1. Which of the following is the best example of a core benefit?

a. Chin buys a used Schwinn bicycle for transportation.

b. Marla stays in a Marriott because she likes the nightly mint on her pillow.
c. Tatiana eats at Wendy's because she likes the 99-cent value products.
d. Arvin shops at The Limited because she likes the style of clothes it carries.
e. James enjoys the coupons in the Sunday newspaper.

2. Which of the following is the BEST example of non-durable goods?

a. living room furniture
b. aluminium cookware
c. watches
d. breakfast cereals
e. computer monitors

3. Products that are bought frequently, immediately and with little deliberation like soda and chewing
gum are called ________ goods.
a. non-durable
b. convenience
c. heterogeneous shopping
d. staples
e. homogeneous shopping

4. Wood, cotton, bauxite, coal, industrial-grade diamonds, and platinum are all classified as:
a. component materials
b. capital items
c. supplies and business services
d. raw materials
e. component parts

5. ________ are the equivalent of convenience goods in the industrial field.

a. Supplies
b. Commodities
c. Component parts
d. Office equipment
e. Component materials

6. The number of different product lines offered by a company is termed the product mix's:
a. depth
b. length
c. flexibility
d. width
e. consistency

7. A company might stretch its product line downward because it:

a. is attracted to the higher margins available with this strategy
b. wants to demonstrate to its stakeholders that it is capable of producing at all spectrums of the market
c. wants to abandon the high end of the market and plans for the extension to cannibalise sales
d. wants to tie up lower-end competitors who might otherwise try to move upmarket
e. wants to engage in niche marketing
8. The addition of barbecue flavoured Fritos to the Frito corn chip line is an example of:
a. a downward stretch
b. an upward stretch
c. line augmentation
d. a two-way stretch
e. line filling

9. Managers at Greville Street Lingerie considered making embroidered slip covers, but then decided slip
covers were not within the company's corporate mission. Which stage of the new-product development
process did they reach?
a. development
b. idea generation
c. idea screening
d. business analysis
e. testing

10. After Carlton Foods evaluated many new cereal ideas and before any prototype was created, the cereal
company selected three ideas to present to a group of consumers. The consumer group was asked to
evaluate the three product ideas in terms of their marketability. This stage of new-product development
is called:
a. idea screening
b. concept tests
c. test marketing
d. simulated test marketing
e. venture teams

11. When selecting a test market city, a researcher should look for a city:
a. where the demographics and purchasing habits mirror the overall market for the product
b. that has media spillover from other cities to increase media alternatives
c. that is as large as possible
d. that has limited distribution
e. where there is no competition

12. Which of the following is the most expensive part of the new product development process?
a. concept testing
b. business analysis
c. product development
d. commercialisation
e. idea generation

13. During commercialisation, a company must develop an action plan for the rollout. The action plan
answers the commercialisation question of:
a. what?
b. where?
c. how?
d. to whom?
e. who?
14. Most new product ideas are provided by:
a. customers
b. internal sources
c. competitors
d. distributors
e. product managers

15. The stages a product passes through from development to eventual decline are described by the
product:
a. life cycle
b. class cycle
c. form cycle
d. sales curve
e. history

16. Profits typically are non-existent in the stage of the product life cycle known as:
a. growth
b. decline
c. introduction
d. maturity
e. demise

17. When introduced in the late 1960s, hand-held calculators had an instant huge demand. People were
eager to buy these gadgets that could add, subtract, multiply and divide at the push of a button. These
simple calculators were initially priced at around $200. The manufacturer of these first calculators was
obviously using a ________ pricing strategy.
a. cost-oriented
b. market-skimming
c. value-oriented
d. market-penetration
e. product-quality leadership

18. Demand is likely to be price elastic if:

a. there are many alternatives and direct substitutes for the product
b. buyers do not readily notice price changes
c. buyers are slow to change their purchasing habits
d. buyers think a higher price is justified by quality differences
e. the buyers can use normal inflation to explain the price increase

19. Which of the following is an example of a fixed cost?

a. a salesperson's commission
b. monthly rental fee on office space
c. delivery costs of a 100kg generator to Brisbane and another to Broome
d. cost of hiring a vice-president of marketing research
e. extra employees brought in to handle contest entries

20. Which of the following is an example of a variable cost?

a. the CEO's salary
b. annual business licensing fee paid to the city
c. rent on warehouse buildings
d. monthly $2,000 payment on loan to buy earthmoving equipment
e. employees' overtime pay
21. A company that sells bottled water at a premium price is using a ________ pricing strategy.
a. mark-up
b. target-return
c. value-based
d. going-rate
e. demographic

