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3023 MIDTERM MAR 2 SPRING 2009 1. Prada is a high end purse manufacturer. The company noticed a recent decline in sales and gathered a team of marketers to find out how to increase their business. The marketers decided to try to appeal to men for the first time, so they created and advertised a new "Murse" (short for Man Purse"). Prada modified one of its current designs to make it more appealing for men by adding more rugged straps and special pockets to resemble a tool belt. With the help of marketing, men carrying the Prada Murse became perceived as "real men" who were tough and macho. What techniques did the marketers implement to extend Prada's brand life cycle? A. They engaged in product modification and market development. They pursued market penetration by appealing to male customers. B. They engaged in product modification and product repositioning. They pursued market penetration by discouraging female customers from buying their products. C. They engaged in product modification and product repositioning. The pursued market development by appealing to male customers. D. They engaged in product modification and product repositioning. They pursued market penetration by appealing to male customers. E. They engaged in product modification and category repositioning. They pursued market development by discouraging female customers from buying their products. 2. Kroger required that Birdseye pay $15,000 to get its new frozen stir-fry vegetable mix placed in the freezers of Kroger supermarkets. This payment is an example of a: A. Product support fee B. Retail goodwill fee C. Product development fee D. Bribe E. Slotting fee 3. The brochure for Spa Sydell has photographs of people enjoying the various spa amenities. By seeing the pictures of what is available at the spa, a customer has a better idea of what she is buying. Spa Sydell uses a brochure to help customers deal with the __________ that is associated with all services. A. Inconsistency B. Incongruity C. Inseparability D. Inventory costs E. Intangibility 4. Molly went to Disneyland for her birthday. On her way, the airlines lost Molly's luggage. When she arrived at the Disney Resort she asked the concierge, Nate, to notify her when the airline arrived with her lost luggage. Much to her surprise, Nate went one step further and gave Molly 100 "Disney Dollars" to purchase whatever she needed until her luggage arrived. Which type of service did Nate provide? A. Potential B. Core C. Augmented D. Expected E. Over the Top 5. The __________ is the unique identification number that defines an item for ordering or inventory purposes. A. B. C. D. E. Order quantity code Independent stock code Distinct stock size Stock keeping unit Universal product code 6. When a product reaches the decline stage of the product life cycle, a firm has two choices. One choice involves product deletion, where a product is dropped from a firm's product line. Another less drastic choice is to retain the product in the product line, but to reduce marketing costs. When this option, called __________ , is selected, advertising expenditures for the product are drastically reduced and salespeople do not devote their efforts to selling the product. A. Harvesting B. Diversification C. Divestment D. Decline maintenance E. Maturity re-development 7. Gatorade wants to check how well their new energy drink, "Super Tebow Charge" is doing in the Tallahassee market. After extensive research, they find that the BDI and CDI of the Tallahassee territory are 10 and 120, respectively. What should Gatorade do? A. There is no demand for energy drinks in that territory. Gatorade should take their product out of the Tallahassee market, but continue to sell their product in territories where energy drinks are popular. B. Take their product off the U.S. market. There are too many energy competitors and no demand for their product. C. Research the territory and their competitors in the energy drink category. They may find a way to change their marketing approach to capture more customers in the Tallahassee territory. D. Nothing should be done. The category and brand are successful. E. Continue to invest in their product in the Tallahassee territory. The category growth is limited but Tallahassee customers are buying unexpectedly large amounts of their brand. 8. Western Airlines operates five flights daily between Chicago and Phoenix during the winter. One flight leaves Phoenix at 12:10 PM. The plane, a Boeing 737, has a capacity of 120 passengers. Sometimes the plane is completely full; other times, it is nearly empty. During the past month, the flight has averaged only 24 passengers, a load factor of 20 percent. Once the plane takes off, the other 96 seats are of no value to the airline for that flight. What unique aspect of services does this situation describe? A. Intangibility B. Inconsistency C. Incongruity D. Idle production capacity E. Inseparability 9. Chris has heard great things about On the Border restaurant, so he decided to go to dinner there one night. His friends told him how delicious their tacos and burritos were and