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Marketing Management, 14e (Kotler/Keller)

Chapter 3 Collecting Information and Forecasting Demand


1) As the manager of an organization that is attempting to build a Marketing Information System
(MIS), you have been informed that a MIS is built upon three fundamental information sources
!he sources are """""""", marketing intelligence activities, and marketing research
A) e#ternal records and documents
$) databases found on the Internet
%) consultant reports
&) internal company records
') secondary data from government sources such as the $etter $usiness $ureau
Ans(er) &
*age +ef) ,-
.b/ective) 1
&ifficulty) 'asy
0) !he company1s marketing information system should be a mi# of (hat managers think they
need, (hat managers really need, and """"""""
A) (hat the marketing research department is able to do
$) (hat consumers are (illing to consume
%) (hat the government policies allo(
&) (hat is acceptable at the industry level
') (hat is economically feasible
Ans(er) '
*age +ef) ,-
.b/ective) 1
&ifficulty) Moderate
2) !he heart of the internal records system is the """"""""
A) pay3roll system
$) purchase order cycle
%) order3to3payment cycle
&) e#pense cycle
') human resources system
Ans(er) %
*age +ef) 45
.b/ective) 0
&ifficulty) Moderate
1
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8) !he """""""" begins (ith sales representatives and dealers sending orders to the firms and is
follo(ed by the sales department preparing invoices, and finally generating shipping and billing
documents (hich are then sent to various departments
A) payroll system
$) market research process
%) human resources system
&) e#pense cycle
') order3to3payment cycle
Ans(er) '
*age +ef) 45
.b/ective) 0
&ifficulty) Moderate
9) $y e:uipping its sales force (ith handheld devices (ith bar3code readers and Internet
connections to speed inventory assessment, !aylorMade allo(s sales e#ecutives to have
significantly more time to interact (ith their consumers !his is an e#ample of the use of
technology in improving """"""""
A) sales information systems
$) payroll systems
%) cookies
&) cohort segmentation
') competitive intelligence gathering
Ans(er) A
*age +ef) 45
.b/ective) 0
AA%S$) ;se of I!
&ifficulty) Moderate
,) %ompanies can practice targeted marketing by using """"""""<records of =eb site usage
stored on personal bro(sers
A) plug3ins
$) black s(ans
%) cookies
&) trolls
') honey3pots
Ans(er) %
*age +ef) 45
.b/ective) 0
AA%S$) ;se of I!
&ifficulty) 'asy
0
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4) !he internal records system supplies results data, but the marketing intelligence system
supplies """""""" data
A) internal
$) revenue
%) thematic
&) happenings
') process
Ans(er) &
*age +ef) 41
.b/ective) 2
&ifficulty) 'asy
>) A """""""" is a set of procedures and sources managers use to obtain everyday information
about developments in the marketing environment
A) data (arehousing system
$) viral marketing campaign
%) product management system
&) marketing intelligence system
') sales information system
Ans(er) &
*age +ef) 41
.b/ective) 2
&ifficulty) Moderate
-) A company can take several steps to improve the :uality of its marketing intelligence =hich
of the follo(ing best describes the practice used by Mc&onald1s (hen it sent pseudo customers
to assess stores1 internal speed standards?
A) training and motivating the sales force to spot and report ne( developments
$) motivating intermediaries to pass along important intelligence
%) net(orking e#ternally
&) purchasing information from outside research firms and vendors
') using the sales information system to get accurate sales reports
Ans(er) $
*age +ef) 40
.b/ective) 2
AA%S$) Analytic skills
&ifficulty) Moderate
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15) A company can take several steps to improve the :uality of its marketing intelligence If the
company purchases competitive products for study, attends open houses and trade sho(s, and
reads competitors1 published reports and stockholder information, the company is using
"""""""" to improve the :uality of its marketing intelligence
A) sales3force surrogates
$) intermediaries
%) e#ternal net(orks
&) advisory panels
') customer feedback systems
Ans(er) %
*age +ef) 40
.b/ective) 2
&ifficulty) &ifficult
11) =hen gathering marketing intelligence, companies often use the 0555 ;S census, (hich
provides an in3depth look at the population s(ings, demographic groups, regional migrations,
and changing family structure of 0>1@ million people =hich of the follo(ing steps to improve
the :uality of a company marketing intelligence system (ould be most closely associated (ith
this illustration?
A) A company can purchase information from outside suppliers
$) A company can take advantage of government data sources
%) A company can use online customer feedback systems to collect data
&) A company can net(ork e#ternally
') A company can use its sales force to collect and report data
Ans(er) $
*age +ef) 40
.b/ective) 2
&ifficulty) Moderate
10) =hen a company ac:uires consumer3panel data from firms like A% Aielsen %ompany and
Information +esources Inc, (hich of the follo(ing steps to improve the :uality of a company
marketing intelligence system is the company resorting to?
A) training and motivating the sales force to spot and report ne( developments
$) motivating distributors, retailers, and other intermediaries to pass along important intelligence
%) hiring e#ternal e#perts to collect intelligence
&) using e#ternal net(ork
') purchasing information from outside research firms and vendors
Ans(er) '
*age +ef) 40
.b/ective) 2
&ifficulty) Moderate
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12) 'lancecom is a service provider that allo(s contractors to describe their level of satisfaction
(ith subcontractors !his is an e#ample of a(n) """"""""
A) independent customer goods and service revie( forum
$) public blog
%) customer complaint site
&) combo site offering customer revie(s and e#pert opinions
') distributor or sales agent feedback site
Ans(er) '
*age +ef) 42
.b/ective) 2
AA%S$) ;se of I!
&ifficulty) Moderate
18) !he sites (hich offer positive or negative product or service revie(s and are built by the
retailers of a particular product or service are called """"""""
A) combo sites
$) distributor or sales agent feedback sites
%) public blogs
&) independent service revie( forums
') customer complaint sites
Ans(er) $
*age +ef) 42
.b/ective) 2
AA%S$) ;se of I!
&ifficulty) 'asy
19) A """""""" is Bunpredictable, short3lived, and (ithout social, economic, and political
significanceB
A) fad
$) fashion
%) trend
&) megatrend
') style
Ans(er) A
*age +ef) 48
.b/ective) 8
&ifficulty) 'asy
9
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1,) A """""""" is a direction or se:uence of events that has some momentum and durabilityC it
reveals the shape of the future and can provide strategic direction
A) fad
$) fashion
%) trend
&) megatrend
') style
Ans(er) %
*age +ef) 48
.b/ective) 8
&ifficulty) 'asy
14) A """""""" is a Blarge social, economic, political, and technological change that is slo( to
form, and once in place, influences us for some timeDbet(een seven and ten years, or longerB
A) fad
$) fashion
%) trend
&) megatrend
') style
Ans(er) &
*age +ef) 48
.b/ective) 8
&ifficulty) 'asy
1>) =hich of the follo(ing is true about trends in (orld(ide population gro(th?
