Marketing Management – 12th Edition – Kotler/Keller · Web viewSuggested Answer: Student...

Chapter 1: Defining Marketing for the 21st Century

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. Good marketing is no accident, but a result of careful planning and ________.a. executionb. sellingc. strategiesd. tacticse. research

Answer: a Page: 4 Level of difficulty: Medium

2. Marketing is both an “art” and a “science”—there is constant tension between the formulated side of marketing and the ________ side.a. creativeb. sellingc. managementd. forecastinge. behavior

Answer: a Page: 4 Level of difficulty: Easy

3. The most formal definition of marketing is ________. a. meeting needs profitablyb. identifying and meeting human and social needsc. 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 that benefit the organization and its stake holders.

e. improving the quality of life for consumersAnswer: d Page: 6 Level of difficulty: Medium

4. Marketing management is ________.a. managing the marketing processb. monitoring the profitability of the companies products and servicesc. selecting target marketsd. developing marketing strategies to move the company forwarde. the art and science of choosing target markets and getting, keeping, and growing

customers through creating, delivering, and communicating superior customer value

Answer: e Page: 6 Level of difficulty: Easy

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Part 1: Understanding Marketing Management

5. A transaction involves ________. a. at least two partiesb. each party has something that might be of value to the other partyc. each party is capable of communication and deliveryd. each party is free to accept or reject the exchange offere. all of the above

Answer: e Pages: 6–7 Level of difficulty: Medium

6. ________ goods constitute the bulk of most countries’ production and marketing efforts.a. Durableb. Impulsec. Physicald. Servicee. Event

Answer: c Page: 8 Level of difficulty: Medium

7. ________ can be produced and marketed as a product.a. Informationb. Celebritiesc. Durable goodsd. Organizationse. Properties


8. Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the store, ________.”a. we make profitsb. we challenge competitorsc. we implement adsd. we sell hopee. we sell quality

Answer: d Page: 9 Level of difficulty: Easy

9. A ________ is someone seeking a response (attention, a purchase, a vote, a donation) from another party, called the ________.a. salesperson, customerb. fund raiser, contributorc. politician, voterd. marketer, prospecte. celebrity, audience

Answer: d Page: 10 Level of difficulty: Hard

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10. In ________—consumers may share a strong need that cannot be satisfied by an existing product.a. negative demandb. latent demandc. declining demandd. irregular demande. non-existent demand

Answer: b Page: 10 Level of difficulty: Medium

11. In ________—more customers would like to buy the product than can be satisfied.a. latent demandb. irregular demandc. overfull demandd. excessivee. negative demand


12. Marketers often use the term ________ to cover various groupings of customers.a. people b. buying powerc. demographic segment d. social class position e. market

Answer: e Page: 10 Level of difficulty: Hard

13. Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image in markets called ________. a. business marketsb. global marketsc. consumer marketsd. nonprofit and governmental marketse. service markets


14. In business markets, advertising can play a role, but a stronger role may be played by the sales force, ________, and the company’s reputation for reliability and quality.a. brand imageb. distributionc. promotiond. pricee. performance


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15. Global marketers must decide ________.a. which countries to enterb. how to enter each country (as an exporter, licenser, joint venture partner, contract

manufacturer, or solo manufacturer)c. how to adapt their product and service features to each countryd. how to price their products in different countriese. all of the above


16. Mohan Sawhney has proposed the concept of ________ to describe a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.a. metamarketb. vertical integrationc. horizontal integrationd. betamarkete. synchronized marketing

Answer: a Page: 12 Level of difficulty: Hard

17. The ________ promises to lead to more accurate levels of production, more targeted communications, and more relevant pricing.a. Age of Globalizationb. Age of Deregulationc. Industrial Aged. Information Agee. Production Age

Answer: d Page: 13 Level of difficulty: Medium

18. Many countries have ________ industries to create greater competition and growth opportunities.a. open-marketb. deregulatedc. regulatedd. scientifically segmented e. created mass market


19. Customers are showing greater price sensitivity in their search for ________.a. the right productb. the right servicec. the right stored. valuee. relationships


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20. Rising promotion costs and shrinking profit margins are the result of ________.a. changing technologyb. globalizationc. deregulationd. privatizatione. heightened competition

Answer: e Page: 14 Level of difficulty: Hard

21. Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries—this is called ________.a. globalizationb. customizationc. industry convergenced. heightened competitione. acquisition


22. In response to giant retailers and category killers, entrepreneurial retailers are building entertainment into stores with coffee bars, lectures, demonstrations, and performances. They are marketing a(n) ________ rather than a product assortment.a. experienceb. customer valuec. customer delightd. total service solutione. intangible benefit(s)


