The _____ act criminalized securities fraud and toughened penalties for corporate fraud.

Study Guide: Chapter 1

Multiple Choice Questions 1. ____ is the primary goal of business.

A. Charity

B. Profit

C. Bureaucracy

D. Quality

E. Strategy

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit. 2. Which of the following is NOT a product?

A. A Dell personal computer

B. A veterinarian's treatment of a pet's injuries

C. A lawyer's advice in a divorce case

D. A checkup by a doctor

E. A business profit

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

3. Which of the following is an example of an intangible product?

A. A movie DVD

B. A sandwich

C. A sports car

D. A music concert

E. Jewelry

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

4. Which of the following is a similarity between businesses and nonprofit organizations?

A. Both do not have to abide by government regulations.

B. Both are unaffected by political or social change.

C. Both of them engage in management and finance activities.

D. Both of them do not need to adapt to technological changes.

E. Both aim to maximize financial returns for their owners.

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

5. All the groups that have an interest in an organization's success and outcomes are known as the organization's ____.

A. agencies

B. stakeholders

C. owners

D. investors

E. shareholders

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

6. Which of the following is a force within an organization's control that has an impact on the business's daily operations?

A. Employees

B. Regulatory environment

C. Competition

D. Political environment

E. Technology

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

7. Which of the following is true of the responsibilities of the people involved in a business?

A. Finance is concerned with acquiring, developing, and using human effectively and efficiently.

B. Marketing refers to all activities concerned with obtaining money for the firm and using it effectively.

C. Nonprofit organizations include all the functions that businesses do, except for the marketing function.

D. Management is not involved in the day-to-day functions of production and manufacturing.

E. It is the primary responsibility of the owners to provide financial resources for the operation of the business.

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

8. The functions of organizing, staffing, planning, and controlling are most closely associated with:

A. managers.

B. assembly line workers.

C. investment advisors.

D. stockbrokers.

E. direct sales executives.

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

9. _________ gather information and conduct research to determine what customers want. They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available. A. Accountants

B. Engineers

C. Marketers

D. Supervisors

E. Stock brokers

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

10. Advertising, personal selling, coupons, and sweepstakes are forms of the _____ aspect of marketing activities. A. finance

B. promotion

C. production

D. fund raising

E. social responsibility

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

11. When a business fails or does not make a profit, _____ have the most to lose in terms of finances. A. consumers

B. media agencies

C. government bodies

D. owners

E. market experts

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

12. ___________ refers to all activities concerned with obtaining and managing money and using it effectively. A. Public relations

B. Marketing

C. Production

D. Advertising

E. Finance

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

13. All the following are factors of production used to make goods and services, EXCEPT: A. natural resources.

B. human resources.

C. customers.

D. capital.

E. financial resources.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems.

14.

Which of the following statements is true about communism?

A.

It is characterized by the government owning and operating most businesses.

B.

It relies on supply and demand to make decisions about pricing and production of goods.

C.

It encourages private ownership of the means of production.

D.

It encourages free market and competition.

E.

It provides scope for the production of a large variety of goods and services.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems.

15. In a capitalist economic system: A. the government owns and operates all businesses.

B. there is little scope for competition.

C. consumers have a limited choice of goods and services.

D. the majority of people possesses government jobs.

E. prices of goods and services are determined by demand and supply.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems

16. ___________ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time. A. Demand

B. Supply

C. Elasticity

D. Balance of payments

E. Deficit

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

17. The __________ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time. A. bundled price

B. equilibrium price

C. discount price

D. competitive price

E. maximum retail price

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

18. The market for corn in Brazil has a large number of sellers, and there is no difference in the products sold by each seller. As there are also a large number of buyers for the corn, the actions of a single seller or buyer cannot affect the price. The market for corn can be described as ____.

A. a monopoly

B. monopolistic competition

C. pure competition

D. an oligopoly

E. modified competition

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

19. A budget deficit occurs when a nation: A. reduces its expenditures.

B. receives excess taxes.

C. has no national debts.

D. spends more than it takes in from taxes.

E. balances taxes and expenditures.

Hint: Learning Objective: 01-05 Specify why and how the health of the economy is measured.