22. Passengers on a Qantas flight from Sydney to Singapore are paying several different fares, depending
on when they bought their tickets. In charging these prices, Qantas has engaged in ________ pricing.
a. time
b. functional
c. service-form
d. captive-market
e. image

23. The only element in the marketing mix that produces revenue is:
a. price
b. satisfaction
c. promotion
d. benefit
e. none of the above

24. The "floor" for the price that a company can ask for its product is set by:
a. revenues
b. resources
c. production capacity
d. costs
e. reservation price

25. Packaged peanuts are sold in grocery stores, service stations, convenience stores, drugstores, discount
stores, and vending machines. This is a(n) example of ________ distribution strategy.
a. exclusive
b. franchising
c. selective
d. horizontal
e. intensive

26. Once channel objectives have been established, the next step in channel design is to:
a. determine service output levels
b. select the channel members
c. set up contingency plans in the event of environmental changes
d. identify the major channel alternatives
e. evaluate the major channel alternatives

27. Transporting and storing goods is part of which of the following marketing channel functions?
a. negotiation
b. physical distribution
c. contact
d. matching
e. risk taking
28. Avon, Amway and Tupperware use which of the following forms of channel distribution?
a. direct marketing channel
b. indirect marketing channel
c. forward channel
d. fashion channel
e. intermediary channel

29. If Pizza Hut franchisees complain that other Pizza Hut franchisees are cheating on ingredients, giving
poor service, and are hurting the overall Pizza Hut image, these complaints are indicative of a ________.
a. parallel conflict
b. system conflict
c. horizontal conflict
d. vertical conflict
e. conventional conflict

30. Sears obtains more than 50 per cent of its goods from companies that it partly or wholly owns. This
would be an example of a(n):
a. power based VMN/VMS
b. corporate VMN/VMS
c. contractual VMN/VMS
d. administered VMN/VMS
e. global VMN/VMS

31. According to your text, the term that is not a function performed by channel members is:
a. information
b. risk taking
c. negotiation
d. risk reduction
e. none of the above

32. Disagreements among channel members regarding roles and goals generate:
a. healthy competition which improves channel efficiency
b. channel conflict
c. an increase in channel length
d. improved communication
e. greater cooperation

33. Tom loves to go to the Nike Store where he finds athletic shoes and clothing at lower prices than at
department stores. The Nike Store carries leftover merchandise, overruns and irregulars. This retail
store is an example of a:
a. combination store
b. factory outlet
c. discount store
d. superstore
e. warehouse club
34. When Bill goes to do his grocery shopping for the week, he also likes to drop off his dry cleaning and get
his paycheck cashed at the same store. He would also like the idea of getting his shoes repaired there
while he is shopping. Bill would enjoy doing his grocery shopping at a:
a. combination store
b. category killer
c. superstore
d. hypermarket
e. warehouse store

35. A ________ consists of a wholesaler-sponsored group of independent retailers engaged in bulk buying
and common warehousing.
a. retailer cooperative
b. voluntary chain
c. consumer cooperative
d. retailing franchise
e. merchandising conglomerate

36. Which of the following is NOT a part of a store's atmosphere?

a. the music played by the speakers located throughout the store
b. the way merchandise is displayed
c. the lighting system used in the store
d. the employee who helps you carry your purchases to your car
e. the smell from potpourri containers scattered throughout the store

37. ________ do not take title to goods and perform only a few functions. Their main function is to facilitate
buying and selling, for which they are paid a commission.
a. Agents and brokers
b. Industrial distributors
c. Rack jobbers
d. Producer's cooperatives
e. Commission merchants

38. Retailers that carry a huge selection of merchandise in a single product category at such good prices
that they destroy competitors are known as:
a. copy catters
b. price dealers
c. warehouse firms
d. category killers
e. discount houses

39. Specialty stores and "first-class" department stores are most likely to employ:
a. self-service
b. full-service
c. low-service
d. limited-service
e. none of the above

40. The type of retail store that introduced the self-service concept is called a:
a. convenience store
b. department store
c. discount store
d. supermarket
e. specialty store
41. Which of the following statements partially explains the rapid growth of sales promotions?
a. Top management now views sales promotions as effective sales tools.
b. Consumers have become more price-oriented.
c. The trade is demanding more deals from manufacturers.
d. Companies face more competition from competing product categories and brands.
e. All of the above reasons help explain the rapid growth of sales promotions.