23. In response to threats from such companies as AOL, Amazon, Yahoo, eBay, E’TRADE, and dozens of others, established manufacturers and retailers became “brick-and-click” oriented by adding online services to their existing offerings. This process became known as ________. a. reintermediationb. disintermediationc. e-commerced. e-collaboratione. new market synchronization


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24. Many brick-and-click competitors became stronger contenders in the marketplace than the pure-click firms because they had a larger pool of resources to work with and ________.a. better pricesb. greater valuec. well-established brand namesd. one-on-one communicationse. direct selling capability


25. The ________ is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots.a. marketing conceptb. selling conceptc. production conceptd. product concepte. holistic marketing concept


26. The ________ concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.a. productb. marketingc. productiond. selling e. holistic marketing


27. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.a. productionb. sellingc. marketingd. producte. holistic marketing


28. Several scholars have found that companies who embrace the marketing concept achieve superior performance. This was first demonstrated for companies practicing a ________—understanding and meeting customers’ expressed needs.a. reactive market orientationb. proactive marketing orientationc. total market orientationd. impulsive market orientatione. holistic market orientation


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29. According to Theodore Levitt, who drew a perceptive contrast between the selling and marketing concepts, ________ is preoccupied with the need to convert products into cash.a. marketingb. sellingc. direct marketingd. holistic marketing e. service marketing


30. In the course of converting to a marketing orientation, a company faces three hurdles—________.a. organized resistance, slow learning, and fast forgettingb. management, customer reaction, competitive responsec. decreased profits, increased R&D, additional distributiond. forecasted demand, increased sales expense, increased inventory costse. customer focus, profitability, slow learning


31. Companies that practice both a reactive and proactive marketing orientation are implementing a ________ and are likely to be the most successful.a. total market orientationb. external focusc. customer focusd. competitive, customer focuse. confrontation process


32. Marketers argue for a ________ in which all functions work together to respond to, serve, and satisfy the customer.a. cross-functional team orientationb. collaboration modelc. customer orientationd. management-driven organizatione. total quality model


33. ________ can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breadth and interdependencies of their effects. a. Niche marketingb. Holistic marketingc. Relationship marketingd. Supply-chain marketinge. Demand-centered marketing


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34. ________ marketing has the aim of building mutually satisfying long-term relations with key parties such as customers, suppliers, distributors, and other marketing partners in order to earn and retain their business.a. Holistic b. Demand-based c. Direct d. Relationshipe. Synthetic

Answer: d Pages: 17–18 Level of difficulty: Easy

35. Companies who form a ________ collect information on each customer’s past transactions, demographics, psychographics, and media and distribution preferences.a. sales networkb. holistic unionc. marketing networkd. supply-chain networke. integrated network

Answer: c Page: 18 Level of difficulty: Hard

36. The ability of a company to deal with customers one at a time has become practical as a result of advances in ________, computers, the Internet, and database marketing software. a. improved communication flowb. information technologyc. just-in-time manufacturingd. factory customizatione. customer-centered strategies


37. 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 priceb. product, production, price, and placec. promotion, place, positioning, and priced. place, promotion, production, and positioning e. product, price, promotion, and place

Answer: e Page: 19 Level of difficulty: Easy

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38. The four Ps represent the sellers’ view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs. The four Cs are ________.a. customer focus, cost, convenience, and communicationb. customer solution, customer cost, convenience, and communicationc. convenience, control, competition, and costd. competition, cost, convenience, and communicatione. category control, cost, concept development, and competition

Answer: b Pages: 19–20 Level of difficulty: Medium

39. Holistic marketing incorporates ________, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management.a. profit objectivesb. share of customerc. internal marketingd. the marketing mixe. strategic planning


40. Marketing is not a department so much as a ________.a. company orientationb. philosophyc. functiond. branch of managemente. branch of economics


41. Holistic marketing incorporates ________ and understanding broader concerns and the ethical, environmental, legal, and social context of marketing activities and programs. a. safe product designb. cultural marketingc. social responsibility marketingd. cross-functional teamse. direct sales policies


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42. The ________ holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.a. customer-centered businessb. focused business modelc. societal marketing conceptd. ethically responsible marketing managere. production-centered business


43. Companies see ________ as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage.a. cause-related marketingb. brand marketingc. equity marketingd. direct marketinge. recognition marketing


44. When a customer has a(n) ________ need he/she wants a car whose operating cost, not its initial price, is low. a. stated b. real c. unstated d. delight e. secret

Answer: b Page: 24 Level of difficulty: Hard

45. When a customer has a(n) ________ need the customer wants to be seen by friends as a savvy consumer.a. real b. unstated c. delightd. secrete. stated


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46. During market segmentation analysis, the marketer identifies which segments present the greatest opportunity. These segments are called ________.a. target marketsb. primary marketsc. tertiary marketsd. demographic marketse. focused markets


