MKT 421 Final Exam Answers

1) Big Fizz Co., a manufacturer of cola-flavored drinks, wants to add packaged fruit juices to its existing product line. Big Fizz must make some decisions regarding packaging and branding the fruit juices. These decisions would fall under which variable of the marketing mix?

A. Product
B. Place
C. Promotion
D. Price

2) Hewlett-Packard sells personal computers through specialty computer stores, electronics superstores, and its own Internet site. What is the marketing mix variable that is being considered here?

A. Price
B. Promotion
C. Product
D. Place

3) Marketing strategy planners should recognize that:

A. target markets should not be large and spread out
B. mass marketing is often very effective and desirable
C. large firms like General Electric, Target, and Procter & Gamble are too large to aim at clearly defined markets
D. target marketing is not limited to small market segments

4) Target marketing, in contrast to mass marketing,

A. is limited to small market segments
B. assumes that all customers are basically the same
C. ignores markets that are large and spread out
D. focuses on fairly homogeneous market segments

5) The process of naming broad product-markets and then dividing them in order to select target markets and develop suitable

A. market penetration
B. market segmentation
C. market development
D. market research

6) ______________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.

A. Market positioning
B. Market segmentation
C. Mass marketing
D. Diversification

7) Marketing research which seeks structured responses that can be summarized is called

A. focus group research
B. quantitative research
C. qualitative research
D. situation analysis research

8) One of the major disadvantages of the focus group interview approach is that

A. ideas generated by the group cannot be tested later with other research
B. it is difficult to measure the results objectively
C. it is difficult to get in-depth information about the research topic
D. there is no interviewer, so the research questions may not be answered

9) When focus group interviews are used in marketing,

A. each person in the group answers the same questionnaire, to focus the discussion
B. the typical group size is 15 to 20 typical consumers whether online or off-line
C. it is primarily as a follow-up to more quantitative research
D. the research conclusions will vary depending on who watches the interview whether online or off-line

10) Focus groups

A. are usually composed of 10 to 15 people as participants
B. yield results that are largely dependent on the viewpoint of the researcher
C. always do a good job of representing the broader target market
D. have a low cost per participant

11) A small manufacturing firm has just experienced a rapid drop in sales. The marketing manager thinks that he knows what the problem is and has been carefully analyzing secondary data to check his thinking. His next step should be to

A. conduct an experiment
B. develop a formal research project to gather primary data
C. conduct informal discussion with outsiders, including intermediaries, to see if he has correctly defined the problem
D. develop a hypothesis and predict the future behavior of sales

12) The marketing manager at Massimino & McCarthy, a chain of retail stores that sells men’s clothing, is reviewing marketing research data to try to determine if changes in marketing strategy are needed. Which of the following sources of data would be a secondary data source?

A. Looking through the company’s marketing information system to see past sales trends
B. Reviewing videotapes of a recent focus group
C. Making phone calls to some of the best customers to learn their interest in a new line of clothing
D. Spending time in stores observing customers’ behavior

13) Which of the following statements about consumer products is true?

A. Convenience products are those that customers want to buy at the lowest possible price.
B. Shopping products are those products for which customers usually want to use routinized buying behavior.
C. Specialty products are those that customers usually are least willing to search for.
D. Unsought products are not shopped for at all.

14) The attitudes and behavior patterns of consumers making a purchasing decision are part of the

A. political environment
B. social and cultural environment
C. competitive environment
D. firm’s resources and objectives

15) The observing method in marketing research

A. uses personal interviews
B. may require customers to change their normal shopping behavior
C. is used to gather data without consumers being influenced by the process
D. is not suitable for obtaining primary data

16) The first step in market segmentation should be

A. deciding what new product you could develop
B. evaluating what segments you currently serve
C. finding a demographic group likely to use your products
D. defining some broad product-markets where you may be able to operate profitably

17) The product life cycle

A. describes the stages a new product idea goes through from beginning to end
B. has three major stages
C. applies to categories or types of products as opposed to brands
D. shows that sales and profits tend to move together over time

18) Which of the following is one of the product life cycle stages?

A. Market analysis
B. Market growth
C. Market feedback
D. Market research

19) While watching a television program, Liza gets a phone call just as a commercial is starting. She presses the mute button on the television’s remote control and takes the call, so she pays no attention to the commercial. In terms of the communication process, the telephone call is an example of what?

A. Encoding
B. Noise
C. Decoding
D. Feedback

20) Which of the following functions are performed by wholesalers in the channel of distribution?

A. Providing information to retailers
B. Placing radio advertisements for retailers
C. Placing newspaper advertisements for retailers
D. Providing goals for retailers

21) Typically the ______________ and the marketing manager are responsible for building good distribution channels and implementing place policies.