20. Which of the following is a change that occurred in the U.S. during the Industrial Revolution? A. Farm production decreased as industrial production increased.

B. As work became more localized, productivity decreased.

C. Trade within the country decreased as regions became self-sufficient.

D. Farmers began to move to cities to find jobs in factories.

E. Fewer goods were available, and prices of goods increased.

Hint: Learning Objective: 01-06 Trace the evolution of the American economy and discuss the role of the entrepreneur in the economy.

Chapter 2

21. Obeying the law is a business's ____. A. right

B. choice

C. economic responsibility

D. legal responsibility

E. ethical responsibility

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

22. The principles and standards that determine acceptable conduct in business organizations are referred to as: A. social responsibility.

B. business strategies.

C. business ethics.

D. business stances.

E. corporate citizenship.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

23. The term social ___________ refers to a business's obligation to maximize its positive impact and minimize its negative impact on society. A. citizenship

B. strategy

C. ethics

D. responsibility

E. rule

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

24. The ________ Act criminalized securities fraud and toughened penalties for corporate fraud. A. Dodd-Frank

B. Federal Trade Commission

C. Foreign Corrupt Practices

D. Sarbanes-Oxley

E. Sherman Antitrust

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

25. The Sarbanes-Oxley Act was passed to: A. punish those who committed accounting fraud in the late 1990s.

B. improve corporate profits.

C. help laid-off employees get their jobs back.

D. help investors recoup their losses.

E. help restore confidence in corporate America.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

26. One of the most difficult things for a business to restore after an ethics scandal is: A. regulations.

B. ethics training programs.

C. trust.

D. codes of conduct.

E. morale.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

27. According to the National Business Ethics Survey, _____ is the number one area of misconduct observed in the workplace. A. plagiarism

B. discrimination

C. abusive behavior

D. misuse of company time

E. stealing

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

28. If Laura, a manager, chooses to act so that she benefits financially at the expense of her firm, then she: A. is bullying.

B. is engaging in bribery.

C. has a conflict of interest.

D. is cheating.

E. has broken the law.

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

29. Managers use the _____ of their position to influence employees' decisions and actions. A. responsibility

B. standards

C. principles

D. authority

E. acceptance

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

30. _____ involves taking someone else's work and presenting it as your own. A. Conflict of interest

B. Bullying

C. Inspiration

D. Bribery

E. Plagiarism

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

31. Which of the following is true of ethics? A. Ethical conflict increases when employees feel that their company is exerting pressure on them to engage in unethical conduct.

B. Professional codes of ethics are informal rules and standards that describe what the company expects of its employees.

C. Codes of ethics need to be very detailed so that they take into account every situation.

D. The development of a code of ethics should include only a firm's executives and board of directors.

E. Employees always utilize the same ethical standards at work as they do at home.

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

32. A set of formalized rules and standards that describes what a company expects of its employees is called a(n) ____. A. contractual capacity

B. consumerist code

C. moral philosophy

D. social responsibility

E. code of ethics

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

33. A code of ethics represents _____ rules and standards of what a company expects of its employees. A. unceremonious

B. short-term

C. comprehensive

D. formalized

E. situational

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

34. _________ is the act of an employee exposing an employer's wrongdoing to outsiders. A. Fraud

B. Whistleblowing

C. Plagiarism

D. Bullying

E. A criminal lawsuit

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

35. Being profitable relates to the dimension of _____ responsibility. A. corporate citizenship

B. voluntary

C. ethical

D. legal

E. economic

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

36. Avoiding misconduct and doing what is right, just, and fair relates to a business's: A. economic responsibility.

B. corporate citizenship.

C. legal responsibility.

D. ethical responsibility.

E. government's responsibility.

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

37. Being a "good corporate citizen" is an example of the _____ social responsibility dimension. A. puritanical

B. economic

C. legal

D. ethical

E. voluntary

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

38. Studies have found a direct link between social responsibility and _____ in business. A. profitability

B. ethics

C. declining stock prices

D. happiness of stakeholders

E. global warming

Hint: Learning Objective: 02-05 Debate an organization's social responsibilities to owners; employees; consumers; the environment; and the community.