said the service is always great due to the restaurant's server training program. Chris has really high expectations when he enters the restaurant and he chooses a great meal off the extensive menu. When his food finally arrives, 45 minutes later, the waiter merely grunts and drops it at his table. Luckily, Chris still enjoyed his food, but he was very disappointed in the waiter's service. Which gap in the extended gap model of service was the greatest source of the poor service Chris received? A. Communications Gap B. Delivery Gap C. Service Gap D. Knowledge Gap E. Standards Gap 10. Hot Shots Sports specializes in producing equipment, accessories, and clothes that are necessary for golfing. They have had such success that they are thinking about expanding their business into the tennis sector. They plan on producing all the items necessary for playing tennis. They will brand their new product Hot Shots as well, in order to transfer their name recognition and great brand equity. This is an example of: A. Category extension B. Line extension C. Multiple branding D. Licensing E. Product bundling 11. An extremely large machine for producing sheet metal from steel ingots would be classified as which type of support good that a manufacturer would purchase? A. Production good B. Services C. Raw material D. Installation E. Supplies 12. Dove decides to market a special Valentine's Day assortment of chocolates. When designing the packaging, Dove creates a heart-shaped box on which they clearly indicate which types of chocolates are inside as well as the nutrition information for each. However, when customers open the box, many of the chocolates are broken and in pieces. Obviously Dove spent too much time on _____ and should have focused more on _____ when they designed the package. A. Fitting channel needs; Innovation B. Innovation; Fitting channel needs C. Communication; Containing and protecting D. Containing and protecting; Innovation E. Communication; Facilitation of use 13. Target did a study of its customers and separated them into categories based upon their loyalty. Examine the following data carefully: Shop Target 90% of time 6.3 162.38 8.6 xxx Shop Target 50% of time 4.2 140.38 5.5 xxx Shop Target 10% of time 2.3 128.38 3.2 xxx Visits/Month $$ per visit Average Life (years) Customer Lifetime Value (CLTV) Based on the chart above, what is the difference in customer lifetime value between a 90% loyal customer and a 10% loyal customer? A. B. C. D. E. $94,234.46 $3442.78 $38,913.33 $7852.87 $25,574.81 14. Mary walks into her local supermarket, Bobby's, and is deciding which brand of spaghetti to buy for dinner tonight. She sees one brand that is familiar to her from a TV ad, while another box simply says "Bobby's Spaghetti" on it. Mary is very loyal to Bobby's and gets all her groceries there. Also, Mary is on a budget and sees that the Bobby's box is less expensive. Mary decides that she is going to buy the Bobby's Spaghetti for dinner. Which kind of brand is Mary choosing? A. Family brand B. National brand C. Generic brand D. Private label brand E. Local brand 15. Walter, an avid disco dancer, has heard about a new DVD that demonstrates all the classic dance moves of the 1970's. All he knows is the name of the DVD, Saturday Night Lights, but he is very intrigued to learn more about it. It may be just what he needs to take his skills to the next level! What process is Walter engaged in? A. new product adoption process B. new product diffusion process C. product form life cycle D. prototype testing process E. trial and evaluation process 16. Mattel has contractually agreed to let Colgate use the Barbie name and image on kids' toothpaste and toothbrushes. Colgate pays Mattel a fee for the use of the Barbie name and image. This is an example of A. Reseller branding B. Mixed branding C. Manufacturer branding D. Brand licensing E. Generic branding 17. Mitchell owns a local bakery, the Bread Shack, that is renowned for its coffee. He has many different customers that come in each day, but his sales fluctuate. To avoid this he decides he needs to create more loyal customers, so he begins a rewards card program. Every B-Shack card member will get their 10th cup of coffee free, a free croissant once a month, an email newsletter from B-Shack, and premade daily coffee so that they don't have to waste time ordering. What is the combination of benefits that are offered by the Bread Shack? A. One hard benefit, three soft benefits B. Two hard benefits, two soft benefits C. Three financial benefits, one soft benefit D. Two financial benefits, two service benefits E. One financial benefit, three service benefits 18. Blackberry recently introduced the Storm, a touch screen phone that competes directly with the iPhone. To stay ahead of the competition, iPhone began to air commercials that emphasized how easy it is to synch your music onto the phone, as well as all the applications that can be downloaded to the phone. However, iPhone ads do not mention the limited warranty on the phone, how to download (a multi-step process) or the cost of these applications. Apple is purposely avoiding mentioning which