Basics of Marketing (BOM)

Basics of Marketing (BOM)

Chapter 1Introduction to Marketing

1. __________ reflects the perceived tangible and intangible benefits and costs to customers.(a) Loyalty (b) Satisfaction(c) Value (d) Expectations(e) Comparison shopping

2. __________ includes all the actual and potential rival offerings and substitutes that a buyermight consider.(a) Competition (b) The product offering(c) A value proposition (d) The supply chain(e) The marketing environment

3. At the heart of any marketing program is the __________—the firm’s tangible offering to themarket.(a) service offer (b) product(c) sales support team (d) packaging e. auxiliary offer

4. The most formal definition of marketing is __________.(a) meeting needs profitably(b) identifying and meeting human and social needs(c) the 4Ps (Product, Price, Place, Promotion)(d) an organizational function and a set of processes for creating, communicating, and

delivering, value to customers, and for managing customer relationships in ways thatbenefit the organization and its stake holders.

5. Marketing Myopia occurs when company ignores the important question.(a) Who moved my cheese? (b) What price should I set?(c) What is the short term goal? (d) What business we are into?

6. Holistic Marketing consists of Internal Marketing, Societal Marketing, RelationshipMarketing and __________.(a) Digital Marketing (b) Integrated Marketing(c) Viral Marketing (d) Negative Marketing

7. The goal of each party is to maximize the benefit received from each transaction.(a) Product Approach (b) Marketing approach(c) Transactional approach (d) All of above

All in One Multiple Choice Questions 143

8. When backed by buying power wants become:(a) Exchanges (b) Demands(c) Social needs (d) Esteem needs

9. A marketing philosophy summarized by the phrase ‘a stronger focus on social and ethicalconcerns in marketing’ is characteristic of the _________ period.(a) Production (b) Sales(c) Marketing (d) Societal Marketing

10. In relationship marketing firms focus on __________ relationships with __________.(a) short-term; customers and suppliers (b) long-term; customers and suppliers(c) short-term; customers (d) long-term; customers

11. A further 3Ps are incorporated into the 4P’s of marketing mix are: __________(a) physical evidence, process and price.(b) process people and promotion.(c) physical evidence, people and production.(d) physical evidence, process and people

12. Which of the following is not an element of the marketing mix?(a) Distribution (b) Product(c) Target Market (d) Pricing

13. Newsletters, catalogues, and invitations to organisation-sponsored events are most closelyassociated with the marketing mix activity of: __________.(a) Price (b) Promotion(c) Product (d) Place

14. The way in which the product is delivered to meet the customers’ needs refers to __________.(a) new product concepts and improvements. Promotion(b) selling(c) advertising and promotion activities(d) place or distribution activities

15. When customer expectations regarding product quality, service quality, and value-based priceare met or exceeded, __________ is created.(a) Customer Satisfaction (b) Planning Excellence(c) A quality rift (d) A value line

16. In order for exchange to occur: __________.(a) a complex societal system must be involved.(b) organized marketing activities must also occur.(c) a profit-oriented organization must be involved.(d) each party must have something of value to the other party.

17. Which of the following approaches to marketing is most likely to lead to marketing myopia(a) Customer driven marketing (b) Societal marketing(c) Selling (d) Production

144 All in One Multiple Choice Questions

18. Product concept says that: __________.(a) Devote its energy to make continuous product improvements(b) Focus on target market and make products that meet those customers demands(c) Market only those products that have high customer appeal(d) Improve marketing of best products

19. A consumer is: __________.(a) One who uses the product (b) One who buys the product only(c) One who sells the product (d) On who disposes the product

20. __________ is defined as the difference between the benefits a customer sees from a marketoffering and the costs of obtaining those benefits.(a) Customer value (b) Customer satisfaction(c) Profit margin (d) Customer loyalty

21. When a manager focuses on making whatever products are easy to produce, and then trying tosell them, that manager has a __________ orientation.(a) Marketing (b) Production(c) Product (d) Selling

22. The __________ concept holds that achieving organizational goals depends on knowing theneeds and wants of target markets and delivering desired satisfaction better that competitorsdo.(a) product (b) productions(c) selling (d) marketing

23. __________ is one of the most basic influences on an individual’s needs, wants, and behavior.(a) Brand (b) Culture(c) Product (d) Price

24. The __________ holds that consumers will favor products that are available and highlyaffordable (therefore, work on improving production and distribution efficiency).(a) product concept (b) production concept(c) production cost expansion concept (d) marketing concept

25. Anything that can be offered to a market for attention, acquisition, use, or consumption thatmight satisfy a want or need is called a(n): __________.(a) idea (b) demand(c) product (d) service

26. The fact that services are sold, produced, and consumed at the same time refers to which ofthe following service characteristics?(a) Intangibility (b) Inseparability(c) Variability (d) Perishability

27. If actual performance exceeds the expected performance of the product, the customer is ____.(a) Satisfied (b) Dissatisfied(c) Delighted (d) Neutral


28. If a firm is practicing __________, the firm is training and effectively motivating itscustomer-contact employees and all of the supporting service people to work as a team toprovide customer satisfaction.(a) double-up marketing (b) interactive marketing(c) service marketing (d) internal marketing

29. A cluster of complementary goods and services across diverse set of industries is called as__________.(a) Market place (b) Meta market(c) Market space (d) Resource Market

30. The act of trading a desired product or service to receive something of value in return isknown as which key concept in marketing?(a) product (b) exchange(c) production (d) customer

31. The most basic level of a product is called the:(a) core product (b) central product(c) fundamental product (d) augmented product

32. In __________ consumers may share a strong need that cannot be satisfied by an existingproduct.(a) negative demand (b) latent demand(c) declining demand (d) irregular demand

33. The __________ holds that the organization’s task is to determine the needs, wants, andinterests of target markets and to deliver the desired satisfactions more effectively andefficiently than competitors in a way that preserves or enhances the consumer’s and thesociety’s well-being.(a) customer-centered business (b) focused business model(c) societal marketing concept (d) ethically responsible marketing

34. Holistic marketers achieve profitable growth by expanding customer share, __________, andcapturing customer lifetime value.(a) undermining competitive competencies(b) building customer loyalty(c) milking the market for product desires(d) renewing a customer base