39. Laws regarding workplace safety are enforced by the ____. A. Federal Trade Commission

B. Occupational Safety and Health Administration

C. Environmental Protection Agency

D. Consumer Bill of Rights

E. Corrupt Practices Act

Hint: Learning Objective: 02-05 Debate an organization's social responsibilities to owners; employees; consumers; the environment; and the community.

40. ________ involves the interaction among nature and individuals, organizations, and business strategies and includes the assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles, so that they maintain the health of the natural environment. A. Philanthropy

B. Consumerism

C. Sustainability

D. Biodiversity

E. Dualism

Hint: Learning Objective: 02-05 Debate an organization's social responsibilities to owners; employees; consumers; the environment; and the community.

Chapter 3

41. _________ is the transferring of manufacturing or other tasks—such as data processing—to countries where labor and supplies are less expensive. A. Importing

B. Exporting

C. Outsourcing

D. Dumping

E. Insourcing

Hint: Learning Objective: 03-01 Explore some of the factors within the international trade environment that influence business.

42. A favorable balance of trade exists when a country: A. imports more than it exports.

B. exports more than it imports.

C. has more debt liabilities than assets.

D. spends more than it saves.

E. saves more than it spends.

Hint: Learning Objective: 03-01 Explore some of the factors within the international trade environment that influence business.

43. Which of the following is likely to be an impact of a decrease in the value of yen in relation to dollar? A. An increase in Japanese imports of U.S. goods

B. An increase in the number of Japanese tourists in the U.S.

C. An increase in the demand for Japanese yen in the foreign exchange market

D. An increase in the price of U.S. goods in Japanese markets

E. An increase in Japanese exports

Hint: Learning Objective: 03-02 Investigate some of the economic; legal-political; social; cultural; and technological barriers to international business.

44. A sudden change in power can result in a regime that is hostile to foreign investment. This is a primary example of a ____. A. political barrier

B. cultural barrier

C. exchange barrier

D. language barrier

E. geographic barrier

Hint: Learning Objective: 03-02 Investigate some of the economic; legal-political; social; cultural; and technological barriers to international business.

45. Understanding that Arab businessmen tend to stand face to face when holding a conversation reveals the importance of understanding another culture's use of: A. language.

B. dialect.

C. religious practices.

D. ethics.

E. body language.

Hint: Learning Objective: 03-02 Investigate some of the economic; legal-political; social; cultural; and technological barriers to international business.

46. The effective translation of product names can be crucial to the success in foreign markets because of: A. political barriers.

B. cultural barriers.

C. legal barriers.

D. the presence of export quotas.

E. the differences in body language.

Hint: Learning Objective: 03-02 Investigate some of the economic; legal-political; social; cultural; and technological barriers to international business.

47. Which of the following is the reason for establishing the World Bank?

A. To fund the member nations of the NAFTA and EU

B. To aid developed economies during financial crisis

C. To act as a global policing service

D. To loan money to underdeveloped and developing countries

E. To help developed nations obtain money to start businesses

Hint: Learning Objective: 03-03 Specify some of the agreements; alliances; and organizations that may encourage trade across international boundaries.

48. Suppose Coca-Cola allows a Mexican firm to use its name, formula, and brands in return for a royalty. This arrangement is known as: A. exporting.

B. licensing.

C. direct investment.

D. contract manufacturing.

E. a joint venture.

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

49. Apple Inc., a leading manufacturer of cell phones and tablets, hires Taiwan's Foxconn Technology Group, whose subsidiary assembles Apple devices in factories in China. Which of the following refers to the business arrangement between Apple and Foxconn? A. Exporting

B. Licensing

C. A direct investment

D. Contract manufacturing

E. A joint venture

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

50. Which of the following is likely to be a reason for some U.S. companies to bring their outsourced production processes back to the United States? A. Increasing labor unionization in the United States

B. Increased government regulation of business in the United States

C. Increasingly strict enforcement of intellectual property rights in Asian countries

D. High cost of transporting products to the home country

E. Increase in labor turnover rates in the United States

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

51. The sharing of the costs and operations of a business between a foreign company and a local partner is called ___________________.

