CHAPTER 8
TURNING MARKETING INFORMATION INTO ACTION
MULTIPLE CHOICE QUESTIONS
8-1 CHAPTER OPENING EXAMPLE: TEST SCREENINGS CONCEPTUAL
Field of Dreams, Honey, I Shrunk the Kids and Pretty Woman were all movies that:
a. had no marketing research done before they were released.
b. contained no product placement advertising.
c. used subliminal advertising.
d. were based on novels.
e. had modifications made after marketing research was conducted on them.
Answer: e Page: 205
Rationale: Shoeless Joe, Teenie Weenies and 3000 were the original titles. However, these
titles confused audiences and were changed after marketing research.
8-2 CHAPTER OPENING EXAMPLE: TEST SCREENINGS CONCEPTUAL
Because the first two weeks of attendance after a movie's release often determines its success or
failure, marketing research on titles and plots is:
a. typically not conducted with representatives from the movie's target audience.
b. often done but typically provides little useful information.
c. often produces conflicting information, which leads to more test screenings.
d. not as crucial to the movie's success as it has been in the past.
e. even more important today than it has been in the past.
Answer: e Page: 206
Rationale: Marketing research on movie titles and plots is more important than ever to get and
keep consumers' attention.
8-3 CHAPTER OPENING EXAMPLE: TEST SCREENINGS CONCEPTUAL
Pocahontas and Fatal Attraction have little else in common, but like virtually every major U.S.
movie produced today these movies:
a. were released before they were ever shown to any audience.
b. had multiple-tiered target audiences that developed after the movies were released.
c. had product spin-offs developed as a result of market research.
d. were modified after market research was conducted.
e. used computer simulations for the animated sections.
Answer: d Page: 206
Rationale: Pocahontas and Fatal Attraction have little else in common, but like virtually every
major U.S. movie produced today they used test screenings to modify film details to suit movie
goers' tastes.
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8-4 CHAPTER OPENING EXAMPLE: TEST SCREENINGS APPLICATION
In the most expensive movie making to date, New Line Cinema produced three Lord of the
Rings films, to be released for Christmas 2001, 2002, and 2003. The estimated cost before
production began was $270 million. Which of the following statements illustrates how New
Line minimized its risks?
a. The films are based on the trilogy Lord of the Rings, three books by J.R.R. Tolkien that
have been international best sellers, with a loyal following since publication in the 1950's.
b. New Line's official website has built anticipation by allowing viewers to see parts of the
film being made, including visual and sound effects that won it the New Media Site of the
Year 2001 award from PR Week.
c. All three films were shot at the same time in New Zealand, where the dramatic natural
scenery made recreating Middle-Earth less expensive, and the set and special effects
needed to be created only once rather than three times.
d. Paying the cast and film crew only once as well as other savings from filming all three
simultaneously made the movies come in at about half the budget for making three movies
separately.
e. All of the above statements illustrate how New Line minimized its risks.
Answer: e Page: 205-206
Rationale: New Line has attempted to reduce risk in many ways an internationally best-selling
work and keeping production costs down while creating the special effects needed to please
audiences and recreate Middle-earth. Its Web site has been an innovative way to get some
feedback so much as test screening the final films, but market research that has helped to fine
tune editing of the films and to position publicity as the release date approaches.
8-5 MARKETING RESEARCH DEFINITION
The process of defining a marketing problem and opportunity, systematically collecting and
analyzing information, and recommending actions to improve an organization's marketing
activities is called:
a. market decision analysis.
b. statistical analysis.
c. marketing research.
d. SWOT analysis.
e. concept testing.
Answer: c Page: 207 Other Locations: W
Rationale: Key term definition—marketing research
444
8-6 MARKETING RESEARCH APPLICATION
TheForce.net is a website that attracts more than 50,000 Star Wars movie fans daily. It is
wholly independent of Lucasfilm (the company responsible for the Star Wars movies), or any
other Lucas corporate entity for that matter, and it rivals Lucasfilm's official Star Wars site in
both scope and sophistication TheForce.net includes a chat room. Executives at Lucasfilm
describe the site as “an example of our core fan base expressing itself.” Lucasfilm should
consider using the website for:
a. advertising of other movies unrelated to Star Wars.
b. marketing research.
c. tactical support.
d. cross-tabulations.
e. social audits.
Answer: b Page: 207 Other Locations: W
Rationale: The website provides a great deal of marketing research information as to what Star
Wars fans like and more importantly don't like.
8-7 MARKETING RESEARCH DEFINITION
Attempting to identify and define both marketing problems and opportunities and to generate
and evaluate marketing action is the role _____ performs.
a. advertising
b. sales promotion
c. publicity
d. marketing research
e. tactical support
Answer: d Page: 207
Rationale: Key term definition—marketing research
8-8 MARKETING RESEARCH CONCEPTUAL
Concept test of plots, testing of marketing campaigns, sneak previews, and awareness tests are
all examples of:
a. marketing decision theory.
b. SWOT analysis.
c. marketing research techniques.
d. target audience identification.
e. survey of experts.
Answer: c Page: 207 Other Locations: SG
Rationale: These are all examples of marketing research methods used in the movie industry.
They are used to reduce uncertainty and to improve marketing decisions.
445
8-9 MARKETING RESEARCH APPLICATION
Grape-Nuts was one of the first cereals Post Cereal Company ever marketed. It scores well in
brand-awareness, but its sales have been steadily declining. Rather than assume the product was
a dog, the marketing manager for this cereal decided Post Cereal Company should first:
a. hire a consultant.
b. engage in marketing research.
c. spend more dollars on advertising.
d. hire more salespeople.
e. develop new cereals.
Answer: b Page: 207
Rationale: Post Cereals recognized a serious marketing problem existed—sales were declining.
However, it didn't know what the factors causing the decline. It needed more information to
learn the cause of the sales decline and how to reverse the trends.
8-10 MARKETING RESEARCH APPLICATION
The Book Promoters Association of Canada members recently questioned what could be done
to rejuvenate the Canadian book publishing industry. Some members claimed the problem was
Canadian retailers had been replaced by Wal-Marts. Others said the problem was with stodgy
promotions. Still others said the problem was caused by too little money being budgeted to fund
marketing programs. It was time that Canadian book publishers used _____ to save the
industry.
a. marketing decision theory
b. marketing research
c. tactical support
d. cross-tabulations
e. social audits
Answer: b Page: 207
Rationale: The Canadian publishers could use marketing research to identify and define both
marketing problems and opportunities and to generate and evaluate marketing action.
8-11 DECISION DEFINITION
A decision is:
a. a conscious choice to select the only possible alternative.
b. a conscious choice between one positive alternative and all other negative alternatives.
c. a conscious choice from among two or more alternatives.
d. an unconscious choice of the alternative which presents the least amount of risk.
e. an unconscious choice of the alternative which presents the greatest possible assurance of
success.
Answer: c Page: 208
Rationale: Key term definition—decision
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8-12 DECISION DEFINITION
A conscious choice made from among two or more alternatives is called a:
a. dilemma.
b. quandary.
c. decision.
d. paradox.
e. predicament.
Answer: c Page: 208
Rationale: Key term definition—decision
8-13 FIVE-STEP APPROACH TO MAKING DECISIONS CONCEPTUAL
Which of the following is NOT a step in the decision making (or problem solving) process?
a. Collect relevant information.
b. Identify market research methods.
c. Take marketing actions.
d. Develop the research plan.
e. Define the problem research.
Answer: b Page: 209
Rationale: The step omitted in the five-step approach to decision making described in Figure
8-2 is Step 4, which is develop findings and recommendations.
8-14 FIVE-STEP APPROACH TO DECISION-MAKING APPLICATION
Watch was a teen publication given out free to high school students, but the publication was
unable to deliver the response rates to coupons or sample offers that its advertisers expected.
After defining the problem, its publisher developed a research plan, gathered information from
teen focus groups, analyzed the findings, and replaced Watch magazine with Fuel for boys and
Verve for girls. How would a marketer describe the publisher's action?
a. Why fix something that is not broken? The magazine was still attracting some advertisers.
b. It made a big deal out of a small decline—a few copy changes would have been enough.
c. The approach it took was too complicated and costly to provide an effective solution to the
problem.
d. It took a systematic approach to analyzing the problem and responding to its advertisers'
concerns.
e. Its publisher is using an approach that works for corporations but will just waste time for the
small publishers
Answer: d Page: 209
Rationale: People who do not use some kind of system--many do not--make poor decisions.
The use of the five-step marketing research approach led to marketing actions that should help
the magazines' publisher's credibility with advertisers.
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8-15 DEFINE THE PROBLEM CONCEPTUAL
Impiric is an integrated marketing solutions company. Whenever a client comes to it wondering
why a product was not welcomed by its target audience or why customers have stopped buying
another product, Impiric always suggests the marketing research process begins with:
a. determining the target market.
b. deciding how much time and money the client is willing to spend.
c. defining the problem.
d. defining the alternatives and uncertainties.
e. developing and implementing the plan.
Answer: c Page: 208-209 Other Locations: SG
Rationale: Step one in the decision process discussed in the text is define the problem precisely:
state objectives, constraints, assumptions, and measures of success.
8-16 DEFINE THE PROBLEM APPLICATION
Several years ago, SwissAir made some unwise investments to pay for a planned expansion. As
a result, the company had to make some cost-cutting moves that alienated its customers.
Eventually the company declared bankruptcy, regrouped, and found itself able to resume
business. Its board of directors recently announced that the company would resume flying if it
could prove that the airlines could regain at least 75 percent of its lost customers. It decided to
allot $50,000 to determine the probability that its former customers would fly on the airline
again and what methods requiring little or no money could be used to increase that probability.
This represents which stage in the marketing research approach?
a. Step 1
b. Step 2
c. Step 3
d. Step 4
e. Step 5
Answer: a Page: 208-209
Rationale: Step one defines the problem precisely, sets the research objectives, and identifies
resulting marketing actions suggested by the research.
448
8-17 OBJECTIVES DEFINITION
Research objectives are the:
a. restrictions placed on potential solutions by the nature of the problem.
b. criteria or standards used in evaluating proposed solutions to the problem.
c. goals a decision maker seeks to achieve in solving a problem.
d. conjecture about factors or situations that simplify the problem enough to allow it to be
solved within the existing constraints.
e. specific goals an organization seeks to achieve and by which it can measure its
performance.
Answer: c Page: 209
Rationale: Alternative A is the definition of constraints. Alternative B is the definition of
measures of success. Alternative D is the definition of assumptions. Alternative E is the
definition of organizational goals.
8-18 OBJECTIVES DEFINITION
During the marketing research process, _____ are the goals the decision maker seeks to achieve
in solving a problem.
a. measures of success
b. objectives
c. marketing research plans
d. decisions
e. definitions
Answer: b Page: 209
Rationale: Key term definition—objectives
8-19 OBJECTIVES DEFINITION
What is the marketing research term for the goals the decision-maker seeks to achieve in solving
a problem?
a. risks
b. objectives
c. uncertainties
d. decisions
e. definitions
Answer: b Page: 209
Rationale: Key term definition—objectives
449
8-20 OBJECTIVES CONCEPTUAL
Several years ago, SwissAir made some unwise investments to pay for a planned expansion. As
a result, the company had to make some cost-cutting moves that alienated its customers.
Eventually the company declared bankruptcy, regrouped, and found itself able to resume
business. Its board of directors recently announced that the company would like to resume
flying. Before resuming flying, SwissAir needed to determine what percentage of its former
customers it could expect to return to the airline. If not enough former customers were willing
to use SwissAir again, the resumption of flights would not be profitable. The determination of
the percentage of returning patrons that would be needed to resume operation is an example of
a(n):
a. risk.
b. objective.
c. uncertainty.
d. decision.
e. definition.
Answer: b Page: 209
Rationale: Objectives are the goals the decision maker seeks to achieve in solving a problem.
In this case, the decision maker is trying to determine how many customers will return.
8-21 OBJECTIVES CONCEPTUAL
The memo written by the marketing manager to the vice-president of marketing research read,
“Determine the highest price we can charge for this model without losing current customers.”
This was most likely an example of a(n)
a. objective.
b. constraint.
c. assumption.
d. measure of success.
e. alternative.
Answer: a Page: 209 Other Locations: SG
Rationale: Objectives are the goals the decision-maker seeks to achieve in solving a problem.
