The system for grouping businesses that grew out of the nafta accord is known as the:

PM (16e) Exam 2n (Ch 6-12)

True/False

Indicate whether the statement is true or false.

____ 1. Personal selling plays a much bigger role in consumer markets than in business markets.

____ 2. When Cannondale purchases aluminum for use in its bicycle frames, the company is participating in the commercial market.

____ 3. The NAICS codes provide information about businesses that allows users to compare business sectors among the member nations of NAFTA.

____ 4. With the implementation of the NAFTA accord, the SIC system replaced the NAICS system to subdivide the business marketplace into detailed segments.

____ 5. End-use application segmentation focuses on the precise way in which a business purchaser will use a product.

____ 6. If Product A is used primarily to manufacture Product B, then the demand for product A is derived from the demand for Product B.

____ 7. Offshoring and nearshoring refer to the methods of acquiring raw materials for the production of goods.

____ 8. Gradually decreasing cost savings is one potential downside to offshoring.

____ 9. A firm deciding to purchase more energy-efficient machines in response to rising fuel prices illustrates the first step in the business buying process.

____ 10. The ongoing evaluation of a supplier's performance on parameters such as price, EDI capability, delivery times, and attention to special requests is called vendor analysis.

____ 11. Soft currencies are methods of exchange that cannot be readily converted into hard currencies such as the dollar, euro, or yen.

____ 12. The social-cultural environment of a country includes its language, education, religious attitudes, and social values.

____ 13. The Helms-Burton Act of 1996 attempted to impose penalties against companies that illegally dump products in the U.S. marketplace.

____ 14. In general, tariffs are imposed to raise revenue, protect prices of domestic products, control access to markets, or gain bargaining clout with another country.

____ 15. Dumping is the practice of selling a large volume of product into a foreign market at prices lower than its own domestic market.

____ 16. A noticeable trend toward multinational integration has been developing since World War II.

____ 17. The World Trade Organization oversees GATT agreements, mediates disputes, and continues the effort to further reduce trade barriers throughout the world.

____ 18. At the time of its passage, critics of NAFTA argued that Canada and Mexico would suffer serious economic losses as manufacturers rushed to relocate their production facilities in the United States.

____ 19. The largest operating multinational economic community in the world is the FTAA, linking 34 countries and 800 million people in the Western Hemisphere.

____ 20. Although the first multinational corporations were U.S. based, today it is likely for a multinational corporation to be Japanese, German, or British.

____ 21. A company that changes its product’s package sizes, prices, and promotional messages to meet the local market’s tastes is using a straight extension marketing strategy.

____ 22. Companies often adapt their pricing strategy from one foreign market to another, and modify pricing when market conditions change.

____ 23. Some of the largest direct investments by foreign companies in the United States have occurred in the automobile industry.

____ 24. An outside marketing research firm is unlikely to be as thorough and accurate as a firm’s in-house staff due to the number of clients they service at one time.

____ 25. Some marketers gain valuable insights by examining the dissatisfaction that leads customers to abandon products for those offered by competitors.

____ 26. Sampling is the process of selecting survey respondents or research participants.

____ 27. A quota sample is a probability sample that is divided so that different segments or groups are represented in the total sample.

____ 28. In research studies using the observation method, researchers view the overt actions of the subjects.

____ 29. By identifying, evaluating, and selecting a target market to pursue, marketers are able to develop more efficient and effective marketing strategies.

____ 30. Primary metropolitan statistical areas (PMSA) are urbanized counties with economic ties to neighboring counties. They are identified within CMSA’s with 2 million-plus populations.

____ 31. Firms define core regions as the locations where they obtain between 40 and 80 percent of their sales.

____ 32. Marketers are increasingly shying away from children and teen market segments because of pressures calling for social responsibility on the part of advertisers.

____ 33. With a 30-year span, Baby Boomers are too large a population with too many varying life stages to be of use to marketers.

____ 34. Baby Boomers are decreasing in popularity as a market segment due to their declining disposable income.

____ 35. The Asian American population is more geographically distributed than either Hispanics or African Americans.

____ 36. Some industries that might benefit from people in the empty nester stage are the travel, restaurant, and automotive industries, along with vacation real estate and institutions of higher education.