35. The promotion “P” of marketing is also known as __________.(a) Product Differentiation (b) Distribution(c) Cost (d) Marketing Communication

36. Whether to sell via intermediaries or directly to consumers, how many outlets to sell through,and whether to control or cooperate with other channel members are examples of decisionsmarketers must make about(a) Promotion (b) Price(c) Distribution (d) Product


37. What is the basic property of a service which makes it different from a product.(a) Shape (b) Size(c) Very expensive (d) Intangibility

38. The __________ is practiced most aggressively with unsought goods, goods that buyersnormally do not think of buying, such as insurance, encyclopedias, and funeral plots.(a) marketing concept (b) selling concept(c) production concept (d) product concept

39. __________ marketing has the aim of building mutually satisfying long-term relations withkey parties such as customers, suppliers, distributors, and other marketing partners in order toearn and retain their business.(a) Demand-based (b) Direct(c) Relationship (d) Synthetic

40. One traditional depiction of marketing activities is in terms of the marketing mix or four Ps.The four Ps are characterized as being __________.(a) product, positioning, place, and price(b) product, production, price, and place(c) promotion, place, positioning, and price(d) product, price, promotion, and place

41. Luxury products, such as Rolex watches, are also known as: __________(a) Shopping Product (b) Convenience Product(c) Emergency product (d) Specialty product

42. __________ is defined as the difference between the benefits a customer sees from a marketoffering and the costs of obtaining those benefits.(a) Customer value (b) Satisfaction scale(c) Profit margin (d) Competitive benefit

43. Which of the following is NOT consistent with a manager having a marketing orientation?(a) Inventory levels are set with customer requirements and costs in mind(b) Customer relationship focuses on customer satisfaction before and after sale, leading to a

profitable long-run relationship(c) Focus of advertising is on product features and how products are made(d) Packaging is designed for customer convenience and as a selling tool

44. Need becomes __________ when they are directed towards a specific object.(a) Actual need (b) Want(c) Satisfaction (d) Demand

45. Which one of the following BEST describes the human need?(a) Food (b) French-fries(c) Burger (d) Pizza


46. __________ – recognizes that “Everything Matters” with marketing and that a broad,integrated perspective is often necessary.(a) The production concept (b) The product concept(c) The holistic marketing concept (d) The selling concept

47. In __________, more customers would like to buy the product than can be satisfied.(a) Latent demand (b) Irregular demand(c) Overfull demand (d) Negative demand

48. __________ is a cluster of complementary products and services that are closely related in theminds of consumers but are spread across a diverse set of industries.(a) Metamarket (b) Vertical integration(c) Beta market (d) Synchronized marketing

49. The __________ holds that the organization’s task is to determine the needs, wants andinterests of target market and to deliver the desired satisfactions more effectively andefficiently than competitiors in a way that preserves or enhances the customer’s & society’swell being.(a) Cultural marketing (b) Societal marketing concept(c) Transactional marketing (d) Direct marketing

50. __________ activities are the means by which firms attempt to inform, persuade, and remindconsumers directly or indirectly about the brands they sell.(a) Consumer Behaviour (b) Market segmentation(c) Marketing communication (d) The selling concept

Answer Key of Chapter 1

1. (c) 11. (d) 21. (d) 31. (a) 41. (a)2. (a) 12. (c) 22. (d) 32. (b) 42. (a)3. (b) 13. (b) 23. (b) 33. (c) 43. (c)4. (d) 14. (d) 24. (b) 34. (b) 44. (b)5. (d) 15. (a) 25. (c) 35. (d) 45. (a)6. (b) 16. (d) 26. (b) 36. (c) 46. (c)7. (c) 17. (c) 27. (c) 37. (d) 47. (c)8. (b) 18. (a) 28. (d) 38. (b) 48. (a)9. (d) 19. (a) 29. (b) 39. (c) 49. (b)10. (b) 20. (a) 30. (b) 40. (d) 50. (c)


Chapter 2Consumer Behaviour

1. Consumer behavior can be defined as: __________.(a) a field of study focusing on marketing activities(b) a field of study focusing on consumer activities(c) a study of pricing(d) the study of decision rules

2. Many firms are trying to develop relationships with their customers because: _________.(a) people are naturally brand loyal(b) new customers are very expensive to recruit(c) doing so makes it easier to retain them(d) consumer behavior is very difficult to understand(e) (b) and (c) are correct

3. __________ is the buying behavior of final consumer.(a) Global purchasing (b) Business buying behaviour(c) Reseller buying behaviour (d) Consumer buying behaviour

4. Basic needs such as hunger & thirst are called __________.(a) Physiological needs (b) Psychological needs(c) Social needs (d) Safety needs

5. Which step of buyer decision process immediately precedes the purchase decision?(a) Information search (b) Evaluation of alternatives(c) Need recognition (d) Post purchase behaviour

6. If a consumer has discomfort caused by post purchase conflict, the consumer is experiencing__________.(a) Cognitive dissonance (b) Subliminal persuasion(c) Confirmation (d) Stimulus ambiguity

7. According to research, there are four factors that influence consumer buyer behaviour:______.(a) psychological, personal, social, CRM systems(b) cultural, organizational, personal, psychological(c) cultural, social, personal, psychological(d) none of the above

8. Needs of customers are triggered by _________.(a) internal stimuli (b) external stimuli(c) both (a) and (b) (d) none of above

9. Highly involved consumer buying behavior and customers perceive fewer differences amongbrands is called __________.(a) complex buying behaviour(b) variety seeking buying behaviour


(c) dissonance reducing buying behaviour(d) habitual buying behaviour

10. Mental process in which customer ends up as buyer of a new product is called __________.(a) adoption process (b) cognitive dissonance(c) pre purchase behaviour (d) post-purchase behaviour

11. Buyer decision process starts with __________.(a) need recognition (b) information search(c) evaluation of alternatives (d) both (b) and (c)

12. In buyer decision process, stage in which purchase intention is transformed in to purchasedecision is called __________.(a) need recognition (b) information search(c) purchase decision (d) both (b) and (c)

13. Remembrance of good points that are related to chosen brand as compared to competingbrands is called __________.(a) selective attention (b) selective distortion(c) selective retention (d) both (a) and (b)