In this case the decision-maker is trying to identify the best price.
8-22 OBJECTIVES APPLICATION
Which of the following is a typical marketing research objective?
a. Increase sales revenue and profit for Diet Coke by 20 percent in 2004.
b. Discover whether consumers that buy Pampers are aware of gender-specific disposables.
c. Find out why the new line of plus-size clothing is not selling well.
d. Determine whether to offer a new & improved version of an existing product.
e. All of the above are typical marketing objectives.
Answer: e Page: 209 Other Locations: W
Rationale: Objectives are specific, measurable goals the decision maker seeks to achieve in
solving a problem.
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8-23 MEASURES OF SUCCESS DEFINITION
Measures of success are:
a. the goals the decision-maker seeks to achieve in solving a problem.
b. criteria or standards used in evaluating proposed solutions to a problem.
c. approaches that can be used to collect data or solve the problem.
d. very difficult to quantify.
e. also called consumer differentiators.
Answer: b Page: 209 Other Locations: W
Rationale: Key term definition—measures of success
8-24 MEASURES OF SUCCESS APPLICATION
Which of the following statements represents a possible measure of success in problem
recognition stage of the marketing research process?
a. You have three weeks and $10,000 to determine if it is going to be profitable to serve
breakfast on weekdays or not.
b. If three year olds like this, then it stands to reason four-year olds will like it even more.
c. If observations show that children like Toy A more than Toy B in terms of hours spent
playing with it, then we will have identified that there is a problem with Toy B.
d. Let's identify the most cost effective method of advertising.
e. Use mail questionnaires, not focus groups.
Answer: c Page: 209
Rationale: Measures of success are criteria or standards used in evaluating proposed solutions
to the problem.
8-25 MEASURES OF SUCCESS APPLICATION
When Home Depot entered the Quebec market, two percent of the population was aware of the
retail chain. To determine how effective its advertising was in the first 18 months of its
presence in the Canadian province, it conducted awareness research for a second time. Prior to
conducting the research, it was decided that if at least 50 percent of the population were aware
of the Home Depot brand that it would continue its present advertising program. This is an
example of a:
a. objective.
b. constraint.
c. assumption.
d. measure of success.
e. barrier to entry .
Answer: d Page: 209
Rationale: Measures of success are criteria or standards used in evaluating proposed solutions
to the problem. The results of the survey showed that more 80 percent of the Quebecois had
become aware of Home Depot.
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8-26 MEASURES OF SUCCESS CONCEPTUAL
Before undertaking a study, many companies reduce the chance of later conflicts over data
interpretation by:
a. limiting the ultimate decision making to one person.
b. specifying a quantifiable measure of success and accompanying actions.
c. using a jury of executive opinion to interpret experimental data.
d. agreeing to take action only if the decision is unanimous.
e. using only internal secondary data.
Answer: b Page: 209
Rationale: By clearly and objectively defining the measure of success and accompanying
actions before the data are collected, a company can reduce the chance of argument after the
results are in, when opposing points of view about success or failure are likely to be emotional.
8-27 MEASURES OF SUCCESS DEFINITION
Effective decision makers specify _____, which are criteria or standards used in evaluating
proposed solutions to the problem being researched.
a. standards of accuracy
b. measures of success
c. measures of variability
d. limits of consideration
e. limits of probability
Answer: b Page: 209
Rationale: Key term definition—measures of success
8-28 DEVELOP THE RESEARCH PLAN DEFINITION
After defining problem, the next step in the marketing research process is to:
a. develop the research plan.
b. evaluate the results.
c. examine the alternatives.
d. enumerate the uncertainties.
e. experiment.
Answer: a Page: 210 Other Locations: SG
Rationale: The second step of the five-step marketing research approach is to “Develop the
Plan.”
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8-29 CONSTRAINTS DEFINITION
Constraints in a decision are the restrictions placed on potential solutions by the nature and
importance of the problem. What are the two most common constraints in marketing problem
solving?
a. Limitations on the time and money available.
b. Limitations of personnel and office space.
c. Limitations on access to upper and middle management.
d. Limitations of the thinking and creativity of the firm's advertising agency.
e. Government regulations and rights to privacy.
Answer: a Page: 211
Rationale: Key term definition—constraints
8-30 CONSTRAINTS DEFINITION
The restrictions placed on potential solutions to problem solving include limitations on time and
money available. These restrictions are determined by the nature and importance of the
problem and are called:
a. dependent variables.
b. regulations.
c. risks.
d. constraints.
e. decision factors.
Answer: d Page: 211
Rationale: Key term definition—constraints
8-31 CONSTRAINTS APPLICATION
DirectProtect is an insurance provider that uses telemarketers rather than insurance agents to
sell its insurance and to deal with claims. It wants to introduce its product into new markets, but
before it does so, it wants to have a prediction of how successful its sales efforts will be. The
marketing research firm conducting the research study has six months to gather, analyze its data,
and present them to DirectProtect. This is an example of a:
a. dependent variable.
b. regulation.
c. risk factor.
d. constraint.
e. decision factor.
Answer: d Page: 211
Rationale: Constraints are the restrictions placed on potential solutions by the nature and
importance of the problem. Common constraints in marketing problems are limitations on the
time and money available to solve the problem.
453
8-32 CONSTRAINTS APPLICATION
Penningtons Superstore specializes in plus-size fashions for women. It thought it recognized a
marketing opportunity in plus-size junior clothes and was considering adding a line of teen
plus-sizes to its 117 stores. Before doing so, it contracted with a marketing research firm to
make sure that the teen plus-size market was viable. It told the research company it needed to
have the results of its study by September so it could introduce the line in the following March if
the market was viable. Pennington created a(n) _____ for the research firm.
a. objective
b. constraint
c. assumption
d. measure of success
e. risk factor
Answer: b Page: 211
Rationale: Constraints are the restrictions placed on potential solutions by the nature and
importance of the problem. They are often expressed in terms of time and money.
8-33 DEVELOP THE RESEARCH PLAN APPLICATION
The retail mall owner told the marketing researcher, “We have the option of staying open late
twice a week, or opening up an hour early every day. We need to know which will be most
profitable since we cannot do both. The decision must be made in 11 weeks, and we only have
$10,000 budgeted for this research project.” In which stage of the marketing research process
would this statement have been made?
a. Define the problem.
b. Develop the research plan.
c. Collect relevant information.
d. Develop findings and recommendations.
e. Take marketing actions.
Answer: b Page: 211
Rationale: During the development of the research plan, constraints on the research activity
would be specified.
8-34 COLLECT RELEVANT INFORMATION DEFINITION
After defining the problem and developing the research plan, the next step in the marketing
research process is to:
a. collect relevant information.
b. develop findings and recommendations.
c. take marketing actions.
d. plan the budget.
e. identify the constraints on the process.
Answer: a Page: 211
Rationale: The third step in the five-step marketing research approach is “Collect Relevant
Information.”
454
8-35 COLLECT RELEVANT INFORMATION APPLICATION
The owner of a retail mall is considering expanding its hours of operation. In a discussion with
the marketing research firm, the research plan says, “To see which is more effective, staying
open late at night or opening up earlier in the morning, let's distribute a questionnaire to all
current customers, then hire someone to monitor sidewalk traffic at 7 AM and 6 PM, and see if
there is any pertinent information in any of the recent trade journal.” In which stage of the
marketing research process would such a conversation occur?
a. Define the problem.
b. Develop the research plan.
c. Collect relevant information.
d. Develop findings and recommendations.
e. Take marketing actions.
Answer: c Page: 212 Other Locations: SG
Rationale: Step 3 in the text's decision process is to collect enough relevant information to
make a rational, informed marketing decision.
8-36 COLLECT RELEVANT INFORMATION APPLICATION
Penningtons Superstore, which specializes in plus-size fashions for women, wanted to see if it
should add a line of plus size junior wear. The following statement reflects which step in the
marketing research process? “To see which is more effective, offering products for this market
in our current stores or opening separate stores targeted directly to the teenage market, let's
distribute questionnaires to current shoppers and solicit their opinions, set up some focus groups
with plus size teens, and locate for any relevant secondary research.”
a. Define the problem.
b. Develop the research plan.
c. Collect relevant information.
d. Develop findings and recommendations.
e. Take marketing actions.
Answer: c Page: 212
Rationale: Step 3 in the five-step marketing research process is to collect enough relevant
information to make a rational, informed marketing decision.
8-37 HYPOTHESIS DEFINITION
A conjecture or idea about the relationship of two or more factors or what might happen in the
future is called a(n):
a. assumption.
b. hypothesis.
c. decision.
d. alternative.
e. decision factor.
Answer: b Page: 211
Rationale: Text term definition—hypothesis
455
8-38 HYPOTHESIS APPLICATION
Penningtons Superstore specializes in plus-size fashions for women. It thought it recognized a
marketing opportunity in plus-size junior clothes and was considering adding a line of teen
plus-sizes to its 117 stores. Before doing so, it contracted with a marketing research firm to
make sure that the teen plus-size market was viable. The marketing research firm was hired to
substantiate a(n) _____ for Penningtons.
a. assumption
b. hypothesis
c. decision
d. alternative
e. decision factor
Answer: b Page: 211
Rationale: Text term definition—hypothesis
8-39 NEW-PRODUCT CONCEPT DEFINITION
A tentative description of a good or service a firm might offer for sale is known as a(n):
a. hypothesis.
b. proposition.
c. new-product concept.
d. alternative.
e. opportunity.
Answer: c Page: 211
Rationale: Text term definition new-product concept
8-40 NEW-PRODUCT CONCEPT APPLICATION
Pepsi-Cola Bottling Companies decided to put brewed Lipton tea in twelve-ounce cans and
market it as an alternative to soft drinks. This idea began as what is called a(n):
a. assumption.
b. alternative.
c. hypothesis.
d. new-product concept.
e. uncertainty.
Answer: d Page: 211 Other Locations: W
Rationale: A new-product concept, as the text explains, is a tentative description of a good or
service a firm might offer for sale.
456
8-41 NEW-PRODUCT CONCEPT APPLICATION
Youth Culture is a research and media firm that developed a magazine called Watch for students
aged 11-13. The idea for this publication began as:
a. an assumption.
b. an alternative.
c. a hypothesis.
d. a new-product concept.
e. an uncertainty.
Answer: d Page: 211 Other Locations: W
Rationale: A new-product concept, as the text explains, is a tentative description of a good or
service a firm might offer for sale.
8-42 METHODS DEFINITION
The approaches that can be used to solve part or all of a marketing research problem are called:
a. market research proposals.
b. marketing strategies.
c. marketing tactics.
d. SWOT analysis.
e. methods.
Answer: e Page: 211 Other Locations: SG
Rationale: Text term definition—methods
8-43 METHODS CONCEPTUAL
Sampling and statistical inference are known as special _____, which are vital in marketing to
solve part or all of a problem.
a. systems
b. styles
c. manners
d. modes
e. methods
Answer: e Page: 211
Rationale: Sampling and statistical inference are defined as special methods vital to marketing.
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8-44 METHODS CONCEPTUAL
The Journal of Marketing Research and the Journal of Marketing provide:
a. the latest data on consumer sales.
b. the latest data on marketing expenditures.
c. summaries of research methods and techniques valuable in addressing marketing problems.
d. an in-depth list of marketing positions and opportunities.
e. all of the above.
Answer: c Page: 211
Rationale: Some periodicals and technical journals such as Journal of Marketing Research and
Journal of Marketing summarize methods and techniques valuable in addressing marketing
problems.
8-45 SAMPLING DEFINITION
The process of selecting representative elements from a population is called:
a. hypothesis generation.
b. sampling.
c. questionnaire research.
d. experimental research.
e. probability extrapolation.
Answer: b Page: 212
Rationale: Marketing researchers often select a group of distributors, customers, or prospects
(in a process called sampling), ask them questions, and treat their answers as typical of all those
in whom they are interested.
8-46 PROBABILITY SAMPLING DEFINITION
Using precise rules to select a research sample such that each element of the population has a
specific known chance of being selected is called:
a. nonprobability sampling.
b. probability sampling.
c. extrapolation.
d. statistical inference.
e. criteria sampling.
