MKTG350 Exam 2
1. When Honda ads claimed, “You meet the nicest people on a Honda” they were trying
to distance Honda from Hell’s Angels and the stereotype of people had of motorcycle
riders because Hell’s Angels is _________ for Honda’s target market.
A. a membership group
B. an aspiration group
C. a disociative group
D. an important segment
2. Psychographic categories reflect
A. demographic characteristics
B. personality traits
C. attitudes, interests, and opinions
D. all of the above
3. If a firm uses coupons to offer significant discounts on price, it may succeed in
increasing the amount of brand loyalty toward its brand. It does so primarily by
A. beliefs about the product
B. behavior with respect to the product
C. consumer involvement with the product category
D. interest in the product category
4. Assume consumers could either (a) have a positive experience with a product, or (b)
read a positive advertisement for the product. Which would more likely produce the
more positive attitude toward the product, and why?
5. Ideally, organizational buyers should regard the marketer as
A. a source of products
B. a seller
C. a deal maker
D. a problem solver
6. Jim Dunn is an electrical engineer with Mirco Circuits, Inc. Though he seldom gets
involved in the buying process for the components that his company installs in the circuit
boards, the purchasing agent routinely seeks his advice on new products before a decision
is made. Jim’s role is best described as
D. purchasing agent
7. Codes assigned by the U.S. government to categories of business are called ______
8. To use benefit segmentation, a marketer must know two things:
A. customers’ values and their perception of products
B. amount of product use and degree of brand loyalty
C. how often and where customers shop
D. level of customer involvement and social class
9. By meeting the needs of various segments, a differentiated segmentation strategy will
produce greater profit than a strategy of mass marketing. Is this true or false? Explain.
10. A company may sell the same product as both a consumer and an industrial product.
11. Match by putting the appropriate letter in the blanks:
____convenience product A. day care service
____shopping product B. butter
____specialty product C. engagement ring
12. Put the following in the order in which they would occur by putting a 1 next to the
item that would happen first, a 2 for the item that would occur next, and so on.
13. A product that is widely distributed, undergoing some slight modifications, and
promoted with coupons and advertising is in which PLC stage?
14. After billions of dollars spent on R&D, a pharmaceutical company finally is ready to
market a drug that can cure the common cold. With patent protection and the headstart
on development, the company expects to have at least a year before competitive products
are introduced. As a result, the price for this product will probably be highest during
which PLC stage?
15. When laggards begin buying a product, the product is in which PLC stage?
16. Assume you are marketing manager of a large cereal company. If consumers regard
store brands and private label cereals to be pretty similar to your brand, what can your
firm do to compete?
17. In which of the following should there be the greatest concern for the inseparability
of the consumption of the service from the production of the service?
A. an auto dealership
B. a shoe manufacturer
C. a fast-food restaurant
D. this marketing course
18. A good reputation is generally more important to a service firm than a goods provider
A. consumers tend to talk to one another more about services
B. reputation is one the few ways that consumers can evaluate services
C. it is easier to develop good reputations for services than for goods
D. unlike for goods, service firms can use a good reputation to charge higher prices
19. Effective promotion has what effect on a product’s demand?
A. shifts the product’s demand curve to the left
B. shifts the product’s demand curve to the right
C. increases the steepness of the slope of the product’s demand curve
D. decreases the amount of the product people will buy at a given price
20. If a store bought ties for $10 each and sold 200 of them at $25 each, total revenue
would be what?
21. For a manufacturer, which of the following is most likely to be considered a fixed
A. materials cost
B. labor cost
C. rent for the factory building
D. sales commissions paid to the sales staff
22. John Johnson sells candy bars for his school. He reports to his teacher that he bought
the candy bars for $.25 each and sold them for a markup on price of 120%. Is that
possible? Explain. What price did he sell them for?
23. A major drug company makes a product that can be used to treat certain types of
cancer in humans. By coincidence it can also be used to treat minor problems in sheep.
The company sells the version of the pill for humans for $5.00 per pill and the version for
sheep for $.10 per pill. In either case, the costs are $.03 per pill. The company is using
what method to set its prices?
A. meeting social responsibility objectives
B. cost plus
C. quality value analysis
D. meeting market penetration objectives
24. An invoice for $10,000 is quoted as 4/20, net 45. The firm is able to pay the bill 28
days after receiving the invoice. Should they pay it at that time? Explain.
25. You make candy bars, which sell for $.49. You would like to raise your price but
you believe that consumers will object. What would be the best decision? (No, reducing
the size of the candy bar is not an option this time.)
A. shift to odd/even pricing
B. switch to prestige pricing
C. time the price increase to coincide with product improvement
D. raise prices dramatically, then lower them to a point slightly higher than now
26. A firm cannot influence consumer evaluations of a product if the consumers don’t
think the product is important.
27. Nike added AquaSocks (shoes designed for athletic activity in and around the water)
as a new product. This was an example of segmenting the market on the basis of
A. life cycle stage
B. life style
C. use situation
D. price sensitivity
28. If a manufacturer determines that a toy should retail for $30 and wholesalers and
retailers will take trade discounts of 5% (wholesalers) and 40% (retailers), what is the
highest variable cost the manufacturer can have if the target contribution margin is 20%.
29. Big Sky Ski Resort analyzed average price and sales for two years. In 1976, average
price was $8.85 per day and sales were 910 ski-days. In 1977, average price was $9.97
and sales were 988 ski-days. Based on this analysis, would you recommend that Big Sky
go ahead with a plan to raise prices by 10% for 1978? Explain.
30. A small candy maker has the following costs: annual depreciation of equipment of
$120,000, total overhead expenses of $260.000, an advertising budget of $200,000, and
selling salaries of $300,000. Variable costs, including sales commissions, totaled $8 per
box. At an average selling price of $18 per box, how many units must be sold to break
Answers to some:
1c, 2d, 3b, 4a, 5d, 6c, 7b, 8a, 9(depends on benefits/costs), 10a, 11bca, 12(3,4,1,2),
13c,14a,15c,16(change product or image), 17d,18b,19b,