidences and trade secrets c) Low start-up investment cost d) Less continuous feedback e) None of the above

c. Low start-up investment cost

The basic cost involved in a poor recruiting effort is _____. a) The wasted cost of spending a great deal of time and effort training b) The cost of exposing the customer to a poor salesperson c) The strain on the enterprise and its management d) All of the above

d. All of the above

Which of the following statements is true about a sales representative’s job description? a) The second step in recruiting is to develop a sales representative’s job description b) A good job description details the specific responsibilities of the position, the skills required and the person to whom the new hire will report c) Job descriptions are only used for recruiting and selecting d) None of the above

b. A good job description details the specific responsibilities of the position, the skills required and the person to whom the new hire will report

What are some characteristics described in the module to be a successful salesperson? a) Obtain a deep reservoir of technical knowledge b) Talk more and listen less c) Making the customer’s problems your own d) Both A and C e) All of the above

d. Both A and C

In selecting salespeople . a) It takes a lot of skill to recognize the very bad and the very good candidate b) Psychologists and personal specialists have had a great deal of success helping companies identify successful salespeople c) It is important to conduct a job analysis at regular intervals to identify the typical salesperson’s actual daily activities d) It is not worth making the very best attempt to increase the effectiveness of salesforce selection

c. It is important to conduct a job analysis at regular intervals to identify the typical salesperson’s actual daily activities

Which of the following criteria is more important in selecting salespeople as discussed in the sales module? a) A personal interview b) A resume c) Both the resume and the personal interview are equally important d) None of the above

a. A personal interview

What is true in the salesperson selection process? a) If candidates cannot demonstrate confidence when selling themselves, then they are unlikely to be able to sell other products and services b) Confrontational interviews that incorporate role-playing are often used to see how adaptable and enterprising potential salespeople are under fire c) Most companies test the process thinking and political skills of potential recruits using problem solving exercises d) Both A and B e) All of the above

d. Both A and B

Which statement is true about training salespeople? a) Only a few companies are trying to find ways of increasing the return on personal sales call b) Training is an investment in human capital that can produce a highly profitable return from each call c) Most companies don’t perceive high turnover of their salesforce as a waste d) On-the-job specific training may be a less important determinant of sales performance than personal characteristics

b. Training is an investment in human capital that can produce a highly profitable return from each call

As discussed in the sales module, which types of training can increase the loyalty of the salesperson and reduce turnover? a) Basic behavioral sales training b) Company-specific training c) Both A and B d) None of the above

b. Company-specific training

Which of the following is important while training salespeople? a) All salespeople need to hear, “You can do it, too” b) The inspirational part of training should be continued throughout the salesperson’s career c) The best way to preparing people for training and learning is to place them in the shoes of the teacher d) Knowledge about an emerging usage market segment should be taught by experienced salespeople because they are not blinded by past beliefs e) All of the above

e. All of the above

Mentoring is about ______. a) Discouraging disconnected salespeople from helping each other b) Solving a classic social group problem in salesforce management c) A mentoring system that encourages members of both groups to see the others as interesting and capable individuals d) In sales, real learning comes from formal training

c. A mentoring system that encourages members of both groups to see the others as interesting and capable individuals

Which of the following statement best describe rewarding the salesforce? a) Sales motivation drives how hard a salesperson wants to work to accomplish a task or achieve a goal b) Many theories and explanations for what motivates people are based on the idea that people want to work hard when outcomes are valued and when effort is linked to performance c) For one salesperson, money may be the strongest motivator, while for another, receiving an award at a banquet is the best incentive d) Both A and B e) All of the above

d. All of the above

Regarding sales compensation . a) The ending point for the compensation package must be the market rate in the industry, including any customary incentive schemes used by the industry b) Sales is typically the best paid entry level job in marketing c) Perhaps the most fundamental principle of sales compensation is to keep it as clear and simple as possible d) Both B and C e) All of the options are true

d. Both B and C

A company may desire to change its incentive schedule to adapt to new competitive realities or company constraints, but changing the scheme has which of the following negative effects? a) It is likely to confuse the more experienced salespeople who have worked under several different schemes b) Having adapted to them, they may find it difficult to break their behavioral adaptation and to distinguish among the schemes in their memory c) A history of such changes increases the expectations that the scheme will be changed again in the future, thus reducing commitment to the new scheme d) All of the above e) There are no negative effects to changing its incentive schedule - the more often the better

d. All of the above

In considering whether or not a salesforce be paid a salary or a commission, which is NOT true? a) For the first year, a salesperson may be paid a lower base salary to compensate for time in training b) Much depends on the realities of the marketplace c) Most companies pay a base salary with a commission on all sales or bonuses for exceeding quota d) Both B and C

a. For the first year, a salesperson may be paid a lower base salary to compensate for time in training