Answer: b Page: 212
Rationale: Key term definition—probability sampling
458
8-47 PROBABILITY SAMPLING APPLICATION
To create a sample using _____, a marketing researcher might say, “Put all the names through
the computer, and select every hundredth name to put on the mailing list to receive a survey.”
a. nonprobability sampling
b. probability sampling
c. extrapolation
d. statistical inference
e. criteria sampling
Answer: b Page: 212
Rationale: In probability sampling, precise rules are used to select a sample such that each
element of the population has a specific known chance of being selected.
8-48 NONPROBABILITY SAMPLING DEFINITION
Using arbitrary judgments to select the sample so that the chance of selecting a particular
element may be unknown or zero is called:
a. nonprobability sampling.
b. probability sampling.
c. extrapolation.
d. statistical inference.
e. criteria sampling.
Answer: a Page: 212
Rationale: Key term definition—nonprobability sampling
8-49 NONPROBABILITY SAMPLING APPLICATION
“I want to question recent graduates about their transportation preferences. See if you can find
some graduates still living in town.” The marketing researcher is using:
a. nonprobability sampling.
b. probability sampling.
c. extrapolation.
d. statistical inference.
e. criteria sampling.
Answer: a Page: 212 Other Locations: SG
Rationale: Nonprobability sampling is the selection of a sample using arbitrary judgments so
the chance of selecting a particular element may be unknown or zero.
459
8-50 NONPROBABILITY SAMPLING CONCEPTUAL
The primary reasons for using nonprobability samples when conducting a survey include all of
the following EXCEPT:
a. the conclusions require a sample that is representative of the entire population.
b. a limited time to collect data.
c. a limited budget to collect data.
d. the difficulty in recruiting a probability sample.
e. the results will not have a significant impact on the organization.
Answer: a Page: 212
Rationale: Although not mentioned in the text, Alternative D (difficulty in recruiting a
probability sample because the researcher cannot identify all members of a population and
therefore not everyone has an equal chance of being selected., or Alternative E (the slight
impact that the results will have if implemented because the overall cost to the organization is
negligible if the results are based on a nonprobability sample. are two logical reasons for using
nonprobability samples in survey research.
8-51 STATISTICAL INFERENCE DEFINITION
Which method is used to draw conclusions about a population (the universe of all people, stores,
or salespeople about which one wishes to generalize. from a sample (some elements of the
universe. taken from that population?
a. nonprobability sampling
b. probability sampling
c. extrapolation
d. statistical inference
e. criteria sampling
Answer: d Page: 212
Rationale: Key term definition—statistical inference
8-52 STATISTICAL INFERENCE DEFINITION
The method of _____ involves drawing conclusions about every woman who wears a size 14 or
larger (a population) from a representative sample of 250 women who wear a size 14 or larger (a
sample).
a. probability sampling
b. nonprobability sampling
c. random sampling
d. statistical inference
e. interpolation
Answer: d Page: 212
Rationale: Key term definition—statistical inference
460
8-53 STATISTICAL INFERENCE APPLICATION
The National Health Interview Survey is conducted annually by the Centers for Disease Control
and Prevention. By examining information gathered from sampling it was able to announce that
14.1 percent of all Americans lacked healthcare insurance. To make this statement the Centers
for Disease Control and Prevention had to use:
a. independent variables.
b. no constraints.
c. holistic sampling.
d. statistical inference.
e. interpolation.
Answer: d Page: 212
Rationale: Statistical inference is used to draw conclusions about a population (the universe of
all people, stores, or salespeople about which one wishes to generalize. from a sample (some
elements of the universe. taken from that population.
8-54 STATISTICAL INFERENCE APPLICATION
A company is interested in producing self-stick decorative posters. It draws a probability
sample of high school students who currently have one or more standard posters on their walls,
to try to make projections about what all students like these want in posters. This is an example
of:
a. sensitivity analysis.
b. single source data.
c. extrapolation.
d. statistical inference.
e. criteria sampling.
Answer: d Page: 212
Rationale: Statistical inference is used to draw conclusions about a population (the universe of
all people, stores, or salespeople about which they wish to generalize. from a sample (some
elements of the universe. taken from that population.
8-55 DATA DEFINITION
Data, the facts and figures pertinent to the research problem, can be divided into two main types.
They are _____ data.
a. independent and dependent
b. primary and secondary
c. conceptual and factual
d. extraneous and experimental
e. measurable and nonmeasurable
Answer: b Page: 212 Other Locations: SG
Rationale: Key term definition—data
461
8-56 DATA CONCEPTUAL
A general rule of thumb among marketing researchers is to use _____ first and then collect
____.
a. external secondary data, internal secondary data
b. internal primary data, external primary data
c. primary data, secondary data
d. secondary data, primary data
e. primary data, external secondary data
Answer: d Page: 212 Other Locations: W
Rationale: Secondary data are less expensive and less time consuming. If you can obtain what
you need that way, you may be able to forgo primary data or pursue only the primary data that
are absolutely necessary.
8-57 SECONDARY DATA DEFINITION
Secondary data are:
a. facts and figures that are newly collected for the project at hand.
b. facts and figures obtained by watching people mechanically rather than in person.
c. facts and figures obtained by asking people questions.
d. facts and figures that have already been recorded before the project.
e. conclusions developed from information obtained from a representative sample of a
population.
Answer: d Page: 212 Other Locations: W
Rationale: Alternative A is the definition of primary data. Alternative B is the definition of
observational data. Alternative C is the definition of questionnaire data. Alternative E is the
definition of statistical inference.
8-58 PRIMARY DATA DEFINITION
Facts and figures that are newly collected for a project at hand are called:
a. internal secondary data.
b. external secondary data.
c. primary data.
d. observational data.
e. data.
Answer: c Page: 212
Rationale: Key term definition—primary data
462
8-59 INTERNAL SECONDARY DATA APPLICATION
All of the following are examples of internal secondary data EXCEPT:
a. Nielsen ratings reports for Minneapolis purchased by an organization.
b. an organization's income statement and balance sheet for 2001.
c. customer lists generated by an organization's marketing information system.
d. studies conducted three years ago by the firm's market research department.
e. monthly sales and customer contact reports developed by an organization's sales manager.
Answer: a Page: 212
Rationale: Alternative A is an example of an external secondary data source.
8-60 INTERNAL SECONDARY DATA CONCEPTUAL
When a marketing researcher uses a collection of reports, financial statements, and surveys
from different departments within her firm, she is using:
a. primary data.
b. internal secondary data.
c. external secondary data.
d. sensitivity analysis.
e. nonprobability sampling.
Answer: b Page: 212
Rationale: Internal secondary data are information or data that have already been collected and
exist inside a business firm or organization.
8-61 SECONDARY DATA APPLICATION
When Karsh & Hagan Advertising Agecy uses information found in Nielsen Reports, published
by the A.C. Nielsen Company, to plan television advertising schedules for its clients it is relying
on _____ data.
a. proprietary
b. primary
c. secondary
d. observational
e. experimental
Answer: c Page: 212
Rationale: Secondary data are facts and figures that have already been recorded before the
project at hand.
463
8-62 SECONDARY DATA APPLICATION
The National Health Interview Survey is conducted annually by the Centers for Disease Control
and Prevention. By examining information gathered from sampling it was able to announce that
14.1 percent of all Americans lacked healthcare insurance in 2001. A health care organization
doing research on patient nonpayment would refer to this information as _____ data.
a. proprietary
b. primary
c. secondary
d. observational
e. experimental
Answer: c Page: 212 Other Locations: SG
Rationale: Secondary data are facts and figures that have already been recorded before the
project.
8-63 SECONDARY DATA APPLICATION
According to research conducted by Canadian cultural anthropologists, Canadians place a high
importance on personal relationships. This leads them to be extremely reluctant to buy through
an impersonal medium like a telephone. For an insurance company that was hoping to sell
insurance through telemarketers, this research would be an example of:
a. an objective.
b. external secondary data.
c. an assumption.
d. internal data.
e. a dependent variable.
Answer: b Page: 213
Rationale: Constraints are the restrictions placed on potential solutions by the nature and
importance of the problem. In this instance, the constraints are the results of a national
characteristic.
8-64 EXTERNAL SECONDARY DATA DEFINITION
Published data from outside the firm is called _____ data.
a. proprietary
b. external primary
c. external secondary
d. internal primary
e. external primary
Answer: c Page: 213
Rationale: External secondary data includes published data from outside the firm such as U.S.
Census reports, trade association studies and magazines, business periodicals, and
internet-based reports.
464
8-65 EXTERNAL SECONDARY DATA APPLICATION
Which of the following is an example of external secondary data?
a. a survey by the Economic Research Service of the U.S. Department of Agriculture
b. government statistics from the Department of Commerce
c. business periodicals and trade journals
d. specialized on-line computerized databases such as Nexus or CompuServe
e. all of the above
Answer: e Page: 213
Rationale: External secondary data is published data from outside the organization.
8-66 EXTERNAL SECONDARY DATA APPLICATION
The Economic Research Service of the U.S. Department of Agriculture would provide
information on topics from how many dairies there are in the U.S. to how much broccoli was
eaten per person in 2000. This service provides:
a. primary data.
b. nonprobability sampling tools.
c. internal secondary data.
d. external secondary data.
e. marketing journals.
Answer: d Page: 213
Rationale: External secondary data is published data from outside the organization.
8-67 SINGLE-SOURCE DATA DEFINITION
Information provided by one firm on household demographics and lifestyle, purchases, TV
viewing behavior, and responses to promotions is called:
a. multi-source data.
b. marketing research data.
c. single-source data.
d. on-line data.
e. in-home data.
Answer: c Page: 213
Rationale: Text term definition—single-source data
8-68 SINGLE-SOURCE DATA DEFINITION
Marketing data services offer single-source data, which is information provided by a single firm
on household demographics and lifestyle, purchases, TV viewing behavior, and:
a. magazine and newspaper subscription rates.
b. recreational activities like tennis and golf.
c. responses to promotions like coupons and free samples.
d. attendance at church, theater, and the like.
e. ethnicity, culture, class, and first language.
Answer: c Page: 213
Rationale: Text term definition—single-source data
465
8-69 SINGLE-SOURCE DATA DEFINITION
What does it mean when the text refers to a single-source data?
a. The term refers to the legal limitations placed on a marketing research firm forbidding them
to survey a household more than once a year.
b. Single-source data are information provided by one firm on household demographics and
lifestyle, purchases, TV viewing behavior, and responses to promotions.
c. Single-source data are primary data that have been gathered from a single research project.
d. Single source data are primary data that have been gathered from independent sources.
e. Single-source data refer to the type of information gathered at retail checkouts and sent to
wholesalers in place of orders.
Answer: b Page: 213-214
Rationale: Text term definition—single-source data
8-70 SINGLE-SOURCE DATA APPLICATION
Marketing Works, a market research firm located in Anchorage, Alaska, specializes in
providing marketing information to retail stores around the world. The employees at Marketing
Works perform a variety of services for and provide a wide range of information to their clients.
For example, they collect data on consumer demographics, purchase behavior, lifestyle, and
responses to sales promotions. Finally, the Marketing Works employees analyze, interpret, and
interrelate the data they have collected and provide retailers with market related information.
Marketing Works is an example of a firm that offers:
a. single-source data.
b. informational data services.
c. technological data services.
d. out-source data services.
e. decision-based data services.
Answer: a Page: 213-214 Other Locations: SG
Rationale: The revolutionary advances in information technology have resulted in the
emergence of marketing data services that provide single-source data. These firms collect,
analyze, and interrelate information on household demographics, purchases, media viewing
behavior, and responses to sales promotions.
8-71 ADVANTAGES OF SECONDARY DATA CONCEPTUAL
Two important advantages of secondary data are:
a. they are inexpensive and up-to-date.
b. they are up-to-date and supply all relevant categories of information.
c. they are usually inexpensive and save time.
d. they are tailor-made to your specifications and relatively inexpensive.
e. none of the above.
Answer: c Page: 214
Rationale: Two important advantages of secondary data are (1) the tremendous time savings if
the data have already been collected; and (2) the low cost (for example, most census reports are
available for only a few dollars each).
466
8-72 PRIMARY DATA CONCEPTUAL
Observing people and asking them questions are really the only two ways to obtain:
a. primary data.
b. internal secondary data.
c. external secondary data.
d. experimental independent variables.
e. nonprobability samples.
