Chapter 1 Defining Marketing for the Twenty-First Century

True/False Questions
1. Consumers today have greater ease in interacting and placing and receiving orders than ever before. True (easy) p. 2 2. Because of the digital revolution, customers can easily compare notes with other shoppers when considering a major purchase. True (moderate) p. 2 3. The Internet allows companies to do consumer research online. True (easy) p. 3 4. The computer metamarket consists of the manufacturers of computer memory chips, monitors, keyboards, coaxial cables, modems, software, as well as those who install computers and software and who repair or upgrade computers and software. True (moderate) p. 7 5. Entrepreneurial marketing is practiced by individuals who start a company because they see a market opportunity. True (moderate) p. 4 6. A concert by Jimmy Eat World is an example of a product. True (moderate) pp. 4-5 7. A brand is an offering from a known source. True (moderate) p. 8 8. Exchange is synonymous with transaction. False (difficult) p. 8 9. A latent demand is one that cannot be satisfied with existing products. True (moderate) p. 5 10. A market segment is the product choice the marketer chooses to sell to the public. False (difficult) p. 6 11. A marketing network consists of the company, all its supporting stakeholders, and others who have built a profitable business relationship. True (moderate) p. 10 12. The operating principle of relationship marketing is build profitable transactions and good relationships will follow. False (moderate) p. 9 13. The task environment of an organization consists of the demographic environment, the economic environment, the natural environment, the technological environment, the political-legal environment, and the socio-cultural environment. False (difficult) p. 11 14. The production concept holds that consumers will prefer products that are widely available and inexpensive. True (moderate) p. 12 15. A value proposition is a set of benefits offered to satisfy customer needs. True (moderate) p. 8 16. The ultimate purpose of the marketing concept is to help organizations achieve their objectives. True (moderate) pp. 13-14 17. The four Cs that correspond to the four Ps of the marketing mix are customer solution, customer confidence, convenience, and communication. False (difficult) p. 11

18. External marketing refers to integrated marketing efforts directed at people outside the company. True (moderate) p. 15 19. The societal marketing concept takes the marketing concept one step further by considering long-run societal welfare. True (moderate) p. 17 20. When a company benchmarks, it looks at the worst practices in the industry and tries to avoid them. False (moderate) p. 18

Multiple Choice Questions

21. When Anne Peterson began Olde Westport Spice and Trading Co., she had one product, an allpurpose seasoning mix called Olde Westports Special Blend for adding flavor to bland casseroles. She mixed and packaged the product in her basement. She sold her product at craft fairs throughout the Midwest. Peterson was practicing _______________ marketing. a.) formulated b.) entrepreneurial (moderate) p. 4 c.) demand d.) intrepreneurial e.) societal 22. Which of the following is an example of an entity that marketing people market? a.) a Civil War novel about two sisters b.) an actor like Rob Lowe c.) the Homespun Arts & Crafts Festival d.) plastic e.) all of the above (difficult) pp. 4-5 23. Which of the following is not an entity that can be marketed? a.) places b.) events c.) information d.) persons e.) All of the above can be marketed. (moderate) pp. 4-5 24. Overfull demand is a.) where consumers avoid a product _______________. b.) where demand varies by season, hour, or day c.) where there is more demand than can be handled (moderate) p. 5 d.) where consumers demand unhealthy products e.) where consumers lack interest in the product 25. Which of the following products will have the strongest negative demand? a.) nursing home care (moderate) p. 5 b.) Star Wars collectible figures c.) McDonalds Happy Meals d.) ice cream e.) landscaping