____ 37. One family life cycle trend noted by researchers in the past decade is an increase in the number of grown children who have returned home to live with their parents, some even bringing along families of their own. These individuals are known as “boomerang” children.

____ 38. The percentage spent on housing, household operations, and clothing remains constant as income increases according to Engel’s laws. In recent years, however, this has proven to be false. In fact, the percentage of income spent on these items has increased with income.

____ 39. The management-driven method of identifying market segments asks customers which attributes of a product are important to them and clusters responses to identify potential segments.

____ 40. When analyzing the toothpaste market, there are products that control tartar, fight cavities, freshen breath, and whiten teeth. It is correct to say the toothpaste market is utilizing product positioning.

____ 41. In relationship marketing, the focus is on enticing a buyer to make an immediate purchase based on factors such as low price, convenience, or packaging.

____ 42. Successful internal marketing efforts create satisfied employees who spread positive word-of-mouth messages to relatives, friends, and acquaintances.

____ 43. The second step on the relationship marketing continuum is actually the first step to personalizing the relationship by allowing it to evolve past the impersonal aspects of the financial decisions.

____ 44. Customer satisfaction is defined as the psychological difference between what a customer expects and what they perceive they need.

____ 45. The cost of acquiring a new customer is almost similar to keeping a loyal one.

____ 46. In business-to-business markets, legal contracts form the basis of relationship marketing.

____ 47. By assembling a team of individuals to service just one account in national account selling, the seller demonstrates the depth of its commitment to the customer.

____ 48. Retailers using electronic data interchange can implement quick-response merchandising strategies or just-in-time strategies that reduce the time they hold merchandise in inventory.

____ 49. A horizontal strategic alliance is one between firms at different levels of the supply chain.

____ 50. One way to distinguish a good from a service is that a service is inseparable from the service provider.

____ 51. Services are perishable and cannot be stockpiled or inventoried.

____ 52. The service sector of the U.S. economy is only one-third as large as the manufacturing sector.

____ 53. Product strategies are essentially the same for consumer and business markets.

____ 54. A product a customer keeps on hand and replenishes when the product runs out is called a staple.

____ 55. Accessory equipment for the business market includes such products as hand tools, portable drills, and laptop computers.

____ 56. Advertising is seldom an important component in the marketing mix for accessory equipment products.

____ 57. The Malcolm Baldrige National Quality Award is the highest national recognition for quality that a U.S. company can receive.

____ 58. The purpose of benchmarking is to achieve the minimum acceptable performance for releasing a product into the marketplace.

____ 59. SUVs produced by Toyota, Ford, and Chrysler constitute a single product line.

____ 60. Extending a product line allows a firm to maximize sales opportunities without being limited by its resources.

____ 61. A promotional campaign for a family brand does not benefit all products in the line.

____ 62. A certain brand’s sales outside the home country account for half of its total sales. It is considered to be a global brand.

____ 63. Tide laundry detergent commands an extremely high market share. Purchases of the product are less sensitive to price changes. Based on this assessment, it can be said that Tide has extremely high brand equity.

____ 64. Brand relevance refers to a brand's ability to stand apart from its competitors.

____ 65. The original objective of product packaging is to influence buyers’ purchase decisions.

____ 66. Brand extensions, also called line extensions, refer to the strategy of attaching a popular brand name to a new product in an unrelated product category.

____ 67. Packaged-goods marketers often pursue the market penetration strategy to boost market share for mature products in mature markets.

____ 68. Cannibalization is the use of flanker brands to take market share away from a competitive brand.

____ 69. Consumer innovators are individuals who develop novel uses for products already on the market and are themselves part of the adoption process.

____ 70. The creation of a new-product committee by a corporation to investigate a new line of products would involve gathering a group of specialists from different areas of the organization, for as long a period of time as is needed, to perform the task of new product development.

Multiple Choice

Identify the choice that best completes the statement or answers the question.

____ 71. Comparing the business market to the consumer market, all of the following statements are correct except:

a.

business purchasing processes tend to be more complex.

b.

buying processes in the business market are longer and include more decision makers.

c.

advertising plays a larger role in the business market.

d.

personal selling plays a bigger role in business markets than in consumer markets.

____ 72. Which of the following is the largest segment of the business market?

a.