In markets where a company’s sales are highly volatile because of frequent and dramatic changes in the trading environment or in the company’s marketing strategy: a) A straight commission approach may not work b) An uncertain link exists between effort and results c) The uncertainty about these external determinants of success makes it less fair and reasonable to tie salesforce rewards directly to salesforce success d) All of the above statements are true

d. All of the above statements are true

Generally, the overall objective of an enterprise is to increase profitability. From this perspective, which factor should a salesforce’s compensation scheme be connected to in order to maximize its profitability? a) Sales volume b) Variable costs c) Gross margin d) All of the above

c. Gross margin

What type of information needs to be disclosed to salespeople if basing compensation on gross margin is applied? a) The relative profitability of the item b) Unit cost of the item c) Unit selling price of the item d) All of the above

a. The relative profitability of the item

Which of the following statements is true while using quotas to reward high performance? a) Setting quotas too high may encourage customer inventory manipulation distortions at year end b) It is only fair to use exactly the same commission or bonus plan for every territory c) A general bonus scheme encourages overall cooperation and creates a company culture where everyone is aware that the company’s competitiveness depends on everyone’s performance d) Both A and C e) A, B and C

d. Both A and C

What might be the drawback in using commission compensation schemes as discussed in the sales module? a) They motive salespeople to sell and serve their accounts b) They tend to encourage a short-term and selfish perspective c) Firms have no solution for the problems associated with using commission compensation schemes d) The compensation scheme is flexible; there is no major drawback need to be concerned

b. They tend to encourage a short-term and selfish perspective

A salesforce should be led from front means _____. a) Salespeople should not be asked to do things that the sales manager and senior management would not do b) CEOs convey their product enthusiasm to the public and this inspires their salesforce c) Both A and B d) None of the above

c. Both A and B

Which of the following is one of the three major benefits from requiring the senior executive team to spend time out on the road with salespeople calling on small accounts? a) It gives executive a second-hand sense of the market b) It helps senior executives understand the effects of their decision-making on the salesperson c) It fosters a belief in the salesforce that senior management is watching them d) All of the above

b. t helps senior executives understand the effects of their decision-making on the salesperson

Sensible marketing planners _____. a) Involve salespeople in their planning after they have tested the plan in the field b) Often test the implementation of proposed selling tactics in a few low-potential territories c) Consult and work with sales to ensure they are 100 percent behind the marketing plan d) Both A and B e) A, B and C

c. Consult and work with sales to ensure they are 100 percent behind the marketing plan

Sales managers are involved in the marketing planning for key product markets to _______. a) Ensure line salespeople do not think about and interact with marketing b) Suggest how to re-engineer sales practices around new product launches c) Propose and provide incentives and rewards for suggested sales process improvements d) B and C

d. Both B and C

Which of the following is a best practice in annual sales conferences as discussed in the sales module? a) Paying $10,000 to $100,000 to have celebrity speakers at sales conferences that salespeople can take photos and shake hands with celebrity speakers b) Signal appreciation to both the salespeople and their families c) Have the marketing people party with sales people d) Both A and B e) All of the above

d. Both A and B

Which of the following contributes to the growth of the company culture? a) Ceremonies b) Rites of passage c) Knighting of the superstars that occur at sales conferences d) All of the above

d. All of the above

Which of the following is the most powerful motivator for salespeople? a) Peer recognition b) Management speeches c) A new product introduction d) All of the above

a. Peer recognition

How can recognition at a conference be made even more powerful? a) Recognition directed at the self-realization need of a salesperson b) Recognition made in front of a “significant other” attending the conference c) By recognizing a salesperson’s failures as well as his/her successes d) All of the above

b. Recognition made in front of a “significant other” attending the conference

A good trade show team employs ____. a) At least two people: a screener and a closer b) A screener at the front of the exhibit to meet people c) A good closer spend his or her time at the back of the booth or in a hotel suite with serious prospects, closing deals d) All of the above

d. All of the above

In some specialized markets, the annual trade show is ______. a) An absolute must attend b) An important element of the marketing mix c) Something that is attended every second year or so d) Not important

a. An absolute must attend

Qualifying is _____. a) A term used in personal selling to describe the process of understanding a customer’s problems b) Establishing a customer is a hot prospect c) Being approved as a preferred supplier d) Both A and B e) All of the above

b. Establishing a customer is a hot prospect

The major difference between a prospect and a qualified prospect is: a) Prospects are more likely than qualified prospects to become customers b) Qualified prospects require a modification to the original presentation to make the sale c) There are far more qualified prospects than prospects d) Qualified prospects have not only the need or desire for your product, but the ability and authority to purchase it e) The only difference between a prospect and a qualified prospect is that a qualified prospect has purchased your product in the past and a prospect has not

d. Qualified prospects have not only the need or desire for your product, but the ability and authority to purchase it