14. According to ‘Maslow’s hierarchy of needs’, need of recognition and status is classified as__________.(a) physiological needs (b) social needs(c) safety needs (d) esteem needs

15. Friends, family, and co-workers would all be considered __________ groups, if they have asignificant effect on consumer behaviour.(a) reference (b) endorsement(c) credential (d) expertise

16. The “mental location” to which a consumer assigns a product in his or her mind is called thatproduct’s __________.(a) extension (b) position(c) image (d) formula

17. _______ is individuals and households who buy goods and services for personal consumption.(a) The target market (b) A market segment(c) The consumer market (d) The ethnographic market

18. Understanding consumer buying behavior is not easy. The answers are often locked deepwithin the consumer’s head. The central question for marketers is: __________.(a) how much money is the consumer willing to spend?(b) how much does the consumer need the product being offered for sale?(c) how much does a discount or a coupon affect the purchase rate?(d) how do consumers respond to various marketing efforts the company might use?

19. Consumer purchases are influenced strongly by cultural, social, personal, and: __________.(a) psychographic characteristics (b) psychological characteristics(c) psychometric characteristics (d) supply and demand characteristics


20. As a form of a reference group, the _____ are ones to which the individual wishes to belong.(a) secondary groups (b) facilitative groups(c) primary groups (d) aspirational groups

21. The stages through which families might pass as they mature over time is a description ofwhat is called the: __________.(a) adoption process(b) lifestyle cycle(c) Values and Lifestyle (VALS) topology(d) family life cycle

22. The basic premise of the __________ is that people’s possessions contribute to and reflecttheir identities; that is, “we are what we have.”(a) lifestyle concept (b) self-concept(c) personality concept (d) cognitive concept

23. __________ is the process by which people select, organize, and interpret information to forma meaningful picture of the world.(a) Readiness (b) Selectivity(c) Perception (d) Motivation

24. __________ describes changes in an individual’s behaviour arising from experience.(a) Modeling (b) Motivation(c) Perception (d) Learning

25. If a consumer describes a car as being the “most economical car on the market,” then thisdescriptor is a(n): __________.(a) rule (b) attitude(c) belief (d) cue

26. If a consumer tells friends “I like my car more than any other car on the road,” then theconsumer has expressed a(n): _________.(a) rule (b) attitude(c) belief (d) cue

27. Which of the following is NOT one of the five stages of the buyer decision process?(a) need recognition (b) brand identification(c) information search (d) purchase decision

28. The buying process can be triggered by a(n) __________ when one of the person’s normalneeds—hunger, thirst, sex—rises to a level high enough to become a drive.(a) awareness (b) external stimuli(c) internal stimuli (d) experiential motivation

29. The consumer can obtain information from any of several sources. If the consumer were toobtain information from handling, examining, or using the product, then the consumer wouldhave obtained the information by using a(n): __________.(a) personal source (b) commercial source(c) informative source (d) experiential source


30. With respect to post purchase behavior, the larger the gap between expectations andperformance: __________.(a) the greater likelihood of re-purchase(b) the greater the customer’s dissatisfaction(c) the less likely the consumer will be influenced by advertising(d) the less likely the consumer will need sales confirmation and support

31. Cognitive dissonance occurs in which stage of the buyer decision process model?(a) need recognition (b) information search(c) evaluation of alternatives (d) post purchase conflict

32. The business marketer normally deals with __________ than the consumer marketer does.(a) far greater but smaller buyers (b) far greater and larger buyers(c) far fewer but far larger buyers (d) far fewer and smaller buyers

33. When demand comes (as it does in the business market) from the demand for consumer goods,this form of demand is called: __________.(a) kinked demand (b) inelastic demand(c) cyclical demand (d) derived demand

34. That business markets have more buyers involved in the purchase decision is evidence ofwhich of the following characteristic differences between business and consumer markets?(a) market structure and demand (b) the nature of the buying unit(c) types of decisions made (d) type of decision process itself

35. The place in the business buying behaviour model where interpersonal and individualinfluences might interact is called the: ___________.(a) environment (b) response(c) stimuli (d) buying center

36. The decision-making unit of a buying organization is called its __________: all theindividuals and units that participate in the business decision-making process.(a) buying center (b) purchasing center(c) bidding center (d) demand-supply center

37. The psychological factors influencing consumer behaviour are __________.(a) motivation, perception, learning, beliefs, attitude(b) culture, sub culture, social class(c) reference group, family(d) all of the above

38. __________ is more than just repeat purchase behaviour. It also includes a preference for aparticular brand and a positive emotional response to the brand.(a) Attitude (b) Individualism(c) Purchase behaviour (d) Brand Loyalty

39. The consumer’s salient beliefs about relevant consequences become a choice criteria duringwhich of the following stages of the consumer problem solving process?(a) Problem Recognition (b) Evaluation of alternatives(c) Purchase (d) Post purchase


40. Jane decided to purchase a car that was one or two years old with low mileage. In this regard,Jane has started visiting a few dealers, talking to salespeople, and has discussed the purchasewith her father. Jane is currently in which of the following phases of the Generic Model ofConsumer Problem Solving?(a) Purchase (b) Searching for alternative solutions(c) Evaluation of alternatives. (d) Problem recognition/definition

41. _________ is one of the most basic influences on an individual’s needs, wants, and behaviour.(a) Brand (b) Culture(c) Product (d) Price

42. Marketing managers should adapt the marketing mix to __________ and constantly monitorvalue changes and differences in both domestic and global markets.(a) Sales strategies (b) Marketing concepts(c) Cultural values (d) Brand images

43. ___________ are the groups that individuals look to when forming attitudes and opinions.(a) Reference groups (b) Teenage groups(c) Religious groups (d) Adult groups

44. Marketing strategies are often designed to influence ______ and lead to profitable exchanges.(a) Consumer decision-making (b) Sales strategies(c) Advertising strategies (d) Export strategies

45. __________ refers to the information a consumer has stored in their memory about a productor service.(a) Cognitive dissonance (b) Product knowledge(c) Product research (d) Marketing research

46. One of the key tasks of marketers is __________ and to create consumer perceptions that theproduct is worth purchasing.(a) To make products easily visible and available(b) To promote sales of products(c) To differentiate their products from those of competitors(d) To do marketing surveys