Trade industries, which include retailers, wholesalers, and resellers.

b.

The commercial market, which includes anyone who acquires products to support production of other goods and services.

c.

Government organizations, including the military, state, and federal governments.

d.

Institutions such as schools, hospitals, and churches.

____ 73. The system for grouping businesses that grew out of the NAFTA accord is known as the:

a.

Standard Industrial Classification System.

b.

Industrial Data Records System.

c.

International Organization for Standardization 14000 series.

d.

North American Industry Classification System.

____ 74. _____ is the combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers.

a.

Supply chain management

b.

Business intelligence

c.

Database management

d.

Customer relationship management

____ 75. Which of the following is not a characteristic that distinguishes B2B markets from consumer markets?

a.

Organizational markets are more geographically concentrated.

b.

More people exert influence on organizational buying decisions.

c.

The organizational market tends to have a greater number of buyers.

d.

B2B relationship marketing requires superior communication among the organization’s personnel.

____ 76. Dell Computer purchases parts and resources for its computers from multiple suppliers that are spread across the world. This practice is known as:

a.

offshoring.

b.

global sourcing.

c.

outsourcing.

d.

reciprocity.

____ 77. Inventory practices that seek to boost efficiency by cutting inventories to absolute minimum levels are known as:

a.

inventory bounce.

b.

just-in-time.

c.

stock obsolescence.

d.

perpetual inventory management.

____ 78. Which of the following is one of the disadvantages of outsourcing?

a.

Increasing expenses to remain competitive

b.

Compromises on the quality and speed of software development and maintenance

c.

Slows down efforts in bringing new products to market

d.

Inflation in wages of employees

____ 79. Which stage of the organizational buying process would procedures that measure characteristics, such as a supplier's reliability, price, and order accuracy, be part of?

a.

Searching for potential sources

b.

Analyzing proposals

c.

Recognizing a need

d.

Evaluating proposals and selecting suppliers

____ 80. When a business purchaser renews the terms of sale of an item that has performed satisfactorily in the past and requires no new information to decide to purchase it again, the buying situation is called:

a.

straight rebuying.

b.

new-task buying.

c.

reciprocity.

d.

modified rebuying.

____ 81. An ongoing evaluation of a supplier's performance in categories such as price, EDI capability, delivery times, and attention to special requests is known as:

a.

customer relationship management.

b.

business intelligence gathering.

c.

vendor analysis.

d.

task-based evaluation.

____ 82. The function performed by the gatekeeper in the company buying center is to:

a.

supply information to guide the evaluation of alternatives.

b.

select a supplier and implement the procedures for securing the goods and services.

c.

choose which goods and services will actually be bought.

d.

control the information that all buying center members will review.

____ 83. The identity of the _____ is the most difficult role for salespeople to pinpoint.

a.

user

b.

decider

c.

buyer

d.

influencer

____ 84. The world’s largest corporations represent all of the following industries except:

a.

oil.

b.

pharmaceutical.

c.

automobile.

d.

retail trade.

____ 85. Technology presents challenges for global marketers that extend beyond the Internet and other telecommunications innovations. A major issue involving food marketers is _____.

a.

value engineering

b.

reverse engineering

c.

genetic reengineering

d.

business process reengineering

____ 86. The controversial 1996 law that attempted to impose trade sanctions on Cuba is the:

a.

Helms-Burton Act.

b.

Cuban Trade Restriction Act.

c.

Export Trading Act.

d.

North American Free Trade Agreement.

____ 87. A company sells products to a foreign market at a price lower than it sells within its own country. This practice is known as:

a.

dumping.

b.

inventory reduction.

c.

open-market theory.

d.

competitive counter-strategy.

____ 88. The _____ type of multinational organization features free trade of goods among its members, and a uniform tariff for trade with nonmember nations.

a.

common market

b.

common area of administration

c.

customs union

d.

free-trade area

____ 89. All of the following statements about the FTAA are correct except:

a.

NAFTA nations will become members of the FTAA.

b.

FTAA would be the largest free-trade zone in the world.

c.

FTAA would include nations from both North and South America.

d.

FTAA is scheduled to go into effect in 2010.