What presentation format is being used when the following statement is conveyed to every prospect? "Hello, Mrs. X, my name is Y. I'm calling for Samantha's fashions. We carry a complete line of little girls’ playwear..." a) Formula-selling presentation b) Stimulus-response presentation c) Needs-satisfaction presentation d) Hard sell e) Persuasive sales presentation

a. Formula-selling presentation

Which type of sales presentation is represented by the following statement? "What type of driving do you do? How many people will you usually have in the car? Maybe you should look at vans instead of sedans." a) Stimulus-response presentation b) Formula-selling presentation c) Need-satisfaction presentation d) Persuasive-selling presentation e) Canned sales presentation

c. Need-satisfaction presentation

Why does personal selling work better than other communication options available to firms selling in the business-to-business market? a) Personal selling employs more people in the North America than advertising b) North America firms have become particularly adepts at hiring “born” salespeople c) Salespeople are able to tailor unique messages for each prospective buyer d) Personal selling is the most expensive form of promotion

c. Salespeople are able to tailor unique messages for each prospective buyer

The primary objective of the partnering-oriented salesperson is to: a) Create a market-exchange relationship b) Close the sale quickly c) Develop long-term relationships with customers d) Act ethically when dealing with international customers e) Satisfy the short-term needs of the supplier

c. Develop long-term relationships with customers

Which statement represents a correct response to postponing an objection? a) "I think I might be able to explain that better to you after showing you this diagram" b) "Yes, you're right, it is lighter, but that is done intentionally to make your work easier" c) "That's true, it does have a shorter shelf life, but that hasn't really been a problem. It is so popular it never gets to stay on the shelf that long anyway" d) "Where did you hear that? They must not have had the correct information" e) "As I was saying...."

a. "I think I might be able to explain that better to you after showing you this diagram"

At which stage of the personal selling process would you obtain a purchase commitment from the prospect? a) Approach b) Presentation c) Sale d) Follow-up e) Close

e. Close

Regarding the expression “Keep the message simple,” which is true? a) It is not an advertising principle b) It is an advertising principle that is followed by most advertising campaigns c) It is an advertising principle that is violated by most advertising campaigns d) None of the above

c. It is an advertising principle that is violated by most advertising campaigns

Which of the following is NOT one of the fundamental advertising principles? a) If you have something to say, advertise. If not, don’t b) Keep your message simple and powerful; otherwise, it will be lost in the advertising clutter c) Communicate first with your existing customers to keep their business d) Communicate second with your hottest prospects e) None of the above

e. None of the above

As attention-grabbing advertising devices continually advance on the supply side, the sensory-system adaptation of buyers and their ability to screen out advertising continually advance on the demand side. a) True b) False

a. True

In which of the following countries is advertising much more effective? a) Canada b) Japan c) Russia d) China e) Both C and D

e. Both C and D

Answers to “How believable are ads?” scored ___ out of 9 in the 1950s and ____ out of 9 in the 1970s. a) Under 3, around 8 b) Around 8, under 3 c) Neither of the above

b. Around 8, under 3

6. Advertising in the new media such as the Internet is trusted _____ television, newspaper, magazine, radio and billboard advertising. a) Less than b) About the same as c) More than

c. More than

Which of the following advertising functions is a hierarchy-of-effects model of advertising effect because consumer learning about the product leads to belief changes, which lead to changes in feelings (attitude) toward the product, which lead to buying the product? a) BFL b) LFB c) FBL

b. LFB

Which advertising model assumes thoughtful decision-making? a) LFB b) BFL c) FBL d) Both A and B e) All of the above

a. LFB

Romantic fragrance ads are an example of which advertising model? a) LFB b) BFL c) FBL d) Both A and C e) All of the above

c. FBL

What type of advertising persuasion is the basis for the advertising message theme “Try me”? a) LFB messages b) BFL messages c) FBL messages

b. BFL messages

What type of advertising persuasion is the basis for the advertising message theme “Have you got this problem? I have the solution”? a) BFL messages b) FBL messages c) LFB messages

c. LFB messages

Whose responsibility is it to put together a creative brief that describes the target market, product competitive positioning, quality-added claims and sales increase goals? a) An ad agency b) The company c) Both A and B

