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Midterm Exam, Mark 6361, Spring, 2009

Name: __________________________________ UH ID: __________________________________ P ea!e "rite #$%r UH ID& $n t'e !(antr$n a! "e and ) a(ken t'e mat('ing (ir( e!* M% tip e +'$i(e: Ea(' ,%e!ti$n! "$rt' 2 p$int!* +'$$!e t'e $ne a ternati-e t'at )e!t ($mp ete! t'e !tatement $r an!"er! t'e ,%e!ti$n* 1. In terms of its effect on the marketing process, undifferentiated marketing: a) increases administrative and production costs b) keeps down advertising and R&D costs pp. 12 !" c) increases the firm#s cost for product modification d) creates more tota$ sa$es than differentiated marketing e) puts the compan% at risk of being supp$anted b% an entire$% new techno$og% 2. &ick 'rahmann, our speaker from (hampion )echno$ogies *s$ides were posted) made the point that a) a preferred supp$ier has attained the best position to inf$uence a customer b) repeat bu%ers are the on$% customers worth pursuing for a business!to!business compan% such as his c) the cost of becoming a +trusted advisor, is so great that a compan% se$$ing to man% customers can on$% afford this ro$e for a sma$$ proportion of them. d) a +b$ue ocean, strateg% a$$ows a firm to avoid head!to!head competition e) a technica$ compan% such as his needs to spend a$$ it can on R&D before considering spending on marketing . -arketers se$$ing to organi.ations are $ike$% to encounter ine$astic demand, we said in c$ass. )herefore: a) /ersona$ re$ationships wi$$ not be important b) /rice cuts ma% not increase tota$ sa$es p. 01 c) 2a$espeop$e ma% +ad3ust, their forecasting estimates d) (ompared to consumer marketing, bu%ers wi$$ be sma$$er and more wide$% dispersed geographica$$% e) /urchases b% governments wi$$ not be factor in tota$ sa$es ". 4or a bank to segment the market for its services b% marita$ status and target recent$% divorced individua$s wi$$ be most effective if a) banks are susceptib$e to +churning, b) the recent$% divorced group is a $arge enough segment to 3ustif% the e5tra cost of creating and promoting services to them p. 121 c) other banks are a$so targeting this segment d) other marketers, not on$% banks, are targeting this segment

e) demand for bank services is not on$% price e$astic but a$so advertising e$astic 6. Database marketing uses information about a customer and that customer#s purchasing behavior to a) ask for referra$s b) p$an promotiona$ e5penditure $eve$s c) bui$d a re$ationship with that customer p. 71 d) se$ect channe$ partners e) find 8ip (odes in other cities with customers simi$ar to customers in the +home, cit% 1. If there is one theme to derive from the first ha$f of this c$ass, it wou$d be that sophisticated marketers e5ce$ at: a) advertising decisions b) pricing decisions c) resource a$$ocation decisions d) product deve$opment decisions e) distribution decisions 7. 9e ta$ked about the +beer man, at our first c$ass to make the point that a) /eop$e bu% benefits, not products b) )echno$ogica$ superiorit% guarantees competitive advantage, according to /orter#s 4ive 4orces c) : characteristic that is of no importance to customers can be a core competenc% if a marketer tru$% e5ce$s at it. d) )he +marketing concept, has man% e5ceptions e) /ure sa$esmanship is more important than other aspects of marketing ;. 2egments that present the greatest profit opportunit% that fits a firm#s ob3ectives shou$d be se$ected as <<<<<<<<<< a) market positions b) growth markets c) reference markets d) va$ue segments e) target markets p. 122 0. Don#t go after a$$ potentia$ customers, sa%s the te5tbook. :dditiona$ advice offered b% the book concerning one!to!one marketing that can be adapted to the task of ma5imi.ing customer $o%a$t% inc$udes: a) tai$oring offerings different$% for customer needs p. 17 b) ad3usting marketing e5penditures so that $ess is spent on customers a$read% $o%a$ to the firm c) offering an e5perience as the va$ue sought b% the bu%er d) successfu$$% promoting the idea that a given product represents the past and tradition e) targeting successfu$ business $eaders