26. Jane and Henry produce and sell garden artwork. They are debating over a description of the potential customers for their artwork. Jane and Henry are debating _______________. a.) the definition of customer value b.) customer satisfaction c.) who their market is (moderate) pp. 6 d.) what constitutes an exchange e.) relationship marketing 27. _______________ is the societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others. a.) Marketing (easy) p. 6 b.) Management c.) Strategic planning d.) Ethics e.) Consumer behavior 28. Marketing ____________ is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. a.) internally b.) management (moderate) p. 6 c.) segmentation d.) training e.) integration 29. Which of the following is correct? a.) A metamediary is a physical marketplace. b.) A marketspace is a stall in a flea market. c.) A metamarket is a huge store. d.) A marketspace is a digital shopping area. (difficult) p. 7 e.) A megamarket includes only suppliers. 30. The computer ______________ consists of the manufacturers of computer memory chips, monitors, keyboards, coaxial cables, modems, software, as well as those who install computers and software and who repair or upgrade computers and software. a.) marketplace b.) metamarket (moderate) p. 7 c.) macromarket d.) marketspace e.) micromarket 31. Which is true? a.) Needs preexist marketers. (moderate) p. 7 b.) Marketers create needs. c.) A persons need for food or shelter is a creation of marketers. d.) Wants become needs when they are directed at specific objects that might satisfy the want. e.) Demand strictly means desire for some object.

32. ______________ are wants for specific products backed by an ability to pay. a.) Demands (moderate) p. 7 b.) Needs c.) Values d.) Morals e.) Exchanges 33. A brand name such as BMW carries many associations in the minds of people: speed, expensive, engineering, status, the BMW logo. These associations make up BMWs ____________. a.) brand strength b.) customer value triad c.) brand image (moderate) p. 8 d.) effective demand e.) value proposition 34. Which of the following is an example of a product? a.) a screenplay based on the life of Bill Clinton b.) a haircut c.) a seminar on time management d.) a carton of eggs e.) all of the above (difficult) pp. 4-5 35. A ______________ is an offering from a known source. a.) product b.) demand c.) need d.) brand (moderate) p. 8 e.) service 36. _______________ is the ratio between what the customer gets and what the customer gives. a.) Value (moderate) p. 8 b.) Cost c.) Satisfaction level d.) Price e.) Benefit 37. Marketers can increase the value of a customer offering by a.) lowering benefits and raising costs. b.) reducing benefits. c.) raising costs. d.) raising benefits. (difficult) p. 8 e.) not considering the competitive offering. 38. The act of obtaining a desired product from someone by offering something in return is known as _______________. a.) product valuation b.) the service desired of the product c.) an exchange (moderate) p. 8 d.) the cost of the product e.) customer satisfaction

39. Which is not necessary in order for exchange to exist? a.) at least two parties b.) satisfaction by both parties (difficult) p. 8 c.) each party is free to accept or reject the offer d.) each party believes it is appropriate or desirable to deal with the other party e.) each party has something that might be of value to the other party 40. Which of the following is an example of a transfer? a.) Mrs. King gives Bonnie a dozen cookies for walking her dog. b.) Ofra buys a sweater at a flea market. c.) Andi places the winning bid on a vase at an auction. d.) Anna donates money to the American Cancer Society. (difficult) p. 9 e.) All of the above are examples of transfers. 41. If a marketer seeks to retain customers long-term preference and business through a win-win business style, the marketer is engaged in _______________ marketing. a.) relationship (moderate) p. 9 b.) transaction c.) transfer d.) reciprocal e.) give-and-take 42. _______________ marketing aims to build long-term, mutually satisfying relationships with key parties -- customers, suppliers, distributors -- in order to earn and retain their long-term preference and business. a.) Network b.) Business-to-business c.) Transaction-oriented d.) Behavioral response e.) Relationship (moderate) p. 9 43. Customers, employees, suppliers, and distributors could all be considered _______________. a.) stockholders b.) stakeholders (moderate) p. 10 c.) channel members d.) part of the marketing organization e.) supply chain members 44. ______________ channels deliver messages to and receive messages from target buyers. a.) Communication (moderate) p. 10 b.) Distribution c.) Supplier d.) Delivery e.) Informal 45. Which of the following is a part of the physical distribution channel for a producer of bottled water? a.) the warehouse where empty plastic bottles are stored (moderate) p. 10 b.) the toll-free number it uses for customer orders c.) the print media that runs its advertisements d.) the bank where it borrowed the money to purchase its filtration system e.) the insurance company that insures the company in the event of litigation