b. The company

Regarding where to place your ads, which of the following statements is correct? a) By their very evident evolutionary success, the new mass communication technologies and advertising processes have increased the efficiency of markets b) Spending on television broadcast, cable and satellite advertising in the United States continues to grow from around $55 billion in 2002 to a projected $86 billion in 2009 and dominates all media advertising spending c) Spending on TV advertising can be argued to be a good allocation of shareholder’s funds d) Both A and B e) A, B and C

d. Both A and B

With each revolution in marketing communication, the entire media market is spurred on by the new competition to become: a) Less competitive b) More competitive c) More innovative d) Both B and C

d. Both B and C

Media suitability depends on: a) The target market b) The basic message strategy c) The creative tactics used to execute the message strategy d) All of the above

d. All of the above

Regarding POP advertising: a) It is often much less cost effective (per thousand target shopper exposures) than any other media b) The advertising exposure often occurs only moments before purchase, so it is less timely than any other advertising c) It is the first priority in advertising placement d) POP end-of-aisle displays are also very effective promotion devices and such displays are much less expensive than placing shelf-talkers on the regular product display shelves

c. It is the first priority in advertising placement

The price per click is increasing as advertisers discover: a) The payoff they get from search advertising b) It is not worth it to allocate too much budget in Internet advertising any more c) It is more subjective to rapid improvement than the traditional mass media advertising process d) Both A and C

d. Both A and C

Which of the following statements is true about Internet advertising? a) Internet advertising can be fine-tuned and improved in a few days of testing in ways that no TV or other mass media advertising can b) The art of Internet advertising is to select the right companies c) Every company shouldn’t have a Yellow Pages campaign, but should have Google advertising campaign and invest in a high quality website d) Both A and C e) All of the above

a. Internet advertising can be fine-tuned and improved in a few days of testing in ways that no TV or other mass media advertising can

The problem with Facebook's business model is? a) Increasing concern of regulators over privacy issues b) Increasing concern of its users over privacy issues c) Very low click-through rates d) It does not have problems

c. Very low click-through rates

The productivity of advertising expenditure can be improved by one or more of the following approaches: a) Improving the way you find media that delivers the lowest cost-per- thousand members of the target audience b) Achieving the most effective mix of ad reach and exposure frequency c) Improving the timing of the ad campaign d) Both A and B e) All of the above

e. All of the above

How are media costs generally measured? a) Costs for every media used for advertisements b) Cost-per-hundred of delivered audience c) Cost-per-thousand of delivered audience (CPM) d) None of the above

c. Cost-per-thousand of delivered audience (CPM)

A number of researchers have argued that having _) exposures within a purchase cycle (time between purchases) is optimal. a) Two exposures b) Three exposures c) Four exposures d) Five exposures e) It is irrelevant

b. Three exposures

The effective reach of a proposed media schedule is: a) The percentage of the target audience exposed to an ad the total number of times (frequency) that is judged necessary for the ad to be effective b) The percentage of the target audience exposed to an ad the maximum number of times (frequency) that is judged necessary for the ad to be effective c) The percentage of the target audience exposed to an ad the minimum number of times (frequency) that is judged necessary for the ad to be effective d) None of the above

c. The percentage of the target audience exposed to an ad the minimum number of times (frequency) that is judged necessary for the ad to be effective

According to the article “More Weeks, Less Weight: The Shelf-Space Model of Advertising,” what kind of products need to have constant advertising to maintain their share-of-voice, share-of-mind and market shares? a) High-involvement products that sell as much on their brand name as on their features and have short repurchase cycles b) High-involvement products that sell as much on their brand name as on their features and have long repurchase cycles c) Low-involvement products that sell as much on their brand name as on their features and have long repurchase cycles d) Low-involvement products that sell as much on their brand name as on their features and have short repurchase cycles

d. Low-involvement products that sell as much on their brand name as on their features and have short repurchase cycles

How should small companies advertise? a) They should advertise in the same media channels as the large companies b) They should maintain a low level of advertising, often in a single medium c) They should use pulsed bursts of increased advertising timed around peak demand periods or special promotions d) Both B and C e) A, B and C

d. Both B and C

Which of the following do magazines sometimes use to try to cheat advertisers? a) Magazines sometimes try to cheat advertisers by claiming more sales and a larger circulation than they actually have b) Magazines sometimes try to cheat advertisers by claiming less sales and a smaller circulation than they actually have c) Magazines never try to cheat advertisers

a. Magazines sometimes try to cheat advertisers by claiming more sales and a larger circulation than they actually have

Which of the following does television sometimes use to try to cheat advertisers? a) Television networks sometimes cheat by offering the most popular programs during ratings weeks, thus boosting audience size b) Television networks sometimes cheat by offering celebrity-loaded programs during ratings weeks, thus boosting audience size c) Television networks sometimes cheat by offering financial incentives during ratings weeks, thus boosting audience size d) None of the above

b. Television networks sometimes cheat by offering celebrity-loaded programs during ratings weeks, thus boosting audience size