____ 90. A(n) _____ buys products from domestic producers, controls marketing and distribution of those products and resells them abroad.

a.

outsourcing firm

b.

export-trading company (ETC)

c.

export-management company (EMC)

d.

offset marketer

____ 91. Alternative strategies from which international marketers can choose in selecting an appropriate product/promotion strategy include:

a.

product adaptation and dual adaptation.

b.

promotion adaptation and direct exporting.

c.

countertrading and product invention.

d.

global marketing and multinational marketing.

____ 92. Pricing decisions in a foreign market can most likely be limited by which constraint?

a.

Ecological

b.

Political

c.

Social

d.

Ethical

____ 93. Once a firm has defined the problem it seeks to solve, researchers can begin:

a.

forming preliminary hypotheses based upon speculated information.

b.

exploratory research which involves discussing the problem with informed people.

c.

implementing a progressively linear approach aimed at eliminating possible causes.

d.

extrapolating the information to arrive at a plausible solution.

____ 94. _____ refers to a tentative explanation for a specific event.

a.

Analysis

b.

Syndication

c.

Extrapolation

d.

Hypothesis

____ 95. Jake is deciding which customers to include in a sample. What stage of the marketing research process is he currently in?

a.

Formulating a hypothesis

b.

Collecting data

c.

Creating a research design

d.

Defining a problem

____ 96. Penelope is using data collected and published by a trade association in her marketing research study. What kind of data is Penelope using?

a.

Secondary data

b.

Primary data

c.

Tertiary

d.

Proprietary

____ 97. A common problem confronting managerial decision makers presented with the results of a marketing research study is that:

a.

they are too concerned about the costs associated with market research.

b.

they feel the data will be of little use owing to complex terminology.

c.

they believe in outsourcing the marketing research function to outside providers.

d.

they fear that the research will become obsolete before the recommendations can be implemented.

____ 98. The U.S. database that combines features such as railroads, highways, and rivers with census data such as household income is called:

a.

AEGIS (American Exploratory Geographic Information Systems).

b.

PoLeCAT (Population Legally Counted and Typologized).

c.

TIGER (Topographically Integrated Geographic Encoding and Referencing).

d.

ZEBRA (Zoned Environment Business Report Activities).

____ 99. The survey method of data collection for marketing research may include:

a.

personal observation of subjects as they shop.

b.

review of sales data on customer purchase rates.

c.

analysis of historical census data.

d.

personal interviews with members of a sample.

____ 100. Which of the following is true about marketing research using the experimental method?

a.

It is the least expensive of all marketing research procedures.

b.

Controlled experiments are used across a wide variety of product categories such as automobiles and foodstuff.

c.

By studying the test market, competitors can develop alternative strategies.

d.

It is a nonscientific investigation method compared to the survey research method.

____ 101. A marketing research firm has set up a special store in a foreign country where customers are told they may be observed while shopping. Customer behavior is observed in this setting, and then the firm interprets the data based on an understanding of social and cultural characteristics of that setting. What type of research is this firm conducting?

a.

Secondary data collection

b.

Interpretative research

c.

Controlled experiment

d.

Focus group

____ 102. A _____ is a planned, computer-based system designed to provide decision makers with a continuous flow of information relevant to their areas of responsibility.

a.

business intelligence system

b.

critical response management system

c.

competitive intelligence system

d.

marketing information system

____ 103. Which of the following is a qualitative sales forecasting technique?

a.

Test markets

b.

Delphi technique

c.

Exponential smoothing

d.

Trend analysis

____ 104. When one product becomes part of another product that is destined for resale, the first product is considered:

a.

a consumer product.

b.

a business product.

c.

a primary product.

d.

a used product.

____ 105. Which of the following is a basic requirement for effective market segmentation?

a.

The firm must avoid focusing on non-variables, such as profitability and volume.

b.

The market segment must have measurable purchasing power and size.

c.

The company must expand beyond its marketing capabilities to capture growing markets.

d.

The market segment must reflect the population's changing attitudes and lifestyles.

____ 106. In terms of total population, the United States is ranked _____ in the world.

a.

tenth

b.

first

c.

third

d.

fifth

____ 107. Domino's succeeds in physically delivering more than 1.3 million pizzas to American homes during the Super Bowl because of:

a.

advertising shown during the game.

b.

written reports about peak and off-peak periods from area managers.

c.

the measures undertaken for brand-building a week before the event.

d.

a geographic information system that spatially locates every destination for delivery.

