A well chosen target market embodies the following characteristics

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NAME:_________________________________________ BUAD 1010: Spring 2016

Due in class on Thursday, March 31.

Each multiple choice question is worth 2 points. Bubble-in your answer on the green bubble sheets.

1. Big Bull Energy Drink focuses its marketing on young males who enjoy sports and other outdoor

activities. The company advertises its product at skateboard parks, basketball matches, ski resorts, and

so on. This customer group upon which the energy drink manufacturer focuses its marketing efforts

toward represents the:

a. marketing mix.

b. target market.

c. market mavens.

d. market share.

2. All of the following are necessary criteria for obtaining a patent except _____.

a. the product idea has profit potential

b. the product idea is new

c. the product idea is not obvious

d. the product idea has utility

3. Using _____ branding, a company makes a product and sells it to a retailer who resells it under its own

name.

a. special

b. primary

c. private

d. tag

4. Stay-Inn is a chain of hotels that are located near major highway off-ramps. This is an example of a

business providing _____ utility.

a. form

b. special

c. place

d. ownership

5. If a company disposes of old computers by selling them in a surplus property sale, this would be a

USE of cash on the Statement of Cash Flows.

a. True b. False

6. Using _____ pricing, a company initially charges a high price to grab a sizeable share of the market

and earn higher profit margins.

a. skimming

b. flexible

c. penetration

d. bidding

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7. The difference between your sales and your cost of goods sold is known as your _____.

a. net profit

b. cost of doing business

c. owner’s equity

d. gross profit or gross margin

8. Retaining customers is the purpose of _____, a marketing strategy that focuses on nurturing and

maintaining strong relationships with current customers.

a. goodwill hunting

b. consumer cultivation

c. prospecting

d. customer-relationship management

9. A well-chosen target market embodies the following characteristics:

a. size, profitability, accessibility, and limited competition.

b. size, limited profitability, accessibility, and competition.

c. limited size, profitability, accessibility, and intense competition.

d. size, profitability, limited accessibility, and intense competition.

10. An idea turns into a business opportunity when

a. people like the product;

b. it is a quality product;

c. it can be made cheaply;

d. it has commercial potential.

11. Doggy Nose, a heavy metal band, is about to release its first music CD. It is important that Doggy

determine its target market in order to successfully distribute its music. The band knows adolescent

urban males make up the largest portion of the heavy metal music market. Using this information to

develop its target market is known as demographic segmentation.

a. True b. False

12. Susie’s Smoothies has fixed costs of $1,600 per month. The only variable costs Susie’s incurs

are for the ingredients and labor needed to produce smoothies. These costs are $1.50 per

drink. Susie sells her drinks for $3.50 each. Which of the following statements is correct?

a. Susie will be able to earn a profit if she can sell more than 400 smoothies each month.

b. In order to break even, Susie must sell at least 800 smoothies each month.

c. In order to stay in business, Susie must raise her price to at least $4 per smoothie.

d. Susie will maximize her profits at a sales volume of 560 smoothies per month.

13. Generation X members represent the single largest group of persons moving into retirement age.

a. True b. False

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14. A company selling sailing equipment and magazines should ascribe to what market segmentation:

a. demographic

b. geographic

c. behavioral

d. psychographic

15. Which of the following explains how Best Buy adds value by acting as a distributor for electronics,

when people can go to Tiger Direct or Newegg.com and cut out the middle man?

a. Best Buy has a stranglehold on the market because their salespeople are paid hourly, not on

commission. Consumers like low pressure environments.

b. Best Buy adds value by providing place utility. People can come in and physically interact with

the electronics they are considering for purchase. Sometimes this makes all the difference

between “just looking” and “sold.”

c. Best Buy adds value by providing service utility. It's employees help customer choose the

model best suited for them by giving them tips and explaining things to them, allowing

customers to make informed decisions.

d. Best Buy adds value by providing time utility. Consumers can get in, find what they need, and

get out. To that end, a drive-through concept is currently being developed

16. When a travel agency wanted to predict sales for a new travel adventure they wanted to begin

marketing, they looked at sales figures and customer feedback of similar types of vacation packages

they had offered in the past. This is an example of:

a. primary data gathering

b. secondary data gathering

c. scientific research

d. intermediate data gathering

17. In the growth phase of the Product Life Cycle, your advertising efforts would focus on:

a. distinguishing your product from that of your competitors'

b. increasing awareness of who you are as a company

c. R&D efforts of the company

d. skimming pricing strategies

e. none of the above

18. What external forces influence business activities?

a. Consumer trends

b. The economy

c. The government

d. all of the above

19. When you file a Patent Application, if you do not file a Non-publication request, your application will

be available for the world to see and read.

a. True b. False

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20. All of the following are forms of Intellectual Property EXCEPT?

a. Patents.

b. Trademarks

c. Copyrights

d. Annual Financial Reports

e. Trade Secrets

21. Once you understand something about your industry, your next task is to learn something about your

potential customers (without whom, of course, you’re going nowhere). What sort of preliminary

things do you need to know about your customers?

a. Who they are b. Whether they’re individuals, other businesses, or both c. Who your ultimate consumer is d. all of the above e. none of the above

22. Product development always results in a very successful venture.

a. True b. False

23. The process of developing an operating budget begins with the development of a(n):

a. sales budget.

b. income statement.

c. production schedule.

d. capital expenditure budget

24. In the decline stage of the product life cycle, competition:

a. is virtually nonexistent.

b. begins as competing firms introduce their own versions of the product.

c. has already become well-established, with many weaker firms already leaving the market.

d. will spur major price cuts that dramatically cut into profits.

25. Marketers can directly control most of the promotional tools they use. The tool that they are

least likely to have control over is:

a. messages delivered by salespeople to the consumers.

b. publicity.

c. personal selling.

d. advertising messages and their placement in the media.

26. Copyright protection is only good as long as the original author lives and so protection will expire when

the author dies.

a. True b. False

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27. The consumer decision-making process involves need recognition, followed by:

a. information search, alternative evaluation, purchase decision, and post-purchase behavior.

b. information search, information learning, purchase evaluation, and post-purchase behavior.

c. product search, benefit analysis, price analysis, and value analysis.

d. cognitive dissonance, alternative evaluation, and post-purchase learning.

28. By subtracting dividends paid to shareholders from the net income, accountants are able to

calculate:

a. increase in net income.

b. decrease in profit margins.

c. change in the cash balance in the firm’s bank account.

d. change in retained earnings.

29. The combination of communication tools that a firm chooses to advertise their products is

called a(n):

a. distribution channels

b. research and development

c. business portfolio

d. promotional mix

30. Personal selling only involves face-to-face presentation of products and services to other

businesses.

a. True

b. False

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NAME: __________________________________________________

Essay #1: 10 points

Draw and label the product life cycle. Briefly discuss & describe the sections of the product

life cycle.

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Essay #2: (10 points)

What does DICEE represent? Give a BRIEF example of a product for each.

1. D = ______________________________

Example:

2. I = ______________________________

Example:

3. C = ______________________________

Example:

4. E = ______________________________

Example:

5. E = ______________________________ No example needed

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Essay #3 (10 points)

List , define, and briefly discuss the 4 P's of Marketing.

1. ______________________________

2. ______________________________

3. ______________________________

4. ______________________________

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Essay #4 (10 points):

a. Discuss the two introductory pricing strategies. Make sure to clearly explain the differences

between the two and when each would be used.

b. Discuss two of the other alternative pricing strategies, explain each.