factors that negatively influence the rate of diffusion? A. Communicability and Compatability B. Relative advantage and Communicability C. Complexity and Risk D. Relative advantage and Complexity E. Compatibility and Risk 19. The strategy of trading down involves: A. Seeking a less price sensitive target market B. Adding product features and using lower quality product materials C. Adding product features and using higher quality product materials D. Reducing the number of features, quality or price of a product E. Reducing product features and using higher quality product materials 20. A small number of people from different departments in an organization who are mutually accountable to a common set of performance goals in new product development are called a(n): A. Interdepartmental autocracy B. Cross-functional team C. Corporate bureaucracy D. Executive committee E. External committee 21. Starbucks just introduced a new website called MyStarbucksIdea.com. On this website, loyal Starbucks' customers are encouraged to share, vote on, and discuss new ideas they want to see implemented by Starbucks both online and in their stores. There are separate forums dedicated to products, the brand experience, and volunteering. This website is an example of trying to foster: A. a brand community B. a consumer-brand relationship C. features vs. benefits D. product positioning E. a brand association 22. Marissa just estimated that her new product will generate sales revenue of $1 million dollars in the first year and incur production costs of $500,000. Marissa has just completed the _____ stage of the new product planning cycle and should next enter the _____ stage. A. Business Analysis, Screening and Evaluation B. Business Analysis, Marketing Testing C. Market Testing, Commercialization D. Business Analysis, Prototype Development E. Idea Generation, Screening and Evaluation 23. A customer contact audit is: A. A method of consumer evaluation of service quality and consistency B. An estimation of demand based on service forecasting techniques C. The effort to know customers and their needs D. A flowchart of the points of interaction between a consumer and a service provider E. The initial contact between a service provider and the ultimate consumer 24. The Digital Video Recorder (DVR) is a product that can record television programs. At first, TiVo was the only company to manufacture the DVR. Currently, regional cable companies and satellite providers are entering into the DVR market and now offer their own DVRs for recording television programs. Based on this information, DVRs are most likely in the _____ phase of the Product Life Cycle. A. Growth B. Expansion C. Maturity D. Competitive E. Introduction 25. Phil Anthropy owns a company that gives all of its profits to charities. The company produces three flavors of popcorn, six salsa types, and 14 different salad dressings under the Phil Anthropy brand name. Each set of similar products (i.e., the popcorns, salsas, and salad dressings) is termed a: A. Stock keeping unit B. Product line C. Product constellation D. Product item E. Product mix 26. Natalie loves Jennifer Aniston's style. She attempts to imitate it as much as possible by buying similar clothes and accessories. On her recent trip to New York, Natalie found out where Jennifer Aniston gets her hair cut. Although Natalie is a poor college student, she decides to splurge and get the expensive hair cut. She asks for the same hair style as Jennifer Aniston had in the third season of Friends. The stylist assured her that she had cut others' hair in that style many time previously. However, Natalie was disappointed to find that her hair looked nothing like she expected at the end of the hair cut. Natalie was victimized by one of the main characteristics of services: A. Intangibility B. Irregularity C. Inconsistency D. Inseparability E. (Not in) Inventory 27. Dr. Denslow likes to go running on the weekends. He needed new running shoes, so he went to Sports Authority to check out his options. After trying on every shoe in the store, Dr. Denslow chose to buy a pair of Nikes with extra cushioning. The cushioning will help absorb the shock to his joints. Dr. Denslow could have gotten a pair of Reeboks with the same cushioning, but he prefers the athletic brand image that Nike conveys. In this scenario, the cushioning is a _____, and shock absorption is a _____. A. B. C. D. E. Product form, Product feature Benefit, Feature Feature, Benefit Feature, Feature Benefit, Benefit 28. No More Cats! is a nonprofit organization that catches wild or stray cats, neuters them, vaccinates them, and releases them back into the wild. The personnel of No More Cats! are caring people who love animals and try to do what they can to meet the needs of each cat they care for. The caring nature of the personnel relates to which service quality dimension? A. Empathy B. Reliability C. Tangibles D. Assurance E. Credibility FIGURE 11-3 29. The product life cycle (PLC) shown in "D" in Figure 11-3 is an example of a __________ PLC. A. Introductory B. Fad product C. Fashion product D. Low-learning product E. High-learning product 