47. For each target market, the firm develops a ________. The offering is positioned in the minds of the target buyers as delivering some central benefit(s).a. value offeringb. niche offeringc. market offeringd. segment offeringe. social offering


48. ________ reflects the perceived tangible and intangible benefits and costs to customers. a. Loyaltyb. Satisfactionc. Valued. Expectationse. Comparison shopping


49. If a marketer decides to use warehouses, transportation companies, banks, and insurance companies to facilitate transactions with potential buyers, the marketer is using what is called a ________.a. service channelb. distribution channelc. brand channeld. relationship channele. intermediary channel


50. ________ includes all the actual and potential rival offerings and substitutes that a buyer might consider.a. Competitionb. The product offeringc. A value propositiond. The supply chaine. The marketing environment


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51. The ________ includes the immediate actors involved in producing, distributing, and promoting the offering. The main actors are the company, suppliers, distributors, dealers, and the target customers.a. operations environmentb. management environmentc. strategic environmentd. task environmente. tactical environment


52. The ________ process consists of analyzing marketing opportunities; selecting target markets; designing marketing strategies; developing marketing programs; and managing the marketing effort.a. marketing planningb. strategic planningc. market researchd. opportunity analysise. share of customer


53. David Packard of Hewlett-Packard once said, “Marketing is far too important to leave to ________.”a. the advertising boysb. uninformed managersc. novicesd. the CEOe. the marketing department

Answer: e Page: 27 Level of difficulty: Medium

54. Some companies are now switching from being solely product-centered (with product managers and product divisions to manage them) to being more ________ centered. a. competencyb. strategyc. marketingd. customer-segmente. sales


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55. Companies are recognizing that much of their market value comes from ________, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital.a. variable assets b. the value propositionc. intangible assetsd. tangible assetse. customer preferences

Answer: c Page: 28 Level of difficulty: Easy

56. ________ can increasingly be conducted electronically, with buyer and seller seeing each other on their computer screens in real time.a. Public relationsb. E-commercec. Advertisingd. Personal sellinge. Mass marketing


57. Top management is going beyond sales revenue alone to examine the marketing scorecard to interpret what is happening to ________.a. market shareb. customer loss ratec. customer satisfactiond. product qualitye. all of the above


58. At the heart of any marketing program is the ________—the firm’s tangible offering to the market.a. service offer b. productc. sales support teamd. packaginge. auxiliary offer


59. ________ activities are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the brands they sell. a. Consumer behavior b. Market segmentationc. Marketing research d. Marketing communicatione. New product development

Answer: d Page: 30 Level of activity: Medium

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60. Marketing evaluation and ________ processes are necessary to understand the efficiency and effectiveness of marketing activities and how both could be improved. a. controlb. analysisc. measurementd. feedbacke. consumer behavior


True/False

61. A short definition of marketing is “meeting needs profitably.”Answer: True Page: 5 Level of difficulty: Easy

62. Value marketing is the “art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.”

Answer: False Page: 6 Level of difficulty: Medium

63. One of the key conditions for an exchange to take place is that each party is capable of communication and delivery.

Answer: True Pages: 6–7 Level of difficulty: Medium

64. In a transfer, A gives X to B but does not receive anything tangible in return.Answer: True Page: 7 Level of difficulty: Medium

65. Services constitute the bulk of most countries’ production and marketing effort.Answer: False Page: 8 Level of difficulty: Medium

66. The U.S. economy today consists of a 70–30 services-to-goods mix.Answer: True Page: 8 Level of difficulty: Medium

67. “Friends Don’t Let Friends Drive Drunk,” is an example of marketing an experience to an interested audience.

Answer: False Page: 9 Level of difficulty: Hard

68. Unwholesome demand occurs when consumers dislike the product and may even pay a price to avoid it.


69. When consumers share a strong need that cannot be satisfied by an existing product they are engaged in latent demand.

Answer: True Page: 10 Level of difficulty: Medium

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70. Companies selling goods and services in the global marketplace have the advantage of being able to sell the goods and services in almost the same way as they do in their domestic market.

Answer: False Pages: 11–12 Level of difficulty: Easy

71. A marketspace is physical, as when you shop in a store.Answer: False Page: 12 Level of difficulty: Medium

72. The Industrial Age was characterized by mass production and mass consumption, stores stuffed with inventory, ads everywhere, and rampant discounting.


73. Regulation of industries has created greater competition and growth opportunities because the playing field has been leveled.


74. Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries.


75. The marketing concept is one of the oldest concepts in business.Answer: False Page: 15 Level of difficulty: Medium

76. The selling concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.


77. The marketing concept stresses a customer-centered approach to marketing.Answer: True Page: 16 Level of difficulty: Easy

78. The marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies.


79. Relationship marketing has the aim of building mutually satisfying long-term relationships with key parties.


80. A marketing network consists of the company and its supporting stakeholders with whom it has built mutually profitable business relationships. Answer: True Page: 18 Level of difficulty: Medium

81. The marketing mix component called promotion includes such items as product variety, design, packaging, services, and warranties.