47. It important for marketers to devise communications that offer __________, and are placed inmedia that consumers in the target market are likely to use.(a) Consistent messages about their products(b) Better pricing(c) Product information to the customers(d) A new marketing strategy

48. When consumers are seeking low-involvement products, they are unlikely to engage inextensive search, so __________ is important.(a) Order processing (b) Order booking(c) Ready availability (d) Information about warranty

49. If the purchase is for a high-involvement product, consumers are likely to develop a highdegree of _____ so that they can be confident that the item they purchase is just right for them.(a) Brand loyalty (b) Society(c) Product knowledge (d) References


50. For which of the following purchases would a consumer most likely engage in extensivedecision-making?(a) The purchase of a pair of panty hose at a hotel gift shop(b) The purchase of a $200 wooden table at a crafts fair(c) The purchase of a case of cat food(d) The purchase of a bridal dress and veil for a wedding that will cost the father of the bride

about $18,000


1. (b) 11. (a) 21. (d) 31. (d) 41. (b)2. (e) 12. (c) 22. (b) 32. (c) 42. (c)3. (d) 13. (c) 23. (c) 33. (d) 43. (a)4. (a) 14. (d) 24. (d) 34. (b) 44. (a)5. (b) 15. (a) 25. (c) 35. (d) 45. (b)6. (a) 16. (b) 26. (b) 36. (a) 46. (c)7. (c) 17. (c) 27. (b) 37. (a) 47. (a)8. (c) 18. (d) 28. (c) 38. (d) 48. (c)9. (c) 19. (b) 29. (d) 39. (b) 49. (c)10. (a) 20. (d) 30. (b) 40. (b) 50. (d)


Chapter 3Marketing Environment

1. In macro environment, ‘pressure groups’ and ‘government agencies’ are part of __________.(a) cultural environment (b) demographic environment(c) economic environment (d) political environment

2. Company’s micro environment includes __________.(a) The company (b) The suppliers(c) The marketing intermediaries (d) All of above

3. ‘customer markets’ & ‘publics’ are included in company’s environment called __________.(a) Macro environment (b) Micro environment(c) Both (a) and (b) (d) None of above

4. In company’s micro environment, ‘internal publics’ consists of __________.(a) workers and managers (b) Stockholders(c) Community organizations (d) Company’s lawyers

5. Forces and factors that shape customers preferences and behaviours are known as__________.(a) cultural environment (b) demographic environment(c) economic environment (d) political environment

6. All factors affecting purchasing power of consumers are included in __________.(a) cultural environment (b) demographic environment(c) economic environment (d) both (a) and (b)

7. Factors that affect company’s ability to maintain customer relationships are known as ______.(a) Marketing environment (b) Marketing dashboard(c) Marketing plan (d) Both (a) and (b)

8. Macro environment of any company or organization includes __________.(a) cultural environment (b) demographic environment(c) customers in international markets (d) both (a) and (b)

9. Company’s internal environment considers __________.(a) Finance, Operations, purchasing (b) Research & Development (R&D)(c) Both (a) and (b) (d) None of above

10. Study of human population in context of gender, race and occupation is called __________.(a) demographic environment (b) cultural environment(c) economic environment (d) natural environment

11. Macro environment includes __________.(a) Demographic factors (b) Technological factors(c) The suppliers (d) Both (a) and (b)

12. Large societal forces that affects organizations close factors are known as __________.(a) Micro environment (b) Macro environment(c) Organizations environment (d) Market environment


13. Macro environment does not include __________.(a) Technological factors (b) The marketing intermediaries(c) Political factors (d) Both (a) and (c)

14. In company’s micro environment, ‘media publics’ consists of __________.(a) newspapers (b) blogs(c) internet media (d) all of above

15. Close factors affecting company’s ability to serve its customers are referred as __________.(a) Micro environment (b) Macro environment(c) Both (a) and (b) (d) None of above

16. Which of the following is not part of the external marketing environment?(a) Political (b) Legal(c) Product (d) None of above

17. Tobacco advertising is now virtually banned in all marketing communication forms in manycountries around the world. This can be explained as an influence of: __________.(a) Technological environment (b) Legal environment(c) Economic environment (d) None of above

18. Robert is a marketer for a global consumer products company. He is working on thepromotional campaign designed to reach a target audience in a new international market.Robert is working hard to make sure that the promotional campaign is clearly understood bythe nation’s consumers and doesn’t offend anyone. Which of the factors in the externalenvironment is he being influenced by?(a) Socio-cultural environment (b) Legal environment(c) Economic environment (d) None of above

19. The process of collecting information about the external marketing environment is: ________.(a) Environmental culture (b) Environmental Scanning(c) Economic environment (d) None of above

20. __________ is the collection and interpretation of information about forces, events, andrelationships that may affect the organization.(a) Environmental culture (b) Environmental Scanning(c) Economic environment (d) None of above

21. To make sense of the external environment, the well-known acronym, PESTLE is used.PESTLE stands for __________.(a) Political, Economic, Substitute, Technological, Legal, Ecological Environments(b) Public, Economic, Substitute, Technological, Legal, Ecological Environments(c) Political, Economic, Social, Technological, Legal, Ecological Environments(d) None of above

22. Marketing managers cannot control __________ but they can at times influence it.(a) Where advertising is placed(b) How products or services are delivered(c) The external environment(d) The products are priced


23. The external environment: __________.(a) Can be controlled similar to internal environment(b) Does not change over time(c) Does not impact Fortune 500 Companies(d) Must be continually monitored by Marketing Managers

24. The __________ consists of the actors and forces outside marketing that affect marketingmanagement’s ability to develop and maintain successful relationships with its targetcustomers.(a) marketing organization (b) marketing system(c) marketing network (d) marketing environment

25. Which of the following terms best describes the environment that includes the forces close tothe company that affect its ability to serve its customers—the company, suppliers, marketingchannel firms, customer markets, competitors, and publics?(a) micro environment (b) macro environment(c) global environment (d) networked environment

26. All of the following would be considered to be in a company’s micro environment EXCEPT:__________.(a) marketing channel firms (b) political forces(c) publics (d) customer markets