A) $irthrates are on the rise in developed countries
$) .verall, the (orld population gro(th is declining
%) $irthrates are on the rise in developing countries
&) &eath rates are rising in developing countries
') *opulation gro(th is highest in developing countries
Ans(er) '
*age +ef) 49
.b/ective) 8
&ifficulty) 'asy
1-) A gro(ing population does not mean gro(ing markets unless """"""""
A) the people are under a democratic system of government
$) there is common o(nership of all resources
%) people have sufficient purchasing po(er
&) there is ade:uate governmental intervention in the market
') the government has a budget surplus
Ans(er) %
*age +ef) 49
.b/ective) 8
&ifficulty) Moderate
,
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05) In the ;S, people born bet(een the years """""""" are called boomers
A) 1-4> and 0550
$) 1-8, and 1-,8
%) 1-09 and 1-89
&) 1-,9 and 1->9
') 1-05 and 1-85
Ans(er) $
*age +ef) 49
.b/ective) 8
&ifficulty) 'asy
01) Eirms find Breverse innovationB advantage by """"""""
A) introducing a commodity in a developed country and then distributing it globally
$) introducing a commodity in a developing country and then distributing it in other developing
countries
%) introducing a commodity in a developing country and then distributing it globally
&) introducing a commodity in a developed country and then distributing it in developing
countries
') introducing a commodity in a developed country and then distributing it in other developed
countries
Ans(er) %
*age +ef) 4,
.b/ective) 8
&ifficulty) Moderate
00) """""""" refer to groups of individuals (ho are born during the same time period and travel
through life together
A) %ohorts
$) *opulations
%) %lans
&) Societies
') 'thnic groups
Ans(er) A
*age +ef) 4,
.b/ective) 8
&ifficulty) 'asy
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02) According to the 0555 %ensus, (hich of the follo(ing is the largest group in the ;nited
States?
A) =hites
$) 7ispanics
%) African Americans
&) %hinese Americans
') Asian Indians
Ans(er) A
*age +ef) 4,
.b/ective) 8
&ifficulty) 'asy
08) !he three largest subgroups of the 7ispanics in the ;S are """""""", """""""", and
""""""""
A) *uerto +icanC Me#icanC %hilean
$) SalvadoranC %ubanC &ominican
%) Me#icanC *uerto +icanC %uban
&) $razilianC Me#icanC %uban
') SalvadoranC &ominicanC %olumbian
Ans(er) %
*age +ef) 4,
.b/ective) 8
&ifficulty) 'asy
09) =hich of the follo(ing is true about the gro(th of the 7ispanic population in the ;S?
A) 7ispanics made up 11 percent of all ne( (orkers in the past decade
$) !he disposable income of 7ispanics has not gro(n as fast as that of the rest of the population
%) 7ispanics no( outnumber African Americans in the ;S
&) Eamily incomes of 7ispanics have gro(n at a rate double that of the rest of the population
') 7ispanics are the fastest gro(ing consumer group in the ;S
Ans(er) '
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
0,) !he traditional household consists of """"""""
A) a husband, (ife, and children (and sometimes grandparents)
$) a group of related persons living together
%) t(o or more families living together
&) a man and a (oman living together ((hether married or not)
') related or unrelated persons (ho share living arrangements
Ans(er) A
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
>
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04) $y 0515, pro/ections indicate that the largest category of households (ill be composed of
""""""""
A) childless married couples and empty nesters
$) single3parent families
%) single live3alones
&) singles living (ith nonrelatives
') married couples (ith children
Ans(er) A
*age +ef) 44
.b/ective) 8
&ifficulty) Moderate
0>) =hich of the follo(ing is likely to occur during economic do(nturns?
A) *eople tend to spend more on lu#ury goods
$) %onsumption of necessary goods decline
%) Fong term credit is available at concessional rates of interest
&) !he purchasing po(er of the people declines
') !he level of investment in the economy rises
Ans(er) &
*age +ef) 44
.b/ective) 8
AA%S$) &ynamics of the global economy
&ifficulty) Moderate
0-) =hich of the follo(ing economies provide limited opportunities to international marketers to
develop product sales?
A) capitalist economies
$) subsistence economies
%) ra(3materials3e#porting economies
&) industrializing economies
') industrialized economies
Ans(er) $
*age +ef) 4>
.b/ective) 8
&ifficulty) 'asy
-
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25) In response to the ;S income distribution trend to(ard """""""", Fevi3Strauss introduced
premium Fevi1s %apital ' line to upscale retailers and the economy Fevi Strauss Signature line to
mass3market retailers
A) very lo( incomes
$) mostly lo( incomes
%) mostly high incomes
&) mostly medium incomes
') lo( and high incomes
Ans(er) '
*age +ef) 4>
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) &ifficult
21) In the ;S, consumer e#penditures on homes and big ticket items tend to slacken during
recessions because """"""""
A) the consumers generally have a lo( debt3to3income ratio
$) of steady supply of loanable funds in the economy during recession
%) the consumers have a high debt3to3income ratio
&) consumer borro(ing increases during recession
') of stringent credit policies adopted by the Eed before the onset of recession
Ans(er) %
*age +ef) 4>
.b/ective) 8
&ifficulty) Moderate
20) =hich of the follo(ing elements of sociocultural environment can be associated (ith the
gro(ing demand for Bsocial surrogatesB like social net(orking sites, television, etc?
A) vie(s of ourselves
$) vie(s of organizations
%) vie(s of others
&) vie(s of nature
') vie(s of the universe
Ans(er) %
*age +ef) 4>
.b/ective) 8
&ifficulty) Moderate
15
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22) !oday, corporations need to make sure that they are good corporate citizens and that their
consumer messages are honest in order to positively align themselves (ith consumers1
""""""""
A) vie(s of others
$) vie(s of organizations
%) vie(s of themselves
&) vie(s of the universe
') vie(s of society
Ans(er) $
*age +ef) 4-
.b/ective) 8
AA%S$) +eflective thinking
&ifficulty) Moderate
28) *eople vary in their vie(s of society and their consumption patterns often reflect their social
attitudes """""""" usually live more frugally, drive smaller cars, and (ear simpler clothing
A) Makers
$) 'scapers
%) Seekers
&) %hangers
') &evelopers
Ans(er) &
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
29) *eople vary in their vie(s of society and their consumption patterns often reflect their social
attitudes """""""" usually eat, dress, and live (ell
A) Makers
$) 'scapers
%) Seekers
&) %hangers
') &evelopers
Ans(er) A
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
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2,) *eople vary in their vie(s of society and their consumption patterns often reflect their social
attitudes """""""" are a ma/or market for movies, music, surfing, and camping
A) Makers
$) *reservers
%) 'scapers
&) %hangers
') &evelopers
Ans(er) %
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
24) """""""" beliefs and values are passed from parents to children and reinforced by social
institutionsDschools, churches, businesses, and governmentsC they are very difficult to change
A) !ransient
$) Secondary
%) *rotected
&) %ore
') Gariable
Ans(er) &
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
2>) =hich of the follo(ing (ould be the best illustration of a secondary belief or value?