A. public relations manager
B. sales manager
C. advertising manager
D. human resources manager

22) SGCA is having a sales contest to encourage retailers to quickly reduce the inventory of SuperGamer computers. Retailers with the highest sales during the next month win an expense paid trip to a special dealer meeting at a resort in Hawaii. This is

A. probably illegal because it might encourage price competition among retailers
B. an example of cooperative advertising
C. the type of promotion that continues to impact sales even after the promotion is over
D. an example of a manufacturer using trade sales promotion in the channel

23) Advertising allowances

A. are incentive monies given to firms further along in the channel to encourage them to advertise or otherwise promote the firm’s products
B. involve intermediaries and producers sharing in the cost of ads
C. allow for coordination and integration of ad messages in the channel
D. set the allowance amount as a percent of the retailer’s actual purchases

24) Price reductions given to channel members to encourage them to promote or otherwise promote a firm’s products locally are

A. quantity discounts
B. brokerage allowances
C. push money allowances
D. advertising allowances

25) A producer using very aggressive promotion to get final consumers to ask intermediaries for a new product has

A. a pulling policy
B. a target marketing policy
C. a selective distribution policy
D. a pushing policy

26) Nantucket Hammocks, Inc., uses dealer incentives, discounts, and sales contests in order to encourage retailers to give special attention to selling its products. Nantucket Hammocks is using

A. exclusive distribution
B. a corporate channel system
C. dual distribution
D. pushing

27) Quality Ceramic, Inc., (QCI) defined five submarkets within its broad product-market. To obtain some economies of scale, QCI decided NOT to offer each of the submarkets a different marketing mix. Instead, it selected two submarkets whose needs are fairly similar, and is counting on promotion and minor product differences to make its one basic marketing mix appeal to both submarkets. QCI is using the

A. combined target market approach
B. single target market approach
C. multiple target market approach
D. mass marketing approach

28) When segmenting broad product-markets, cost considerations tend
A. to encourage managers to disregard the criterion that a product-market segment should be substantial
B. to lead to more aggregating
C. to be unimportant as long as the segmenting dimensions are operational
D. to lead to a large number of small, but very homogeneous, product-market segments

29) ______________ focuses on introducing new products to existing markets.

A. Market development
B. Product development
C. Diversification
D. Market penetration

30) When a company grows globally by introducing existing product lines to new markets, this is an example of what?
A. Market development
B. Product development
C. Diversification
D. Market penetration

MKT 421 Final Exam Study Guide

1. Genetech Corp. has invested heavily to develop a patented new product. Genetech wants to achieve a rapid return on its investment. It probably should set a ______________ pricing objective.

Profit maximization

Explanation: A profit maximization strategy will seek out the highest level of return on the new product.

2 . When an advertiser pays a fixed amount (e.g. 70 cents) each time a Web surfer clicks on the advertiser’s ad and links to the advertiser’s website, this process is called a(n):


Explanation: Pay-per-click is the backbone of modern web based advertising that is offered by companies like Google and Bing.

3 The advantages of working with an intermediary usually increase when there is:

A greater number of customers.

Explanation: A larger number of customers will require a stronger group of people to reach fully, which can be assisted with the use of intermediaries.

4 When a company provides its advertising agency with a statement about a new product to use in designing an advertising campaign, and this statement includes a description of the target market, the product type, the primary benefits of using the product, and how this product is different from, and better than, competitive products, what type of statement is this?


Explanation: A position statement is designed to identify the target market’s characteristics, which can aid advertisers in creating effective communication.

5 According to the concept of social responsibility, a firm has a duty to:

Conduct business in a way that is good for society as a whole, both now and for the future.

Explanation: Social responsibility mandates that companies consider their surrounding communities in addition to pursing profits.

6. Clearwater Office Supply sells frequently purchased office supplies to businesses in a metropolitan area. It is a well-established company with a large share of the market. Its promotion should probably focus on:


Explanation: Because it already has a very well established reputation, the Clearwater Office Supply should remind consumers about its offers.

7 The main difference between a ‘marketing strategy’ and a ‘marketing plan’ is that:

Time-related details are included in a marketing plan.

Explanation: A marketing plan will generally include a well-defined timeline and performance targets.

8 More than 600,000 loyal customers signed up in advance to purchase the iPhone4 in an Apple store the first day it was available for sale in the U.S. What type of response behavior were these Apple followers demonstrating?

Routinized response

Explanation: In marketing, a routinized response occurs when a buyer has prepared or is conditioned in advance to make purchase decision.