Which of the following statements is appropriate to describe pay-per-click advertising fraud? a) Click numbers are being inflated by unknown cheaters acting in their own interests b) Click numbers are hard to count c) It is when a Google partner pays others to click, thus creating a flood of fraudulent clicks that the advertiser must pay for d) None of the above

c. It is when a Google partner pays others to click, thus creating a flood of fraudulent clicks that the advertiser must pay for

Marketers must decide whether to concentrate advertising seasonally or to give it greater continuity. A lot depends on: a) The consumer purchase cycle b) The nature of producer supply c) Whether selling seasons exist d) The price of the product e) Both A and C

e. Both A and C

An advantage of publicity over advertising is: a) Its greater credibility b) Its paid-for endorsement by media celebrities c) Its speed of coverage d) Both A and C e) A, B and C

d. Both A and C

The huge success of blog and social network sites on the Internet has become a powerful new source of publicity and WOM, particularly among which age group? a) People under 30 b) People between 31-40 c) People between 41-50 d) All age groups

a. People under 30

Which of the following is an advantage of publicity over advertising? a) Its creation of public interest b) Its word-of-mouth momentum c) Excitement that few advertising campaigns can match d) All of the above

d. All of the above

The disadvantage of publicity is: a) The lack of control of whether you get the coverage or not b) It is often an all-or-nothing proposition c) Both A and B d) None of the above

c. Both A and B

Regarding sponsorship advertising: a) It has decreased its share of advertising expenditure over the last 20 years, according to IEG Inc. of Chicago b) Your target segments attend the event and some of the event halo attaches to your product or service c) It has a relatively expensive reach and frequency d) The attention level of the audience is low for ads placed in or around the actual event e) None of the above

b. Your target segments attend the event and some of the event halo attaches to your product or servic

Regarding Buzz marketing, which of the following statements is true? a) Business Week has concluded that initiating and controlling publicity on the Internet is not as hard as generating publicity through traditional communication means b) Blog readers are as excited with advertising messages built into blogs as they are with advertising messages in traditional advertising c) Forrester Research estimates that about a quarter of adults read at least one blog each month, and the numbers are increasing d) None of these social sites are generating cash flows that come anywhere close to justifying the values Google, You Tube and NewsCorp are paid

d. None of these social sites are generating cash flows that come anywhere close to justifying the values Google, You Tube and NewsCorp are paid

About publicity: a) Publicity stories are often not reproduced or mentioned in a company’s advertising because they may hurt the credibility of the story b) Several sources carrying the story cannot increase credibility c) You may get no coverage if no editor or major blog site is interested d) Extraordinary reach and frequency can be obtained in a long period of time

c. You may get no coverage if no editor or major blog site is interested

Public relations is directed at: a) Employees b) Stakeholders c) Politicians d) Media commentators and the general public e) All of the above

e. All of the above

When consumers buy products, they are essentially saying that they trust the products to satisfy their needs. This trust can result from: a) The advertising of products b) Their past experiences with products c) The companies that make those products d) Both B and C

d. Both B and C

Public relations (PR) is: a) The management function that evaluates public attitudes, identifies the policies and procedures of an organization with public disinterest, and executes a program of action and communication to earn public understanding and acceptance b) The management function that evaluates public attitudes, identifies the policies and procedures of an organization with the public interest, and executes a program of action and communication to earn public understanding and acceptance c) Is a conscious and targeted attempt to shape a company’s image d) The content of PR programs should be kept consistent with the different targeted audience e) Both B and C

e. Both B and C

Corporate advertising has been: a) Proven to work b) Controversial and unproven to work c) Well accepted by consumers d) None of the above

b. Controversial and unproven to work

Which of the following statements is true about PR, as discussed in advertising module? a) PR is used to inoculate against past negative events b) In 2006, BP experienced a pipeline oil spill in Alaska and the extensive bad publicity this created totally swamped BP’s previous environment-friendly PR image c) The general public is addressed through corporate advertising d) Public relations is used to stabilize the share price of a company e) B, C and D

e. B, C, and D

Which of the following activities comes first in the direct marketing process? a) Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer b) Database elements are specified, including shopping behavior history c) Record is added to database

b. Database elements are specified, including shopping behavior history

Which of the following activities comes second in the direct marketing process? a) Customer sends in warranty card, enters sweepstake or name is on list. b) Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer

a. Customer sends in warranty card, enters sweepstake or name is on list.