27. Which of the following BEST describes the environment that contains the larger societalforces that affect the company-level environment—demographic, economic, natural,technological, political, and cultural forces?(a) micro environment (b) macro environment(c) global environment (d) networked environment

28. Finance, research and development, purchasing, and manufacturing are all activities that are apart of which element of the micro environment?(a) the company’s internal environment (b) the suppliers.(c) the marketing channel firms (d) the publics

29. __________ publics include workers, managers, volunteers, and the board of directors of anorganization.(a) General (b) Financial(c) Internal (d) Local

30. All of the following are among the major forces considered to be in a company’s macroenvironment EXCEPT: __________.(a) demographic forces (b) natural forces(c) technological forces (d) competitor forces

31. Which of the following is a socio-cultural factor, which may impact upon an organisation?(a) Inefficiencies (b) Core Competency(c) Cross cultural issues (d) Integrating mechanisms


32. Which of the following is a technological factor, which may impact upon an organisation?(a) Attitudes to work & leisure(b) Government policies on monopolies & competition(c) Consumer disposable income(d) New patents & products

33. The elements of the micro environment consist of: __________.(a) Political, competitive pressures, Social and physical forces(b) Suppliers, competitors, customers and distributors(c) Technology, legal legislation, supply chain and competitors(d) Economic, Customers, Social and Political forces

34. If environmental scanning is poor and a company responds by continuing to do business asusual in spite of environmental forces which might affect future performance; the companywould be said to be responding through: __________.(a) Apathy (b) Ignorance(c) Delay (d) Retrenchment

35. The marketing environment consists of which of the following?(a) Micro Environment and Macro Environment(b) Micro Environment and Mini Environment(c) Macro Environment and Mini Environment(d) Mini Environment and Major Environment

36. You are directed to study the actors close to the company that affect its ability to serve itscustomers-departments within the company, suppliers, marketing intermediaries, customermarkets, competitors, and public’s. What are you studying?(a) The macro environment (b) The micro environment(c) Marketing environment (d) The demographic environment

37. You are directed to study the demographic, economic, natural, technological, political, andcultural factors that are larger societal forces affecting your company. What are you studying?(a) The macro environment (b) The micro environment(c) Marketing environment (d) The demographic environment

38. Your marketing department is currently researching the size, density, location, age, andoccupations of your target market. Which environment is being researched?(a) Demographic (b) Psychographic(c) Economic (d) Geographic

39. Which of the following represents the most directly important reason why firms monitor theirdemographic environment?(a) To explain historical trends (b) To predict political change(c) To predict the size of target markets (d) Tp predict business cycle

40. Which of the following is NOT part of an organization’s micro environment?(a) Customers (b) Suppliers(c) Competitors (d) Government Legislation


41. Which of the following is an element of an organization’s internal environment?(a) Competitors (b) Employees(c) Wholesalers (d) Retailors

42. A method of comparing the internal capabilities of an organization with the demands andchallenges of its external environment is referred to as: __________.(a) SHOT Analysis (b) SWOT Analysis(c) Stakeholder Analysis (d) Shareholder Analysis

43. Finance, research and development, purchasing, and manufacturing are all activities that are apart of which element of the micro environment?(a) The company’s internal environment (b) The suppliers(c) The marketing channel firms (d) The publics

44. A ‘PEST’ analysis is conducted on which of the following of an organisation’s environments?(a) Internal environment (b) Market environment(c) Historical environment (d) Macro environment

45. Which of the following would not be a reason for management carrying out an environmentalor PESTEL analysis?(a) To identify all potential influences on the future of the organisation(b) To consider how organisational strategy should take account of changes in the outside world(c) To determine environmentally responsible business practices(d) To determine the external factors most likely to impact upon the organization

46. ‘customer markets’ & ‘publics’ are included in company’s environment called _________.(a) Internal environment (b) Micro environment(c) Historical environment (d) Macro environment

47. ‘natural forces or factors’ are considered in company’s environment called __________.(a) Internal environment (b) Micro environment(c) Historical environment (d) Macro environment

48. Markets in which market offerings are bought from sellers for reselling purpose are known as__________.(a) business markets (b) reseller markets(c) government markets (d) international markets

49. Buying of products by government agencies is classified as __________.(a) business markets (b) reseller markets(c) government markets (d) international markets

50. In company’s micro environment, ‘financial publics’ consists of __________.(a) banks (b) investment analysis(c) stockholders (d) all of above



1. (d) 11. (d) 21. (c) 31. (c) 41. (b)2. (d) 12. (b) 22. (c) 32. (d) 42. (b)3. (b) 13. (b) 23. (d) 33. (b) 43. (a)4. (a) 14. (d) 24. (d) 34. (b) 44. (d)5. (a) 15. (a) 25. (a) 35. (a) 45. (c)6. (c) 16. (c) 26. (b) 36. (b) 46. (b)7. (a) 17. (b) 27. (b) 37. (a) 47. (d)8. (d) 18. (a) 28. (a) 38. (a) 48. (b)9. (c) 19. (b) 29. (c) 39. (c) 49. (c)10. (a) 20. (b) 30. (d) 40. (d) 50. (d)


Chapter 4Segmentation, Target Marketing & Positioning

1. Geographic segmentation is about __________.(a) Dividing consumer groups based on lifestyles(b) Dividing markets based on location(c) Understanding the benefit the product has to offer(d) Dividing consumer groups based on social status

2. Lifestyle segmentation is about: __________.(a) Understanding how people live and developing products/services that match that way of life(b) Dividing the market into distinct groups of buyers(c) Understanding what consumers like or dislike about their life(d) Developing stylish products for that segment

3. The three step process within marketing segmentation includes: __________.(a) Segmentation, differentiation and positioning(b) Targeting, Segmentation, and Positioning(c) Segmentation, Targeting and Positioning(d) Positioning, Mass Marketing and Segmentation

4. Concentrated marketing is based around: __________.(a) Focusing marketing efforts on a number of segments(b) Focusing marketing efforts on the mass market(c) Focusing marketing effort on one segment(d) Focusing marketing effort on a particular country

5. Product positioning is about: __________.(a) Developing a product(b) Developing a perception of the product/service(c) Product quality decisions(d) The perception of the product from the view of the competitors