____ 108. Which of the following age groups would marketers of life insurance most likely target?

a.

Baby Boomers

b.

Teenagers

c.

Over 60 years old

d.

Between 25 and 35

____ 109. Places where more than half the population is a single racial or ethnic group other than non-Hispanic white are called as _____.

a.

minority counties

b.

majority-minority counties

c.

majority counties

d.

native-majority counties

____ 110. Compared with other ethnic groups, Asian Americans represent the _____ growing population, and are _____ geographically concentrated than other minority groups.

a.

slowest; less

b.

slowest; more

c.

second fastest; less

d.

second fastest; more

____ 111. According to Engel's laws:

a.

as household income increases, the percent spent on recreation and education increases.

b.

as household income increases, the percent spent for clothing and household operations increases.

c.

as household income increases, the percent spent for food and medical items increases.

d.

as household income decreases, the percent spent on housing and food decreases.

____ 112. Using demographic segmentation abroad is:

a.

challenging because many countries do not take regular censuses.

b.

standardized, with most countries using guidelines set by the UN.

c.

simplified due to the wealth of income data available in certain countries, such as Italy and Japan.

d.

sometimes controversial because the integrity of the data can be questioned.

____ 113. Psychographic segmentation is based on:

a.

the quantitative side of consumer demographic analysis.

b.

the quantitative side of consumer geographic analysis.

c.

individuals' residential patterns and life cycle preferences.

d.

grouping people according to their values and lifestyles.

____ 114. The VALS framework displays differences in resources as vertical distances, whereas _____ is represented horizontally.

a.

eagerness to buy

b.

primary motivation

c.

income

d.

education

____ 115. The product-related segmentation of consumers based according to the strength of their attachment and allegiance to their preferred products is called _____ segmentation.

a.

values and lifestyles

b.

business-to-business

c.

psychographic

d.

brand loyalty

____ 116. CoreLogix Inc., have segmented the market as per product usage rates. They have also developed the relevant profile for each of their segments. What would be the next logical step for them in this process of segmentation?

a.

Commit resources in developing one or more segments

b.

Forecast market potential

c.

Forecast probable market share

d.

Design specific marketing strategy

____ 117. While researching an idea of opening his own health club, Tom learned there are 11 million health club members in the United States, and 90 percent of them are between the ages of 18 and 49. They prefer to exercise with people of their own sex, are more likely to buy foreign brand cars, and are urban dwellers. Tom has assembled information he can use in:

a.

observational analysis.

b.

marketing research.

c.

forecasting total market potential.

d.

developing a market segment profile.

____ 118. The four basic determinants of a market-specific segmentation strategy include company resources, product homogeneity, stage in the product life cycle, and:

a.

product demand.

b.

competitors' strategies.

c.

environmental constraints.

d.

organizational efficiencies.

____ 119. Best Buy Rewards Program tracks customer sales, and periodically issues coupons to customers based on prior purchases. This program is classified as _____ marketing.

a.

affinity

b.

database

c.

frequency

d.

social

____ 120. Which of the following is an example of affinity marketing?

a.

University of Iowa branded credit card

b.

Hallmark’s Gold Crown card

c.

Blockbuster Rewards video card

d.

United Airlines Mileage Plus program

____ 121. Properly used, databases have the capacity to:

a.

predict the exact amount of a customer's next purchase.

b.

normalize the buying power of a company’s customers.

c.

determine a company’s share of the customer’s wallet.

d.

identify a firm's most profitable customers.

____ 122. _____ assist marketers by providing software when it is needed to capture, manipulate, and analyze consumer data.

a.

Application service providers

b.

Data aggregators

c.

DBMS administrators

d.

Data harvesters

____ 123. Compared with the traditional system of business-to-business communication, electronic data interchange (EDI):

a.

has a smaller capacity to gather marketing information.

b.

improves the firm’s efficiency and competitiveness.

c.

involves data duplication at many points.

d.

is currently inefficient until the system can be updated.

____ 124. Which of the following is an important competitive advantage that results from effective supply chain management?

a.