9 Because she frequently buys books at, Sophie Soleil set up an account and password at the website. Now, when she logs on and searches for a specific book, a note pops up at the center of her laptop screen saying: ‘Hello, Sophie, we have recommendations for you,’ and proceeds to list other titles that Sophie might enjoy based on her previous purchases. Amazon can remember Sophie (and her previous purchases) because the online retailer uses:


Explanation: Cookies are simple files saved by your Internet browser that provide 3rd party websites with certain browsing information.

10 In which quadrant of the SWOT analysis tool does the following fit? A firm is in a fast-growing industry.


Explanation: A fast growing industry will typically present a great deal or opportunity for firms.

11 The sales analysis of a product revealed that profits were highest when it was initially introduced into the market with a high selling price. However, the price was gradually reduced as it started facing competition as substitutes entered the market. This is an example of a(n) _____.

Skimming price policy

Explanation: With Skimming, the initial price for the product is set high for a short time, but must be lowered as competition grows.

12 David Oreck advertises Oreck vacuum cleaners via commercials that run on national radio programs. He encourages consumers to ‘…try my 8-pound Oreck vacuum for free for 30 days,’ and to return it if they aren’t satisfied. He then provides an easy-to-remember toll-free telephone number that consumers can use to place orders. Regarding the AIDA model, the free-trial period and availability of a toll-free number are devices used mainly to:

Obtain action.

Explanation: These tactics give viewers motivation to take action on the purchase because they break down barriers and risks.

13 Which of the following is true of direct distribution?

It requires a significant investment in facilities.

Explanation: Direct distribution occurs when a producer sells a product to the end-user. In order to do this, it typically requires facilities like storefronts and warehouses to execute successfully.

14 The three basic sales tasks are:

Order-taking, supporting, and order-getting.

15 The primary purpose of branding is:

To identify a product.

Explanation: A core function of branding is to make a product stand out.

16 TammiSoloft has itchy eyes and a stuffy nose, and suddenly becomes aware of many TV ads for allergy products that she never noticed before. This illustrates:

selective retention.

Explanation: Selective retention occurs when people retain marketing messages that closely align with their interests.

17 In the American Marketing Association’s Statement of Ethics, which ethical value stresses a firm’s attempts to balance the needs of its buyers with the interests of sellers?


Explanation: See the fairness section at:

18 Which of the following is a common cause of new product failures?

The product fails to offer the customer a unique benefit.

Explanation: Virtually all successful products offer some type of unique benefit.

19 Marketers cannot assume that a product that meets consumer needs in one country will do so in another. This is because:

Many wants are culturally learned.

Explanation: Culturally learned desires have a large impact on marketing. This is why McDonalds has a hard time selling Big Macs in India.

20.From the perspective of macro-marketing, e-commerce specialists CarFax (which provides vehicle history reports) and (a website offering auto comparison shopping) have emerged within the auto industry because:

The information they provide makes the exchange process between producers and consumers more efficient and effective.

21 .The main difference between the ‘marketing department era’ and the ‘marketing company era’ is:

Whether the whole company is customer-oriented.

22 Behavioral targeting:

Delivers ads to consumers based on previous websites the customer has visited.

Explanation: Behavioral targeting uses a person’s web history to predict ads that will be of interest to them.

23 In the 1990s, DVDs replaced audiocassettes and floppy disks as the storage media of choice for music and computers. At which stage of the product life cycle is the DVD today?

Sales decline

Explanation: DVDs have become less common in recent years, but are not yet extinct from the market.

24 Blending the firm’s promotion efforts to convey a complete and consistent message is the goal of:

Integrated marketing communications.

Explanation: The goal of integrated marketing communications is to ensure that all channels are reaching consumers with a similar message.

25 Compared with other approaches to business, the marketing concept is distinct in that it:

Focuses on satisfying customers’ needs.

Explanation: The ultimate goal of marketing is to satisfy the needs of consumers through product design, branding, and advertising.

26 When new product ideas are chosen based on ratings and comments from customers, this process is called ______.


Explanation: Internet technology has made it possible to gain product ideas based on the wisdom of large crowds.

27 A useful tool for organizing the competitor analysis is:

A competitor matrix.

Explanation: A competitor matrix is used to classify competing firms based on their performance threat and position in the market.

28 Most firms in the business world set their prices using:

Cost-oriented price setting.

Explanation: Most firms consider their fixed/variable costs and the required rate of return to set prices.

A producer might use a ‘pulling policy’ rather than a ‘pushing policy’ if:

Intermediaries are reluctant to handle a new product.

Explanation: A pulling strategy gets consumers to demand a product, which will motivate intermediaries to carry it.

30 The phrase ‘big data’ refers to:

the massive amount of data being collected and processed by today’s organizations.

Explanation: Large amounts of data are being generated by social technologies that and processed by a growing industry of technology companies.