1=. :s consumers eva$uate a$ternatives for purchase, the te5tbook advises a marketer to communicate in such a wa% as to a) change unfavorab$e attitudes, so that +our, product $ooks the best b) compare our product to a $ower >ua$it% offering, so that it $ooks better b% comparison c) fit our product into the e5isting attitudes of the potentia$ bu%er p. ;7 d) shorten the time spent on comparison b% offering a $imited!time dea$ e) $engthen the time spent on comparison so that the merits of our product can be fu$$% e5p$ained 11. : *n) <<<<<<<, which wou$d be characteri.ed as a structura$ tie between supp$ier and customer, estab$ishes a $ong!term re$ationship in which the supp$ier promises to re!supp$% the bu%er as needed at agreed upon prices over a specified period. a) over!run contract b) purchase order contract c) superior order contract d) b$anket contract p. 1=" e) specia$i.ed contract 12. ?ow can a compan% grow in sa$es@ 9e showed a 2 5 2 matri5 of possibi$ities and suggested as the first choice to target: a) competitors# customers b) one#s own customers, with a product the% do not now purchase c) one#s own customers, to se$$ them more of the product the% are now bu%ing d) a new set of customers, with a new product e) a new set of customers with a service, not with tangib$e goods 1 . 9hen we ta$ked about stars, dogs, cash cows, and the $ike, we made the point that a) it is usefu$ for a compan% to re$ocate periodica$$% b) it makes sense to earn surp$us cash with some products and invest that cash in other products c) ta5 considerations shou$d be inc$uded in marketing decisions d) growth markets are the $east profitab$e e) companies with high market share re$ative to competitors have the most difficu$t time gaining profits 1". -arketing strateg% has three e$ements, we said in c$ass: a) concentration, deve$opment, and diversit% b) sa$es potentia$, sa$es budgets, and sa$es forecasts c) markets to target, products to offer, and differentia$ advantage over competitors d) attaining, retaining, and growing customers e) customer identification, customer re$ationship management, and customer e5perience management

16. Aearning $eads to genera$i.ation, according to the te5tbook. )he authors offer as an e5amp$e: a) 2omebod% who has shopped e5tensive$% for printers wi$$ see them a$$ as simi$ar, compared to someone who has seen on$% a few brands b) 2omebod% who has a good e5perience with a computer wi$$ e5pect that the same compan% wi$$ make high >ua$it% printers p. ; c) )he e5perience of owning one printer and using it for a period of time wi$$ make someone a more astute shopper for his or her second printer d) 2omeone who bu%s printers for a business instead of his or her own use wi$$ know more about how to compare features e) 2omeone who $ooks for va$ue in bu%ing a printer wi$$ e5amine more features more carefu$$% 11. )he te5tbook suggests improving the >ua$it% of marketing inte$$igence b% a) estab$ishing a consumer advisor% pane$ p. "1 b) asking competitors to share pricing p$ans, in e5change for sharing one#s own pricing p$ans with them c) rep$acing the purchase of information such as scanner data with surve% data d) using a +tria$ and error, approach to marketing decisions e) avoiding observationa$ data and focus groups 17. )he point of showing in c$ass that an auto dea$er might target women for vehic$e oi$ changes was to emphasi.e the potentia$ pa%off from: a) casting as wide a net as possib$e b) se$$ing two obvious$% re$ated products c) focusing on one demographic segment d) directing marketing efforts to the $argest possib$e segment e) directing marketing efforts to the segment c$osest to the organi.ation#s current customer base 1;. 2ome organi.ations bu% strict$% from the $owest price supp$ier, the te5tbook notes, and recommends in such a situation: a) -oving on to seek business from other organi.ations, not that one b) Bffering a $ow introductor% price, p$anning to increase it $ater c) Bffering testimonia$s from other bu%ers who purchase in the same product categor% d) 2howing that over the $ife of the product the bu%er actua$$% saves with what we offer p. 1= e) Cefriending the members of the Cu%ing (enter b% 3oining organi.ations that the% a$read% be$ong to

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10. )he tasks of hiring, training, and motivating ab$e emp$o%ees who work together and embrace a +think customer, perspective are a$$ a part of <<<<<<<<<< marketing. a) integrated b) e5trapo$ated c) m%opic d) re$ationship e) interna$ pp. 1"!16 2=. )he te5tbook sa%s that it ma% make e5ce$$ent sense for a marketer se$$ing to organi.ations to segment the market b%: a) educationa$ $eve$ of the bu%ers b) how >uick$% the bu%er needs the product p. 12= c) geo!demographic methods that use bu%er 8ip codes to infer $ifest%$e d) under$%ing motive for purchase e) ps%chographic groups 21. Dohn -cEeever, our speaker from 'e$b (onsu$ting 'roup, Inc., basica$$% made the point that a) :dvertising can raise e5pectations so high that a marketer inevitab$% disappoints customers b) Fven a +me!too, brand can successfu$$% charge a price higher than the price competitors charge c) :ffi$iation with a we$$!known professiona$ group $ike the :merican ?ospita$ :ssociation raises tota$ categor% demand d) (onsu$tants $earn usefu$ information both from customers and from emp$o%ees e) In difficu$t economic times, it seems unwise in ?ouston for a consu$tant to target the oi$ & gas industr% or hea$th care providers 22. It is impossib$e to e5p$ain the idea of positioning without recogni.ing a) Aifest%$e differences among bu%ers b) )echno$ogica$ differences among branded products c) 9hat a potentia$ bu%er a$read% is considering p. 1"0 d) )he concept of brand e>uit% e) )he $ike$ihood that a business bu%er ma% be under orders to bu% at the $owest price 2 . )he te5tbook considers it important for marketers to understand facets of the techno$ogica$ environment, such as the fact that a) )he pace of techno$ogica$ change is s$owing down b) : growing portion of research and deve$opment spending in the G.2. is going into deve$opment rather than research p. 66 c) Regu$ation of techno$ogica$ change in the G.2. is becoming $ess re$evant as companies simp$% shift R&D efforts to other countries d) )he time between the introduction of a techno$ogica$ innovation and peak production has increased b% 1H over the past decade 6