A) belief in (ork
$) belief in giving to charity
%) belief in getting married
&) belief in getting married early
') belief in being honest
Ans(er) &
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
2-) 'ach society contains """""""", groups (ith shared values emerging from their special life
e#periences or circumstances
A) stakeholders
$) cli:ues
%) consumer bundles
&) subcultures
') behavioral niches
Ans(er) &
*age +ef) >5
.b/ective) 8
&ifficulty) 'asy
10
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85) =hich of the follo(ing is the largest contributor to global (arming, contributing almost a
:uarter of the carbon dio#ide in the environment?
A) transportation
$) industrial production facilities
%) electrical po(er plants
&) aerosol cans
') rural cooking fires
Ans(er) %
*age +ef) >5
.b/ective) 8
&ifficulty) 'asy
81) =hich of the follo(ing is the second largest contributor to global (arming, accounting for
roughly a fifth of carbon emissions?
A) transportation
$) primary metal production facilities
%) electrical po(er plants
&) aerosol cans
') rural cooking fires
Ans(er) A
*age +ef) >5
.b/ective) 8
&ifficulty) 'asy
80) Eirms (hose products re:uire """""""" resourcesDoil, coal, platinum, zinc, silverDface
substantial cost increases as depletion approaches
A) infinite
$) near finite
%) finite rene(able
&) finite nonrene(able
') perishable
Ans(er) &
*age +ef) >1
.b/ective) 8
&ifficulty) 'asy
12
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82) *restige FF%, a small company that manufactures specialty cereals and energy bars, (ants to
launch a Bgreen marketingB program in response to heightened consumer a(areness about
environmental issues =hat should the company do to ma#imize the program1s chances of being
successful?
A) demonstrate that the products (ill benefit both customers and the society in the long3term
$) emphasize benefits to the consumer rather than environmental benefits
%) focus on the efforts and costs incurred by the company to bring these BgreenB products to
consumers
&) engage in Bgreen(ashingB to highlight the environmental benefits of the product
') e#plain the rules and regulations laid out by governmental agencies to protect the environment
Ans(er) A
*age +ef) >0
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) &ifficult
88) =hen a company is said to have engaged in Bgreen(ashing,B it means that """"""""
A) the company has significantly changed its business processes to incorporate a greener, more
environmentally friendly philosophy
$) the company has moved its production facilities to countries (here environmental la(s and
regulations are less rigorous
%) the company has changed its BgreenB image in order to appeal to a different, usually older,
demographic
&) the company1s products are not nearly as green and environmentally beneficial as its
marketing might suggest
') the company has undertaken a campaign to lobby for tougher environmental regulations for
the industry
Ans(er) &
*age +ef) >0
.b/ective) 8
&ifficulty) 'asy
89) =hich of the follo(ing consumer environmental segments cares a great deal about the
environment, but doesn1t seem to have the kno(ledge or resources to take action?
A) not me greens
$) business first greens
%) mean greens
&) go3(ith3the3flo( greens
') dream greens
Ans(er) '
*age +ef) >0
.b/ective) 8
&ifficulty) 'asy
18
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8,) !he consumer environmental segment termed """""""" holds the vie( that the environment
is not a huge concern and that business and industry is doing its part to help !his may e#plain
(hy they don1t feel the need to take action themselvesDeven as they cite lots of barriers to doing
so !hey are also the largest consumer environmental segment
A) not me greens
$) business first greens
%) mean greens
&) go3(ith3the3flo( greens
') dream greens
Ans(er) $
*age +ef) >0
.b/ective) 8
&ifficulty) 'asy
84) !he consumer environmental segment termed """""""" claims to be kno(ledgeable about
environmental issues, but does not e#press pro3green attitudes or behaviors Indeed, it is
practically hostile to(ard pro3environmental ideas !his segment has chosen to re/ect prevailing
notions about environmental protection and may even be vie(ed as a potential threat to green
initiatives
A) not me greens
$) business first greens
%) mean greens
&) go3(ith3the3flo( greens
') dream greens
Ans(er) %
*age +ef) >0
.b/ective) 8
&ifficulty) 'asy
8>) =hich of the follo(ing is true about the technology trends that marketers should monitor?
A) A gro(ing portion of ;S +H& e#penditures are going to(ard the research side as opposed
to the development side
$) !oday, the time bet(een idea and implementation is e#panding
%) More single companies rather than consortiums are directing research efforts to(ard ma/or
breakthroughs
&) !he pace of change is accelerating today
') !he government has decreased regulation of technological change
Ans(er) &
*age +ef) >23>8
.b/ective) 8
&ifficulty) Moderate
19
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8-) Mandatory recycling la(s have boosted the recycling industry and launched dozens of ne(
companies making ne( products from recycled materials =hich of the follo(ing most closely
resembles the situation discussed above?