30. Sally and her friend Jenny are driving to school. Sally offers to stop at McDonald's to get coffee. Jenny declines, saying "Only Starbucks coffee can wake me up in the morning." From an article she read online, Sally knows that both coffees have the same amount of caffeine in them. Jenny's opinion is most likely influenced by Starbucks': A. Brand Awareness B. Brand Equity C. Brand Name D. Trademark E. Brand Strategy 31. Britney and Paris have been selling a new hi-tech ladies' razor that has a target market of 100 million consumers nationally. They did some research and discovered the national category sales for ladies' razors are $400 million and that their national brand sales are $80 million. They want to know which territory of South Dakota, California, Florida, New York, and Pennsylvania offers the best potential for expanding sales of the brand, so they gather information from the different states and create the following table: TERRITORY CATEGORY SALES # CONSUMERS BRAND SALES South Dakota $10M 2M $2M California $37M 10M $9M Florida $21M 7M $8M New York $35M 10M A. B. C. D. E. 143 138 113 78 125 32. Honey's, a restaurant located in Boca Raton, offers a variety of foods and entertainment opportunities to its customers. The restaurant is famous for fine steaks, spicy chili, exceptional and outstanding customer service. In order to maintain the restaurant's reputation for putting the needs of the customer first, the marketing manager at Honey's has developed marketing activities that are directed at the waiters and waitresses. These marketing activities are an example of __________ and are designed to help the restaurant employees to develop a customer service orientation. A. Marketing development B. Internal marketing C. Product development D. Service marketing E. Employee development 33. Jim is a manufacturer of handheld radios. While conducting market research, he discovers that many of his consumers are avid professional golf fans. Therefore, Jim decides to start manufacturing radios with antennas that look like golf clubs to appeal to this market. What type of innovation is Jim's new golf club antenna radio? A. B. C. D. E. dynamic innovation continuous innovation dynamically discontinuous innovation dynamically continuous innovation discontinuous innovation 34. Paul picks up a DiGiorno frozen pizza at the grocery store and pops it in the oven when he gets home. When his roommate Tracy arrives a little later, she has a Pizza Hut takeout pizza with her. On the experience continuum discussed in class, Paul's pizza is a(n) _____ , while Tracy's is a(n): A. experience, service B. product, experience C. good, good D. good, service E. commodity, good 35. Jami found a dress at J Crew that she just had to have, but they didn't have it in her size. She decided to go home and order the dress at JCrewOnline instead. During the checkout process Jami checked the box to receive emails from J Crew. Now she is annoyed that she gets an email every week from J Crew. What form of marketing is J Crew utilizing? A. Personal selling B. Permission marketing C. Direct mail D. Ambush marketing E. Spamming 36. Which of the following statements describes a role personal selling plays in an organization's marketing effort? A. Salespeople play a dominant role in implementing an organization's push strategy B. Salespeople are the critical link between organizations and government regulators C. Salespeople generate customer complaints. D. Salespeople are most effective when they speak quickly. E. Salespeople monitor investments in R&D and production facilities 37. Rachel likes to go shopping whenever she has the free time. Her favorite items to shop for include shoes and jewelry. Rachel tries to stretch her money by never buying an item at full price; she believes that it is always possible to find a sale, rebate or coupon for almost anything. Which of the following reasons for the shift away from advertising and toward sales promotion does Rachel demonstrate? A. Short-Term Focus B. Growing Retailer Power C. Accountability D. Brand Proliferation E. Increased Promotion Sensitivity 38. Please read the following short excerpt from an article in AdAge.com. "Will Text Rumor Scare Off Walmart Customers?" March 19, 2009 BATAVIA, Ohio -- A text-messaging hoax that apparently began making the rounds yesterday in at least 16 states warns women to stay away from Walmart stores or risk being killed. The outbreak appears to riff off an urban myth that dates back to a 2005 e-mail scare that originated in Memphis, Tenn., according to About.com. But it comes in a particularly inopportune time and medium for Walmart, which is gearing up for parties at more than 2,400 U.S. stores at midnight on March 21 to back the release of a "Twilight" DVD and related merchandise. The events, which include giveaways to the first 50 customers through the door at each store after midnight and have been widely promoted via digital and social media, are expected to attract thousands of texting-intensive girls in the movie's tween and teen target, as well as their moms. Already the "Twilight" DVD has been the most preordered in the history of