Which of the following activities comes third in the direct marketing process? a) Customer is assigned to a product, channel or profitability segment b) Record is added to database. c) Database elements are specified, including shopping behavior history d) Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer

b. Record is added to database.

Which of the following activities comes fourth in the direct marketing process? a) Database is updated, recording response to the campaign b) Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer c) Customer is assigned to a product, channel, or profitability segment

c. Customer is assigned to a product, channel, or profitability segment

Which of the following activities comes fifth in the direct marketing process? a) Database is updated, recording response to the campaign b) Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer c) Database is built up through the use of billing statements, warranty cards and sweepstake information d) Customer is assigned to a product, channel or profitability segment

b. Most appealing direct marketing campaign is designed to promote most appealing products and services to each individual customer

When choosing a list for direct marketing, which criteria are often considered to be critical? a) How old the list is b) The amount of money spent on direct buying by each individual on a list c) Both A and B d) None of the above

c. Both A and B

The growth potential for direct marketing is limited: a) Very much by the type of merchandise b) By the type of people who patronize direct marketers c) By the price of the product d) Both B and C e) A, B, and C

b. By the type of people who patronize direct marketers

Direct marketing is facing the following issue(s): a) As with any high-growth industry, direct marketing has grown faster than the quality of its supporting systems b) Consumer response rate to direct marketing is falling c) The issue of privacy d) All of the above

d. All of the above

Direct marketing has become popular mainly because of: a) The availability of computer hardware and software to undertake data mining and list Creation, thereby enhancing contact efficiency b) Time pressures on consumers c) The increased use of 800-numbers and Internet shopping, which allow easy ordering d) An explosion in the issuance and use of credit cards, thus facilitating purchases by phone

a. The availability of computer hardware and software to undertake data mining and list Creation, thereby enhancing contact efficiency

Which of the following statement is NOT true about direct advertising? a) Direct advertising is about one third of all advertising, as measured by expenditure b) In simple terms, direct marketing is marketing that produces an immediate recorded response from consumers c) The Direct Marketing Association helps companies involved in direct marketing standardize their practices and have a collective voice in dealing with legislation directed at protecting consumers’ privacy d) None of the above

a. Direct advertising is about one third of all advertising, as measured by expenditure

Which of the following cities were innovative distribution hubs because their canals allowed goods to be loaded and unloaded directly into a merchant’s warehouse? a) Venice b) Amsterdam c) London d) Both A and B e) All of the above

d. Both A and B

Intermediaries add what type of utility to a manufacturers’ product? a) Time utility b) Place utility c) Time and place utiliy d) Convenience utility

c. Time and place utility

Which of the following statements is true about reaching target customers? a) Channel segmentation is important in distribution reach strategy b) The most common function of a marketing channel member is to provide reach and to resell the product into a market where the original seller can’t reach efficiently or effectively c) Retailers can give manufacturer both location and image competitive positioning d) Both A and B e) A, B, and C

e. A, B, and C

Reach is short for? a) % of target customers the company distribution reaches b) Gross reach c) Net reach d) Selective reach

a. % of target customers the company distribution reaches

Which of the following is the basic channel activity discussed in distribution? a) Reaching target customers, where they are and where they shop b) Informing and serving the customer c) Moving the product d) Financing the venture e) All of the above

e. All of the above

Risk-taking and financing activities of channel intermediaries a) Are an important basic channel function these days b) Have been greatly increased over the last one hundred years c) Have been greatly reduced over the last one hundred years d) Bothe A and B

c. Have been greatly reduced over the last one hundred years

Which of the following criteria does the basic channel choice NOT depend on? a) Capability b) Cost c) Control d) Conviviality e) All of the above

d. Conviviality

Channel evolutionary rigidity occurs when channels _____. a) Rigidly adopt new technology and processes that increase efficiency b) Very slowly adopt new technology and processes that increase efficiency c) Very quickly adopt new technology and processes that increase efficiency d) None of the above

b. Very slowly adopt new technology and processes that increase efficiency

In markets suffering from evolutionary rigidity, the potential rewards from innovating are _____. a) Significant b) No change c) Small d) None of the above

a. Significant

As markets mature: a) The need for pioneer personal selling efforts increase b) The need for pioneer personal selling efforts decrease c) The need for direct selling and billing efforts increase d) The need for pioneer personal selling,, direct selling and billing efforts decrease e) Both B and C

e. Both B and C

Which of the following statements best describes convenience products? a) Shoppers will go out of their way to buy the preferred alternative b) Shoppers will purchase the next preferred alternative when the product or service is not available c) The best distribution for a convenience product is to be everywhere d) Both B and C

d. Both B and C

What kinds of products are best suited for mass distribution? a) Products that are frequently purchased b) Products that are expensive c) Products that are major durables d) Products that are high risk purchases e) Both A and C