A) Iovernment makes reforestation mandatory for lumbering firms leading to a rise in timber
production
$) Iovernment restricts industries from purchasing farmland thereby increasing agricultural
produce
%) Iovernment subsidizes e#port of beef to promote production of beef cattle
&) Iovernment pollution control norms increase the production of pollution control e:uipment
') Iovernment restricts unfair trade practices to promote international trade
Ans(er) &
*age +ef) >8
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) &ifficult
95) An unintended effect of business legislation is """"""""
A) restricting fair competition in the market
$) encouraging unbridled business behavior
%) reducing the social cost of producing a particular commodity
&) e#posing consumers to unfair trade practices
') slo(ing economic gro(th
Ans(er) '
*age +ef) >8
.b/ective) 8
&ifficulty) Moderate
91) An important force affecting business is the """""""" movement, a movement of citizens
and government organized to strengthen the rights and po(ers of buyers in relation to sellers
A) human rights
$) consumerist
%) environmental
&) self3determination
') materialistic
Ans(er) $
*age +ef) >8
.b/ective) 8
&ifficulty) 'asy
1,
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90) %ompanies can prepare as many as """""""" different types of demand estimates
A) ,
$) 25
%) ,5
&) -5
') 195
Ans(er) &
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
92) !he demand estimates of an organization comprise of five space levels !hey are (orld,
country, region, territory, and """"""""
A) zone
$) organization
%) customer
&) product
') input
Ans(er) %
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
98) !he """""""" market is the set of consumers (ith an ade:uate interest, income, and access
to a particular offer
A) potential
$) available
%) target
&) penetrated
') reserve
Ans(er) $
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
99) !he """""""" market is the part of the :ualified available market the company decides to
pursue
A) potential
$) available
%) target
&) penetrated
') reserve
Ans(er) %
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
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9,) !he """""""" market is the set of consumers (ho are buying the company1s product
A) potential
$) available
%) target
&) penetrated
') reserve
Ans(er) &
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
94) =hen the government of any country restricts the sale of a particular commodity to certain
groupsDfor e#ample, restricting sales of alcohol to individuals above the age of 01Dthe eligible
consumers (ho have income, interest, access and :ualification constitute the """"""""
A) accessible market
$) target market
%) potential market
&) :ualified potential market
') :ualified available market
Ans(er) '
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
9>) Jeanine (ould like to o(n a Mercedes but is unable to afford one at this time Jeanine is part
of the """""""" for this product
A) potential market
$) available market
%) target market
&) pro/ected market
') penetrated market
Ans(er) A
*age +ef) >9
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
1>
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9-) """""""" for a product is the total volume that (ould be bought by a defined customer
group in a defined geographical area in a defined time period in a defined marketing
environment under a defined marketing program
A) %ompany demand
$) Area market potential
%) Market demand
&) %ompany sales potential
') !otal market potential
Ans(er) %
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
,5) =ith an increase in marketing e#penditure, market demand """"""""
A) continues to increase at an increasing rate
$) initially increases and then declines
%) increases first at an increasing rate, then at a decreasing rate
&) decreases first and then spikes
') continues to increase at a decreasing rate
Ans(er) %
*age +ef) >,
.b/ective) 9
&ifficulty) Moderate
,1) !he base sales of an organization that takes place even (ithout any demand3stimulating
e#penditures is called """"""""
A) primary demand
$) market potential
%) market minimum
&) optimum demand
') market demand
Ans(er) %
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
,0) !he distance bet(een the market minimum and the market potential sho(s the overall
""""""""
A) marketing sensitivity of demand
$) market share of the firm
%) market forecast of the firm
&) product3penetration percentage
') sales :uota
Ans(er) A
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
1-
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
,2) A lo( market3penetration inde# indicates """"""""
A) it (ill be e#pensive for the firms to attract the fe( remaining prospects
$) substantial gro(th potential for all firms
%) the rival firms try to capture greater market share by lo(ering their product price
&) the profit margins of the firms decline
') the firms cannot raise demand substantially by raising its market e#penditure
Ans(er) $
*age +ef) >,
.b/ective) 9
&ifficulty) Moderate
,8) .nly one level of industry marketing e#penditure (ill actually occur !he market demand
corresponding to this level is called the """"""""
A) market minimum
$) market share
%) market forecast
&) market potential
') company demand
Ans(er) %
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
,9) A company can e#pect to e#pand its market share to a large e#tent (hen """"""""
A) it has a high market3penetration inde#
$) its share3penetration inde# is lo(
%) its share3penetration inde# is high
&) its product3penetration percentage is high
') it has a lo( market potential
Ans(er) $
*age +ef) >4
.b/ective) 9
&ifficulty) Moderate
,,) &uring recession, the market demand curve (hich is a function of marketing e#penditure
""""""""
A) shifts up(ard
$) becomes vertical
%) remains unaffected
&) shifts do(n(ard
') slopes do(n(ard
Ans(er) &
*age +ef) >4
.b/ective) 9
AA%S$) &ynamics of the global economy
&ifficulty) &ifficult
05
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
,4) !he sales goal set for a product line, company division, or sales representative of an
organization is called """"""""
A) sales budget
$) company sales forecast
%) sales :uota
&) company sales potential
') market potential
Ans(er) %
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
,>) A """""""" is a conservative estimate of the e#pected volume of sales, primarily for making
current purchasing, production, and cash flo( decisions
A) sales budget
$) company sales forecast
%) sales :uota
&) company sales potential
') market potential
Ans(er) A
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
,-) """""""" is the limit approached by market demand as industry marketing e#penditures
approach infinity for a given marketing environment
A) Sales budget
$) %ompany sales forecast
%) Sales :uota
&) %ompany sales potential
') Market potential
Ans(er) '
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
45) """""""" is the company1s estimated share of market demand at alternative levels of
company marketing effort in a given time period
A) Sales budget
$) Market demand
%) %ompany demand
&) %ompany sales potential
') Market potential
Ans(er) %
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
01
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
41) """""""" is the sales limit approached by company demand as company marketing effort
increases relative to that of competitors
A) Sales budget
$) Market demand
%) %ompany demand
&) %ompany sales potential
') Market potential
Ans(er) &
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
40) A company1s sales potential (ould be e:ual to market potential if """"""""
A) the marketing e#penditure of the company is reduced to zero
$) industry marketing e#penditures approach infinity for a given marketing environment
%) the market is non3e#pandable
&) market minimum is e:ual to market potential
') the company gets 155 percent share of the market
Ans(er) '
*age +ef) >4
.b/ective) 9
&ifficulty) Moderate
42) """""""" is the ma#imum sales available to all firms in an industry during a given period,
under a given level of industry marketing effort and environmental conditions
A) %ompany demand
$) Market demand
%) %ompany sales potential
&) Sales :uota
') !otal market potential
Ans(er) '
*age +ef) >>
.b/ective) 9
&ifficulty) 'asy
48) Suppose an individual buyer purchases three pairs of shoes each year at K95 each pair and
that there are 95 million such consumers in the economy %ompute the total market potential for
shoes
A) K,,955 million
$) K9,555 million
%) K49 billion
&) K4,955 million
') K15,555 million
Ans(er) &
*age +ef) >>
.b/ective) 9
&ifficulty) 'asy
00
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
49) !he """""""" method of determining area market potential calls for identifying all the
potential buyers in each market and estimating their potential purchases
A) group3discussion
$) market3test
%) market3buildup
&) brand development inde#
') multiple3factor inde#
Ans(er) %
*age +ef) >>
.b/ective) 9
&ifficulty) 'asy
4,) An efficient method of estimating area market potentials makes use of the """""""",
developed by the ;S $ureau of the %ensus in con/unction (ith the %anadian and Me#ican
governments It classifies all manufacturing into 05 ma/or industry sectors and further breaks
each sector into a si#3digit, hierarchical structure
A) !homson +euters $usiness %lassification
$) Ilobal Industrial %lassification Standard
%) Aorth American *roduct %lassification System
&) Industry %lassification $enchmark
') Aorth American Industry %lassification System
Ans(er) '
*age +ef) >>
.b/ective) 9
&ifficulty) 'asy
44) =hich of the follo(ing organizations is likely to use the multiple3factor inde# method to
estimate the market potential?