46. Which of the following is not true? a.) The supply chain is longer than the marketing channel. b.) The supply chain includes the final customer. (difficult) p. 10 c.) The supply chain for womens leather purses includes the supplier of the hides and the tanning process. d.) Marketing channels connect the marketer to the target buyer. e.) The distribution channel is used to display or deliver the physical product or services to the buyer or user. 47. ______________ is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. a.) Marketing mix (moderate) p. 11 b.) Environmental scan c.) Consumer behavior d.) Business markets e.) Consumer markets 48. When Anne Peterson began Olde Westport Spice and Trading Co., she had one product, an allpurpose seasoning mix called Olde Westports Special Blend for adding flavor to bland casseroles. She sold 6-ounce bottles of her seasoning mix for $6.95. Her only outlets were booths at craft fairs throughout the Midwest. She relied on word-of-mouth advertising and a few feature articles in regional newspapers to tell people about her product. The above describes Olde Westports _______________. a.) method of exchange b.) transaction marketing c.) marketing tactics d.) marketing mix (difficult) p. 11 e.) transfer marketing 49. Which of the following is NOT one of the customers Four Cs as defined by Robert Lauterborn? a.) communication b.) customer solution c.) commitment (moderate) p. 11 d.) customer cost e.) convenience 50. The first computers originated for home use were only sold in kit form to technical enthusiasts who did their own assembly. Demand was high and so were prices. At that time, the firm offering these kits would likely have been using the _______________ concept. a.) production (moderate) p. 12 b.) market c.) technological d.) product e.) selling

51. Intel, one of the largest producers of integrated circuit chips, puts a great deal of effort into expanding production of chips to drive down the cost and thus expand the market. This is most indicative of the _______________ concept. a.) production (moderate) p. 12 b.) product c.) customer d.) marketing e.) societal 52. Which of the following is not a level of competition for marketers? a.) employee competition (moderate) pp. 10-11 b.) brand competition c.) form competition d.) generic competition e.) industry competition 53. Producers of unsought products like burial insurance would normally employ the _______________ concept. a.) production b.) product c.) marketing d.) selling (moderate) p. 13 e.) customer 54. In the history of the railroads, management thought that travelers wanted trains rather than transportation and overlooked the growing competition from airlines, buses, trucks, and automobiles. This was an example of marketing _______________. a.) vision b.) naivet c.) far-sightedness d.) relationships e.) myopia (moderate) p. 13 55. The selling concept assumes _______________. a.) consumers will favor products that offer quality, performance, and innovation b.) a company has a social responsibility for the effects of its products c.) if left alone, consumers will ordinarily not buy enough of the organizations products (difficult) p. 13 d.) being more effective than competitors in integrating marketing activities will lead to success e.) consumers do not have to be compelled by promotions to buy what a company is selling 56. Which is not true about the selling concept? a.) It assumes that consumers must be coaxed into buying. b.) It always takes into account the greater societal good. (moderate) p. 13 c.) Firms tend to practice the selling concept when they have overcapacity. d.) The selling concept is practiced most aggressively with unsought goods. e.) If focuses on the needs of the seller.