6. Mass marketing is about __________.(a) Aiming a product at one particular segment(b) Developing products for different segments(c) Going for a global marketing strategy(d) Aiming the product at the entire market

7. Why is market segmentation carried out?(a) To break down large markets into smaller markets(b) Provides an opportunity to surpass competitors(c) By grouping together customers with similar needs, it provides a commercially viable

method of serving these customers(d) Allows the achievement of greater market share


8. An example of a segmented market would be: __________.(a) Phillips marketing its product to all residents of the European Union with one marketing

mix based on the concept ‘Sense and Sensibility’(b) High-income and low-income consumers being treated the same at Marks and Spencer

(M&S)(c) A garden nursery seeing residents of urban areas and rural areas as one market needing

trees(d) Honda separating its potential customers into economy car buyers and luxury car buyers

9. To be effective, the process of market segmentation must meet which of the following basicrequirements?(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.

10. A commonly used basis for segmenting consumer markets is: __________.(a) Organizational Size (b) Demographics(c) Product Type (d) Price

11. The family life cycle: __________.(a) is a way to apply psychographic segmentation(b) refers to the process of family formation and dissolution(c) provides insights into the relationships among age, occupation, income, and housing(d) is composed of the 11 stages of personal growth from infancy to retirement

12. 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 psychological characteristics, values, and lifestyles.

13. Segmentation by benefits sought is a type of product-related segmentation: __________.(a) to determine the marketer’s effectiveness in satisfying the consumer(b) used to create a psychographic profile of the benefit of having the product as a common

alternative(c) as a post-consumption evaluation tool(d) that focuses on the attributes that people seek in a product

14. Before beginning the market segmentation process, a firm should: __________.(a) identify bases for segmenting markets(b) forecast total market potential(c) forecast market share(d) select target market segments


15. The purpose of evaluating the attractiveness of the differing market segments identified in thesecond stage of the market segmentation process is to: __________.(a) identify the specific members of each segment to be able to contact each of them directly(b) determine the level of resources that must be committed to each segment(c) evaluate the market potential within each segment(d) design marketing strategy and tactics to reinforce the firm’s image

16. A key benefit of the STP process is: __________.(a) more effective and efficient matching of company resources to targeted market segments

promising the greatest ROMI(b) enhancing a company’s competitive position by providing direction and focus for

marketing strategies(c) examining and identifying growth opportunities in the market through the identification of

new customers, growth segments, or new product uses(d) all of the above

17. The process of market segmentation is strongly related to which other marketing concept?(a) Product differentiation (b) PEST analysis(c) ANSOFF matrix (d) Brand management

18. __________ are used in the positioning process to illustrate differing attributes of a selectionof brands.(a) Product features (b) SIC code(c) Perceptual maps (d) Organizational characteristics

19. What is market segmentation?(a) A statement that shows company sales, costs of goods, expenses and profits during a given

period of time.(b) The process of dividing a market into distinct groups of buyers with similar requirements.(c) The total present value of a time series of future cash flows(d) The net contribution produced after the marketing expenses are deducted from the

contribution produced.20. What is a STP-approach?

(a) Using a successful brand name to launch a new or modified product in a new category.(b) The principle of segmentation, targeting and positioning in order to select a distinct group

of consumers who require a special marketing mix.(c) Segmenting according to choice criteria, decision-making unit structure, decision-making

process, buying class, purchasing structure and organizational innovativeness.(d) All of the above.

21. Segmentation on basis of values and attitudes and behavioural patterns is an example of_____.(a) geographic location (b) cultural factors(c) economic factors (d) political and legal factors


22. Targeting affluent customers with luxurious goods is an example of __________.(a) geographic segmentation (b) income segmentation(c) psychographic segmentation (d) behavioural segmentation

23. Segmentation of international markets on basis of common languages, religions and customsis example of __________.(a) geographic location (b) cultural factors(c) economic factors (d) political and legal factors

24. Customer market division done on basis of ‘compulsive, ambitious and outgoing customers’classified as __________.(a) geographic segmentation (b) demographic segmentation(c) psychographic segmentation (d) behavioural segmentation

25. When a manufacturer designs an advertising program to sell its chain saws only to farm andprofessional segments, it is using what type of strategy?(a) undifferentiated strategy (b) mass market strategy(c) concentration strategy (d) differentiated strategy

26. When an organization attempts to develop a different marketing mix for each of its customers,it is using which type of strategy?(a) custom marketing strategy (b) mass marketing strategy(c) differentiated marketing strategy (d) undifferentiated marketing strategy

27. What is the purpose of segmentation?(a) To identify differences in behaviour that have implications for marketing decisions.(b) To identify the most profitable consumer segments.(c) To target segments that are not targeted by competitors.(d) To target segments which match our product/service attributes.

28. A company who develops a single marketing mix for the whole market and doesn’t segmentthe market uses which of the following marketing strategies?(a) Niche Marketing (b) Differentiated Marketing(c) Undifferentiated Marketing (d) Customised Marketing

29. All the following would be the ways to segment within the category of psychographicsegmentation except __________.(a) Social Class (b) Occupation(c) Lifestyle (d) Personality

30. __________ consists of dividing a market into distinct group of buyers on the basis of needs,characteristics or behaviour who might require separate products or marketing mixes.(a) Product differentiation (b) Market segmentation(c) Market targeting (d) Market positioning

31. __________ is the process of evaluating each market segment’s attractiveness and selectingone or more segments to enter.(a) Product differentiation (b) Market segmentation(c) Market targeting (d) Market positioning


32. In positioning statement, first thing that must be stated is __________.(a) target segment (b) market segmentation(c) differentiation (d) positioning

33. The process of designing the company’s image and offering to get a distinctive place in theminds of the target market is known as __________.(a) Positioning (b) Targeting(c) Segmentation (d) None of the above

34. Positioning is done to achieve __________.(a) Customer-focused value proposition (b) Product-focused value proposition(c) Company-focused value proposition (d) None of the above

35. When a company focuses on two frames of reference it is __________.(a) Straddling positioning (b) Stretching positioning(c) Dual positioning (d) None of the above

36. When BMW made a competitive entrance in the U.S. in the early 1980s, it positioned thebrand as that offered __________.(a) Luxury (b) Performance(c) Both (a) and (b) (d) None of the above

37. Company can create differentiation for its product with help of __________.(a) channel differentiation (b) image differentiation(c) employee differentiation (d) all of above

38. Which of the following could be used as a basis for segmenting business-to-business markets?(a) Frequency of purchase (b) Number of employees(c) Industry type (d) All of above

39. Which of the following is not a demographic characteristic?(a) Gender - male (b) Personality - Anxious(c) Marital Status - Single (d) Age 21

40. Marketers segment markets to achieve which of the following objectives?(a) To create an offer that best fits the desires of the groups that exist in the market.(b) To identify the most appropriate media for advertising.(c) To better understand their target segments.(d) All of the above.