A) a firm that manufactures auto parts
$) a firm that provides facility management services to large offices
%) a company that provides =eb site development services for small businesses
&) a company that manufactures diagnostic machines for hospitals
') a firm that manufactures fashionable clothes for teenagers
Ans(er) '
*age +ef) >>
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
02
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
4>) =hich of the follo(ing is true of the various elements of the multi3factor inde# method of
estimating area market potentials?
A) Lip@8 code centers generally have stable boundaries and a population of about 8555
$) !he (eights in the buying3po(er inde# are some(hat arbitrary
%) Aormally, the lo(er the $&I, the less room there is to gro( the brand
&) %ensus tracts are a little larger than neighborhoods
') !his method is primarily used by business marketers
Ans(er) $
*age +ef) >-
.b/ective) 9
&ifficulty) 'asy
4-) Suppose %oncrete '#press, a cement manufacturing firm, finds that its sales have increased
by 2 percent this year, (hile industry sales have increased by 9 percent !his implies that
""""""""
A) %oncrete '#press has ac:uired additional market share in relation to the cement industry
$) %oncrete '#press is losing its relative standing in the cement industry
%) other players in the industry are losing market share
&) the absolute market share of %oncrete '#press has declined
') %oncrete '#press1s position in relation to the industry has remain unchanged
Ans(er) $
*age +ef) -5
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
>5) Eor (hich of the follo(ing categories of products (ill demand forecasting be easiest?
A) commodities (hich are in the initial stage of their product life cycles
$) products (hich have many close substitutes in the market
%) goods (hich are produced in an oligopoly market
&) products (hose sales fluctuate (idely
') products (hose consumers are highly sensitive to change in price
Ans(er) %
*age +ef) -5
.b/ective) 9
&ifficulty) Moderate
08
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
>1) Aovamalt Inc, a manufacturer of health drinks, plans to introduce its ne( range of (oman
health drinks into the market It involves a specialized marketing research firm to forecast the
sales of this product !he research firm analyzes past buying behavior of customers and uses
time3series analysis for making the sales forecasts =hich of the follo(ing information bases is
being used by the research firm in this scenario?
A) (hat people say
$) (hat people do
%) (hat people have done
&) (hat people (ill do
') (hat people speculate
Ans(er) %
*age +ef) -5
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
>0) !imeseries analysis method of forecasting sales breaks past time series into four
components3 trend, cycle, seasonal, and """"""""
A) regular
$) annual
%) erratic
&) recurring
') periodic
Ans(er) %
*age +ef) -1
.b/ective) 9
&ifficulty) 'asy
>2) """""""" pro/ects the ne#t period1s sales by combining an average of past sales and the most
recent sales, giving more (eight to the latter
A) !imeseries analysis
$) Statistical demand analysis
%) 'conometric analysis
&) %ost effectiveness analysis
') '#ponential smoothing
Ans(er) '
*age +ef) -1
.b/ective) 9
&ifficulty) 'asy
09
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
>8) """""""" measures the impact of a set of causal factors (such as income, marketing
e#penditures, and price) on the sales level
A) !imeseries analysis
$) Statistical demand analysis
%) 'conometric analysis
&) %ost effectiveness analysis
') '#ponential smoothing
Ans(er) $
*age +ef) -1
.b/ective) 9
&ifficulty) 'asy
>9) !he sales forecasting method of """""""" builds sets of e:uations that describe a system and
statistically derives the different parameters that make up the e:uations statistically
A) timeseries analysis
$) statistical demand analysis
%) econometric analysis
&) cost effectiveness analysis
') e#ponential smoothing
Ans(er) %
*age +ef) -1
.b/ective) 9
&ifficulty) 'asy
>,) Marketers have little information about ho( consumption patterns vary across and (ithin
countries
Ans(er) EAFS'
*age +ef) ,>
.b/ective) 1
&ifficulty) 'asy
>4) %ompanies (ith superior information en/oy a competitive advantage
Ans(er) !+;'
*age +ef) ,-
.b/ective) 1
&ifficulty) 'asy
>>) Many firms use the Internet and e#tranets to improve the speed, accuracy, and efficiency of
the order3to3payment cycle
Ans(er) !+;'
*age +ef) 45
.b/ective) 0
&ifficulty) 'asy
0,
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
>-) Ee( consumers actually delete cookies fre:uently =hen customers do not delete cookies,
they e#pect customized marketing appeals and deals
Ans(er) !+;'
*age +ef) 45
.b/ective) 0
&ifficulty) Moderate
-5) Mailing of a ne( offer to a handful of selected customers instead of all customers reduces
the response rate to the offer
Ans(er) EAFS'
*age +ef) 41
.b/ective) 0
&ifficulty) Moderate
-1) %ompetitive intelligence gathering is inherently illegal and unethical
Ans(er) EAFS'
*age +ef) 40
.b/ective) 2
&ifficulty) 'asy
-0) If a company (ere pursuing a policy of net(orking e#ternally to gather marketing
intelligence, it might collect competitors1 ads or look up ne(s stories about competitors
Ans(er) !+;'
*age +ef) 40
.b/ective) 2
&ifficulty) 'asy
-2) .ne of the (ays to find relevant online information on competitors1 strengths and
(eaknesses might be to fre:uent distributor or sales agent feedback sites
Ans(er) !+;'
*age +ef) 42
.b/ective) 2
&ifficulty) 'asy
-8) !he competitive intelligence function (orks best (hen it is closely coordinated (ith the
decision3making process
Ans(er) !+;'
*age +ef) 42
.b/ective) 2
&ifficulty) 'asy
-9) A fad is more predictable and durable than a trend
Ans(er) EAFS'
*age +ef) 48
.b/ective) 2
&ifficulty) 'asy
04
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
-,) A ne( market opportunity generally guarantees success, if the ne( product is technically
feasible
Ans(er) EAFS'
*age +ef) 48
.b/ective) 8
&ifficulty) Moderate
-4) &emographic developments are often unpredictable
Ans(er) EAFS'
*age +ef) 49
.b/ective) 8
&ifficulty) 'asy
->) *opulation gro(th is highest in countries and communities that can least afford it
Ans(er) !+;'
*age +ef) 49
.b/ective) 8
&ifficulty) 'asy
--) !here is a global trend to(ard an aging population
Ans(er) !+;'
*age +ef) 49
.b/ective) 8
&ifficulty) 'asy
155) !he basis of cohort segmentation is that the e#periences of key defining moments during
the time (hen an individual becomes an adult can influence his or her values, preferences, and
buying behaviors for the rest of his or her life
Ans(er) !+;'
*age +ef) 4,
.b/ective) 8
&ifficulty) 'asy
151) Marketing strategies of firms should not consider the ethnic and racial diversity e#isting in
their markets
Ans(er) EAFS'
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
150) %onsumers belonging to the same ethnic group have identical tastes and preferences
Ans(er) EAFS'
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
0>
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