Answer: a Page: 214
Rationale: There are really only two ways to collect primary data for a marketing study: (1) by
observing people; and (2) by asking them questions.
8-73 PRIMARY DATA APPLICATION
Someone making the statement, “Before we begin this project we'll have to hire someone to
interview people to find out how many people in a 50-mile radius could use our service, what
their average income is, and what their occupations are.” is preparing to:
a. collect primary data.
b. collect internal secondary data.
c. collect external secondary data.
d. perform a sensitivity analysis.
e. use probability sampling.
Answer: a Page: 214 Other Locations: W
Rationale: Primary data are those facts and figures, which are new and are collected for the first
time for the project at hand.
8-74 OBSERVATIONAL DATA DEFINITION
Observational data are:
a. facts and figures newly collected for the project at hand.
b. facts and figures obtained by watching people mechanically or in person.
c. facts and figures obtained by asking people questions.
d. facts and figures that have already been recorded before the project.
e. conclusions developed from information obtained from a representative sample of a
population.
Answer: b Page: 214
Rationale: Key term definition—observational data
467
8-75 OBSERVATIONAL DATA DEFINITION
Facts and figures obtained by watching, either mechanically or in person, how people actually
behave are called _____ data.
a. questionnaire
b. observational
c. hypothetical
d. problematical
e. secondary
Answer: b Page: 214
Rationale: Key term definition—observational data
8-76 OBSERVATIONAL DATA APPLICATION
When the A.C. Nielsen Company develops television ratings using information from their
people meters, it relies on data collected by:
a. census.
b. hypothesis generation.
c. sensitivity analysis.
d. technological forecasting.
e. observation.
Answer: e Page: 214 Other Locations: W
Rationale: Watching, either mechanically or in person, how people actually behave is the way
marketing researchers collect observational data.
8-77 OBSERVATIONAL DATA APPLICATION
A manufacturer of electronic toys is interested in learning about consumers' attitudes toward its
product line. All of the following can be a source for this type of marketing information
EXCEPT:
a. observation.
b. mail questionnaire.
c. in store-interview.
d. telephone survey.
e. focus group interview.
Answer: a Page: 214-215 Other Locations: SG
Rationale: Observation data will not give you information relative to a consumer's feelings and
attitudes.
468
8-78 PRIMARY DATA APPLICATION
You are the product manager for a new children's cold breakfast cereal. Its proposed brand
name is Barney, named after the popular, purple dinosaur of the PBS children's television show
Barney & Friends. Barney cereal is positioned as a health-oriented, fun and socially positive
cereal that consists of natural whole grains and fruit-sweetened, Barney-like purple dinosaurs
that provide children with more than the 100 percent recommended daily allowance of vitamins
A, B, and C. To ascertain the cereal's appeal among prospective buyers, which of the following
would be a primary data collection method to help you make marketing decisions regarding the
new Barney brand cereal?
a. You, personally, via a one-way mirror, watch the reactions of 10 different groups of 6 to 10
children eating bowls of the new Barney cereal with its purple dinosaurs.
b. You conduct 30 in-depth personal interviews with parents of children to identify the
attitudes and purchase intentions of these parents relative to the new Barney cereal and the
“I love you, you love me” advertising theme patterned after the television show.
c. You send 10,000 trial boxes of Barney cereal to randomly selected households with
children in Peoria, IL (a national test market for consumer products) along with a business
reply, postage-paid postcard to obtain the reactions of these households to the cereal.
d. You contract with major supermarket chains in Phoenix, AZ (a major consumer products
test market) to stock 10,000 standard-size boxes of Barney cereal on their shelves. You
also contract with InfoScan, a consumer product sales tracking service to determine the
effect of a test marketing campaign consisting of ads on Saturday morning children's
programs aired locally in Phoenix, coupons in the local Phoenix newspapers, and a direct
mailing to all households with children in the Phoenix market.
e. All of the above are methods using primary data collection.
Answer: e Page: 214-215
Rationale: The two principal ways to collect new or primary data for a marketing study are by
(1) observing people, and (2) asking them questions.
8-79 OBSERVATIONAL DATA APPLICATION
Shelly, the manager of a large grocery store, was concerned. She had received complaints from
several customers who said they had been treated rudely by clerks at the store. In order to
determine whether or not her clerks were indeed rude, Shelly hired a team of marketing
researchers. The researchers posed as customers shopping in the store, but were actually taking
notes and recording the actions of the store clerks. Later, Shelly reviewed those notes. The
research notes Shelly reviewed were a form of _____ data.
a. secondary
b. developmental
c. observational
d. national
e. conceptual
Answer: c Page: 214-215
Rationale: Some research questions are not readily answered via experimental or survey
methods. When the behavior of people might change if they were aware their behavior was
being studied, more subtle methods are necessary. In this instance, the store clerks would be
unlikely to knowingly treat a customer rudely if the clerks were aware that their actions were
being studied. The researchers in the example engaged in observational research and their
notes, which were later reviewed by the store manager, served as observational data.
469
8-80 WEBLINK CONCEPTUAL
Information in on-line databases through the Internet divide into two categories: (1) indexes to
articles in publications, which are accessed through key-word searches, and (2):
a. primary data.
b. statistical or financial data on markets, products and organizations.
c. observation data.
d. statistical data collected by the government.
e. probability sampling data.
Answer: b Page: 215
Rationale: The Web Link provides examples of statistical and financial sources such as
Bloomberg and Investor’s Business Daily.
8-81 WEBLINK CONCEPTUAL
Which of the following statements about on-line databases is true?
a. On-line databases can be accessed via the Internet.
b. Information in on-line databases is divided into two categories called (1) indexes to articles
and (2) statistical and financial data.
c. Some on-line databases are restricted to users who have paid a subscription fee.
d. All of the above statements about on-line databases are true.
e. None of the above statements about on-line databases is true.
Answer: d Page: 215
Rationale: The statements in a, b, and c are all found in the WebLink, “Online Databases and
Internet Resources.”
8-82 WEBLINK CONCEPTUAL
Online databases such as ABI/Inform and Lexis-Nexis provide information from articles that:
a. relate to consumer activities.
b. have appeared in journals and periodicals.
c. have been excerpted from books.
d. apply to sports and lifestyles.
e. have been published in local newspapers.
Answer: b Page: 215
Rationale: On-line databases of indexes, abstracts and full-text information from journals and
articles include Lexis-Nexis, ABI Inform ProQuest, and Gen. BusinessFile ASAP.
470
8-83 QUESTIONNAIRE DATA DEFINITION
The facts and figures obtained by asking people about their attitudes, awareness, intentions, and
behaviors are called:
a. questionnaire data.
b. secondary data.
c. primary data.
d. observational data.
e. statistical inferences.
Answer: a Page: 217
Rationale: Key term definition—questionnaire data
8-84 QUESTIONNAIRE DATA APPLICATION
Research and media firm Youth Culture published Watch magazine, a teen publication given
out free to high school students, but the publication was unable to deliver response rates to
coupons or sample offers that its advertisers expected. Youth Culture handed out surveys to
learn how students felt about the publication. Feedback indicated teen boys and girls were
demanding very different things from the publication. This feedback was the gleaned from
_____ data.
a. questionnaire
b. internal secondary
c. external secondary
d. observational
e. panel
Answer: a Page: 217 Other Locations: SG
Rationale: Questionnaire data are the facts and figures obtained by asking people about their
attitudes and awareness.
8-85 QUESTIONNAIRE DATA APPLICATION
When Marine Midland Bank sent market researchers door-to-door in the neighborhoods of their
branch banks to ask people with savings accounts why they did not also have checking accounts
and credit cards with Marine Midland, they were gathering what is called _____ data.
a. questionnaire
b. secondary
c. intercept
d. observational
e. nonprobability
Answer: a Page: 217
Rationale: Information of the type Marine Midland collected door-to-door is questionnaire
data.
471
8-86 QUESTIONNAIRE DATA APPLICATION
The Belsen interview is a means of pretesting media surveys. With this technique, the
respondent is interviewed twice—first by an interviewer using the proposed survey and then by
a different interviewer, who asks questions about the survey itself. The Belsen interview is used
to gather _____ data.
a. questionnaire
b. secondary
c. intercept
d. observational
e. synergistic
Answer: a Page: 217
Rationale: The Belsen interview gathers facts and figures obtained by asking people about their
attitudes, beliefs, and awareness.
8-87 FOCUS GROUP APPLICATION
The Minnesota Twins, a professional baseball team, wanted to develop creative ways to boost
sagging attendance at their ball games. The Twins hired a moderator who, after every home
game during the month of July, led informal discussions with groups of 6 to 10 fans to find out
what they did and did not like about the baseball team. The discussions were tape recorded and
videotaped so that researchers could review the data at a later date and in more detail. What are
such informal research discussions called?
a. experiments
b. secondary data
c. focus groups
d. research variables
e. hypotheses tests
Answer: c Page: 217
Rationale: In order to generate more specific research questions or to clarify a marketing
problem, many marketers conduct focus groups. Focus groups are defined as informal sessions
with 6 to 10 current, past, or future customers. Focus groups are used to identify aspects of a
good or service that are liked or disliked by consumers.
472
8-88 FOCUS GROUP APPLICATION
DirectProtect is an insurance provider that uses telemarketers rather than insurance agents to
sell its insurance and to deal with claims. It wants to introduce its product into new markets, but
before it does so, it wants to have a prediction of how successful its sales efforts will be. One of
the first things researchers did was to invite in a group of eight people with insurance to talk
about home and auto insurance. Their conversation was recorded and later analyzed to
determine if there were any differences between customers from different countries. This was
an example of a(n):
a. experiment.
b. mechanical observation.
c. focus group.
d. research variable.
e. hypotheses test.
Answer: c Page: 217
Rationale: In order to generate more specific research questions, the researchers asked general
questions to identify consumers' likes and dislikes.
8-89 FOCUS GROUPS APPLICATION
A publishing company sponsors an informal one-time-only session with seven college
instructors who use a given text. The instructors meet to discuss the textbook, its study guide,
and the product's competition. This is an example of a(n):
a. jury of executive opinion.
b. consumer panel.
c. focus group.
d. Likert scale interview.
e. experiment.
Answer: c Page: 217
Rationale: Focus groups are informal sessions in which six to ten past, present, or prospective
customers are directed by a discussion leader or moderator, to identify what they do and don't
like about the firm's products and its competitors' products, how they use the products, and
special needs they have that the products don't address. It is not a panel of any kind because it
meets only once.
8-90 FOCUS GROUPS DEFINITION
A marketing research approach that uses a discussion leader to interview 6 to 10 past, present, or
prospective customers is called:
a. a depth (or individual) interview.
b. an experiment.
c. a focus group.
d. small group dynamics.
e. secondary data collection.
Answer: c Page: 217 Other Locations: SG
Rationale: Alternative D does happen during focus group discussions, but is not the approach
itself. Alternative E is name of the broad category of market research methods of which focus
groups are one, but it is not the definition of the approach itself.
473
8-91 QUESTIONNAIRE DATA APPLICATION
DirectProtect is an insurance provider that uses telemarketers rather than insurance agents to
sell its insurance and to deal with claims. It wants to introduce its product into new markets, but
before it does so, it wants to have a prediction of how successful its sales efforts will be. One of
the first things researchers did was to invite a group of eight people with insurance in to talk
about home and auto insurance. One of the purposes of this exploratory research was to gather
information about the group members' attitudes toward insurance and their awareness of
DirectProtect. While additional research still needs to be done, the marketing researchers were
able to use a focus group to gather _____ data.
a. hypothetical
b. generative
c. evaluative
d. questionnaire
e. experiential
Answer: d Page: 217
Rationale: Questionnaire data are the facts and figures obtained by asking people about their
attitudes, beliefs, interests, and awareness.
8-92 HYPOTHESIS GENERATION APPLICATION
DirectProtect is an insurance provider that uses telemarketers rather than insurance agents to
sell its insurance and to deal with claims. It wants to introduce its product into new markets, but
before it does so, it wants to have a prediction of how successful its sales efforts will be. One of
the first things researchers did was to invite in a group of eight people with insurance to talk
about home and auto insurance. One of the purposes of this exploratory research was to search
for topics that needed to be evaluated with additional research. The focus group was used for:
a. hypothesis generation.
b. acculturation purposes.
c. experiential research.
d. gathering observational data.
e. creating a probability sample.