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82. When a marketer makes decisions involving channels, assortments, locations, and transportation, the marketer is making what are called place decisions.


83. Advertising, sales promotion, and direct marketing are all part of what is called the offering mix.


84. The customers’ 4Cs are customer solution, customer price, customer service, and customer information technology.


85. Internal marketing is an appropriate practice to be used in holistic marketing.Answer: True Page: 20 Level of difficulty: Easy

86. The selling relationship concept holds that consumers will prefer products that are ethical, environmentally responsible, legal, and social in the context of marketing activities and programs.


87. The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

Answer: True Page: 22 Level of difficulty: Easy

88. McDonald’s has decided to engage in cause marketing. An appropriate action would be to sponsor an endangered species at a national or city zoo.


89. Wants are basic human requirements such as food or air. Answer: False Page: 24 Level of difficulty: Medium

90. Demands are wants for specific products backed by an ability to pay. Answer: True Page: 24 Level of difficulty: Easy

91. The customer indicates that he or she wants an inexpensive car. This would be an illustration of a delight need.


92. An unstated need occurs when a consumer expects good service from a dealer.Answer: True Page: 24 Level of difficulty: Easy

93. Most marketers satisfy everyone in a market—that’s how they stay in business.Answer: False Page: 24 Level of difficulty: Medium

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94. The customer value triad consists of a combination of quality, service, and price. Answer: True Page: 25 Level of difficulty: Hard

95. A distribution channel includes distributors, wholesalers, retailers, and agents that display, sell, or deliver the physical product or service(s) to the buyer or user.


96. The main actors in the task environment are the components of demographics, economics, physical setting, technology, the political-legal system, and the social-cultural arena.


97. In the center of factors that influence a company’s marketing strategy is the target customers.


98. Today, there is an increasing focus on profitable transactions as the way to ensure customer lifetime value.


99. To understand what is happening inside and outside the company, the company needs a reliable marketing information system.


100.Because of surprises and disappointments that can occur as marketing plans are implemented, the company will need feedback and control to improve itself.


Essay

101. Marketing has been described being both an “art” and a “science. Discuss the differences and similarities between these two marketing thrusts. Provide your theoretical response and a “real-life” example where you have seen both processes work effectively at creating customer value and loyalty.

Suggested Answer: The student should demonstrate his or her understanding that the marketer must use data to understand customer needs and translate this understanding into properly designed products and services. They should also see the “art” side of human behavior, where the customer makes decisions based on emotions, such as the perceived benefits.Page: 6 Level of difficulty: Medium

102. Marketing has often been defined in terms of satisfying customers’ needs and wants. Critics maintain that marketing does much more than satisfying customers’ needs and wants and, in fact, create needs and wants that did not exist before.

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According to these critics, marketers encourage consumers to spend more money than they should on goods and services they really do not need. What is your opinion of this on-going debate? Take a stance and defend your position using examples of companies that you perceive to have created or satisfied customer needs.

Suggested Answer: The student should understand the processes whereby the marketer fills a customer need and situations where a need is created. For example, automobiles may be a basic “need,” but, if that automobile has a 450 Hp engine it may be very impractical. However, that car may haven been “created” for those buyers who like the idea of having a “muscle car” and imagine themselves drag racing or running the ¼ mile in record time off a set of traffic lights.Page: 24 Level of difficulty: Hard

103. As described in the textbook, exchange is the process of obtaining a desired product from someone by offering something in return. For exchange potential to exist, five conditions must be satisfied. What are those conditions? Taking the tenets of exchange, apply these collectively and describe an exchange where you left the process feeling like a valued customer. What were the tangible/intangible benefits of the exchange?

Suggested Answer: Exchange is a basic concept that every student should understand. Everyday people exchange something of value (usually currency) for a product/service. The five conditions are: (1) there are at least two parties, (2) each party has something that might be of value to the other party, (3) each party is capable of communication and delivery, (4) each party is free to accept or reject the exchange offer, and (5) each party believes it is appropriate or desirable to deal with the other party. The relationship between the amounts of exchange for the value received differentiates most suppliers from their competitors. Use the example of Starbucks (selling an “experience”) versus Dunkin Donuts (selling coffee) where one sells both intangible and tangible benefits and the other sells tangible benefits.

Pages: 6–7 Level of difficulty: Medium

104. Marketers are skilled in stimulating demand for a company’s products, but this is too limited a view of the tasks they perform. Just as production and logistics professionals are responsible for supply management, marketers are responsible for demand management. Marketing managers seek to influence the level, timing, and composition of demand to meet the organization’s objectives. List and briefly characterize the eight demand states described in the text.