Walmart.com. A spokesman Walmart declined to comment on whether the texts might be a coordinated effort at sabotage but said in a statement: "The safety and security of our customers and associates is our top priority. We are aware of the message being circulated and are working with local authorities to enhance our security efforts at our stores. While we take these types of situations seriously, we regard this as being only a rumor, much like similar rumors that have circulated via e-mail in previous years." From Walmart's perspective, what does this AdAge.com story represent? A. B. C. D. E. Publicity Public Relations Personal Selling Advertising Word-of-Mouth 39. Based on the hierarchy of effects table below for a Gator NIT t-shirt, what is the most appropriate promotional objective for the Gator T-Shirt Shoppe? A. B. C. D. E. Increase the actual number of buyers of the t-shirt Increase awareness of the t-shirt Increase knowledge about the t-shirt Increase intention to buy the t-shirt Increase liking of the t-shirt FIGURE 18-4 40. In Figure 18-4 line "B" shows that __________, an element of the promotion mix, is higher in importance in the purchase stage of the buying decision, as compared with its importance in the pre- and post-purchase stages. A. Sales promotion B. Advertising C. Public relations D. Personal selling E. Communication 41. Michael, the regional manager of Dunder Mifflin, is trying to evaluate his salesforce's performance. The table below shows the data for each employee during the month of December. Employee Jim 225 Dwight Pam Stanley Angela # Sales # Calls $ Actual Sales $ Sales Goals 297 11,446 15,000 175 246 10,732 13,000 85 119 6,550 8,000 130 212 7,094 9,000 354 481 13,365 18,000 Suppose Michael chooses to evaluate his employees' performance by how well they met their quota. In this case, which of the above employees did the best? A. Angela B. Dwight C. Pam D. Stanley E. Jim 42. Ads for carbon dioxide detectors sometimes feature homeowners who discuss the dangers of carbon monoxide poisoning. The homeowners then go on to state how disaster can be averted by purchasing and using the advertised product. Such advertisements are using A. Fear appeals B. Family appeals C. Humorous appeals D. Sex appeals E. Coercive appeals 43. Chanel wants to showcase their upcoming summer line of perfumes in an advertisement. Their main goal is to get the most "bang for their buck" in terms of CPM. They have narrowed it down to two options, Vogue magazine or Elle magazine. Using the following information, in which magazine should Chanel purchase an ad and what will be its CPM? Vogue: Page cost: $350,000 Exposures: 1.5 million readers A. Vogue, CPM = $233 B. Vogue, CPM = $4,286 C. Elle, CPM = $5,000 D. Elle, CPM = $200 E. Elle, CPM = $15 Elle: page cost: $150,000 exposures: 750,000 readers 44. Which element of the promotional mix has the inherent weakness of high absolute costs and difficulty in receiving immediate audience feedback? A. Personal selling B. Advertising C. Sales promotion D. Publicity E. Direct marketing 45. Craftsman is working on promoting their line of power tools. They want to know how they compare to two of their competitors, DeWalt and Hitachi, and have constructed a multi-attribute model to accomplish this. (In all cases 1 = low and 10 = high, as discussed in class.) DeWalt 3 9 7 6 Craftsman 8 5 6 7 Hitachi 7 8 9 2 Importance 4 6 9 8 Price Quality Durability Size What would be the best strategy for Craftsman to pursue to improve its competitive position in the market? A. B. C. D. E. Increase Craftsman's rating on Durability Increase the importance of Quality Increase Craftsman's rating on Quality Increase Craftsman's rating on Size Increase the importance of Price 46. Michael Bolton is a producer working on a sequel to the 1990's cult classic movie Office Space. He decides that a funny addition to the movie would be to do a scene involving the famous Staples "easy button." He approaches the marketing team for Staples and says that if they run a Office Space themed commercial featuring the easy button in their next ad campaign, they will not have to pay a fee for Staples' inclusion in the movie. This product placement arrangement is called: A. Barter B. Ambush Marketing C. Viral Marketing D. Reciprocal E. Straight Fee 47. Katie saw an ad for Smirnoff Vodka in The Alligator yesterday. After looking at it closer, she thought she saw a picture of Tim Tebow in the ice in the glass. She showed a friend what she found, but when he looked at it he could not see Tim Tebow anywhere in the ad. Katie has seen a(n): A. ambiguous stimulus B. truly subliminal stimulus C. brand stimulus D. supraliminal stimulus E. embedded stimulus 48. Blackberry is using communications theory to analyze its current marketing strategy for its newest touch screen phone, the Hurricane. They created an advertising campaign to communicate that "the Blackberry helps you juggle all of the different aspects of your life." The TV commercials ran during prime time on ABC, NBC, and CBS, along with magazine ads that ran in Time and People. They also created a website where users could provide information to