42. What kind of trade promotion is Minolta cameras using when it gives a camera store money to advertise
its products?
a. a trade allowance
b. a cash refund
c. a patronage award
d. a tie-in promotion
e. a cross promotion

43. Ryan Cooper sells classified ads for a newspaper targeted to plastic manufacturers around the world.
When he searches for new companies who might be interested in buying ads in his newspaper, he is:
a. prospecting
b. targeting
c. information bartering
d. servicing
e. allocating

44. A cutlery firm with a limited variety of products and a desire to give its sales representatives maximum
accountability, would use a ________ salesforce structure.
a. territorial
b. product
c. market
d. network
e. matrix

45. When using the workload approach to establish salesforce size, a manager should:
a. consider the territorial limits of the accounts
b. determine the number of calls that need to be made on each account and the number of accounts that
there will be per sales representative
c. review the number and size of the markets served by the salesforce
d. consider the complexity of the product line
e. design the sales territories so that each has equal potential for sales and growth

46. Which of the following is an example of fixed compensation?

a. annual bonus
b. salary
c. profit sharing
d. commission
e. expense allowance

47. What is the most important source of information about a sales representative's performance?
a. personal observation
b. conversations with other sale representatives
c. his or her sales reports
d. his or her customer reports
e. the company's performance appraisal format
48. The total number of sales calls required per year is divided by the average number of calls each
salesperson can make in determining the salesforce size based on:
a. workload
b. division
c. call-ratio
d. call productivity
e. all of the above

49. Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified
sponsor is known as:
a. advertising
b. direct marketing
c. sales promotion
d. personal selling
e. public relations and publicity

50. The first step in the development of effective communication is:

a. identifying the target audience
b. determining the communication objectives
c. designing the message
d. setting the budget
e. selecting the communication channels

51. If a company's communication objective were to increase consumer preference, it might:

a. run numerous commercials stressing its name and logo
b. run print ads that gave little vignettes explaining the history of the company
c. create point-of-purchase displays for its retailers
d. emphasise its community service and worker-friendly environment, in its public relations and advertising
efforts
e. promote its product's quality, value and performance in its advertisements

52. A purchasing agent is likely to be most responsive to a(n) ________ appeal.

a. moral
b. emotional
c. cognitive
d. social
e. rational

53. McDonald's uses reminder advertising that runs steadily all year. This is a ________ media schedule.
a. seasonal
b. pulsed
c. flighted
d. consecutive
e. continuous

54. Coburg Auto Sales advertises regularly both on radio and in the daily newspaper. At strategic sales
points such as the end of the month and holiday weekends, Sam buys extra advertising space and time.
This is a(n) ________ scheduling plan.
a. continuous
b. flighted
c. interval
d. seasonal
e. pulsing
55. Source credibility is a function of the source's:
a. personal, social and moral influences
b. quality of expression both verbal and non-verbal
c. likeability, expertise and trustworthiness
d. recognisability, trustworthiness and reputation
e. knowledge, reputation and perceived expertise

56. A Hewlett Packard salesperson giving her sales presentation to the office manager and president of a
management consultant company would be using a(n) ________ communication channel.
a. personal
b. expert
c. advocate
d. informal
e. social

57. MasterFoods is an Australian producer of mustards, marinades, relishes, sauces, etc. It is preparing its
promotional budget for next year. If its first step is to forecast next year's sales, then MasterFoods is
using the ________ method.
a. percentage-of-sales
b. affordable
c. market share
d. competitive parity
e. objective-and-task

58. In an ideal world, which is the preferred method of setting a promotion budget?
a. percentage-of-sales method
b. arbitrary allocation
c. affordable method
d. competitive parity method
e. objective-and-task method

59. Which of the following statements about a pull promotional strategy is true?
a. Pull strategies work best with low-involvement products.
b. Advertising and consumer promotions are the most commonly used promotional tools to implement pull
strategies.
c. The target of pull strategies is the trade channel.
d. With pull strategies, promotional tools are directed toward intermediaries to get them to order and to
carry the product.
e. With pull strategies, manufacturers use consumers to ask intermediaries to carry products.

60. Which promotional tool is most cost effective when a product is in the decline stage of its product life
cycle?
a. direct mail
b. sales promotion
c. advertising
d. public relations
e. personal selling