A. exporting

B. licensing

C. direct investment

D. contract manufacturing

E. a joint venture

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

52. The purchase of overseas production and marketing facilities is an example of ____. A. licensing

B. contract manufacturing

C. using an export agent

D. direct investment

E. exporting

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

53. A corporation that operates in several countries but without significant ties to any of them is an example of a(n): A. licensor.

B. exporter.

C. monopolist.

D. multinational.

E. contract manufacturer.

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

54. Which of the following is an example of foreign direct investment? A. A software development company in the United States investing in shares of an American computer manufacturing firm.

B. A U.S. investor buying stocks of a German automobile manufacturing company.

C. A Canadian firm purchasing a majority stake in a Japanese company.

D. A U.S. cell phone manufacturer hiring an Indian firm to provide customer support services and trouble shooting.

E. A Chinese steel manufacturing firm exporting 60 percent of its output to European nations.

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

55. Which of the following is true of an MNC? A. It is the highest level of international business involvement.

B. It operates on a national scale.

C. It has significant ties to specific nations or regions.

D. They usually have lesser assets than the countries in which they operate.

E. They are less complicated than corporations.

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

56. On which of the following grounds are MNCs often criticized by antiglobalization activists? A. They increase unemployment in the host country.

B. They bring in technology that is unknown to the host country.

C. They use capital-intensive mode of production.

D. They are liable to pay the taxes levied by the government of the host country.

E. They increase the gap between rich and poor nations.

Hint: Learning Objective: 03-04 Summarize the different levels of organizational involvement in international trade.

57. McDonald's had to adapt its menus to reflect local preferences in India because: A. Indians do not like hamburgers.

B. all Indians are vegetarians.

C. Indians only like to have a low-fat diet.

D. it had to account for religious and dietary customs related to serving pork and beef.

E. McDonald's had a bad reputation before opening franchises in India.

Hint: Learning Objective: 03-05 Contrast two basic strategies used in international business.

58. Lever Brothers changed the formula of its bar soap to match different countries' water conditions and washing habits. This is an example of: A. globalization strategy.

B. outsourcing.

C. strategic alliance.

D. multinational strategy.

E. joint venture.

Hint: Learning Objective: 03-05 Contrast two basic strategies used in international business.

59. When a firm's products are standardized in all countries: A. advertising cannot be used.

B. only publicity can be used for promotion.

C. using different advertisement content is illegal.

D. distribution is more expensive.

E. advertising may still need modification.

Hint: Learning Objective: 03-05 Contrast two basic strategies used in international business.

60. Standardizing products for the whole world as if it were a single entity is a characteristic of the ____. A. global strategy

B. individualized strategy

C. domestic strategy

D. customization strategy

E. national strategy

Hint: Learning Objective: 03-05 Contrast two basic strategies used in international business.

Chapter 11

61. Ryan has produced 1000 jars of pickled oranges using the oranges in his orchard. By concentrating his efforts on advertising and publicity, he is trying to encourage people to notice and buy his product. Through his promotional activities, Ryan is primarily engaging in the marketing function of ____. A. financing

B. grading

C. warehousing

D. buying

E. selling

Hint: Learning Objective: 11-02 Specify the functions of Marketing.

62. Burgerama Inc., a popular fast food chain, is famous for its French fries and hash browns. It is one of the few fast food chains to exclusively use the potatoes from its own farms. However, its potatoes can be harvested for only three months of the year. Which of the following marketing functions can Burgerama employ to achieve time utility and satisfy year-round demand for its exclusively grown French fries and hash browns?