152) .f all illiterate adults in the (orld, t(o3thirds are (omen
Ans(er) !+;'
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
158) 7ouseholds comprising of single, separated, (ido(ed, and divorced individuals generally
demand larger apartments, and e#pensive appliances, furniture, and furnishings
Ans(er) EAFS'
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
159) !he available purchasing po(er in an economy depends on current income, prices, savings,
debt, and credit availability
Ans(er) !+;'
*age +ef) 44
.b/ective) 8
&ifficulty) 'asy
15,) Industrial economies provide limited marketing opportunities for lu#urious goods
Ans(er) EAFS'
*age +ef) 4>
.b/ective) 8
&ifficulty) 'asy
154) Markets (ith a segment of very (ealthy consumers, but high income disparity, present fe(
opportunities to marketers
Ans(er) EAFS'
*age +ef) 4>
.b/ective) 8
&ifficulty) Moderate
15>) $usiness has responded to increased a(areness of nature1s fragility and finiteness by
producing (ider varieties of camping, hiking, boating, and fishing gear such as boots, tents,
backpacks, and accessories
Ans(er) !+;'
*age +ef) 4-
.b/ective) 8
&ifficulty) 'asy
15-) Secondary beliefs and values are passed on from parents to children and reinforced by
ma/or social institutions, making them very difficult to change by marketers
Ans(er) EAFS'
*age +ef) 4-
.b/ective) 8
&ifficulty) Moderate
0-
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
115) 'nvironmental regulations enforced by the government adversely affect automobile and
steel manufacturing companies
Ans(er) !+;'
*age +ef) >5
.b/ective) 8
&ifficulty) 'asy
111) %orporate environmentalism recognizes the need to integrate environmental issues into the
firm1s strategic plans
Ans(er) !+;'
*age +ef) >1
.b/ective) 8
&ifficulty) 'asy
110) Eirms that can develop substitute materials for finite nonrene(able resources have an
e#cellent opportunity
Ans(er) !+;'
*age +ef) >1
.b/ective) 8
&ifficulty) 'asy
112) !he time bet(een introduction of products and peak production is shrinking
Ans(er) !+;'
*age +ef) >2
.b/ective) 8
&ifficulty) 'asy
118) A gro(ing portion of ;S +H& e#penditures goes to the development as opposed to the
research side
Ans(er) !+;'
*age +ef) >8
.b/ective) 8
&ifficulty) 'asy
119) +egulation of technological changes has been rela#ed by the ;S government over recent
years
Ans(er) EAFS'
*age +ef) >8
.b/ective) 8
&ifficulty) 'asy
11,) 'nvironmental la(s imposed by the government may at times create ne( business
opportunities
Ans(er) !+;'
*age +ef) >8
.b/ective) 8
&ifficulty) 'asy
25
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
114) &emand estimates prepared by companies are based on four different time periods
Ans(er) EAFS'
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
11>) !he penetrated market is the set of consumers (ho have an interest in a market offer but do
not have the accessibility
Ans(er) EAFS'
*age +ef) >9
.b/ective) 9
&ifficulty) 'asy
11-) Market demand for a product is the total volume that (ould be bought by a defined
customer group in a defined geographical area in a defined time period in a defined marketing
environment under a defined marketing program
Ans(er) !+;'
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
105) An e#pansible market is unlikely to be affected by the level of industry marketing
e#penditures
Ans(er) EAFS'
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
101) !he market forecast sho(s e#pected market demand, not ma#imum market demand
Ans(er) !+;'
*age +ef) >4
.b/ective) 9
&ifficulty) 'asy
100) %ompanies assume that the lo(er the product3penetration percentage, the lo(er (ill be the
market potential
Ans(er) EAFS'
*age +ef) >4
.b/ective) 9
&ifficulty) Moderate
102) In order to estimate future demand, companies commonly prepare a company sales forecast
first, follo(ed by an industry forecast, and finally a macroeconomic forecast
Ans(er) EAFS'
*age +ef) -5
.b/ective) 9
&ifficulty) Moderate
21
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
108) Eorecasting is the art of anticipating (hat buyers are likely to do under a given set of
conditions
Ans(er) !+;'
*age +ef) -1
.b/ective) 9
&ifficulty) 'asy
109) Sales reps might have better insight into developing trends than any other group, and
forecasting might give them greater confidence in their sales :uotas and more incentive to
achieve them
Ans(er) !+;'
*age +ef) -1
.b/ective) 9
&ifficulty) Moderate
10,) =hat is a marketing information system (MIS)? Erom (hat sources is the MIS developed?
Ans(er) A marketing information system (MIS) consists of people, e:uipment, and procedures
to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers
A marketing information system is developed from internal company records, marketing
intelligence activities, and marketing research
*age +ef) ,-
.b/ective) 1
AA%S$) ;se of I!
&ifficulty) 'asy
104) =hat is a marketing intelligence system? 7o( can marketing intelligence data be
collected?
Ans(er) A marketing intelligence system is a set of procedures and sources that managers use to
obtain
everyday information about developments in the marketing environment !he marketing
intelligence system supplies happenings data
Marketing managers collect marketing intelligence in a variety of different (ays, such as by
reading books, ne(spapers, and trade publicationsC talking to customers, suppliers, and
distributorsC monitoring social media on the InternetC and meeting (ith other company managers
*age +ef) 41
.b/ective) 2
&ifficulty) Moderate
20
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
10>) =hat are the various steps a company can take to improve the :uality of its marketing
intelligence function?
Ans(er) !he steps are) (1) a company can train and motivate the sales force to spot and report
ne( developmentsC (0) a company can motivate distributors, retailers, and other intermediaries to
pass along important intelligenceC (2) a company can net(ork e#ternallyC (8) a company can set
up a customer advisory panelC (9) a company can take advantage of government data resourcesC
(,) a company can purchase information from outside suppliersC and (4) a company can use
online customer feedback systems to collect competitive intelligence
*age +ef) 40
.b/ective) 2
&ifficulty) Moderate
10-) Fist and briefly describe the five main (ays in (hich marketers can find relevant online
information on competitors1 strengths and (eaknesses
Ans(er) !he five (ays are) (1) independent customer goods and service revie( forumsC (0)
distributor or sales agent feedback sites (hich are built by the distributors themselves to describe
their e#perience and level of satisfaction on products or servicesC (2) combo sites offering
customer revie(s and e#pert opinions mainly on financial services and high3tech products that
re:uire professional kno(ledgeC (8) customer complaint sites designed mainly for dissatisfied
customers, (hich allo(s customers to e#press their dissatisfaction in certain firms or productsC
and (9) public blogs offering personal opinions, revie(s, ratings and recommendations on
virtually any topic
*age +ef) 42
.b/ective) 2
AA%S$) ;se of I!