a. Products that are frequently purchased

Reseller, image, services and marketing are NOT as important in? a) Franchising b) Mass distribution c) Selective distribution d) All of the above

b. Mass distribution

Most of the focus in mass distribution is on? a) Reducing the cost of distribution b) Keeping the shelves stocked c) Keeping the quality of service high d) Both A and B e) A, B and C

d. Both A and B

Which of the following statements is true about franchising? a) Franchisees are imitators; there is little innovation in a franchise system b) About a quarter of all retailing is franchised c) Franchising is a way for an innovator to earn higher innovation profits d) Franchising is a big part of going global and acting global e) Both C and D

c. Franchising is a way for an innovator to earn higher innovation profits

Which of the following products is suited for mass distribution? a) A Coach purse b) A Chanel watch c) A pack of Charmin toilet paper d) A marketing textbook

c. A pack of Charmin toilet paper

A retail store’s assortment of customers has varying degrees of uniqueness, measured in terms of: a) Individual differences (age or income) b) Product usage and needs c) Perceptions of the competitive offerings d) Sensitivity to different promotional strategies e) All of the above

e. All of the above

As discussed in the distribution module, what is the major concern for a supplier of a mass distribution product? a) Quality of its product or services b) Design of it product or services c) How to get into the mass distribution channels d) How to innovate new products frequently

c. How to get into the mass distribution channels

When choosing a channel partner, a manufacturer seeks: a) A partner whose customers fit the manufacturer’s target market segment b) A partner whose service and current products complement its products and service c) A partner with inferior buying, marketing, merchandising and selling skills d) Both A and B e) A, B and C

d. Both A and B

Relationship synergy occurs when the effectiveness, capability and success of the partnership is: a) The marketing strategies and implementation skills of two trading partners b) When the retailer’s positioning and strategy appeal to the manufacturer’s management c) More than the sum of the seller’s and buyer’s separate capabilities d) When the manufacturer’s positioning and strategy appeal to the retailer’s served market e) None of the above

c. More than the sum of the seller’s and buyer’s separate capabilities

Relationship synergy occurs when there is a ___ served market fit and a ____ fit between the marketing strategies and the implementation skills of two trading partners. a) Low, low b) High, low c) Low, high d) High, high

d. High, high

In trading relationship and processes, which of the following statements is true? a) A unique trading relationship advantage comes from the manufacturer and channel partner working well together to reduce the costs of doing business b) If the cost reduction efforts of both parties are synchronized and if this synchronization is better than any other trading relationship, the trading relationship will have a unique competitive cost advantage c) Both A and B

c. Both A and B

What is/are the competitive advantage(s) for IKEA? a) Elegant Swedish design b) Flat packing furniture saves manufacturing and distribution costs for IKEA c) Customer convenience and lower final delivery costs for IKEA compared to other furniture competitors d) Both B and C e) All of the above

d. Both B and C

When containers were first introduced, a Harvard University transportation economist _______ container-based transportation would lead to a reduction in U.S. manufacturing jobs. a) Warned about how b) Could not see how c) Had nothing to say about how

b. Could not see how

Four of the following phrases appear in the physical distribution QFD figure. Please indicate which of the phrases appears in the box on the right side. a) Transportation process quality and cost b) Order-taking, picking, and packing process quality and costs c) Product quality and cost d) Customer service process quality and cost e) Inventory holding process quality and cost

a. Transportation process quality and cost

Four of the following phrases appear in the physical distribution QFD figure. Please indicate which of the phrases appears in the box on the left side. a) Transportation process quality and cost b) Order-taking, picking, and packing process quality and costs c) Product quality and cost d) Customer service process quality and cost e) Inventory holding process quality and cost

b. Order-taking, picking, and packing process quality and costs

When you make a physical distribution system more reliable and regular in its processes: a) It has no effect on inventory b) You increase the need for inventory c) You reduce the need for inventory d) None of the above

c. You reduce the need for inventory

If the reliability of a delivery system (longest time – average time) is reduced by five days for a buyer who uses 100 boxes a day and the annual inventory carrying cost of each box is $12, how much does the buyer save annually? a) $5,000 b) $6,000 c) $10,000 d) $12,000

b. $6,000

If the reliability of a delivery system (longest time – average time) is reduced by 10 days for a buyer who uses 200 boxes a day, and the annual inventory carrying cost of each box is $150, how much does the buyer save annually? a) $150,000 b) $200,000 c) $300,000 d) $400,000