A. Grading

B. Selling

C. Storing

D. Buying

E. Financing

Hint: Learning Objective: 11-02 Specify the functions of Marketing.

63. _____ is the chance of loss associated with marketing decisions.

A. Value

B. Utility

C. Liability

D. Risk

E. Cost

Hint: Learning Objective: 11-02 Specify the functions of Marketing.

64. A customer's subjective assessment of benefits relative to costs in determining the worth of a product is known as ____. A. risk

B. value

C. cost

D. price

E. profit

Hint: Learning Objective: 11-02 Specify the functions of Marketing.

65.___________________ is the goal of the marketing concept. A. Product orientation

B. Productivity boosting

C. Customer satisfaction

D. Asset turnover

E. Sales orientation

Hint: 11-03 Explain the marketing concept and its implications for developing marketing strategies.

66. Which of the following is an ineffective practice to follow while implementing the marketing concept? A. Using the customer's perception of value as the ultimate measure of work performance

B. Striking a balance between achieving organizational objectives and satisfying customers

C. Adopting a product orientation instead of a consumer orientation to deliver the right good or service

D. Involving the entire organization instead of only the marketing department, in achieving customer satisfaction

E. Adapting products and services according to the changing consumer needs and wants

Hint: 11-03 Explain the marketing concept and its implications for developing marketing strategies.

67. Which of the following requires organizations to gather information about customer needs, share that information throughout the firm, and use it to help build long-term relationships with customers? A. Marketing concept

B. Production orientation

C. Sales orientation

D. Market orientation

E. Customer-relationship orientation

Hint: 11-03 Explain the marketing concept and its implications for developing marketing strategies.

68. The first step in developing a marketing strategy is: A. cultivating effective customer relationships.

B. attracting new customers.

C. selecting a target market.

D. developing an appropriate marketing mix.

E. conducting a SWOT analysis.

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

69. A(n) _____ is best described as a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas. A. market

B. focus group

C. command group

D. target market

E. market segment

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

70. Ferava Inc. is a company that markets its products—luxury wristwatches—exclusively to high-income individuals and celebrities. Thus, high-income individuals and celebrities are most likely Ferava Inc.'s ______________.

A. target market

B. control group

C. reference group

D. market

E. market segment

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

71. Kemmen Foods Inc., a company that manufactures and sells breakfast cereals, has customized its cereal flavors to suit different lifestyles, personal tastes, and age groups. For example, it makes organic cereals for its health-conscious customers, and it makes colorful cereals with cartoon characters for children. Which of the following market segment approaches is Kemmen Foods Inc. using in this scenario? A. Niche market approach

B. Mass market approach

C. Total-market approach

D. Concentration approach

E. Multisegment approach

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

72. In _____ marketing, all marketing efforts are on one small, narrow, well-defined market segment that has a unique, specific set of needs. A. niche

B. mass

C. differentiated

D. total

E. multisegment

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

73. If a company develops an advertising campaign exclusively for a segment of consumers with a certain income and education, which of the following segmentation variables is the company using? A. Behavioristic

B. Demographic

C. Psychographic

D. Geographic

E. Ethnographic

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

74. Which of the following is a basis for the psychographic segmentation of markets? A. Religion

B. Income

C. Education

D. Lifestyle

E. Gender

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

75. Gear Power Inc., an automobile company, manufactures different cars for different market segments. It markets SUVs for customers who live in the mountains, sedans for customers in the coastal plains, and smaller hatchback cars for those in big cities. In this scenario, Gear Power Inc. is primarily using _____ variables of market segmentation. A. demographic

B. psychographic

C. geographic

D. behavioristic

E. ethnographic

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

76. Which of the following is NOT one of the four marketing activities of the marketing mix? A. Price

B. Distribution

C. Promotion

D. Product

E. Profit

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

77. In businesses, the _____ is an important variable—often the central focus—of the marketing mix, based on which the other variables are adjusted. A. price

B. distribution

C. promotion

D. product

E. process

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

78. Gift Nation Inc. is deciding whether to sell its products through vending machines outside subway stations or in stores at popular malls. Which of the following elements in the marketing mix does this decision most relate to? A. Price