Suggested Answer: The eight different demand states are (1) negative demand—consumers dislike the product and may even pay a price to avoid it, (2) nonexistent demand—consumers may be unaware or uninterested in the product, (3) latent demand—consumers may share a strong need that cannot be satisfied by

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an existing product, (4) declining demand—consumers begin to buy the product less frequently or not at all, (5) irregular demand—consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis, (6) full demand—consumers are adequately buying all products put into the marketplace, (7) overfull demand—more consumers would like to buy the product than can be satisfied, and (8) unwholesome demand—consumers may be attracted to products that have undesirable social consequences. Page: 10 Level of difficulty: Hard

105. Customers increasingly expect higher quality and service and some customization. They are more and more time-starved and want more convenience. They perceive fewer real product differences and show less brand loyalty. They can obtain extensive product information from the Internet and other sources that permit them to shop more intelligently. They are showing greater price sensitivity in their search for value.

Examine and document what factors have brought about customers higher expectations with their suppliers. What are the major shifts in marketing management that have brought about these shifts?

Suggested Answer: Students may not understand that our world’s capacity to produce products exceeds the needs. Therefore, customers have more choices and can be more demanding. The time crunch has allowed new providers to enter the market. For example, Netflix, competes effectively with Blockbuster Video because they deliver videos to your home. It’s service like this that fit the customer needs to satisfy what money can buy—time. Students may use appropriate marketing management shifts as described in the chapter.Pages: 27–30 Level of difficulty: Medium

106. The competing concepts under which organizations have conducted marketing activities include: the production concept, product concept, selling concept, marketing concept, and holistic marketing concept. Evaluate the advantages and disadvantages of each concept as defined and presented in your textbook. Which concept do you believe is the most effective? Why?

Suggested Answer: Although students will be expected to research each concept, they should conclude the most effective concept is the holistic marketing concept, where companies need to have a more complete, cohesive approach that goes beyond traditional applications of the marketing concept.

Going over the Puma case in the chapter will bring life to this concept.Pages: 15–20 Level of difficulty: Medium

107. Increasingly, a key goal of marketing is to develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success

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of the firm’s marketing activities. Relationship marketing has the aim of building mutually satisfying long-term relations with key parties—customers, suppliers, distributors, and other marketing partners—in order to earn and retain their business.

Discuss the merits of relationship marketing. Describe in detail a company who is in business today that models relationship marketing.

Suggested Answer: Students should understand the relationship between any supplier and customer is not just in the mechanics of the transaction, but more importantly how the customer is treated during the transaction. The better the relationship the more apt the customer will remain loyal. They should pick a company that has served them well and made them feel special each and every time.Pages: 17–18 Level of difficulty: Medium

108. We can distinguish among five types of customer needs. List and provide an example of each of those customer needs.

Suggested Answer: The five types of customer needs are (note the example from the text): (1) stated needs—the customer wants an inexpensive car, (2) real needs—the customer wants a car whose operating cost, not its initial price is low, (3) unstated needs—the customer expects good service from the dealer, (4) delight needs—the customer would like the dealer to include an onboard navigation system, and (5) secret needs—the customer wants to be seen by friends as a savvy consumer.Page: 24 Level of difficulty: Medium

109. Distinguish between the concepts of value and satisfaction.

Suggested Answer: The offering will be successful if it delivers value and satisfaction to the target buyer. The buyer chooses between different offerings on the basis of which is perceived to deliver the most value. Value reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (called the customer value triad). Satisfaction reflects a person’s comparative judgments resulting from a product’s perceived performance (or outcome) in relation to his or her expectations.Pages: 25–26 Level of difficulty: Medium

110. Marketing people are involved in marketing ten types of entities. List and briefly characterize those entities.

Suggested Answer: The types of entities that marketing people are involved in marketing are (1) goods—physical goods, (2) services—hotels and car rental, (3) events—time-based events such as trade shows, (4) experiences—Walt Disney’s

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Magic Kingdom, (5) persons—celebrity marketing, (6) places—cities, states, regions, and even whole nations, (7) properties—intangible rights of ownership of either real property or financial property, (8) organizations—corporate identity, (9) information—information produced and marketed as a product, and (10) ideas—marketing the basic idea of a market offering.Pages: 8–9 Level of difficulty: Hard

APPLICATION QUESTIONS

Multiple Choice

111. When IKEA noticed that people wanted good furniture at a substantially lower price and created knockdown furniture, they demonstrated marketing savvy and turned a private or social need into a(n) ________.a. market needb. profitable business opportunityc. product developmentd. inventione. customer want


