Marketing Principles: Practice Questions and Key Concepts
1. Consumer Product Classifications
Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think about buying. These products require a lot of advertising, personal selling, and other marketing efforts.
Multiple Choice Questions
1. Which of the following are consumer products that the consumer does not normally think about buying?
A. Shopping products
B. Unsought products
C. Product mix
D. Specialty products
2. Which of the following is true with regard to store brands?
A. Store brands are also known as national brands.
B. Increasing consumer distrust toward store brands has led to a store-brand slump.
C. Store brands have been declining in popularity and strength for more than two decades.
D. Store brands are created and owned by resellers of a product or service.
3. A well-known cosmetic company in New York City added new product lines in order to increase its business. In other words, it ____.
A. Engaged in social marketing
B. Lengthened its existing product line
C. Decreased its product line consistency
D. Widened its product mix
4. If a consumer purchases a new flat-screen “smart” television, what is the augmented product involved?
A. Connection to entertainment and information
B. Tech support and warranty
C. State-of-the-art technology
D. Slick and attractive packaging
5. When Mercedes successfully introduced its C-Class cars at $30,000 without injuring its ability to sell other Mercedes cars for $100,000, it was an example of a successful ____.
A. Upstream integration
B. Two-way stretching
C. Upward stretching
D. Downward stretching
6. BlueFin canned tuna has higher sales than its unbranded rival, even though the unbranded tuna costs $0.45 less per can. BlueFin most likely has ____.
A. High brand equity
B. No brand commitment
C. Negative brand equity
D. Low brand relevance
7. ___ are the sum of the ___ and ____ for any given level of production.
A. Total costs; fixed; variable costs
B. Variable costs; fixed; total costs
C. Fixed costs; total; variable costs
D. Fixed costs; variable; total costs
8. Fixed cost per unit ____ as the number of units produced increases.
A. Decrease
B. Remain the same
C. Increase
D. Divide in half
9. Multiprint, a printer manufacturing firm, sells ink cartridges for each of its specific models. Only Multiprint cartridges are compatible with Multiprint printers. What type of pricing does Multiprint use?
A. By-product pricing
B. Captive product pricing
C. Product line pricing
D. Product bundle pricing
10. As production moves up, the average cost per unit decreases because ____.
A. Variable costs decrease
B. Fixed costs are spread over more units
C. Overhead costs decrease
D. Revenue increases
11. Noticing that themed envelopes aren’t selling well, Charles Payton decides to offer customers a special “letter writing” kit. Which of the following pricing strategies is he using?
A. Product bundle pricing
B. By-product pricing
C. Optional product pricing
D. Captive product pricing
12. Aldo Inc. designed the E-Brush. Sensing market demand, Aldo started with an ideal selling price of $13 based on customer value and then targeted costs to ensure that the price was met. This exemplifies ____.
A. Everyday low pricing
B. Cost-plus pricing
C. Target costing
D. High-low pricing
13. ____ are the largest group of wholesalers. They include two broad types: full-service wholesalers and limited-service wholesalers.
A. Merchant wholesalers
B. Manufacturer sellers
C. Selling agents
D. Brokers
14. Which of the following is an example of an indirect marketing channel?
A. June Bride, which sells bridal gowns via its click-to-order online catalogs
B. Farmer Brown, who delivers fresh milk from his dairy to customers every morning
C. M & M, which sells its picnic baskets to select novelty stores across the country
D. Lifebelt Insurance, which sells life insurance through its door-to-door salespeople
15. Which of the following entities is present in a zero-level marketing channel?
A. Consumers
B. Wholesalers
C. Brokers
D. Retailers
16. Craftsman Furniture Company offers its furniture through independent and smaller chain furniture stores, not through every store that sells furniture. It uses ____ distribution.
A. Direct
B. Intensive
C. Corporate
D. Selective
17. While using the ____ method for setting an advertising budget, a company starts with total revenues, deducts operating expenses and capital outlays, and then devotes some portion of the remaining funds to advertising.
A. Objective-and-task
B. Affordable
C. Percentage-of-sales
D. Competitive-parity
18. More companies are adopting the concept of ____, which carefully integrates and coordinates the company’s many communication channels to deliver a clear, consistent, and compelling message.
A. Nonpersonal communication channels
B. Integrated personal selling
C. Integrated marketing communications
D. Integrated competitive methods
19. Based on the target audience, the communicator makes decisions regarding what will be said, who will say it, when it will be said, where it will be said, and ____.
A. What noise to anticipate
B. How frequently it will be said
C. How much it will cost to prepare the message
D. How it will be said
20. P&G began to market shampoo for normal hair. In an attempt to increase profits, P&G then marketed shampoo for oily hair and color-treated hair. This is an example of ____.
A. A shopping product
B. Brand extension
C. Line filling
D. Line stretching
21. The Promotion Mix
- Advertising: Presentation and promotion of ideas, goods, or services by an identified sponsor.
- Personal selling: A process of assisting and persuading one or more prospects to buy a good or service or to act on an idea through an oral presentation.
- Sales promotion: Short-term incentives to enhance consumer demand, stimulate market demand, or improve product availability.
- Public relations: Building good relations with the company’s various publics by obtaining favorable publicity and building up a good corporate image.
- Direct Marketing: Advertising that allows businesses and nonprofits to communicate directly with consumers.
22. Distribution Strategies
Direct Distribution: A business technique that eliminates the need for any middlemen in the supply chain. Manufacturers sell directly to the consumer. Example: A clothing brand selling directly to consumers via e-commerce.
Indirect Distribution: Entails selling wholesale to brokers or retailers who will resell the product. Example: A furniture manufacturer selling to a lumber supplier, then to a furniture maker, and finally to a retailer.
Distribution Intensity
- Intensive Distribution: Aims to reach as many customers as possible. Example: Biscuits, wheat, and chocolates.
- Selective Distribution: Uses more than one but fewer than all intermediaries. Example: Gucci or Adidas.
- Exclusive Distribution: Consists of opening limited outlets. Example: Apple allowing only specific carriers to sell the iPhone.
23. Product Line Decisions
A product line is a series of related products offered by the same company under a single brand name.
- Product Line Filling: The process of adding new products to an existing line to increase market share. Example: Maruti Suzuki introducing the Alto between the 800 and the Zen.
- Product Line Stretching: Occurs when a corporation expands its product line beyond the scope of its current offering (upward, downward, or both). Example: BMW expanding its range across different price tiers.
24. Pricing Strategies
- Market Skimming: The producer sets a high initial price to attract consumers with strong demand and financial means, then gradually drops the price. Example: New electronics.
- Market Penetration: A marketing approach used to attract customers to a new product by setting a low initial price to gain market traction. Example: General consumer goods.