c. $300,000

The development of a new logistics relationship between businesses and trading partners requires which of the following? a) The development of new attitudes that change old habits b) Enough trust to work together to develop competitive added value for both of you c) A willingness to not exploit the new relationship at the expense of long run cooperation d) Patience; payoff often takes time and there are always initial glitches e) All of the above

e. All of the above

Safety stock is held: a) Against running out of demand because of order-delivery process unreliability b) Against running out of supply because of order-delivery process unreliability c) Against the cost of materials increasing d) None of the above

b. Against running out of supply because of order-delivery process unreliability

Which of the following is/are advantage(s) of computerization in order-taking processes? a) It greatly increase the variability in order processing time b) It often allows immediate notification of item availability c) It can produce courtesy confirmation e-mails that are automatically sent to buyers d) Both B and C e) A, B, and C

d. Both B and C

Which of the following might be a reason for a company to distribute through new channels? a) Introduction of new products b) A different retail channel may reach a different segment of shoppers c) If the manufacturer does not supply the new retailer, other competitors will d) All of the above

d. All of the above

A manufacturer has to reach its target customers, and if those customers shift which channels they shop, then the manufacturer has to . a) Add those channels b) Convince customers to switch back c) Manufacture products that are purchased in the old channel d) All of the above

a. Add those channels

Which of the following statements is the key to operating multiple channels? a) Through customer research undertaken together with channel members, establish whether the current and new channels share the same customers b) The manufacturer sets and follows the same well-defined performance criteria c) Each trading relationship’s uniqueness has to be recognized d) Both A and C e) A, B, and C

d. Both A and C

Which of the following companies successfully added new distribution channels, as discussed in the distribution module? a) Elizabeth Taylor’s Black Pearl fragrance b) Levi Strauss c) Both A and B d) None of the above

b. Levi Strauss

When a manufacturer creates its own retail outlets, what is the real rationale for it? a) The outlets are test labs for new product lines and merchandising innovations b) It strengthens the appeal of the brand sold through other retailers c) The manufacturer can make higher profits by retailing as well as manufacturing them d) All of the above

c. The manufacturer can make higher profits by retailing as well as manufacturing them

A manufacturer prefers: a) Intra-brand competition b) Inter-brand competition c) Both intra-brand and inter-brand competition are the same to a manufacturer d) None of the above

a. Intra-brand competition

A manufacturer’s launching of its own outlet stores is mainly because . a) Consumers like to shop in outlet stores b) Manufacturers produce too many products and too many product lines c) Retail channels take advantage of generous buy-back programs and return a lot of stuff d) All of the above

c. Retail channels take advantage of generous buy-back programs and return a lot of stuff

As discussed in the distribution module, a common source of conflict between manufacturers and partners is misunderstanding the other party’s viewpoint when it comes to planning and implementing joint marketing programs. These misunderstandings may include: a) Retailers have the time and merchandising skills to set up promotional displays, and marketing people sent by a manufacturer to help only get in the way b) Manufacturers get upset when they run advertisements that draw prospective customers into the retail store but lose sales because the in-store marketing push is missing c) Both A and B d) None of the above

b. Manufacturers get upset when they run advertisements that draw prospective customers into the retail store but lose sales because the in-store marketing push is missing

Which of the following is the biggest retail line of business in the U.S., according to U. S. Commerce Department Statistics? a) Food and beverage retailing b) General merchandise retailing c) Automotive dealer retailing d) Eating and drinking retailing e) Gas station retailing

c. Automotive dealer retailing

Retailing success depends on: a) Store location b) The assortment or selection of products offered for sale c) The quality of merchandise presentation d) The attractiveness of the store interior e) All of the above

e. All of the above

Retailers and manufacturers need to seek the balance for: a) Product variety and quality b) Quality and price c) Price and product variety d) Both B and C

b. Quality and price

As discussed in distribution module, retailing is about: a) Price b) Supply chain cost control c) Positioning d) Promotion e) Both B and C

e. Both B and C

Which of the following statements is true about Walmart in Britain? a) Walmart always wins with its everyday low pricing positioning b) Walmart’s acquisition of Asda was a failure as it didn’t gain market from Sainsbury c) Walmart continued to promote every-day low prices, ignoring the fact that rivals were flourishing by marketing selection, quality, organic brands and prepared foods d) None of the above

c. Walmart continued to promote every-day low prices, ignoring the fact that rivals were flourishing by marketing selection, quality, organic brands and prepared foods

Which of the following retailing areas has been greatly impacted by Internet marketing, as mentioned in the distribution module? a) Home furniture market b) Auto market c) Clothing market d) Computer market

b. Auto market

Which of the following channel members was negatively affected by Internet marketing? a) Travel agencies b) Orbitz.com c) Airline industries d) Hotels e) Consumers

a. Travel agencies