112. A person can obtain a product in one of four ways. Which of these ways is most appropriate when the person trades with another person?a. Self-producingb. Using forcec. Beggingd. Exchanginge. Coercing


113. When Bob sells a TV to Roger and receives $400 in cash, a(n) ___________ has just occurred. a. transferb. contributionc. donationd. transactione. charitable action


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114. Walt Disney’s Magic Kingdom represents ________ marketing: customers visit a fairy kingdom, a pirate ship, or a haunted house.a. experientialb. servicesc. eventd. celebritye. goods


115. Janet is very upset that she can’t get tickets to the new Rolling Stones concert. “Why do they keep advertising the show if you can’t get tickets?” wonders Janet. Which of the following demand states applies to Janet’s situation?a. nonexistent demandb. latent demandc. full demandd. unwholesome demande. overfull demand


116. When Jack purchases his air conditioning unit in the winter to avoid the high prices found in the summer, he is exhibiting ________ demand.a. irregularb. decliningc. impulsed. latente. negative


117. If a female consumer hates smoking and is willing to pay an extra tax just to help eliminate smoking in her city, she is exhibiting ________ with respect to her views toward smoking.a. negative demandb. non-existent demandc. latent demandd. declining demande. unwholesome demand


118. In a modern exchange economy, all of the following markets are likely to exist EXCEPT ________.a. resource marketb. manufacturer marketc. government marketd. consumer markete. class market

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119. If the automobile industry sends advertising communications and personal sales messages to prospective buyers in a simple marketing system, it expects ________ in return if the exchange process is really working.a. goodsb. servicesc. moneyd. informatione. image enhancement


120. According to information found in Radical Marketing, a company can emulate a radical marketer by doing all of the following EXCEPT ________.a. hiring only passionate missionaries, not marketersb. having the CEO own the marketing functionc. using marketing research at every opportunityd. creating a community of consumerse. being true to the brand


121. When online dot.coms, such as eBay and Amazon cut out the majority of middlemen that normally would participate in the exchange process, they were advocating ________. a. category killersb. every-day-low pricesc. reintermediationd. disintermediatione. supply-chain conglomeration


122. Under which of the following company orientations toward the marketplacewould we expect to find the “better mousetrap” fallacy? a. Production conceptb. Product conceptc. Selling conceptd. Marketing concepte. Holistic marketing concept.

Answer: b Page: 15 Level of difficulty: Hard

123. If marketers are characterized as “gardening” rather than “hunting,” the ________ is most likely to be the concept the marketers are following.a. production conceptb. product conceptc. selling conceptd. marketing concept

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e. social responsibility conceptAnswer: d Page: 16 Level of difficulty: Hard124. When 3M, HP, and Motorola practice researching or imaging latent needs of

consumers through a “probe-and-learn” process, they are most likely using which of the following marketing orientations with respect to their consumers?a. Selling orientationb. Promotion orientationc. Supply-side orientation d. Reactive market orientatione. Proactive marketing orientation


125. Companies that practice ________ are implementing a total market orientation and are likely to be the most successful. a. reactive market orientation b. proactive marketing orientationc. both reactive and proactive marketing orientationd. consolidation and acquisitione. “invent and market”


126. In which of the following dimensions of holistic marketing might we find an emphasis on communications, products and services, and channels?a. Internal marketingb. Integrated marketingc. Socially responsible marketingd. Global marketinge. Relationship marketing


127. A number of companies—including the Body Shop, Ben & Jerry’s, and Patagonia—have achieved notable sales and profit gains by adopting and practicing a form of the societal marketing concept called ________ by which a company with an image, product, or service to market builds a relationship or partnership with a cause, or a number of causes, for mutual benefit.a. social marketingb. environmental marketingc. cause-related marketingd. benefit marketinge. responsible marketing

Answer: c Pages: 22–23 Level of difficulty: Easy

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128. When a customer has a(n) ________ need, the customer might expect something like admiration from friends because he or she has purchased something that might indicate a certain market savvy. a. real b. unstated c. delightd. secrete. stated


129. When Volvo runs advertisements suggesting that it is the safest car money can buy, it is engaging in which of the following forms of marketing programming?a. Technological b. Servicec. Market segmentationd. Public relationse. Positioning


130. Kroger supermarkets are aggressively pursuing a strategy of capturing a larger share of the customer’s “stomach.” Which of the following shifts in marketing management is most appropriate for this example? a. From relying on old market positions to uncovering new ones.b. From marketing does the marketing to everyone does the marketing.c. From a focus on gaining market share to a focus on building customer share.d. From focusing on profitable transactions to focusing on customer lifetime

value.e. From building brands through advertising to building brands through

performance and integrated communications.Answer: c Page: 28 Level of difficulty: Hard

Short Answer

131. What would be a good social definition of marketing?

Suggested Answer: Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.Page: 6 Level of difficulty: Medium

132. To make successful exchanges, marketers analyze what each party expects from the transaction. Choose a simple example and illustrate this process.