Answer: a Page: 217
Rationale: Hypothesis generation is used to search for ideas that can be evaluated in later
research.
8-93 HYPOTHESIS GENERATION DEFINITION
Hypothesis generation is a marketing tool used for:
a. identifying potential consumers of an existing product or service.
b. identifying potential consumers of a new product or service.
c. searching for ideas that can be evaluated in later research.
d. selecting the best design for production.
e. doing all of the above.
Answer: c Page: 217 Other Locations: W
Rationale: Text term definition—hypothesis generation
474
8-94 INDIVIDUAL INTERVIEWS CONCEPTUAL
When compared with telephone and mail surveys, which of the following is NOT a
characteristic of individual interview surveys?
a. most expensive because of interviewer's time and travel expenses
b. greatest ability to probe and ask complex questions
c. greatest opportunity for interviewer bias
d. least anonymity for the respondent
e. greatest difficulty in establishing rapport with the respondent
Answer: e Page: 217
Rationale: Personal interviews allow greater opportunity to establish rapport with the
respondent than either mail or telephone.
8-95 QUESTION WORDING PROBLEMS APPLICATION
“Do you like pretzels and chips? ___ Yes ___ No,” is a poorly worded question because:
a. it is a leading question.
b. it is actually two questions in one.
c. it is a nonexhaustive question.
d. it has no relevance.
e. it asks for an opinion.
Answer: b Page: 219 Other Locations: W, SG
Rationale: This question combines pretzels and chips together as one substance. A person
would have no way to respond if they liked one but not the other.
8-96 QUESTION WORDING PROBLEMS APPLICATION
“Where do you live? ____ At home with your parent(s) ____ In a dormitory,” is a poorly
constructed question because:
a. it is a leading question.
b. it is actually two questions in one.
c. it is a nonexhaustive question.
d. it has no relevance.
e. it asks for an opinion.
Answer: c Page: 219
Rationale: This is a nonexhaustive question because it does not supply all necessary
alternatives. There is no way to respond if a person lives neither in a dorm nor at home but in his
or her own apartment or with another relative.
475
8-97 QUESTION WORDING PROBLEMS APPLICATION
The question, “How many meals will you eat in restaurants in the next year?” is an example of
a(n):
a. leading question.
b. two questions in one.
c. question with non-exhaustive answers.
d. unanswerable question.
e. question with non-mutually exclusive answers.
Answer: d Page: 219 Other Locations: SG
Rationale: It is unlikely that any respondent would know the answer to this question.
8-98 QUESTION WORDING PROBLEMS APPLICATION
What is your age? Under 20 years, 21 to 45 years, 46 to 60 years is most likely an example of a(n):
a. leading question.
b. a combination of two questions in one.
c. question with non-exhaustive answers.
d. unanswerable question.
e. question with non-mutually exclusive answers.
Answer: c Page: 219
Rationale: What answer does someone give who is over 60 years of age? Or someone who is
20?
8-99 QUESTION WORDING PROBLEMS APPLICATION
“Did you drive to college and buy your lunch there last week?” is most likely an example of
a(n):
a. leading question.
b. a combination of two questions in one.
c. question with non-exhaustive answers.
d. unanswerable question.
e. question with non-mutually exclusive answers.
Answer: b Page: 219
Rationale: What answer do you give if you didn't drive to college, but did buy your lunch there?
476
8-100 QUESTION WORDING PROBLEMS APPLICATION
The following question that appears on a questionnaire, “Did you serve any healthy, nutritious
meals last week?” is most likely an example of a(n):
a. leading question.
b. two questions in one.
c. question with non-exhaustive answers.
d. unanswerable question.
e. question with non-mutually exclusive answers.
Answer: a Page: 219
Rationale: It is a leading question that is biased toward respondent giving a socially desirable
answer and saying he or she served healthy, nutritious meals.
8-101 QUESTION WORDING PROBLEMS APPLICATION
The following question that appears on a questionnaire, “What is your age? A. less than 20 years
old, B. 20 to 40 years old, C. 40 to 60 years old, D. 60 years old or more” is most likely an
example of a(n):
a. leading question.
b. two questions in one.
c. question with non-exhaustive answers.
d. unanswerable question.
e. question with non-mutually exclusive answers.
Answer: e Page: 219
Rationale: Alternative e is correct because a person who is 40 years old would fall into either
category b or c. Also, a person who is 60 years old would fall into either category c or d.
8-102 OPEN-ENDED QUESTION APPLICATION
“Why do you smoke?” is an example of which type of question?
a. Likert scale
b. fixed alternative
c. dichotomous
d. open-ended
e. semantic differential
Answer: d Page: 220
Rationale: This is an example of an open-ended question because the respondent can answer as
much or as little as desired in his or her own words.
477
8-103 OPEN-ENDED QUESTION APPLICATION
Before opening six Torrid plus-size-only retail stores that cater to women aged 15-30, a great
deal of information was gathered to determine what types of items should be carried, the image
of the store, its advertising, etc. Which of the following is an example of an open-ended
question that might have been asked?
a. Do you wear a size 14 or larger dress?
b. How old are you?
c. Would you shop at a store that only sold plus-size clothing?
d. What is your self-image?
e. Do you think the stores should use bright- or subtle-colored fixtures?
Answer: d Page: 220
Rationale: This is an example of an open-ended question because the respondent can answer as
much or as little as desired in her own words.
8-104 CLOSED-ENDED QUESTION APPLICATION
Before opening six Torrid plus-size-only retail stores that cater to women aged 15-30, a great
deal of information was gathered to determine what types of items should be carried, the image
of the store, its advertising, etc. Which of the following is an example of a closed-ended
question that might have been asked?
a. Why would you want to shop at a store that carries plus-size clothing?
b. In what ways might you be uncomfortable shopping at a plus-size-only retailer?
c. Would you be interested in buying the Torrid merchandise on the Internet?
d. What type of person would shop at Torrid?
e. None of the above questions is an example of a closed-ended question.
Answer: c Page: 220 Other Locations: SG
Rationale: The question is the only one that is answerable with a yes or no.
8-105 FIXED ALTERNATIVE QUESTION APPLICATION
The type of question you are answering right now is an example of a(n) _____ question.
a. Likert scale
b. fixed alternative
c. dichotomous
d. open-ended
e. semantic differential
Answer: b Page: 220
Rationale: This question is a fixed alternative question. There are a limited number of answers
to choose from. You merely select the correct one.
478
8-106 DICHOTOMOUS QUESTION APPLICATION
“Have you been to a dentist within the past 6 months? ___Yes ___No?” is an example of which
type of question?
a. Likert scale
b. semantic differential
c. dichotomous
d. open-ended
e. synergistic
Answer: c Page: 220
Rationale: This question is the simplest form of a fixed alternative question. It only supplies
two alternatives; therefore, it is a dichotomous question.
8-107 DICHOTOMOUS QUESTION APPLICATION
A survey shows that 92.6 percent Canadians from Ontario have used toothpaste in the last
twelve months and 87.2 percent of Canadians from the Western provinces have used toothpaste
during the same period. This information was most likely gathered by using which type of
question?
a. open-ended
b. dichotomous
c. holistic
d. evaluative
e. Likert scale
Answer: b Page: 220
Rationale: This question is the simplest form of a fixed alternative question. It only supplies
two alternatives--either do use toothpaste or you don't; therefore, it is a dichotomous question.
8-108 SEMANTIC DIFFERENTIAL SCALE QUESTION APPLICATION
What kind of questions are the following:
“Place an X in the space that describes your feelings about this test.”
Easy __ __ __ __ __ __ __ Difficult
Fair __ __ __ __ __ __ __ Unfair
a. Likert scale question
b. semantic differential scale question
c. dichotomous question
d. open-ended question
e. sensitivity analysis question
Answer: b Page: 220
Rationale: A semantic differential scale uses a 7-point scale in which the opposite ends have
one- or two-word adjectives that have opposite meanings.
479
8-109 LIKERT SCALE QUESTION APPLICATION
What type of question is the following?
Check your degree of agreement with the following statement:
“Marketing is an interesting subject.”
( ) Strongly Agree ( ) Agree ( ) Disagree ( ) Strongly Disagree
a. Likert scale question
b. semantic differential scale question
c. dichotomous question
d. open-ended question
e. fixed alternative question
Answer: a Page: 220
Rationale: In a Likert scale, the respondent is asked to indicate the extent to which he agrees or
disagrees with a statement.
8-110 PANEL DEFINITION
A sample of consumers or stores from which researchers take a series of measurements is called
a(n):
a. experiment.
b. jury of executive opinion.
c. panel.
d. survey of experts.
e. focus group.
Answer: c Page: 222 Other Locations: W
Rationale: Text term definition—panel
8-111 EXPERIMENT DEFINITION
Data obtained by manipulating factors under tightly controlled conditions to test cause and
effect is an example of:
a. questionnaire data.
b. nonprobability sampling.
c. an experiment.
d. a panel.
e. a model.
Answer: c Page: 222 Other Locations: SG
Rationale: Text term definition—experiment
480
8-112 EXPERIMENT APPLICATION
A test market for a new Kellogg's cereal is an example of a(n):
a. hypothesis generation.
b. deviation test.
c. experiment.
d. observational data creation.
e. focus test.
Answer: c Page: 222
Rationale: An experiment uses data obtained by manipulating factors under tightly controlled
conditions to test cause and effect.
8-113 EXPERIMENTAL INDEPENDENT VARIABLE APPLICATION
An experimenter had people choose the sweeter juice from two containers, a red one and a
yellow one. The respondents expressed a definite preference although the juice was exactly the
same. The experimental independent variable was the:
a. sweetness of the juice.
b. relative temperature of the beverages.
c. color of the containers.
d. decision task.
e. preference for each juice.
Answer: c Page: 222 Other Locations: W
Rationale: The colors of the containers were the causal condition that was manipulated by the
experimenter and changed the behavior of the respondent.
8-114 BIAS IN MARKETING EXPERIMENTS APPLICATION
A dress designer wishes to compare consumers' immediate reactions to two fashion designs.
She invites a group of former customers to a large lecture room and divides them into two
groups. Models display the two fashions on stage in the front of the room, and each group
answers several questions about each one of the designs. By comparing responses to the
evaluation questions, she hopes to determine which design will be preferred by her customers.
Which of the following methods for dividing the subjects into two groups would most likely
introduce a bias into the research results?
a. drawing names from a hat
b. tossing a coin for each person, assigning heads to one group and tails to the other
c. assigning every other person to each group
d. assigning people in the front half of the room to one group, the back half to the other
e. assigning people with odd-numbered street addresses to one group, even-numbered to the
other
Answer: d Page: 222
Rationale: Several biases might result from Alternative d. Those in front may have arrived
earlier due to greater enthusiasm, may have more vision or hearing problems, or may be more
interested in seeing the fashions.
481
8-115 DEPENDENT VARIABLE APPLICATION
Eppie's Used Cars wanted to discover whether straight discounting worked better than a free
gift. It ran two different television commercials on alternate Wednesdays. Commercial A
offered 20 percent off Blue Book price for any 4-wheel-drive vehicle on the lot while
Commercial B offered a free tent with the purchase of any 4-wheel-drive vehicle at Blue Book
price. The offer was what is called the experimental independent variable. Whether it was cold
or rained when any of the commercials ran is an extraneous independent variable. How many
people responded to each type of offer is called the _____, and would suggest whether straight
discounting or a gift incentive was the better strategy for increasing traffic.
a. marketing variable
b. dependent variable
c. market potential variable
d. observational variable
e. hypothetical variable
Answer: b Page: 222
Rationale: The change in the behavior of what is studied is called the dependent variable.
8-116 EXPERIMENT APPLICATION
As marketing vice president of Health Care Services, Inc., you are in charge of developing an
experiment to test the hypothesis that increasing the number of salespeople assigned to a
territory will increase sales of health care services in the territory. Which experiment will do
this best?
a. manipulating the independent variable of sales and assessing the impact by measuring the
dependent variable of satisfied customers of health services
b. manipulating the independent variable of salespeople assigned to a territory and assessing
the impact by measuring the dependent variable of sales of health services
c. manipulating the independent variable of sales and assessing the impact by measuring the
dependent variable of sales people of health services
d. manipulating the independent variables of sales and salespeople and assessing the impact
by measuring the dependent variable of satisfied customers of health services
e. manipulating the independent variable of satisfied health service customers and assessing
the impact by measuring the dependent variable of salespeople assigned
Answer: b Page: 222
Rationale: There are two variables of interest in this situation. The independent variable of
salespeople assigned to a territory will be manipulated and the dependent variable of sales of
health services will be assessed after manipulation.