B. Place

C. Promotion

D. Product

E. Process

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

79. Prism Phones Inc. is targeting college students and young professionals. The company has therefore decided to advertise its cell phones over social networking and other popular websites. Relative to television advertising, this strategy will help Prism Phones save costs, allowing the firm to sell its phones at a more competitive price. Prism Phones' decision to advertise via different vehicles than other firms illustrates the _____ activities of the marketing mix. A. price

B. distribution

C. promotion

D. product

E. profit

Hint: 11-04 Examine the development of a marketing strategy; including market segmentation and marketing mix.

80. Jennifer is highly influenced by actresses in movies and advertisements. She wishes to dress like them and adopt their lifestyle. When she is shopping, these celebrities are her point of comparison. In this scenario, actresses in movies and advertisements are Jennifer's ____. A. social class

B. focus group

C. reference group

D. social role

E. market segment

Hint: 11-05 Investigate how marketers conduct marketing research and study buying behavior.

CHAPTER 12

81. During which of the following stages of the product development process are most new product ideas rejected because they seem inappropriate for an organization? A. Idea development

B. Business analysis

C. Test marketing

D. Product development

E. Idea screening

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

82. If a nationwide sandwich shop introduces a new sandwich in the Midwest to try out its marketing strategy before offering the product across the country, it is in the _____ stage of the product development process. A. idea screening

B. commercialization

C. concept testing

D. business analysis

E. test marketing

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

83. During which stage of the product development process does a firm gear up for full-scale production, distribution, and promotions of its products? A. Idea development

B. Commercialization

C. Product development

D. Test marketing

E. Idea screening

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

84. A gallon of milk is an example of a: A. convenience product.

B. shopping product.

C. specialty product.

D. generic product.

E. difficult-to-obtain product.

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

85. Products such as furniture, audio equipment, bicycles, and clothing are generally classified as: A. convenience products.

B. specialty products.

C. capital products.

D. luxury products.

E. shopping products.

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

86. 7-UP, Cherry 7-UP Antioxidant, and Diet 7-UP are products in Dr. Pepper Snapple Group's: A. 7-UP product line.

B. 7-UP marketing mix.

C. 7-UP product position.

D. 7-UP product width.

E. 7-UP product innovation.

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

87. During the _____ stage of the product life cycle, a product's profits peak and then start to decline. A. death

B. decline

C. maturity

D. growth

E. introduction

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

88. If a company is eliminating certain models of a product and cutting back on expenditures, the product is most likely in the _____ stage of the product life cycle. A. growth

B. intermediate

C. introduction

D. decline

E. maturity

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

89. WD-40 spray lubricant is a: A. generic brand.

B. private distributor brand.

C. business product.

D. brand name.

E. specialty product.

Hint: 12-01 Describe the role of product in the marketing mix; including how products are developed; classified; and identified.

90. Which of the following elements is the most flexible variable in the marketing mix? A. Product

B. Production

C. Distribution

D. Promotion

E. Price

Hint: 12-02 Define price and discuss its importance in the marketing mix; including various pricing strategies a firm might employ.

91. Dynamix Computers initially charged a low price for its new computer and then raised the price after gaining a large market share. Which of the following pricing strategies did Dynamix Computers use in this scenario? A. Prestige pricing

B. Symbolic pricing

C. Psychological pricing

D. Price skimming

E. Penetration pricing

Hint: 12-02 Define price and discuss its importance in the marketing mix; including various pricing strategies a firm might employ.

92. If a cosmetics company is selling an eye shadow priced at $11.99 rather than $12, it is using: A. price skimming.

B. penetration pricing.

C. psychological pricing.

D. rational pricing.

E. discount pricing.

Hint: 12-02 Define price and discuss its importance in the marketing mix; including various pricing strategies a firm might employ.

93. If a company's goal is to develop an image of having very high-quality luxury products, it should employ a(n): A. penetration pricing strategy.