Suggested Answer: Responses will vary. Students should reference Figure 1.2 where they will see that an “industry” sends goods and services in exchange for

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money from the market. Additionally, the “industry” sends communications to the market and receives information in return. No matter which example is selected by the students, these areas need to be emphasized.Pages: 7–11 Level of difficulty: Medium

133. The digital revolution has placed a whole new set of capabilities in the hands of consumers and businesses. Consider what consumers have today that they didn’t have yesterday. As indicated in the chapter, what would appear on such a list?

Suggested Answer: Responses to this question should include: (1) a substantial increase in buying power, (2) a greater variety of available goods and services, (3) a great amount of information about practically anything, (4) a greater ease in interacting and placing and receiving orders, and (5) an ability to compare notes on products and services.Page: 11 Level of difficulty: Hard

134. The marketplace isn’t what it used to be. List and briefly discuss what new behaviors, new opportunities, and new challenges await the marketer in the twenty-first century.

Suggested Answer: Responses to this question should include: (1) changing technology, (2) globalization, (3) deregulation, (4) privatization, (5) customer empowerment, (6) customization, (7) heightened competition, (8) industry convergence, (9) retail transformation, and (10) disintermediation.Pages: 13–15 Level of difficulty: Hard

135. Discuss the concept of disintermediation and provide an example.

Suggested Answer: Disintermediation grew out of the rush to embrace the dot.coms and e-commerce. Essentially, the dot.coms removed many of the traditional intermediaries that brought goods and services to consumers by encouraging consumers to deal directly with the dot.coms via the Internet. “Brick-and-click” businesses eventually brought some of the intermediaries back through a process called reintermediation.Page: 15 Level of difficulty: Medium

136. Discuss the demand states for bifocal contact lenses.

Suggested Answer: Student answers may vary but a possible answer includes the following: (1) negative demand—many people don’t want to admit they need bifocals, (2) nonexistent demand—when bifocal lenses were first introduced, people didn’t know they existed, (3) latent demand—before they were introduced, many people thought such a product would be nice, but didn’t think it would ever exist, (4) declining demand—this will occur when something better is invented, such as surgery to repair the eyes, (5) irregular demand—the consumer perceives a need for eye care devices only periodically, possibly when they begin having

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trouble seeing, (6) full demand—the manufacturers of the lenses are making all they possibly can, (7) overfull demand—the manufacturers of the lenses can’t make enough and inventories are low, and (8) unwholesome demand—seeking alternatives, consumers may find that alternatives have undesirable social consequences.Page: 10 Level of difficulty: Hard

137. New terms are now being used to describe where marketing is done. Using the automobile market, describe automotive buying behavior for a: (1) marketplace, (2) marketspace, and (3) metamarket.

Suggested Answer: Responses to this question should include a reference to the following: (1) marketplace—shopping for an automobile at a dealer’s lot, (2) marketspace—shopping for an automobile via the Internet, eBay, or even designing your own car via a manufacturer’s Web site, and (3) metamarket—(a cluster of complementary products and services that are closely related in the customer’s mind but are spread across a diverse set of industries) that might include insurance companies, the racing industry, the travel industry, the customization industry, et cetera. Individual answers might vary.Page: 12 Level of difficulty: Medium

138. Arthur Jones has decided to build his manufacturing business (lawn mowers) around the production concept. If this approach is taken, what will be Mr. Jones’ primary areas of concentration as he builds his business?

Suggested Answer: This orientation holds that consumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on high production efficiency, low costs, and mass distribution. This approach is also used when a company wants to expand the market. Students may use these facts as they design their answer. Page: 15 Level of difficulty: Medium

139. Illustrate the differences between a reactive market orientation and a proactive marketing orientation. Use two companies from the tennis shoe industry to exemplify the differences between the concepts.

Suggested Answer: In a reactive market orientation a company such as Reebok might be content to keep up with understanding and meeting customers’ expressed needs. Paul Fireman might say, “We always give the customers value for their money.” In a proactive market orientation a company like Nike might prefer to make a practice of researching and imagining latent needs through a “probe-and-learn” process. Students’ answers may vary but the basic concepts of reaction and proactivity should be clear in answers. Page: 16 Level of difficulty: Medium

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140. The Internet has given today’s companies a new set of capabilities. Among those capabilities is the ability to operate a new information channel. Describe how information can be used by the marketer in this new channel.

Suggested Answer: Companies can operate a powerful new information and sales channel, the Internet, with augmented geographical reach to inform and promote their businesses and products worldwide. By establishing one or more Web sites, a company can list its products and services, its history, its business philosophy, its job opportunities, and other information of interest to visitors. For additional information, see chapter section. Page: 16 Level of difficulty: Medium

141. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. What would be the parts of a marketing network for motorcycle company such as Harley-Davidson?