41. __________ exists when all consumers have almost the same preferences and the marketreflects no natural segments.(a) Clustered preferences (b) Diffused preferences(c) Homogenous preferences (d) None of the above

42. Niche marketers’ objective is to understand their customers’ need so well following which thecustomers are __________.(a) Willing to pay a premium (b) Reluctant to pay a premium(c) Not willing to buy at even discounts (d) None of the above


43. During which step of the marketing segmentation, targeting, and positioning process does thefirm “develop a marketing mix for each segment?”(a) market segmentation(b) market targeting(c) market positioning(d) The firm does not go through the “development” during any of the above steps

44. When companies divide large, heterogeneous markets into smaller segments that can bereached more efficiently with products and services that match their unique needs, they areconducting a __________ process.(a) marketing aggregation (b) marketing positioning(c) marketing target (d) marketing segmentation

45. A company is practicing __________ if it focuses on sub-segments with distinctive traits thatmay seek a special combination of benefits.(a) micro marketing (b) niche marketing(c) mass marketing (d) segment marketing

46. If a marketer attempts segmentation of a market by dividing the market into different unitsbased on nations, regions, states, counties, cities, or even neighborhoods, then the marketer ispracticing __________ segmentation.(a) demographic (b) geographic(c) political (d) cartographic

47. Age is often a poor predictor of a person’s life-cycle, health, work, or family status. Therefore,when using age and life cycle segmentation, the marketer must guard against: __________.(a) stereotyping (b) gender bias(c) racial bias (d) intellectual bias

48. Proctor & Gamble joined a growing list of marketers who use __________ segmentationwhen they developed Secret, a brand specially formulated for a woman’s chemistry.(a) geographic (b) income(c) benefit (d) gender

49. “Coke in the morning” is an attempt to segment according to which of the following?(a) gender segmentation (b) psychographic segmentation(c) benefit segmentation (d) occasion segmentation

50. When companies market products on the basis of what the product’s attributes will do for agiven segment of consumers, they are using a powerful form of behavioral segmentationknown as: __________.(a) occasion segmentation (b) benefit segmentation(c) user status segmentation (d) usage rate segmentation


Answer Key of Chapter 41. (b) 11. (b) 21. (b) 31. (c) 41. (c)2. (a) 12. (d) 22. (b) 32. (a) 42. (a)3. (c) 13. (d) 23. (b) 33. (a) 43. (c)4. (c) 14. (a) 24. (c) 34. (a) 44. (d)5. (b) 15. (c) 25. (c) 35. (a) 45. (b)6. (d) 16. (d) 26. (a) 36. (c) 46. (b)7. (c) 17. (a) 27. (a) 37. (d) 47. (a)8. (d) 18. (c) 28. (c) 38. (d) 48. (d)9. (b) 19. (b) 29. (b) 39. (b) 49. (d)10. (b) 20. (b) 30. (b) 40. (d) 50. (b)


Chapter 5Product – The First Element of Marketing Mix

1. Anything that can be offered to a market for attention, acquisition, use, or consumption thatmight satisfy a want or need is called a(n): __________.(a) Idea (b) Demand(c) Product (d) Service

2. Broadly defined, products include all of the following EXCEPT: __________.(a) Money and payments (b) Services(c) Ideas (d) Persons

3. A __________ is a form of product that consists of activities, benefits, or satisfactions offeredfor sale that are essentially intangible and do not result in the ownership of anything.(a) Service (b) Demand(c) Need (d) physical object

4. Examples of pure tangible goods include all of the following EXCEPT: __________.(a) soap (b) tax preparation(c) toothpaste (d) salt

5. The most basic level of a product is called the: __________.(a) core product (b) central product(c) fundamental product (d) augmented product

6. The best illustration of an augmented product category or feature would be the: __________.(a) brand name (b) packaging.fundamental product(c) warranty (d) design

7. Products purchased frequently, immediately, and with a minimum of comparison and buyingeffort are called: __________.(a) consumer products (b) convenience products(c) Shopping Products (d) Speciality Products

8. Products that the consumer usually compares with others on price, suitability, quality, andstyle are typically called: __________.(a) convenience products (b) specialty products(c) shopping products (d) unsought products

9. A(n) __________ is a product bought by the final consumer for personal consumption.(a) consumer product (b) industrial product(c) psychological product (d) stress-sensitive product

10. All of the following are characteristics of the convenience product EXCEPT: __________.(a) low price(b) mass promotion by the producer(c) exclusive distribution(d) frequent purchase, little planning, and little comparison


11. The best illustration of a shopping product listed below would be: __________.(a) a television (b) a magazine(c) fine crystal (d) life insurance

12. The best example of a specialty product listed below is that of a(n): __________.(a) luxury good, such as a Rolex watch (b) major appliance(c) Red Cross blood donation (d) laundry detergent

13. Consumer goods with unique characteristics or brand identification often requiring a specialpurchase effort are called: __________.(a) custom products (b) specialty products(c) convenience products (d) shopping products

14. Consumer goods that the consumer does not know about or does not normally think aboutbuying are called: __________.(a) custom products (b) unsought products(c) specialty products (d) shopping products

15. __________ are products bought by individuals and organizations for further processing orfor use in conducting a business.(a) Consumer products (b) Services(c) Industrial products (d) Specialty products

16. The primary distinction between a consumer product and an industrial product is based on the__________.(a) cost (b) size(c) description (d) purpose for which the product is bought

