Midterm II Name_________________________
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
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
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.
7. New to the world products, where the product category itself is new, are also
a. Discontinuous products
b. Moderate innovations
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
10. The demand for consumer goods often affects the demand for business products.
This characteristic of business markets is called ______ demand.
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
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:
c. Undifferentiated targeting
d. Niche marketing
13. _______ takes new technologies and attempts to find useful applications for them.
a. Product development
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
Target ROI pricing
Yield management system
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
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.
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.
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.
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.
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.