Variable costs

b.

Lower costs of product innovation

c.

Improved conflict resolution within the chain

d.

Autonomy and independence among the members

____ 125. Following research reports indicating a renewed interest in board games, Best Toys carried out its own market study and introduced one for kids under 10. The sales for the first couple of months were unsatisfactory, far lower than what Best Toys had expected. Which of the following could be a reason for the low sales?

a.

Toys are convenience goods and therefore consumers do not have the time or patience to check out new product offerings.

b.

Toys are specialty goods and therefore its market is actually limited since people are already loyal to established brands.

c.

Board games cannibalized the sales of its other products.

d.

The shelf space and visibility of the new board game was not good at most of the department stores and toy stores.

____ 126. Financial, legal, and medical services constitute:

a.

convenience services.

b.

shopping goods.

c.

specialty services.

d.

customized services.

____ 127. Which of the following correctly matches consumer factors and marketing mix factors in the consumer products classification system?

a.

Specialty products - personal selling is not important

b.

Convenience products - consumer makes infrequent purchases of these products

c.

Shopping products - relatively short channel of distribution is typical

d.

Emergency products - these are unsought products

____ 128. ABC Airlines emphasizes a lot on their crew uniform and the presentable look of their infrastructure. By doing this which service quality variable is ABC Airlines exhibiting?

a.

Assurance

b.

Responsiveness

c.

Tangibles

d.

Empathy

____ 129. After careful research, a well known company producing personal care products such as soaps and shampoos, decides to produce and market baby soaps. This implies:

a.

an increase in product mix depth for this company.

b.

an increase in product mix width for this company.

c.

an increase in the product lifecycle.

d.

an increase in the cobranding capabilities of this company.

____ 130. Dell manufactures and market computers and several related products, such as laptops, desktops, notebooks, and printers, all under the Dell name. This strategy is called _____ branding.

a.

family

b.

extension

c.

individual product

d.

private label

____ 131. The added value that a certain brand name gives to a product in the marketplace is called brand:

a.

knowledge

b.

esteem

c.

recognition

d.

equity

____ 132. Young & Rubicam’s Brand Asset Valuator model identifies the dimension of brand personality called “relevance” as:

a.

the extent of consumer awareness of a brand and understanding of what kind of product it stands for.

b.

the real and perceived appropriateness of a brand to a big consumer segment.

c.

the way in which brand equity is assigned to the brand by evaluating institutions.

d.

a brand's ability to stand apart from competitors.

____ 133. The extent of consumer awareness of a brand and the understanding of what the good or service represents is _____, according to Young & Rubicam’s Brand Asset Valuator.

a.

knowledge

b.

esteem

c.

recognition

d.

differentiation

____ 134. Which of the following is an allergen that accounts for most documented allergic reactions to food, according to the FDA?

a.

Sodas

b.

Potatoes

c.

Beef

d.

Wheat

____ 135. More than 90 percent of cereal is consumed at breakfast, but ads for Kellogg's Cracklin’ Oat Bran say it tastes like oatmeal cookies and makes “a great snack anytime.” Kellogg’s is implementing a strategy of _____ with this product.

a.

market penetration

b.

market development

c.

product development

d.

product diversification

____ 136. The _____ strategy seeks to increase sales of existing products in existing markets.

a.

product development

b.

market innovation

c.

product diversification

d.

market penetration

____ 137. A consumer innovator is an individual who:

a.

develops a new idea for a consumer product.

b.

hoards patents for newer consumer products.

c.

is among the first to purchase a new product.

d.

finds a new use for an old product.

____ 138. _____ is the process by which new goods or services are accepted in the marketplace.

a.

Brand insistence

b.

Product positioning

c.

Diffusion

d.

Market penetration

____ 139. When Microsoft introduced the latest edition of Age of Empires III, it provided a free download of one of the game scenarios. By adding this link to its Web site, Microsoft was increasing:

a.

observability.

b.

product novelty.

c.

possibility of trial use.

d.

brand equity.

____ 140. What characteristic of a product innovation is reflected by the product’s lower price, physical improvements, and ease of use as compared to previous ideas?

a.

Relative advantage

b.

Compatibility

c.

Possibility of trial use

d.

Observability