57. The marketing concept rests on which four pillars? a.) customer needs, target market, integrated marketing, and profitability (moderate) pp. 14 b.) products, integrated marketing, sales volume, and competition c.) customer needs, competition, sales volume, and profit d.) product, price, promotion, and place e.) customer needs, integrated marketing, profitability, and market focus 58. All of the following represent types of needs discussed in the text EXCEPT: a.) delight needs b.) real needs c.) unreal needs (difficult) p. 14 d.) stated needs e.) unstated needs 59. If a marketer seeks to discover and create solutions to customer needs that customers did not ask for, but respond enthusiastically to, he or she is engaged in _______________ marketing. a.) relationship b.) creative (moderate) p. 14 c.) responsive d.) transaction e.) formulated 60. When a companys departments work together to serve the customers interests, the result is ______________. a.) product management b.) responsive marketing c.) anticipative marketing d.) integrated marketing (moderate) p. 15 e.) bad word-of-mouth communications 61. The tasks of hiring, training, and motivating able employees who want to serve customers well is part of _______________ marketing. a.) integrated b.) external c.) myopic d.) relationship e.) internal (moderate) p. 15 62. Master marketing companies place _______________ at the top of their organizational chart. a.) the marketing department b.) customers (moderate) p. 15 c.) employees d.) management e.) target markets 63. In terms of private firms, the ultimate purpose of the marketing concept is _______________. a.) customer satisfaction at any costs b.) profitability and customer satisfaction (difficult) pp. 14-16 c.) target marketing d.) relationship marketing e.) a competitive advantage

64. Joseph Dinetah is leading his company into becoming a marketing-oriented company. His VP of manufacturing and VP of finance dont like the idea. They fear a diminishment of product quality and too much free spending by marketers. The attitudes of the VP of finance and VP of manufacturing are examples of _______________. a.) the inability of old managers to learn new ideas b.) internal marketing as a passing fad c.) the slow learning process involved in such a conversion d.) fast forgetting e.) resistance to the marketing orientation (difficult) p. 15 65. Taking into account profitability, customers need, and the greater societal good when marketing is called _______________. a.) the societal marketing concept (moderate) p. 17 b.) the selling orientation c.) the customer concept d.) the value proposition e.) cause-related marketing 66. Which of the following is not true about cause-related marketing? a.) It demonstrates good corporate citizenship. b.) It is generally considered the same thing as the societal marketing concept. (moderate) p. 17 c.) It provides an opportunity to enhance corporate reputation. d.) It can be used to raise brand awareness. e.) It may result in increased consumer loyalty. 67. Which of the following statements best represents the societal marketing concept? a.) We have developed a new, more convenient package. b.) Target Corporation chooses to eliminate cigarette sales in their stores. (moderate) p. 17 c.) This product saves much more time for the consumer. d.) Give the customers what they want. e.) Sell at the lowest price. 68. For each 20 kilo bag of Ole Boy High Pro dog food that is purchased, the manufacturer makes a donation to the American Humane Society. The terms of the donation are prominently displayed on the bags and included in its print ads. The manufacturer of Ole Boy is using _______________ marketing. a.) advocacy b.) service c.) nonprofit d.) pro bono e.) cause-related marketing (moderate) p. 17 69. A provider of lawn care hires a telemarketing company to find prospects for its services. The installer is engaged in _______________. a.) remarketing b.) demarketing c.) centralization d.) outsourcing (moderate) p. 18 e.) relationship marketing

Essay Questions
70. In a short essay, discuss as many demand states as you can for bifocal contact lenses. Answer: Since many people dont want to admit they need bifocals, there is a negative demand. When the bifocal lenses were introduced, there was no demand because people didnt know they existed. Before they were introduced, many people thought such a product would be nice but didnt think it would ever exist. This is latent demand. If something better, such as a surgery to repair the eyes is invented, then the lens will experience declining demand. If the manufacturers of the lens are making all they possibly can, then there is full demand. With overfull demand, the manufacturers of the lens cant make enough. Answers may vary. (difficult) p. 5 71. In a short essay, describe the supply chain for denim jeans. Answer: The supply chain begins with cotton growers, then on to cloth textile processors, cutting operations and sewing operations. Next, the jeans are sent through distribution channels, such as wholesalers and retailers. From there, they are purchased by consumers. (moderate) p. 10 72. In a short essay, discuss the marketers argument for why an organization should embrace the marketing concept. Answer: The companys assets have little value without the existence of customers. The key company task, therefore, is to attract and retain customers. Customers are attracted through competitively superior offerings and retained through satisfaction. Marketings task is to develop a superior offering and deliver customer satisfaction. Customer satisfaction is affected by the performance of other departments. Marketing needs to influence those other departments to cooperate in delivering customer satisfaction. (moderate) pp. 13-14 73. In a short essay, describe the four levels of competition for Chrysler-made minivans. Answer: The four levels of competition are based on degree of substitutability. In brand competition, Chrysler would see its competition in Toyota, Honda, and Fords minivansthat is, moderately priced competitor brands. In industry competition, Chrysler sees its competition as all companies that make vehicles in the same product class, so this might include lower-end and higher-end minivans. In form competition, the company sees its competition in all companies that manufacture products that provide consumers with the same utilitysuch as bikes, motorcycles, SUVs, pickups, etc. Lastly, in generic competition, the competition is considered any company that competes for the same dollar as the Chrysler minivanthis could include vacations, car repair services, new homes, etc. (moderate) pp. 10-11