482
8-117 DEPENDENT VARIABLE APPLICATION
A market researcher showed a new brand of blue jeans to several groups of college students and
asked the students to rate the quality of the jeans. Two weeks later, the researcher showed the
same college students a television advertisement featuring super model Cindy Crawford
wearing the new brand of jeans. The marketer asked the students to once again rate the quality
of the jeans. The marketer predicted that after viewing the advertisement, the students' ratings
of the new jeans would be more positive than their original ratings. In this experiment, students'
ratings of the new blue jeans served as the:
a. dependent variable.
b. independent variable.
c. outside factors.
d. secondary data.
e. none of the above.
Answer: a Page: 222
Rationale: The researcher was making a comparison between ratings of the quality of the blue
jeans—before and after the advertisement. The advertisement in the study served as the
experimental independent variable and the ratings of the product served as the dependent
variable. The researcher introduced a change in the environment (the advertisement) and then
measured the accompanying change in the student ratings (dependent variable) of the product
quality.
8-118 DEPENDENT VARIABLE APPLICATION
An experimenter served identical meals to people at six tables at an elegant restaurant. At each
table there was a small lantern with a rheostat. Each table had a different brightness of lighting.
There was a direct correlation between the time it took the people to finish their meals and the
amount of artificial light from the lantern. The dependent variable in this experiment was:
a. the degree of light.
b. the personal eating habits of the subjects.
c. experimenter bias in establishing guidelines.
d. the length of time it took to finish the meal.
e. the number of tables in the experiment.
Answer: d Page: 222 Other Locations: SG
Rationale: The dependent variable is the change in the behavior of what is studied, in this case,
the amount of time it took to eat the meal.
483
8-119 DEPENDENT VARIABLE CONCEPTUAL
When conducting marketing experiments, the dependent variable can often describe any of the
following EXCEPT:
a. actual purchase behavior.
b. preferences in taste tests.
c. attitudes highly correlated to actual purchase behavior.
d. marketing mix variables.
e. behavioral intentions.
Answer: d Page: 222
Rationale: The change in behavior (or its surrogates, such as preferences, attitudes or
intentions) is what constitutes a dependent variable. Marketing mix elements are experimental
independent variables that are manipulated to determine whether changes in purchase behavior
result.
8-120 PRIMARY AND SECONDARY DATA APPLICATION
Compared with _____ data, two disadvantages of _____ data are that the latter is usually far
more time consuming and more expensive to collect.
a. secondary; primary
b. primary; secondary
c. differential; observational
d. sample; population
e. open-ended; closed
Answer: a Page: 223
Rationale: Secondary data consist of information that have been recorded prior to the research
at hand. Primary data consist of facts and figures that are newly collected for a current project.
Two advantages of secondary data are: time savings and low cost as compared to primary data.
8-121 INFORMATION TECHNOLOGY DEFINITION
_____ involves designing and managing computer and communications networks to provide a
system to satisfy an organization's needs for data storage, processing, and access leading to
effective marketing actions.
a. Data mining
b. Environmental scanning
c. Information technology
d. E-marketing
e. Computerization
Answer: c Page: 223
Rationale: Key term definition—information technology
484
8-122 SALES DRIVERS DEFINITION
According to marketing managers, which of the following are examples of sales drivers?
a. special promotions
b. distribution
c. the price
d. consumers
e. all of the above
Answer: e Page: 223-224
Rationale: Factors that influence sales include special promotions, distribution, price,
consumers, and other variables described in Figure 8-8.
8-123 STRATEGIC INFORMATION SYSTEM DEFINITION
An information system contains several key elements, including:
a. input devices.
b. databases.
c. models.
d. computer network.
e. all of the above.
Answer: e Page: 225
Rationale: Each of the elements described in a, b, c, and d, are illustrated in Figure 8-9.
8-124 STRATEGIC INFORMATION SYSTEM DEFINITION
Which of the following is NOT a key element of today's strategic information systems described
in the text?
a. databases
b. input devices
c. models
d. computer networks
e. communications protocols
Answer: e Page: 225
Rationale: Communication protocols are not included as an element of the information system
illustrated in Figure 8-9..
485
8-125 SENSITIVITY ANALYSIS DEFINITION
When a marketing manager begins asking “what if” questions to determine how changes in a
factor like price or advertising affect marketing results like sales or profits, she is performing
a(n) _____ analysis.
a. marketing
b. environmental
c. structured
d. profitability
e. sensitivity
Answer: e Page: 224
Rationale: Text term definition—sensitivity analysis
8-126 SENSITIVITY ANALYSIS APPLICATION
The marketing manager at Popular Electronics must determine a price for a new model of
portable CD player. He will use the company's information system to determine how the
manufacturer's suggested retail price might affect total sales revenues. This type of analysis is
called:
a. database management.
b. database training.
c. sensitivity training.
d. sensitivity analysis.
e. financial analysis.
Answer: d Page: 224
Rationale: Text term definition—sensitivity analysis
8-127 SENSITIVITY ANALYSIS CONCEPTUAL
Hot Topic is a California-based retailer that opened six Torrid plus-size-only retail stores that
cater to women aged 15-30. The retailer used its information system to determine if the average
floor space for Torrid should be 2,500 square feet or 1,900 square feet. This would be an
example of a(n) _____ analysis.
a. 80/20
b. break-even
c. environmental scanning
d. situational
e. sensitivity
Answer: e Page: 224 Other Locations: W
Rationale: Sensitivity analysis permits a marketing manager to query an information system
with questions to assess how allocation of different amounts of floor space would impact retail
sales.
486
8-128 SENSITIVITY ANALYSIS CONCEPTUAL
If a marketing manager queries a strategic information system to determine the effect of three
different levels of price for a new product, she can use a(n) _____ analysis.
a. 80/20
b. break-even
c. environmental scanning
d. situational
e. sensitivity
Answer: e Page: 224
Rationale: Sensitivity analysis permits a marketing manager to query an information system
with questions to assess how different levels of a factor such as price, product feature, or trends,
affect a decision.
8-129 SENSITIVITY ANALYSIS APPLICATION
Which of the following is NOT an example of a “what if” type question that might be asked by
a marketing manager as part of a sensitivity analysis?
a. What effect would increasing magazine advertising by 50 percent have on sales of Tresses
shampoo?
b. What would be the effect of getting a new supplier of raw plastic for our line of
paperweights?
c. What effect would a 10 percent reduction in price have on the profitability of our line of
pocket knives?
d. What would be the effect of expanding our market coverage to include New York and
Pennsylvania?
e. What would be the effect of smaller serving sizes on sales of our turkey and roast beef
dinner specials?
Answer: b Page: 224
Rationale: Alternative b would be asked by a manufacturing manager or engineer and involves
a nonmarketing decision.
8-130 DATA MINING DEFINITION
____ is the term that describes the extraction of hidden predictive information from large
databases.
a. Fact disclosure
b. Information extraction
c. Variable analysis
d. Database management
e. Data mining
Answer: e Page: 224 Other Locations: W
Rationale: Key term definition—data mining
487
8-131 DATA MINING APPLICATION
Through the use of _____, a catalog retailer might determine that customers who purchased
silver frames would also have a high probability of buying vintage hat pins. As a result, its sales
representatives were instructed to offer a special price on hat pins when a customer places an
order for a silver frame.
a. fact disclosure
b. information extraction
c. variable analysis
d. database management
e. data mining
Answer: e Page: 224
Rationale: Data mining is the extraction of hidden predictive information from large databases.
8-132 DEVELOP FINDINGS DEFINITION
Once a marketer researcher has defined the problem, developed the research plan, and collected
the relevant information, what needs to be done next?
a. Set budgets.
b. Determine target market.
c. Select segmentation strategy.
d. Analyze data and present findings.
e. Determine if there is a planning gap between desired findings and actual findings.
Answer: d Page: 225
Rationale: Step 4 of the marketing research approach is “Develop Findings,” which includes
analyze data and present findings.
8-133 TAKE MARKETING ACTIONS DEFINITION
The last step in the marketing research process is to:
a. execute the program.
b. examine the alternatives.
c. experiment.
d. take marketing actions.
e. enumerate the decision factors.
Answer: d Page: 227
Rationale: Step 5 in the text's decision process is: take marketing actions. At this point you
implement the recommendations and evaluate the results.
488
8-134 TAKE MARKETING ACTIONS APPLICATION
Market researchers have delivered findings to Ocean Spray's product manager: (1) “cranberry”
is not part of the language outside the U.S. and Canada and (2) the British like juice in boxes, not
bottles. How can she use these facts to take marketing actions in an advertising campaign that
will encourage consumers in the United Kingdom to try the new cranberry juice drink?
a. Appeal to the British sense of humor while emphasizing the taste of cranberry juice by
showing a small cranberry labeled “actual size” and a huge cranberry labeled “actual taste.”
b. Use a picture of the cranberry juice drink in a box so that consumers will know what to look
for—and see that it's not in a bottle.
c. Appeal to the British sense of adventure and travel by using a picture taken on Cape Cod,
where Ocean Spray cranberries grow.
d. Appeal to green and health-conscious consumers by providing information about vitamin
content and the absence of any artificial colors, flavors, or preservatives.
e. All of the above.
Answer: e Page: 227-228 Other Locations: SG
Rationale: Ocean Spray's marketing manager increased the chance of success of cranberry
juice in international markets by understanding systematic research and implementing its
recommendations. The advertisement is witty, shows the box and typical beach near cranberry
bogs, and uses copy about the healthful qualities of cranberry juice.
8-135 TAKE MARKETING ACTIONS CONCEPTUAL
The evaluation process is the final stage of the marketing research process. The two main tasks
performed in the evaluation process are to:
a. compare the market share and industry growth rate.
b. evaluate the decision and the decision process.
c. compare generated revenue to past performance and projected performance.
d. enumerate the decision factors and evaluate the results.
e. evaluate the results and initiate a new decision process.
Answer: b Page: 227-228
Rationale: There are two aspects of the evaluation process. (1) Evaluate the decision itself,
which usually involves comparing actual results with plans and taking corrective action if
necessary, and (2) evaluate the decision process used which may involve changing the activities
in one or more of the steps used in reaching a decision.
8-136 MARKET POTENTIAL DEFINITION
The maximum total sales of a product by all firms to a segment under specified environmental
conditions and marketing efforts of the firms is called:
a. top-down forecast.
b. market potential.
c. growth potential.
d. sales forecast.
e. Delphi forecast.
Answer: b Page: 228
Rationale: Key term definition—market or industry potential
489
8-137 MARKET POTENTIAL DEFINITION
Another commonly used term for market potential is:
a. industry potential.
b. company growth potential.
c. market share.
d. market forecast.
e. sales forecast.
Answer: a Page: 228
Rationale: Key term definition—market or industry potential
8-138 MARKET POTENTIAL DEFINITION
The term market potential or industry potential refers to what important marketing factor?
a. total industrial products sold worldwide
b. the total of all products sold nationally
c. the sum of products in a particular industry sold domestically under normal economic
conditions
d. the minimum anticipated sales in related industries not including federal, state, and local
taxes
e. the maximum total sales of a product by all firms to a segment under specified
environmental conditions and marketing efforts of the firms
Answer: e Page: 228
Rationale: Key term definition—market or industry potential
8-139 MARKET (INDUSTRY) POTENTIAL APPLICATION
Superba Cravats is a major marketer of men's bow ties. It estimates there are 20 million buyers
of bow ties each year, that the average wearer of bow ties purchases 4 ties per year, and that the
average price per bow tie is $10. Superba Cravats has a market share of 20 percent. The market
(or industry) potential for bow ties is:
a. $200 million.
b. $80 million.
c. $400 million.
d. $800 million.
e. $160 million.
Answer: d Page: 228 Other Locations: SG
Rationale: Market potential equals the total buyers (20 million) times the number of ties bought
per person (4) times the average purchase price ($10). So, 20 million x 4 x $10 = $800 million.
Superba Cravats 20 percent market share is not relevant to the market (industry) potential
question.