the company about what they liked and didn't like about the phone. In this scenario People, Time and the TV networks would be considered the: A. Channel of communication B. Message C. Feedback D. Source E. Method 49. Which type of salesperson would routinely be involved in an industrial straight rebuy situation? A. An order taker B. An outside order getter C. A missionary salesperson D. A sales engineer E. Any of the above 50. Lorelai lives in Stars Hollow, a small town in Connecticut. Lorelai is known and respected by just about everyone who lives in the town and, because she owns an inn, talks with many of the passersby. Luke, who owns the diner across the street, has described her as lovable, intelligent and friendly. Last month Lorelai received a free box of chocolates from Sweetness, a company that sells different types of chocolates. Lorelai offered this chocolate to her friends in the town and to her guests at the inn. Lorelai is a(n) _____ in Stars Hollow and is promoting Sweetness through a process called _____. A. Endorser; the two-step flow B. Spokesperson; guerilla marketing C. Opinion leader; the two-step flow D. Spokesperson; personal selling E. Opinion leader; personal selling 51. Lootzberg Diamonds, a company that specializes in the manufacturing of imitation diamonds, is about to start running a new sales promotion for summer 2009. They have decided to limit themselves to a variety of "pull" promotions. Which of the following is not one that Lootzberg will use? A. rebates B. co-op advertising C. coupons D. contests E. premiums 52. For the new Fast and Furious movie, the writers wanted to include a scene where instead of driving actual cars, Paul Walker and Vin Diesel just end up playing Gran Turismo 5 on a Playstation 3. To prepare for this scene, the movie producers requested that Sony give them 10 PS3s and 10 copies of the videogame to be featured in the movie. By providing the consoles and games to the movie studio, Sony has engaged in which type of product placement? A. Advergaming B. Reciprocal C. Barter D. Straight Fee E. Cross-Marketing 53. The first decision in developing the promotion program is to A. Set the budget B. State the mission C. Select the media D. Select the appeal E. Identify the target audience 54. After completing an 18-week sales training program, Joshua was told, "You will be paid 4 percent on net dollar volume up to $10 million. Sales in excess of $10 million command a rate of 6 percent". The company Joshua works for is using a: A. Straight commission compensation plan B. Sales function compensation plan C. Sales response compensation plan D. Straight sales compensation plan E. Combination compensation plan 55. Because advertising is expensive, marketers want to be certain the advertisements they run communicate the intended message to the target audience. In order to accomplish this communication goal, marketers conduct __________ before advertisements are placed in a medium. A. Advertising matrix evaluations B. Alternative media searches C. Pretests D. Surveys E. Ad agency discussions 56. The key objective of a pioneering ad is to A. Reinforce previous knowledge B. Inform the target market C. Change the target market D. Identify the target market E. State the position of the advertiser on an issue 57. Eleanor is expanding her clothing business into a new region and needs to determine how many sales people she needs to hire to sell her new line of skirts. There are approximately 2,400 customers in the new region and Eleanor wants her sales people to meet with each customer twice a month. Each sales call lasts an average of 45 minutes and each sales person will have an average of 900 hours of selling time available per year. Based on the Workload Method, about how many sales people should Eleanor hire? A. 32 B. 29 C. 48 D. 4 E. 24 58. Gillette, a worldwide leader in the manufacturing of grooming products, is concerned about slumping sales of its indicator strip razor blades launched three years ago, so they use a television ad with a "talking razor." During the advertisement, the razor mentions that when the indicator strip on the razor blade turns white, it is time to replace it with a fresh blade. This television ad is which type of product advertising? A. Comparative B. Competitive C. Reminder D. Pioneering E. Reinforcement 59. __________ is defined as the percentage of households in a market that are tuned to a particular television show or radio station. A. Share B. Reception rate C. Target audience reach D. Rating E. Gross rating points 60. Kelsy is a freshman at the University of Florida and doesn't really know where she should buy her books. Driving around Gainesville, she sees a billboard for Orange and Blue Textbooks and considers buying her books there. While relaxing in her dorm, she sees a commercial for Gator Textbooks. Later, while walking on campus with her older sister, Melissa, Kelsy receives a flyer for Florida Bookstore. Melissa ignores the flyer and tells her sister that she should order her books online through EasyBookFind.com. Kelsy is most likely to buy her books from _____ because of the influence of _____. A. EasyBookFinder.com; word of mouth B. Gator Textbooks; publicity C. Florida Bookstore; sales promotion D. EasyBookFinder.com; personal selling E. Orange and Blue Textbooks; advertising and sales promotion 61. Jason has a job that requires a lot of personal selling. He is currently trying to build rapport with a potential customer by being friendly and making some small talk. However, as he does this, Jason is also asking questions and discovering his customer's needs. Which stage of the selling process is Jason currently engaged in? A. Adaptive Selling B. Preapproach C. Approach D. Presentation E. Prospecting 62. In the early stages of Gatorade's new "G" advertising campaign, there was some confusion as to what the commercials were advertising. Though Gatorade management was satisfied with the commercials, and the message was sent out successfully, viewers were having a hard time discerning the meaning of what the ads were about. Which Communications Theory process is leading to the confusion? A. Encoding B. Audience C. Decoding D. Message E. Feedback 63. Lauren has been hired to work on a new summer-themed campaign for Coca-Cola. She decides that an excellent way to help customers experience the joy of Coke during the summer is to rent a cruise ship, paint it Coke red, and create a special Coke-themed cruise. Cruise travelers will be able to win Coke gift baskets, play Coke games, get free Coke merchandise, and cool off in the Coke Polar Bear Lounge. The Coke Cruise is BEST described as an example of: A. Product Placement B. Sponsorship C. Public Relations D. Advergaming E. Event Marketing 64. Which of the following statements describes the major difference between a lead and a qualified prospect? A. Qualified prospects have not only the need or desire for your product, but they have the ability, eligibility, and authority to purchase it; leads are missing one or more of these B. Leads are more likely than qualified prospects to become customers C. During the sales presentation, leads are more likely to raise objections than qualified prospects D. There are far more qualified prospects than there are leads E. The only difference between a lead and a qualified prospect is that a qualified prospect has purchased your product in the past and a lead has not 65. Phil has a sincere passion for giving back to his community. He has recently decided to raise funds to donate to a local impoverished elementary school, so that they can purchase books for the after school children to read. Phil then went around his neighborhood asking for donations from his neighbors. After telling each person about his initiative, he first requested a $10 donation. If he received a $10 donation, he then asked for a $20 donation in hopes of raising even more money. This is an example of what type of "canned" format? A. Adaptive Selling B. Foot-In-The-Door C. Door-to-Door D. Ingratiation E. Door-In-The-Face 66. A box of dishwasher detergent shrink-wrapped with a bottle of Jet Dry that sells for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing. A. Standard mark-up B. Penetration C. Prestige D. Bundle E. Odd-even 67. Marginal cost is the A. Money or other consideration (including other goods and services) exchanged for the ownership or use of a good or service B. Sum of the expenses of the firm that do not vary directly with the quantity of product that is produced and sold C. Change in total cost that results from producing and marketing one additional unit of product D. Total expense incurred by a firm in producing and marketing a product or service E. Sum of the expenses of the firm that are stable and do not change with the quantity of product that is produced and sold 68. The ratio of __________ to price is called value. A. Value-added pricing B. Perceived costs C. Perceived revenue D. Perceived benefits E. Prestige value 69. Vera Wang, a wedding gown designer, decides that she no longer wants to sell her wedding gowns directly to bridal stores. She decides to use a distributor that charges a 10% markup. Assume that retailers like Solutions Bridal charge $4,000 for a Vera Wang gown and they use a 20% markup. What should Vera Wang's price to the distributor be? A. $3450 B. $2800 C. $3077 D. $2880 E. $3030 70. Florida Power & Light, an electric power company, is the only source of electricity for consumers in most parts of the Florida panhandle. As a(n) __________, the company receives approval from the state utility commission for the rates it can charge. A. Oligopoly B. Pure monopoly C. Monopolistic competitor D. Competitor in a pure competition E. Free enterprise firm 71. The practice of exchanging goods and services for other goods and services rather than for money is called A. Value-pricing B. Pricing substitution C. Barter D. Debt restructuring E. Pricing 72. Mickey and Minnie are trying to figure out ticket prices for entry into the Magic Kingdom. Their fixed costs include a $4,000 fireworks display, $14,000 for running rides, and $10,000 for Goofy's and Donald's salaries. Their unit variable cost is $50. The capacity of the park is 4,000 people. What is the breakeven price they should charge if the park