B. price discounting strategy.

C. even/odd pricing strategy.

D. prestige pricing strategy.

E. inclusive pricing strategy.

Hint: 12-02 Define price and discuss its importance in the marketing mix; including various pricing strategies a firm might employ.

94. The store 47 Avenue buys shoes for men, women, and children from a large producer and sells them directly to end-users. In this scenario, 47 Avenue is a(n) ____. A. manufacturer

B. retailer

C. financier

D. wholesaler

E. customer

Hint: 12-03 Identify factors affecting distribution decisions; such as marketing channels and intensity of market coverage.

95. If a company buys televisions from a manufacturer and then sells them to department stores, it is probably a _____. A. retailer

B. producer

C. consumer

D. wholesaler

E. marketer

Hint: 12-03 Identify factors affecting distribution decisions; such as marketing channels and intensity of market coverage.

96. Which of the following distribution channels would most likely be used for fruits and vegetables sold at a roadside stand or farmer's markets? A. Agent to wholesaler to retailer

B. Producer to consumer

C. Retailer to consumer

D. Merchant to wholesaler

E. Middleman to producer

Hint: 12-03 Identify factors affecting distribution decisions; such as marketing channels and intensity of market coverage.

97. All of the following activities are associated with warehousing, EXCEPT: A. receiving.

B. identifying.

C. producing.

D. dispatching.

E. storing.

Hint: 12-04 Specify the activities involved in promotion as well as promotional strategies and promotional positioning.

98. Colors, a company manufacturing cosmetics and body care products, offers retailers a special incentive to carry its new line of shower gels and body lotions. Which of the following promotion strategies is being applied by Colors in this scenario? A. Pull strategy

B. Advertising

C. Publicity

D. Integrated marketing communications

E. Push strategy

Hint: 12-04 Specify the activities involved in promotion as well as promotional strategies and promotional positioning.

99. When Energia, a soft drink company, seeks to use viral ads on the Internet to introduce its new beverage to consumers before introducing it to supermarkets, it uses a: A. push strategy.

B. pull strategy.

C. publicity campaign.

D. point-of-purchase promotion.

E. skimming strategy.

Hint: 12-04 Specify the activities involved in promotion as well as promotional strategies and promotional positioning.

100. Bart's Beer targets its 1964 beer at those who want to drink beer without consuming many calories. This best exemplifies: A. institutional advertising.

B. promotional positioning.

C. a push strategy.

D. a pull strategy.

E. publicity.

Hint: 12-04 Specify the activities involved in promotion as well as promotional strategies and promotional positioning.

Study Guide: Chapter 1

Multiple Choice Questions

1

.

____ is the primary goal of business.

A.

Charity

B.

Profit

C.

Bureaucracy

D.

Quality

E.

Strategy

Hint:

Learning Objective: 01

-

01 Define basic concepts such as business

;

product

;

and profit.

2.

Which of the following is NOT a product?

A.

A Dell personal computer

B.

A veterinarian's treatment of a pet's injuries

C.

A lawyer's advice in a divorce case

D.

A checkup by a doctor

E.

A business profit

Hint:

Learning Objective: 01

-

01

Define basic concepts such as business

;

product

;

and profit.

3.

Which of the following is an example of an intangible product?

A.

A movie DVD

B.

A sandwich

C.

A sports car

D.

A music concert

E.

Jewelry

Hint:

Learning Objective: 01

-

01 Define

basic concepts such as business

;

product

;

and profit.

Study Guide: Chapter 1

Multiple Choice Questions

1. ____ is the primary goal of business.

A. Charity

B. Profit

C. Bureaucracy

D. Quality

E. Strategy

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

2. Which of the following is NOT a product?

A. A Dell personal computer

B. A veterinarian's treatment of a pet's injuries

C. A lawyer's advice in a divorce case

D. A checkup by a doctor

E. A business profit

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

3. Which of the following is an example of an intangible product?

A. A movie DVD

B. A sandwich

C. A sports car

D. A music concert

E. Jewelry

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.