490
8-140 SALES (COMPANY) FORECAST DEFINITION
Another commonly used term for sales forecast is:
a. environmental forecast.
b. market potential.
c. company forecast.
d. industry potential.
e. market share.
Answer: c Page: 228
Rationale: Key term definition—sales or company forecast
8-141 SALES (COMPANY) FORECAST DEFINITION
Its _____ is defined as what one firm expects to sell under the specified conditions for the
uncontrollable and controllable factors that affect the forecast.
a. sales forecast
b. Delphi forecast
c. industry potential
d. market potential
e. market share
Answer: a Page: 228
Rationale: Key term definition—sales or company forecast
8-142 SALES FORECAST APPLICATION
Superba Cravats is a major marketer of men's bow ties. It estimates there are 20 million buyers
of bow ties each year, that the average wearer of bow ties purchases 4 ties per year, and that the
average price per bow tie is $10. Superba Cravats has a market share of 20 percent. The sales
forecast or company forecast for Superba would be:
a. $200 million.
b. $80 million.
c. $400 million.
d. $800 million.
e. $160 million.
Answer: e Page: 228
Rationale: Market potential equals the total buyers (20 million) times the number of ties bought
per person (4) times the average purchase price ($10). So, 20 million x 4 x $10 = $800 million.
Superba Cravats 20 share of that total would amount to $160 million—its sales forecast.
491
8-143 SALES FORECAST APPLICATION
Superba Cravats is a major marketer of men's bow ties. It estimates there are 20 million buyers
of bow ties each year, that the average wearer of bow ties purchases 4 ties per year, and that the
average price per bow tie is $10. Superba Cravats currently has a market share of 20 percent,
which it expects will increase to 25 percent in the coming year as a result of its new relationship
marketing program. The sales forecast or company forecast for Superba for the coming year
would be:
a. $200 million.
b. $80 million.
c. $400 million.
d. $800 million.
e. $160 million.
Answer: a Page: 228 Other Locations: SG
Rationale: Market potential equals the total buyers (20 million) times the number of ties bought
per person (4) times the average purchase price ($10). So, 20 million x 4 x $10 = $800 million.
Superba Cravats' anticipated 25 percent share of that total would result in sales of $200
million—its sales forecast for the coming year.
8-144 SALES FORECAST APPLICATION
Leeper Publishing Company specializes in books on trout fishing in the United States. Next
year, it expects to achieve total book sales of $187,000. What is this estimate called?
a. a marketing objective
b. a market penetration estimate
c. a market share estimate
d. a sales forecast
e. an industry forecast
Answer: d Page: 228 Other Locations: W
Rationale: Key term definition—sales or company forecast
8-145 SALES FORECAST APPLICATION
Hot Topic is a California-based retailer that opened six Torrid plus-size-only retail stores that
cater to women aged 15-30. Hot Topic expects its six Torrid stores to achieve $56 million in
revenues in 2003. This $56 million is a(n):
a. marketing objective.
b. market penetration estimate.
c. market share estimate.
d. sales forecast.
e. industry forecast.
Answer: d Page: 228 Other Locations: W
Rationale: A sales or company forecast refers to the maximum total sales of a product that a
firm expects to sell during a specified time period under specified environmental conditions and
its own marketing efforts.
492
8-146 MARKET POTENTIAL AND SALES FORECASTS CONCEPTUAL
All of the following factors are essential to develop both market potential and sales forecast
estimates EXCEPT:
a. market segments involved.
b. unit of measurement.
c. market share.
d. time period involved.
e. product involved.
Answer: c Page: 228
Rationale: Market share is not necessary to develop estimates of either market potential or a
sales forecast, although it can be used for the latter. For example, a build-up forecast does not
necessarily use market share data in making a direct forecast.
8-147 TOP-DOWN FORECAST DEFINITION
An approach to forecasting which involves subdividing an aggregate forecast into its principal
components is called:
a. sensitivity analysis.
b. top-down forecasting.
c. bottom-up forecasting.
d. buildup forecasting.
e. summation forecasting.
Answer: b Page: 229
Rationale: Key term definition—top-down forecast
8-148 TOP-DOWN FORECAST DEFINITION
A top-down forecast involves subdividing an aggregate forecast into its _____ components.
a. marketing
b. industry
c. principal
d. informational
e. technological
Answer: c Page: 229
Rationale: Key term definition—top-down forecast
493
8-149 SURVEY OF BUYING POWER DEFINITION
The Survey of Buying Power used to provide information for sales forecasting was developed
by:
a. the U.S. Department of Commerce.
b. American Demographics magazine.
c. the Journal of Market Research.
d. Sales and Marketing Management magazine.
e. the U.S. Census of Manufacturers.
Answer: d Page: 229
Rationale: “The Survey of Buying Power,” published annually by Sales and Marketing
Management magazine, is a widely used source of top-down forecasting information.
8-150 BUILDUP FORECAST DEFINITION
A sales forecasting technique that involves summing the sales forecasts of each of the
components to arrive at a total forecast is called:
a. sensitivity analysis.
b. top-down forecast.
c. trading down forecast.
d. buildup forecast.
e. summation forecast.
Answer: d Page: 229
Rationale: Key term definition—buildup forecast
8-151 BUILDUP FORECAST APPLICATION
What is the sales forecast using the buildup approach for a company having four sales regions
with the following information?
* East coast manager's regional forecast: 30,000 units
* West coast manager's regional forecast: 25,000 units
* Midwest manager's regional forecast: 17,500 units
* Southern manager's regional forecast: 21,300 units
a. 30,000 units
b. 17,500 units
c. 44,300 units
d. 93,800 units
e. cannot be determined with the information provided
Answer: d Page: 229-230
Rationale: 30,000 + 25,000 + 17,500 + 21,300 = 93,800. The buildup approach is a sales
forecasting technique that sums the sales forecasts of each of the components to arrive at a total
forecast.
494
8-152 JUDGMENT OF THE DECISION MAKER DEFINITION
The most commonly used forecasting technique is the:
a. statistical method.
b. technological method.
c. judgment of the decision maker.
d. survey of knowledgeable groups.
e. linear trend extrapolation method.
Answer: c Page: 230
Rationale: According to the text, probably 99.9% of all sales forecasts are judgments of the
person who must act on the results of the forecast—the individual decision maker.
8-153 DIRECT FORECAST DEFINITION
A _____ is an estimate of the value to be forecast without any intervening steps.
a. technological forecast
b. Delphi forecast
c. direct forecast
d. statistical forecast
e. survey of knowledgeable groups forecast
Answer: c Page: 230
Rationale: Key term definition—direct forecast
8-154 DIRECT FORECAST APPLICATION
When Harold Hansen was marketing manager at Creative Concepts Manufacturing Company,
he estimated the company would sell a total of 500,000 of their new sandstone coasters
decorated with Native American petroglyphs the first year on the market although the company
had never before produced a product like that. What is this type of estimate called?
a. a buildup forecast
b. a direct forecast
c. a lost-horse forecast
d. a Delphi forecast
e. a field sales forecast
Answer: b Page: 230 Other Locations: SG
Rationale: He made the forecast without having any data to work with.
495
8-155 DIRECT FORECAST CONCEPTUAL
The least complex sales forecasting technique is the:
a. direct forecast.
b. survey of buyers intentions forecast.
c. trend extrapolation.
d. Delphi forecast.
e. sales force survey forecast.
Answer: a Page: 230
Rationale: Alternative A is correct because a direct forecast is developed using the heuristic
judgment of the decision maker. Alternatives B, C, and E are surveys of knowledgeable groups
that are more time-consuming and costly than judgment forecasts. Alternative D is a statistical
method that involves the greatest cost in terms of time and money due to the data collection and
analysis involved.
8-156 LOST-HORSE FORECAST DEFINITION
With ____ forecasting, a marketing manager would begin with the last known value of an item
being forecast. He would then identify and list the factors that might affect the forecast. This
would include an assessment of whether the factors have a positive or negative impact.
a. jury of executive opinion
b. technological
c. Delphi
d. statistical method
e. lost-horse
Answer: e Page: 230
Rationale: Key term definition—lost-horse forecast
8-157 LOST-HORSE FORECAST APPLICATION
Crescent-Puritan Laundry and Dry Cleaning uses last year's sales as a starting point to estimate
next year's sales and then looks at positive and negative influences that may affect sales. This is
an example of:
a. linear trend extrapolation.
b. statistical inference.
c. experimental estimation.
d. a lost-horse forecast.
e. a survey of buyers' intentions forecast.
Answer: d Page: 230
Rationale: A lost-horse forecast, when used to forecast sales, starts with the last known value
and makes adjustments from that to arrive at the final forecast.
496
8-158 LOST-HORSE FORECAST APPLICATION
The Ohio River Boatworks uses last year's sales as a starting point to estimate next year's sales
of its boats, lists factors that could affect the forecast, assesses whether they have a positive or
negative impact, and makes the final forecast. The Ohio River Boatworks uses a _____
forecast.
a. sales force survey
b. top-down
c. buildup
d. lost-horse
e. survey of experts
Answer: d Page: 230 Other Locations: W
Rationale: A lost-horse forecast starts with the last-known value and makes adjustments from
that to arrive at the final forecast.
8-159 LOST-HORSE FORECAST APPLICATION
When a marketing student overheard the following comments, she knew the person who was
talking was planning to use a _____. “We're increasing TV advertising, adding some sales
representatives, and adding 3 new product models. All those things are positive. But on the
negative side, we're going to increase prices across the board by 20 percent. So on balance, I
think sales will increase next year by 5 percent.”
a. lost-horse forecast
b. technological forecast
c. trend extrapolation
d. delphi forecast
e. survey of buyers' intentions forecast
Answer: a Page: 230
Rationale: A lost-horse forecast, when used to forecast sales, starts with the last known value
and makes adjustments from that to arrive at the final forecast.
8-160 SURVEY OF BUYERS' INTENTIONS FORECAST DEFINITION
A _____ forecast asks prospective customers whether they are likely to buy a good or service
during some future time period.
a. jury of executive opinion
b. technological
c. survey of buyers' intentions
d. statistical method
e. lost-horse
Answer: c Page: 230 Other Locations: SG
Rationale: Key term definition—survey of buyers' intentions forecast
497
8-161 SURVEY OF BUYERS' INTENTIONS FORECAST APPLICATION
Which of the following forecasting techniques would be most accurate for estimating sales
revenues for Waste Treatment Inc.'s commercial garbage disposal equipment for next year?
a. a survey of buyers' intentions forecast
b. a technological forecast
c. a jury of expert opinion forecast
d. a Delphi forecast
e. trend extrapolation
Answer: a Page: 230 Other Locations: W
Rationale: Here the market is small enough and the planning period long and formal enough
that buyers should know with considerable certainty about future contracting. The other
alternatives are less practical.
8-162 SALESFORCE SURVEY FORECAST APPLICATION
All the salespeople in the Southwest regional office are asked to provide estimates of anticipated
sales revenues for the next quarter. Based on this information, the forecast is set at $4,750,000
for the quarter. This is an example of a _____ forecast.
a. judgments of individuals
b. jury of executive opinion
c. sales force survey
d. survey of experts
e. statistical
Answer: c Page: 230
Rationale: A sales force survey forecast uses estimates by a firm's salespeople of sales for a
coming period.
8-163 JURY OF EXECUTIVE OPINION FORECAST APPLICATION
The president, vice-president, and directors of marketing, finance, and research and
development meet to discuss sales for the next fiscal year. All of the people present contribute
to the discussion although they are somewhat inhibited by the strong personality of the finance
director. Together they finalize the sales projections for the following year. This is an example
of: a _____ forecast.
a. judgments of individuals
b. jury of executive opinion
c. Delphi
d. survey of experts
e. statistical
Answer: b Page: 230
Rationale: A jury of executive opinion is a survey of knowledgeable executives inside a firm
and a combination of their opinions to obtain a sales forecast.
498
8-164 SURVEY OF EXPERTS FORECAST APPLICATION
A survey of military health care providers on what types of supplies and how much should be
stockpiled in the event of a bioterroristic attack could be an example of a _____ forecast.
a. judgments of individuals
b. jury of executive opinion
c. Delphi
d. survey of experts
e. statistical
Answer: d Page: 231 Other Locations: SG
Rationale: A survey of experts forecast involves asking experts on a topic to make a judgment
about some future event—in this case, bioterroristic attack.