&ifficulty) Moderate
125) 7o( are household patterns anticipated to change over the ne#t fe( years? =hat (ill be the
impact of such changes on the demand for different goods?
Ans(er) $y 0515, only one in five ;S households (ill consist of married couples (ith
children under the age of 1>, the Btraditional householdB More people are divorcing or
separating, choosing not to marry, marrying later, or marrying (ithout the intention to have
children $y 0515, childless married couples and empty nesters (ill constitute the largest
household group, follo(ed by single live3alones Aontraditional households are currently
gro(ing more rapidly than traditional ones
&emand for smaller apartmentsC ine#pensive and smaller appliances, furniture and furnishingsC
and smaller3size food packages are likely to increase
*age +ef) 44
.b/ective) 8
&ifficulty) Moderate
22
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
121) =hat are the different income3distribution patterns? 7o( does income distribution in the
economies affect the marketing decision of the firms?
Ans(er) Marketers often distinguish countries using five income3distribution patterns) (1) very
lo(
incomesC (0) mostly lo( incomesC (2) very lo(, very high incomesC (8) lo(, medium, high
incomesC and (9) mostly medium incomes
!he market (ould be very small in countries (ith type 1 or 0 income patterns and (ill be
considerably large in the countries (ith income patterns 2 and 8 %ountries (hich have a marked
ine:uality in income distribution the companies tend to produce goods (hich are consumed by
the mass as (ell as produce certain lu#urious goods to cater to the richer section
*age +ef) 4>
.b/ective) 8
&ifficulty) Moderate
120) &iscuss the impact of tougher environmental regulations on businesses, citing e#amples
(henever possible Also, point out opportunities, if any, presented by these regulations
Ans(er) 'nvironmental regulations adversely affect certain industries !hey increase the cost of
production for a range of industries Eor instance, steel manufacturing units and firms (hich
generate electricity are re:uired to install pollution control e:uipments Automobile companies
are re:uired to develop and use cleaner technology in their vehicles 7o(ever, businesses can
also achieve significant savings in their energy and gas bills by moving to environmentally
friendly (ays to heat or cool their offices and run their manufacturing facilities A shift to paper3
less communication can cut costs and pollution *lus, ne( business opportunities are opening up
in the BgreenB sectors as is evident in the companies that manufacture and sell emission3control
e:uipment and sell services to help companies adopt environmentally3friendly practices
*age +ef) >5
.b/ective) 8
&ifficulty) Moderate
122) =hat does total market potential mean? 7o( can it be estimated?
Ans(er) !otal market potential is the ma#imum sales available to all firms in an industry during
a given period, under a given level of industry marketing effort and environmental conditions
A common (ay to estimate total market potential is to multiply the potential number of buyers
by the average :uantity each purchases, times the price A variation on this method is the chain3
ratio method, (hich multiplies a base number by several ad/usting percentages
*age +ef) >>
.b/ective) 9
&ifficulty) 'asy
28
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
128) Suppose a cotton3te#tile company (ants to estimate the area market potential for its high
:uality fabrics in 7ouston Fist the possible steps that the marketers (ill follo( to compute the
area market potential
Ans(er) !he marketers may follo( the follo(ing steps) Identify all the potential buyers of
te#tile in the area, primarily the firms manufacturing ready made garments in that area In order
to do that, the company may compile a list from a directory of all manufacturing establishments
in the area !hen it can estimate the :uantity of fabrics each firm might purchase to produce
garments (orth K1 million %ompiling the :uantity re:uired by each of the firms, the marketers
can estimate the area market potential of the fabric produced by the te#tile company
*age +ef) >>
.b/ective) 9
&ifficulty) Moderate
129) $riefly describe the methods of forecasting future demand on the basis of past sales
Ans(er) !he methods are) 1) !imeseries analysis, that breaks past time series into four
components (trend, cycle, seasonal, and erratic) and pro/ects them into the future 0) '#ponential
smoothing, that pro/ects the ne#t period1s sales by combining an average of past sales and the
most recent sales, giving more (eight to the latter 2) Statistical demand analysis, (hich
measures the impact of a set of causal factors (such as income, marketing e#penditures, and
price) on the sales level 8) 'conometric analysis, builds sets of e:uations that describe a system
and statistically derives the different parameters that make up the e:uations statistically
*age +ef) -1
.b/ective) 9
&ifficulty) Moderate
12,) =hat are the t(o basic advantages that a company1s marketers have in identifying
significant changes in the market?
Ans(er) !he t(o advantages are) (1) !hey have disciplined methods for collecting informationC
and (0) they spend more time interacting (ith customers and observing competition
*age +ef) ,4
.b/ective) 1
&ifficulty) 'asy
124) =hy is it necessary for firms to e#ecute the steps of the order3to3payment cycle :uickly and
accurately?
Ans(er) It is necessary for the firms to e#ecute the steps of the order3to3payment cycle :uickly
and accurately because customers favor firms that can promise timely delivery
*age +ef) 45
.b/ective) 0
&ifficulty) 'asy
29
%opyright 6 0510 *earson 'ducation, Inc *ublishing as *rentice 7all
12>) Skyline Motors, an automobile manufacturing firm, is planning to introduce its ne( range
of sports cars It decides to offer a zero percent financing to the buyers Skyline can save its
mailing e#penses by sending the offer only to its high3scoring customers instead of sending it to
every customer in its database Mention the factors according to (hich it may rank the customers
in its database
Ans(er) A company may rank its customers according to factors such as purchase recency,
fre:uency, and monetary value (+EM)
*age +ef) 41
.b/ective) 0
&ifficulty) Moderate
12-) Fist some of the (ays in (hich data mining assists the decision makers of the company
Ans(er) &ata mining enables the analysts to garner fresh insights into neglected customer
segments, recent customer trends, and other useful information Managers can cross3tabulate
customer information (ith product and salesperson information to yield still3deeper insights
*age +ef) 41
.b/ective) 0
&ifficulty) Moderate
185) 7o( do the distributors, retailers and other intermediaries help a company to improve the
:uantity and :uality of its marketing intelligence?
Ans(er) Since marketing intermediaries are often closer to the customer, they can offer helpful
insights to the company to improve its marketing intelligence system
*age +ef) 40
.b/ective) 2
&ifficulty) 'asy
181) Suppose .rnate Inc and .racle are the only players in digital camera industry =hat can
.rnate do to ac:uire marketing intelligence?