Suggested Answer: A marketing network consists of the company and its supporting stakeholders. These stakeholders (in Harley-Davidson’s case) might be customers, employees, suppliers, distributors, retailers, repair services, ad agencies, lobby groups, and motorcycle support clubs. The operating principle is simple: Build an effective network of relationships with key stakeholders, and profits will follow. Page: 18 Level of difficulty: Medium

142. Linda Evans has been given the task of developing a portion of her company’s marketing mix. Specifically, Ms. Evans has been given the responsibility for auditing all of the product area’s various components. List all the areas that will most likely be included in such an audit.

Suggested Answer: Areas that will most likely be part of Ms. Evans’s audit are product variety, quality, design, features, brand names, packaging, sizes, services, warranties, and returns. To see a more complete diagram of the four P process see Figure 1.4. Page: 19 Level of difficulty: Medium

143. It has been suggested that the seller’s four Ps correspond to the customer’s four Cs. List and match the four Ps to the four Cs.

Suggested Answer: The four Ps (product, price, place, and promotion) match to the four Cs (customer solution, customer cost, convenience, and communication). Page: 19 Level of difficulty: Medium

144. According to information provided in the chapter, McDonald’s has been involved in a variety of corporate social initiatives. Please give an example of how McDonald’s might initiate cause-related marketing. In your answer be sure to define what cause-related marketing is.

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Suggested Answer: Cause-related marketing is donating a percentage of revenues to a specific cause based on revenue occurring during the announced period of support. The example used in the chapter noted McDonald’s earmarking of $1 for Ronald McDonald Children’s Charities from the sale of every Big Mac and pizza sold on McHappy Day. Students may create additional examples but each should meet the parameters set above. Page: 22 Level of difficulty: Medium

145. You have been given the assignment of justifying cause-related marketing to your board of directors. What would be your primary argument in favor of such a proposal?

Suggested Answer: Companies see cause-related marketing as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe customers will increasingly look for signs of good corporate citizenship that go beyond supplying rational and emotional benefits. Page: 23 Level of difficulty: Hard

146. Consumers often have many needs that are not readily obvious. Just observing their behavior inside a retail store is not enough to get a true feel for their “needs.” List and briefly describe the five types of needs that most consumers have.

Suggested Answer: The various consumer needs are: (1) stated needs—what the consumer says he or she wants—a car, (2) real needs—the customer wants a car whose operating costs, not its initial price, is low, (3) unstated needs—the customer expects good service and honesty from the dealer, (4) delight needs—the customer would like a DVD player set-up thrown in to guarantee a quick signing of the purchase agreement, and (5) secret needs—inner fantasies such as gaining prestige with members of the opposite sex or friends. Page: 24 Level of difficulty: Hard

147. Wal-Mart knows that to reach its target markets three kinds of marketing channels may be used. What are these three marketing channels and how might Wal-Mart use each of them?

Suggested Answer: The three marketing channels are communication, distribution, and service channels. Wal-Mart could use advertising to communicate price specials to consumers (communication channel), use wholesalers to assemble merchandise assortments to be sold in the Wal-Mart stores (distribution channels), and use transportation companies (service channels) to extend Wal-Mart’s global reach. Page: 26 Level of difficulty: Hard

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148. Assume that you have been given the task of assisting a company in designing its marketing planning process. What components should be in such a process? Be specific in your answer.

Suggested Answer: The marketing planning process consists of analyzing marketing opportunities, selecting target markets, designing strategies, developing marketing programs, and managing the marketing effort. Students might also review Figure 1.6 for additional information. Page: 27 Level of difficulty: Hard

149. If you were a businessperson who was seeking an expansion opportunity abroad and a colleague suggested that you should be “GLOCAL” in your orientation toward the opportunity, what would the colleague have meant by the term “GLOCAL” and why would you want to consider the suggestion?

Suggested Answer: Today, firms are being encouraged to be “GLOCAL” rather than just local or global (GLOCAL means global and local) in their orientation to expansion abroad. Firms are adopting a combination of centralization and decentralization to better balance local adaptation and global standardization. The goal is to encourage more initiative and “interpreneurship” at the local level, while preserving the necessary global guidelines and standards. Page: 28 Level of difficulty: Medium

150. Your firm is in the process of moving from focusing on a financial scorecard as the basis for running and evaluating your organization to a marketing scorecard approach. What is a marketing scorecard approach and what might be some of its components?

Suggested Answer: Top management is going beyond sales revenue alone to examine the marketing scorecard. Today, the shift to the marketing scorecard attempts to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. Managers know changes in marketing indicators predict changes in financial results. Page: 29 Level of difficulty: Hard

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