is at peak capacity? A. $74.00 B. $57.00 C. $7.00 D. $50.00 E. $7.01 73. After an unsuccessful attempt at stealing back his Heisman Trophy, O.J. Simpson decides he's going to clean up his act and try to get it back legitimately. He notices that his trophy is up for auction on eBay, so he bids against several other people interested in owning his Heisman. By engaging in this bidding war, O.J. is involved in: A. Participative Pricing B. Value-Based Pricing C. Reverse Auction Pricing D. Administered Pricing E. Predator Pricing 74. Uniform delivered pricing means A. Title of goods passes to the buyer when the state boundary is crossed B. Title of goods remains with the manufacturer until sold to the ultimate consumer C. Title of the goods passes to the buyer at the point of shipment D. The seller does not charge the buyer for freight costs E. The price the seller sets includes all transportation costs 75. The Swedish company Asko that prides itself on manufacturing and marketing some of the best-built and most expensive appliances in the world is using which competition-based method of pricing? A. Above-market pricing B. Bait-and-switch pricing C. Bundle pricing D. Customary pricing E. Loss-leader pricing 76. Timmy has recently invested in a new Power-Blaster painting machine for his company, Power Painters, bringing his total investment to $100,000. He has calculated that his total fixed costs equal $100,000 and his unit variable cost equals $40. His target ROI is 40% annually. Power Painters paints 200 equally-sized residential homes a year. What price should Timmy charge to paint a home to achieve his target return on investment? A. $440 B. $740 C. $400 D. $1,000 E. $700 77. The Brazilian government wants to build a global satellite transmission system. The manufacturer will receive $500,000 above actual development costs, whatever those costs may be. The manufacturer of the satellite transmission system is using A. Standard markup pricing B. Cost-plus fixed-fee pricing C. Bundle pricing D. Experience curve pricing E. Cost-plus percentage-of-cost pricing 78. Skimming pricing is a strategy that introduces a new or innovative product by A. Setting a high initial price B. Setting a low initial price C. Determining if the product is supply inelastic D. Creating a product image that appeals to fiscally-conservative consumers E. Setting the price 10 percent below its nearest competitor FIGURE 13-7 79. Figure13-7 shows that, to maximize total revenue, Newsweek should price its magazine at A. $1.00 B. $2.00 C. $.50 D. $1.50 E. $2.50 80. After the Gators win yet another football national championship, the Florida Bookstore lays in a big supply of #15 Gator jerseys since the demand is so high. They decide to mark up the jerseys by 20%, and the cost of goods is $50 on every unit sold. What price should the Florida Bookstore charge for a #15 Gator jersey? A. $70.00 B. $56.25 C. $250.00 D. $62.50 E. $60.00 81. Adam is the pricing manager at Nike and wants to set the price of Nike shoes comparable to Reebok's. The chart below shows the attributes of shoes that customers consider and their importance. Using the critical strategic pricing ratio and knowing that Reebok sets its shoe price at $40.00, what is the parity price for Nike? Brand Ratings Reebok Nike Traction 6 7 Support 8 6 Durability 7 9 Attractive 6 8 A. B. C. D. E. $36.00 $43.40 $36.87 $44.44 $40.00 Importance 8 9 8 6 82. Mary Catherine is opening a new smoothie store and has decided to use target profit pricing with a profit goal of $5,000. Her total fixed cost is $15,000 and her unit variable cost is $3. If she plans to sell 10,000 smoothies, what price should Mary Catherine charge? A. $3.00 B. $5.00 C. $2.50 D. $2.00 E. $50.00 Spring 09 Midterm 2 Key 1. (p. L55) C 2. (p. 273) E 3. (p. 309) E 4. (p. L66) C 5. (p. 255) D 6. (p. 285) A 7. (p. L55) C 8. (p. 311) D 9. (p. L68) B 10. (p. L58) A 11. (p. 257) D 12. (p. L58) C 13. (p. L68) A 14. (p. L57) D 15. (p. L62) A 16. (p. 294) D 17. (p. L69) B 18. (p. L63) C 19. (p. 291) D 20. (p. 267) B 21. (p. L59) A 22. (p. L62) D 23. (p. 316) D 24. (p. T282) A 25. (p. 255) B 26. (p. T310) C 27. (p. L51) C 28. (p. 316; Fig. 12-6) A 29. (p. 285; Fig. 11-3) B 30. (p. T293) B 31. (p. L55-56) E 32. (p. 318) B 33. (p. T259-260) B 34. (p. L70) D 35. (p. L71) B 36. (p. 523) A 37. (p. L81) E 38. (p. T468) A 39. (p. L74) D 40. (p. 473) A 41. (p. L87) B 42. (p. 495) A 43. (p. L80) D 44. (p. 467; Fig. 18-2) B 45. (p. L75) A 46. (p. L71) D 47. (p. L79) A 48. (p. T464, Fig. 18-1) A 49. (p. 524) A 50. (p. L76) C 51. (p. L81) B 52. (p. L71) C 53. (p. 475; Fig. 18-6) E 54. (p. 540) A 55. (p. 506) C 56. (p. 490) B 57. (p. L87) C 58. (p. T491) C 59. (p. 498) D 60. (p. L73) A 61. (p. T530) C 62. (p. L72) C 63. (p. L71) E 64. (p. 528) A 65. (p. L85) B 66. (p. 359) D 67. (p. 345; Fig. 13-8) C 68. (p. 332) D 69. (p. L108) D 70. (p. 338; Fig. 13-4) B 71. (p. 331) C 72. (p. L103) B 73. (p. L101) A 74. (p. 372) E 75. (p. 364) A 76. (p. L105-106) B 77. (p. 360) B 78. (p. 356) A 79. (p. 342; Fig. 13 7) D 80. (p. L104) D 81. (p. L109-110) B 82. (p. L105) B ... View Full Document

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