Mini-Cases
Mini-Case 1-1 S. Truett Cathy entered the restaurant business in 1943. In 1964 he introduced his first Chick-fil-A sandwich. In 1998 he owned 826 Chick-fil-A restaurants in 35 states and South Africa with an additional 92 stores set to open in 1999. Cathy was never the type of entrepreneur who wanted to run an idea up the flagpole and see who saluted it. He will not open a new restaurant unless he is convinced the enterprise will be a success. He will not consider taking the company public even though it would be worth an estimated three-quarters of a billion dollars if it went public. Cathys philosophy is, We started Chickfil-A, we built it, and we own it. Yes, we have thousands of allies, friends, partners, and employees. But

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it we want to maintain the quality, the integrity, and the whole culture of our company, weve got to own it. 74. Refer to Mini-Case 1-1. When Cathy started selling Chick-fil-A sandwiches, the market was saturated with hamburger restaurants. Colonel Sanders was selling chicken dinners, however, there were no restaurants selling the fried chicken sandwich that Cathy visualized. Cathy recognized a(n) _______________ demand for something different to eat. a.) derived b.) latent (moderate) p. 5 c.) elastic d.) irregular e.) declining 75. Refer to Mini-Case 1-1. Cathys philosophy about keeping the company private is an example of _______________ marketing. a.) relationship (difficult) p. 9 b.) entrepreneurial c.) societal d.) environmental e.) transactional 76. Refer to Mini-Case 1-1. The allies, friends, partners, and employees that Cathy refers to are examples of _______________ with whom Chick-fil-A has built mutually profitable business relationships. a.) stockholders b.) transaction partners c.) reciprocal agents d.) stakeholders (moderate) p. 10 e.) business networks 77. Refer to Mini-Case 1-1. Which of the following would be a part of Chick-fil-As task environment? a.) its target customers (moderate) p. 11 b.) development of database marketing c.) laws governing cleanliness standards in the restaurant kitchens d.) consumer desire for low-fat food e.) demographic trends that show the U.S. population moving south and west

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Mini-Case 1-2 A few years ago, Target Corporation (then called Dayton-Hudson) decided that it would no longer sell tobacco products, giving up a very profitable line for them at the time. Liability and corporate responsibility were cited as the reasons for this move at the time. 78. Refer to Mini-Case 2-1. This decision by Target illustrates which of the following? a.) the marketing concept b.) integrated marketing c.) relationship marketing d.) societal marketing concept (moderate) p. 17 e.) benchmarking 79. Refer to Mini-Case 2-1. Which of the external environments likely had the most impact on Targets decision to delete tobacco products from its product line-up? a.) demographic environment b.) political-legal environment (moderate) p. 11 c.) task environment d.) natural environment e.) manufacturing environment 80. Refer to Mini-Case 2-1. Even if a Target consumer wanted to buy tobacco products, no physical product exchange could take place. Why? a.) There are not two parties. b.) One of the parties lacks something that could be of value to the other. (moderate) p. 8 c.) One of the parties is incapable of communicating or delivering. d.) One of the parties cannot accept or reject the exchange. e.) One of the parties believes it is inappropriate or undesirable to deal with the other party.

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