Ans(er) Student ans(ers may vary .rnate Inc can net(ork e#ternally to find out more about
its competitor .racle It can purchase .racle1s products, attend open houses and trade sho(s,
read reports published by the rival firm, attend stockholders1 meetings, talk to employees, collect
competitors1 ads, consult (ith suppliers, and look up ne(s stories about .racle
*age +ef) 40
.b/ective) 2
&ifficulty) Moderate
180) !he ;nited States has one of the (orld1s highest percentages of college3educated citizens
=hat can be the possible implications of this observation to the marketing environment of a ;S
firm?
Ans(er) !he high percentage of college3educated citizens in the ;nited States suggests that
there (ould be high demand for :uality books, magazines, and travel It also implies that there
(ould be a high supply of skilled potential employees Students can point out other implications
*age +ef) 44
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) Moderate
2,
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182) Suppose the people of Ireen(orld, an island on the south(est *acific are primarily
involved in the direct procurement of edible plants and animals from the (ild, foraging and
hunting (ithout significant recourse to the domestication of either .n the contrary people in
Ae(land, a country rich in petroleum resources e#port petroleum to the industrial countries
=hich of the t(o countries mentioned above is likely to offer greater marketing opportunities for
lu#urious goods and (hy?
Ans(er) Ae(land is likely to produce greater marketing opportunities for lu#urious goods as
people in this country are likely to have greater affordability than the people in Ireen(orld
*age +ef) 4>
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) Moderate
188) =hy do the companies need to search for practical means to harness rene(able sources of
energy like (ind and (ater?
Ans(er) *rolonged e#ploitation of the conventional sources of energy like oil has led to an acute
shortage of these resources resulting their prices to increase over time Eirms face substantial
cost increase as these resources are depleted, hence they need to search for means to harness the
infinite rene(able resources
*age +ef) >1
.b/ective) 8
&ifficulty) Moderate
189) *hilips Fighting1s first shot at marketing a standalone compact fluorescent light (%EF) bulb
(as 'arth Fight, at K19 each versus 49 cents for incandescent bulbs !he product had difficulty
climbing out of its deep green niche, as such marketing efforts of *hilips suffered from the
Bgreen marketing myopiaB Identify the three (ays of avoiding this
Ans(er) !he three keys to avoiding green marketing myopia is the tendency to overly focus on
a product1s greenness It can be avoided by (1) appropriately positioning the consumer valueC (0)
calibrating consumer kno(ledgeC and (2) reinforcing the credibility of product claims
*age +ef) >0
.b/ective) 8
&ifficulty) Moderate
18,) .rgani# Internationals FF% is planning to introduce its ne( range of breakfast cereals Fist
the different product levels that it considers (hile formulating the demand estimates for the ne(
product
Ans(er) !he si# different product levels that .rgani# needs to consider to formulate the demand
estimates for its ne( range of cereals are all sales, industry sales, company sales, product line
sales, product from sales, and product item sales
*age +ef) >9
.b/ective) 9
&ifficulty) &ifficult
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184) Suppose, the $elgian government prohibits sale of cigarettes to people belo( 05 years of
age =ho are likely to comprise the :ualified available market for &unhill, a manufacturer of
herbal cigarettes in $elgium?
Ans(er) 'ligible adults (ie people above 05 years of age), (ho have interest and affordability
constitute the :ualified available market for the cigarettes in $elgium
*age +ef) >9
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
18>) If the ratio bet(een current and potential levels of market demand is close to unity, (hat
can you infer about the industry1s market3penetration inde# and the gro(th potential of the firms
in the industry?
Ans(er) !he industry has a high market3penetration inde# and there is a negligible gro(th
potential for all the firms in the industry
*age +ef) >,
.b/ective) 9
&ifficulty) 'asy
18-) 7o( does the marketing environment determine the position of the market demand
function?
Ans(er) &uring economic prosperity the market demand function shifts up as every dollar spent
in stimulating demand leads to a greater market demand =hereas during recession the market
demand function shifts do(n(ard as an e:ual increase in marketing e#penditure leads to a
smaller increase in market demand
*age +ef) >4
.b/ective) 9
&ifficulty) &ifficult
195) Suppose 155 million people consume black tea every year, and an average consumer
consumes > kgs of tea at an average price of K2 per kg %ompute the total market potential for
tea
Ans(er) K0,855 million
*age +ef) >>
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
2>
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191) Simpsons, a manufacturer of air conditioners, finds that its sales potential is less than its
market potential even (hen it spends a sufficient amount on advertisements and after sale
services =hat is the basic reason behind such an observation by the marketers of Simpsons?
Ans(er) %ompany sales potential is less than the market potential, even (hen a company1s
marketing e#penditures increase considerably because each firm has a set of loyal consumers
unresponsive to other companies1 efforts to (oo them
*age +ef) >>
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
190) !(o ma/or methods of computing area market potential are market build3up method and
multiple factor3inde# method =hich of these methods (ill Ae#us 'nterprises, a manufacturer of
auto parts implement to estimate its market potential?
Ans(er) Ae#us 'nterprise (ill implement market3build up method to estimate its area market
potential as this method is primarily used by business marketers such as Ae#us
*age +ef) >>
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
192) Suppose the brand development inde# of the detergent manufactured by Easclean in $oston
is -5 and that in Austin is 8> %ompare the marketing opportunity of Easclean detergent in the
t(o cities
Ans(er) Easclean has a greater marketing opportunity for its detergent in Austin than it has in
$oston
*age +ef) -5
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
198) Suppose +edbus, a player in the small car market is planning to launch its ne( range of
hybrid cars It decides to estimate the future demand for its ne( car before launching it in the
market If intervie(ing consumers is not practical, (hat alternative techni:ue might it resort to?
Ans(er) =hen buyer intervie(ing is impractical, +edbus may ask its sales representatives to
estimate the future sales or use e#pert opinions
*age +ef) -1
.b/ective) 9
AA%S$) Analytic skills
&ifficulty) Moderate
2-
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199) Assume that you are a marketing manager for a youth clothing manufacturer that has /ust
read about the megatrend of the Brising 7ispanic influenceB in the ;nited States '#plain this
megatrend and indicate (hy it might be important to your company
Ans(er) Although 7ispanic households represented only 11M of ;S households in 0555, they
made up half of all ne( (orkers in the past decade 7ispanic disposable income has risen t(ice
as fast as that of the rest of the population $y some estimates, this is the fastest gro(ing and
most influential consumer group !hus, the company must divert its production to the form of
clothing demanded by the 7ispanics
*age +ef) 4,344
.b/ective) 8
AA%S$) Analytic skills
&ifficulty) &ifficult
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