Study questions for Midterm

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					Midterm II                                  Name_________________________
Economics 161
Winter 2005
Version A                                   Total score             _________/50 points

Multiple Choice Questions (1 point each) Circle the correct answer on the test.

   1. ________ is the primary promotional method for the sale of all business products.
         a. Slotting allowances
         b. Advertising
         c. Persal selling
         d. Public relations
         e. Trade promotions

   2. As a short term pricing objective, ______ can be effectively used on a temporary
      basis to sell off excessive inventory.
          a. Profit maximization
          b. Profit oriented pricing
          c. Status quo pricing
          d. Sales maximization

   3. General Electric Co. was accused of conspiring with De Beers Centenary AG to
      set a price for industrial diamonds, which are used on industrial cutting tools. As
      a result, the two companies were charged with:
          a. Price discrimination
          b. Price fixing
          c. Bait pricing
          d. Predatory pricing

   4. The length of the introductory stage of the product life cycle for a new product is
      largely determined by:
          a. The size of the product
          b. The product’s marketing mix
          c. The efficiency of the test marketing
          d. Product characteristics, such s advantages over substitute products

   5. Axe is a brand of body deodorant spray that is popular in Europe. The product’s
      manufacturer has recently introduced Axe shower gel products. Axe shower gel
      products are examples of the implementation of a _________ strategy.
         a. Portfolio breadth expansion
         b. Product portfolio width adjustment
         c. Product line extension
         d. Mix repositioning

   6. A researcher wants to determine what percentage of the population in the
      southeastern United States would use a mass transit system if it were well



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   maintained. He gets telephone books from every city with over 200,000 people in
   those states and selects the fifteenth name in the middle column on every 100th
   page as his sample. He has made a ________ error.
       a. Targeting
       b. Random
       c. Nonprobability
       d. Frame

7. New to the world products, where the product category itself is new, are also
   called:
       a. Discontinuous products
       b. Moderate innovations
       c. Diffusions
       d. Venture products

8. The first step in the marketing research process is to:
      a. Specify the sampling plan
      b. Collect the data plan the research design
      c. Define the marketing problem to be solved
      d. Collect the data

9. The city of Maidenview has a job training program for the homeless but has had a
   difficult time reaching this group with information about the program even though
   radio and television stations have provided public service advertisements free of
   charge. This illustrates a segmentation problem with
       a. Substantiality
       b. Responsiveness
       c. Accessibility
       d. Causality

10. The demand for consumer goods often affects the demand for business products.
    This characteristic of business markets is called ______ demand.
       a. Elastic
       b. Inelastic
       c. Fluctuating
       d. Derived

11. A(n) ______ is a group of people or organizations for which an organization
    designs, implements, and maintains a marketing mix intended to meet the needs
    of that group.
        a. Heterogeneous segment
        b. Target market
        c. Demographic segment
        d. Aggregated market




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   12. For many people, www.travelocity.com was simply a seller of airline tickets. In
       2002, the Internet company spend $40 million to convince customers that it also
       offered many other useful travel services. In other works, Travelocity.com used:
           a. Reposition
           b. Reengineering
           c. Undifferentiated targeting
           d. Niche marketing

   13. _______ takes new technologies and attempts to find useful applications for them.
          a. Product development
          b. Brainstorming
          c. Applied research
          d. Concept testing

   14. Critics claim bank ATMs take advantage of the ________ of customers who
       suffer a poverty of time and have a strong need for convenience.
           a. Elasticity of demand
           b. Inelastic demand schedule
           c. Unitary supply and demand
           d. Supply characteristics

   15. If a marketer decides to price goods at odd-numbered dollar amounts to denote
       bargains, and at even-numbered amounts to denote quality, he or she is using
            a. Two part pricing
            b. Price lining
            c. Price bracketing
            d. Psychological pricing




Definitions – Be clear and thorough in your definition of the following terms (2 points
each)

Price discrimination




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Convenience sample




Perceptual map




                     4
Target ROI pricing

Yield management system
Commercialization




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Short Answer Questions (5 points each) Please write clearly and succinctly to
answer these questions.

1. In the Boston Consulting Group (BCG) portfolio matrix, SBUs can be classified into
   four types. Draw the matrix and identify the four types, and for each type provide a
   specific, “real-life” example of a company’s product or SBU that fits into that
   category.




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2. The marketing mix refers to a unique blend of marketing variables known as the four
   P’s. Name and briefly describe each of the 4 Ps.




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3. Give an example of where ethics is important to the marketing decisions for a
   particular product. Be specific about what aspects of the marketing mix might be
   influenced by ethical considerations.




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4. Assume you are the marketing manager for a leading U.S. manufacturer of machines
   for manufacturing wooden pallets used in storage and distribution of many products.
   Your company would like to become heavily involved in global marketing (especially
   in Japan) but has some capital limitations. Your job is to evaluate whether it should
   use contract manufacturing or direct investment. Compare and contrast these two
   options and make a recommendation.




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5. Assume that your current $69.99 portable television has developed wavy lines across
   the screen and makes the people in your favorite programs sound like they are using
   cheap walkie-talkie radios. Therefore, you have decided to work all summer to save
   money for the ultimate $1200 flat-screen television with surround sound. Trace the
   steps of your decision process for purchasing your new TV.




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6. Application: It is almost 100 degrees outside and Charlie is on his way to the
supermarket to buy groceries. His air conditioner is broken so he is hot and thirsty.
Charlie notices a billboard featuring an ice-cold Pepsi. Charlie remembers that he is out
of Pepsi. Once in the store, Charlie heads straight for the soft-drink aisle and picks up a
six-pack of Pepsi. List the steps of the consumer decision-making process and discuss
how they apply in Charlie’s situation.




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