8-165 TECHNOLOGICAL FORECAST APPLICATION
A _____ would involve a survey of communications engineers to determine how quickly the
nation will adopt mobile wireless technology on their mobile phones using third generation
computer networks. (Third generation computer networks will allow users to send e-mail,
utilize video-conferencing, surf the Web, take digital photos, and listen to music—all one a
single wireless cell phone.)
a. a survey of buyers' intentions forecast
b. a technological forecast
c. a jury of expert opinion forecast
d. a delphi forecast
e. trend extrapolation
Answer: b Page: 231 Other Locations: SG
Rationale: A technological forecast is a form of survey of experts forecast.
8-166 LINEAR TREND EXTRAPOLATION CONCEPTUAL
The CEO says to her marketing manager, “The sales for 2000 were 1000 units higher than 1999,
and the sales for 2001 were 1000 units higher than 2000. I'd say we re safe in forecasting 2002
sales as 1000 units greater than 2001.” The CEO was most likely talking about the results of a
_____ forecast.
a. Delphi
b. jury of executive opinion
c. direct
d. linear trend extrapolation
e. buildup
Answer: d Page: 231
Rationale: Linear trend extrapolation is forecasting by extending a pattern observed in past data
by a straight line into the future. Buildup forecast is not correct because identifiable
components, such as product or market segments, are not summed to arrive at an aggregate total
sales forecast.
499
8-167 TREND EXTRAPOLATION APPLICATION
Assuming influencing factors are reasonably stable, which of the following forecasting
techniques would be the most accurate for estimating the number of replacement car batteries
that will be purchased by U.S. consumers next year?
a. technological forecast
b. sales force survey forecast
c. jury of expert opinion forecast
d. Delphi forecast
e. trend extrapolation forecast
Answer: e Page: 231 Other Locations: SG
Rationale: Trend extrapolation is especially accurate when replacement sales are related to an
installed base. In this case, the number of replacement car batteries sold would relate to the
number of cars on U.S. highways.
8-168 TREND EXTRAPOLATION DEFINITION
The best-known statistical method of forecasting is called _____, which involves extending a
pattern observed in past data into the future.
a. trend extrapolation
b. exponential interpolation
c. information extension
d. inductive extrapolation
e. deductive interpolation
Answer: a Page: 231
Rationale: Key term definition—trend extrapolation
500
8-169 VIDEO CASE: FORD CONSULTING APPLICATION
The raw data that Ford Consulting Group (FGC) sort and compile on a daily basis from sources
such as A.C. Nielsen's ScanTrack and InfoScan are examples of:
a. observational research.
b. primary data.
c. statistical inferences.
d. single-source data.
e. experiential research.
Answer: d Page: 234
Rationale: Single-source data are information provided by one firm on household
demographics and lifestyle, purchases, TV viewing behavior, and responses to promotions.
8-170 VIDEO CASE: FORD CONSULTING APPLICATION
When preliminary research discovered that a client's product Snack-Sticks are not selling well
in the northeast region of the U.S., the next step would be to:
a. attempt to explain why sales are lower in the northeast.
b. determine measures of objectives.
c. locate marketing research constraints.
d. use statistical inference to explain the lower sales.
e. determine the size and composition of the sample survey.
Answer: a Page: 235
Rationale: Table 1 indicates that Tony’s performance is weakest in the northeast region (e.g.,
3% change in volume). The next step would be to attempt to explain why sales are lower (one
explanation is that distribution is lower in the northeast at 93%).
501
CHAPTER 8
TURNING MARKETING INFORMATION INTO ACTION
SHORT ESSAY QUESTIONS
8-171 CHAPTER OPENING EXAMPLE: TEST SCREENINGS CONCEPTUAL
How do movies use marketing research?
Answer:
Studios producing and marketing films emphasize marketing research at different stages in the
motion picture development process. Some examples of this market research include: concept
tests of plots (before production starts), sneak previews of completed films, and awareness tests
before and after the movie release. These research activities are designed to reduce uncertainty
and to improve marketing decisions.
Page: 205-207
8-172 MARKETING RESEARCH DIFFICULTIES CONCEPTUAL
Good marketing research requires great care especially because of inherent difficulties in asking
consumers questions. What are the three basic problems faced by marketing researchers when
trying to assess consumers' willingness to buy products or services with which they are not
familiar?
Answer:
Inherent difficulties in asking consumers questions involve the following:
(1) Consumers do not really know whether they would buy a product they have never thought
about before; they do not recognize the advantages and disadvantages.
(2) Even if they know the answer to a survey question, they might not want to reveal it; this is
particularly true of questions that are personal in nature, and/or that involve the
respondent's status.
(3) If respondents do state a preference for a presumed behavior, it is not necessarily what
they would really do in the buying situation; they might think that is what they would do
or they might just tell the interviewer what they think he or she wants to hear, so as not to
hurt feelings or they might stretch the truth so the interviewer will think more highly of
them.
Page: 207-208
502
8-173 DECISION PROCESS DEFINITION
According to the text, what are the five steps in the marketing research process?
Answer:
The systematic approach is based on five steps:
(1) Define the problem research.
(2) Develop the research plan.
(3) Collect relevant information.
(4) Develop findings and recommendations.
(5) Take marketing actions.
Page: 209
8-174 PROBABILITY VERSUS NONPROBABILITY SAMPLE DEFINITION
Explain probability sampling uses precise rules to select the sample such that each element of
the population has a specific known chance of being selected the difference between probability
and nonprobability sampling.
Answer:
Nonprobability sampling uses arbitrary judgments to select the sample so that the chance of
selecting a particular element may be unknown or zero.
Page: 212
8-175 PRIMARY AND SECONDARY DATA DEFINITION
What is the basic difference between primary and secondary data, and what are the advantages
and disadvantages of each?
Answer:
Secondary data are facts and figures that have already been recorded before the project at hand,
whereas primary data are facts and figures that are newly collected for the project. Secondary
data should be used first, before collection of primary data. Two primary advantages of
secondary data are:
(1) tremendous time savings because the data have already been collected and published
(2) the relatively low cost.
A greater level of detail is often available through secondary data, and industry data is usually
more complete than data collected by private organizations. On the other hand, secondary data
may be out of date, a good example being U.S. Census data that is collected at ten-year intervals.
Furthermore, the definitions and categories might not be quite right for a particular project.
And, finally, because secondary data are collected for another purpose, they may not be specific
enough for particular needs. In the latter case, it might be necessary to collect primary data,
which should be specific to the particular project or program for which the data collection is
designed.
Page: 212-214
503
8-176 QUESTION WORDING PROBLEMS CONCEPTUAL
Give one example each of (1) a leading question, (2) two questions in one, (3) an ambiguous
question, and (4) a non-mutually exclusive answer.
Answer:
(1) Leading question: Why do you like Wendy's fresh meat hamburgers better than those of
the competitors' made of frozen meat?
(2) Two questions in one: Do you eat Wendy's hamburgers and chili?
(3) Ambiguous question: Do you eat at fast food restaurants regularly?
(4) Non-mutually exclusive question: What is your age—under 20, 20 to 40, or 40 and over?
Page: 219
8-177 SEMANTIC DIFFERENTIAL, LIKERT SCALES CONCEPTUAL
What is the difference between a semantic differential scale and a Likert scale?
Answer:
Both are used with fixed alternative questions. The semantic differential scale uses a five or
seven point scale (usually seven) with opposite adjectives at each end. The question usually
asks the respondents to check the scale point which best describes their opinions. The Likert
scale uses a scale (usually five. going from strongly agree to strongly disagree and asks the
respondent to check the degree of agreement with a given statement.
Page: 220
8-178 PANELS CONCEPTUAL
What is a panel? How is it used in marketing research? What disadvantage is associated with
its use?
Answer:
A panel is a sample of consumers or stores from which researchers take a series of
measurements. Unlike a focus group, members of panel are members over long periods of time.
The information gathered from panels is used to tell marketing researchers if consumers change
their behavior over time. A disadvantage is that the marketing research firm needs to recruit
new members continually to replace those who drop out. The new recruits must match the
characteristics of those they replace to keep the panel representative of the marketplace.
Page: 222
504
8-179 EXPERIMENTS CONCEPTUAL
Briefly explain what a marketing experiment is. Include the definitions of dependent and
independent variables and examples of each.
Answer:
Experiments are conducted under tightly controlled conditions to test cause and effect
relationships. There are two types of independent variables. The experimental independent
variable is manipulated and controlled by the experimenter. An extraneous independent
variable is a result of outside factors that the experimenter cannot control. The effect is called
the dependent variable. It cannot be manipulated directly and is the factor affected by the
independent variables.
Page: 222-223
8-180 DECISION PROCESS CONCEPTUAL
Why can't a marketing manager's decision-making stop when he or she has chosen the best
alternative to solving a problem?
Answer:
Identifying a problem's solution in Step 4 of the text's decision process isn't enough; someone
has to develop a detailed plan and see that the solution gets implemented. The goal is to use
both effective planning and execution to achieve a successful marketing program. This task is
an important part of Step 4 of the decision process. Eventually the decision should also be
evaluated (Step 5 of the decision process).
Page: 227
8-181 DECISION PROCESS CONCEPTUAL
There are three actions a marketing manager must take in the final stage in the marketing
research process. What are they?
Answer:
(1) Identify the action recommendations.
(2) Implement the recommendations.
(3) Evaluate the results. When evaluating the results, it is important to evaluate the decision
itself and to evaluate the decision process used.
Page: 227
505
8-182 MARKET POTENTIAL AND SALES FORECAST CONCEPTUAL
Differentiate between market potential and sales forecast.
Answer:
Market potential is also known as industry potential. Market potential refers to the maximum
total sales of a product by all firms to a segment under specified environmental conditions and
marketing efforts by these firms. Sales forecast is also known as company forecast. Sales
forecast refers to what one firm expects to sell of a given product under specified environmental
and marketing conditions.
Page: 228
8-183 TOP-DOWN AND BUILDUP FORECASTS CONCEPTUAL
Compare top-down and buildup forecasting methods
Answer:
The top-down forecast involves subdividing an aggregate forecast into its principal
components. For example, a firm may use the figures published annually by Sales & Marketing
Management magazine to develop state-by-state forecasts of sales. The buildup forecast sums
the sales forecasts of each of the components to arrive at the total forecast. This method is
commonly used when there are identifiable components such as products, product lines, or
market segments. For example, General Electric uses the buildup approach by adding forecasts
of three types of projects -- work under contract, follow-up work, and new business.
Page: 229-230
8-184 SURVEYS OF KNOWLEDGEABLE GROUPS CONCEPTUAL
What are the five common groups surveyed to develop sales forecasts? Describe the
information contained in the forecasts that result.
Answer:
(1) Survey of buyers' intentions asks prospective customers whether they are likely to
purchase a specific product during a specified period of time.
(2) Sales force forecast asked the firm's salespeople to estimate product sales during a
specified period of time since they are in close contact with their current and prospective
customers.
(3) Jury of executive opinion asks knowledgeable executives inside the firm, such as the vice
presidents of marketing, finance, manufacturing, etc. about the likely sales expected
during a specified period of time.
(4) Survey of experts asks experts in the industry to discuss their viewpoints on a topic and to
make a judgment about some future event, such as expected sales for a specified product.
A Delphi panel is an example.
(5) Technological Forecast asks experts to estimate when scientific breakthroughs in
technology will occur and/or the estimated sales of new innovations or inventions.
Page: 230-231
506
8-185 TREND EXTRAPOLATION APPLICATION
Suppose you were a sales forecaster for 3M Company, and had actual sales revenue figures on
adhesives for the past ten years. What statistical method of forecasting might you use?
Answer:
The best-known statistical method of forecasting is trend extrapolation, or extending a pattern
observed in past data into the future. Trend extrapolation assumes the underlying relationships
in the past will continue into the future. If this assumption is correct you develop an accurate
forecast. However, if the factors underlying the trend change, the technique will not provide
accurate forecasts. (If the trend is thought to be a straight line, the forecaster may choose to use
linear trend extrapolation). In the case of 3M's adhesives, the quality is so good, the volume is so
great, and the history so excellent that a trend extrapolation would make great sense.
Page: 231
507
TEST ITEM TABLE FOR
CHAPTER 9 GOES HERE
508