e) 4ewer new ideas are +in the works., 2". :ccording to the te5tbook, compan% sa$es potentia$ is a) the ma5imum number of sa$es avai$ab$e to an industr% given a specific $eve$ of industr% marketing effort and environmenta$ conditions b) ca$cu$ated b% the market bui$dup method, identif%ing a$$ potentia$ bu%ers and their potentia$ purchases c) a conservative estimate of e5pected sa$es vo$ume, used primari$% for making current purchasing, production, and cash f$ow decisions d) the sa$es $imit approached b% compan% demand as compan% marketing effort increases re$ative to competitors p. "; e) determined b% weighting popu$ation and past sa$es figures 26. : +market cha$$enger, I2 firm in a product categor% is advised to consider approaches such as a) Cecoming a +niche, p$a%er b) Refraining from attacking the $eader c) Imitating the $eading brand d) Increasing the promotiona$ budget so that bu%ers wi$$ perceive the I2 brand as the $eader e) 2pecia$i.ing in a sing$e target market segment 21. In positioning a branded product, if we stack up bad$% against competitors we shou$d at $east consider changing: a) our forecasting techni>ues, so that sa$espeop$e have no incentive either to e5aggerate how much their customers wi$$ bu% nor to de$iberate$% estimate too $ow b) our product, to appear better when compared to competition c) the environment in which the firm operates d) the decision to market under a brand nameJ we might do better as a generic e) the si.e of the potentia$ market, to have additiona$ opportunities 27. )aco Ce$$ estimates that a $o%a$ customer might be worth K11,=== to the compan%. )his number stems from something ca$$ed <<<<<<<<<<. a) *&/L)M*RBI) b) customer $ifetime va$ue p. 11 c) the competitive present va$ue of $o%a$t% mode$ *(/LA-) d) repeat purchase ana$%sis e) brand e>uit% 2;. 9hi$e brand e5tensions have obvious advantages, the% a$so have one obvious risk: a) )he% ma% become unintentiona$$% become $ine e5tensions b) )he% ma% become indistinguishab$e from categor% e5tensions c) )he% ma% di$ute the image of the parent brand p. 1 0 d) )he% ma% incur costs that the compan% does not rea$i.e are associated with the brand e5tension

e) )he% ma% $ead to ine$astic demand despite price increases 20. 9hich of the fo$$owing is a wa% of differentiating a marketing offering via personne$@ a) training p. 16" b) ordering ease c) coverage d) events e) conformance =. &eeds pre!e5ist marketing efforts, according to the te5tbook. )he statement is a) an attempt to rebut a common comp$aint about marketing pp. 1!7 b) a defense of the +se$$ing concept, c) a basis for e>uating needs and wants . d) an e5p$anation of wh% the term +market, has more than one meaning e) a cu$ture!specific idea

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I grade $n # $ne mem$, t'at #$% "rite, egi) #, $n # $n t'e .r$nt $. t'i! page* 5%t p ea!e .ee .ree t$ dra.t a 1pra(ti(e2 -er!i$n $n t'e ) ank and t'en ($p# it $nt$ t'i! page a.ter a (are.% rereading and editing* :ssume that %ou are seeking a summer internship with an organi.ation in ?ouston. 9rite a memo to me te$$ing me *1.) how %ou wi$$ segment the market of possib$e emp$o%ers, *2.) the market segment %ou wi$$ then se$ect to target. )hen DG2)I4N that specific segmentation!then!targeting decision based on what %ou offer as a differentia$ advantage to an emp$o%er.

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It can be argued that a severe recession weakens the inf$uence of at $east one of -ichae$ /orter#s +five forces, on the profitabi$it% of a chemica$ compan% such as (hampion )echno$ogies, &ick 'rahmann#s firm. 9rite a memo to &ick se$ecting a +force, that %ou be$ieve becomes AF22 of a threat as the econom% weakens, and wh% %ou se$ected it over the others as $ess inf$uentia$ in a recession than it wou$d be in prosperous times.

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