17. Which of the following would not be one of the three major groups of industrial products andservices?(a) computer software for PCs (b) materials and parts(c) capital items (d) supplies and services

18. As explained in the text, product quality means conformance quality—consistency indelivering a target level of performance and: __________.(a) no recalls for at least one year (b) freedom from defects.(c) standard engineering specifications (d) global standards, such as ISO 9000

19. Good __________ contribute(s) to a product’s usefulness as well as to its looks.(a) style (b) design(c) brand enhancement (d) features

20. If Steelcase office furniture company wanted to make office furniture that really met theneeds of its consumers and provided value to the consumer that was not just “skin deep,” itwould try to improve its products’ __________.(a) design (b) style(c) performance (d) ambiance

21. The number of items within the product line is identified as being the: __________.(a) product line width (b) product line strength(c) product line length (d) product line consistency


22. __________ occurs when a company lengthens its product line beyond its current range.(a) Product line strength (b) Product line consistency(c) Product line mobility (d) Product line stretching

23. __________ is the set of all product lines and items that a particular seller offers for sale.(a) Product line (b) Product mix(c) Product allotment (d) Product choice

24. Product mix __________ refers to the number of different product lines the company carries.(a) width (b) depth(c) length (d) consistency

25. The total number of items that the company carries within its product lines refers to the__________ of the product mix.(a) width (b) depth(c) length (d) consistency

26. The number of different versions of each product offered in the product line is called its: ______.(a) width (b) depth(c) length (d) consistency

27. The characteristic of service meaning that it cannot be seen, tasted, felt, heard, or smelledbefore being bought is called: __________.(a) intangibility (b) inseparability(c) variability (d) perishability

28. Products that are bought without detailed comparisons are best classified as __________.(a) sought products (b) unsought products(c) less convenient products (d) convenient products

29. Bread and milk are which kind of products?(a) Specialty Products (b) Convenience products(c) Shopping products (d) Unsought products

30. The four unique elements to services include: __________.(a) Independence, intangibility, inventory, and inception(b) Independence, increase, inventory, and intangibility(c) Intangibility, inconsistency, inseparability, and inventory(d) Intangibility, independence, inseparability, and inventory

31. Deeds, efforts and performances define: __________.(a) products (b) ideas(c) services (d) goods(e) places

32. Businesses such as fast food restaurants would fall where along the Scale of Market Entities?(a) on the extreme end of the intangible-dominant side(b) on the extreme end of the intangible-dominant side(c) in the middle of the continuum(d) left of the middle towards the tangible-dominant side


33. Which of the following fields would be least likely to be described as intangible-dominant?(a) manufacturing (b) education(c) insurance (d) banking

34. Which of the following statements is true?(a) Service knowledge is obtained differently than goods knowledge.(b) Firms that define their businesses too narrowly have developed marketing myopia.(c) Goods are tangible-dominant.(d) All the above are true.

35. Services cape consists of which of the following features: __________.(a) personal artifacts (b) inanimate objects(c) signs (d) all of the above

36. __________ are consumer products and services with unique characteristics or brandidentification for which a significant group of buyers is willing to make a special purchaseeffort.(a) Specialty products (b) Line extensions(c) Industrial products (d) Shopping products

37. __________ are industrial products that aid in the buyer’s production or operations, includinginstallations and accessory equipment.(a) Specialty items (b) Capital items(c) Parts (d) Supplies

38. __________ are products and services bought by final consumers for personal consumption.These include convenience products, shopping products, specialty products, and unsoughtproducts.(a) Line extensions (b) Industrial products(c) Straight extensions (d) Consumer products

39. __________ means that services cannot be seen, tasted, felt, heard, or smelled before they arebought.(a) Service intangibility (b) Service inseparability(c) Service perishability (d) Service heterogeneity

40. An increasing number of retailers and wholesalers have created their own __________, alsocalled store brands.(a) shopping products (b) service variability(c) specialty products (d) private brands

41. Paper, pencils, lubricants, paint, nails, and brooms are examples of __________.(a) specialty products (b) capital items(c) supplies (d) installations

42. Product is a key element in __________. At one extreme, it may consist of pure tangiblegoods or at the other extreme, pure services.(a) the market offering (b) the market experience(c) brand extension (d) co-branding


43. Product mix __________ refers to the number of different product lines the company carries.Procter & Gamble markets around 250 brands organized into many product lines.(a) height (b) depth(c) width (d) length

44. Product planners must design the actual product and find ways to __________ it in order tocreate the bundle of benefits that will create the most customer value.(a) brand (b) augment(c) present (d) package

45. Product planners need to think about products and services on three levels. The most basiclevel is the __________, which addresses the question, “What is the buyer really buying?”(a) core benefit (b) actual product(c) co-branding (d) augmented product

46. The way in which a product is made distinct as compared to other similar products is called as__________.(a) Product Branding (b) Product Marketing(c) Product Differentiation (d) Product Mapping

47. The complete range of products within a company is known as __________.(a) Marketing Mix (b) Promotion Mix(c) Product mix (d) All of the above

48. If a company has 4 product lines, and 10 products within the product line, than the length ofthe product mix is __________.(a) 2.5 (b) 40(c) 14 (d) 45

49. The lesser the variations between the products, the more is the product line __________.(a) Diversification (b) Extension(c) Deviation (d) Consistency

50. __________ is about all aspects the consumer expects to get when they purchase a product.(a) Augmented Product (b) Potential product(c) Core Product (d) Expected Product

Answer Key of Chapter 51. (c) 11. (a) 21. (c) 31. (c) 41. (c)2. (a) 12. (a) 22. (d) 32. (c) 42. (a)3. (a) 13. (b) 23. (b) 33. (a) 43. (c)4. (b) 14. (b) 24. (a) 34. (d) 44. (b)5. (a) 15. (c) 25. (c) 35. (d) 45. (a)6. (c) 16. (d) 26. (b) 36. (a) 46. (c)7. (b) 17. (a) 27. (a) 37. (d) 47. (c)8. (c) 18. (b) 28. (d) 38. (d) 48. (b)9. (a) 19. (b) 29. (b) 39. (a) 49. (d)10. (c) 20. (a) 30. (c) 40. (d) 50. (d)

Basics of Marketing (BOM)

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